samchain/econo-pairs-v1 huggingface dataset:
Miguel Fernández Ordóñez: Presentation of the 2011 Annual Report Address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, to the Governing Council of the Bank of Spain on the presentation of the 2011 Annual Report, Madrid, 8 June 2012. *  *  *  Ladies and gentlemen, The presentation of the Annual Report for 2011 is taking place in an extremely difficult setting for Europe in general, and for Spain in particular, marked by the acute euro area sovereign debt crisis and the double-dip recession in the Spanish economy. The year 2011 was characterised by the worsening of the euro area sovereign debt crisis. Initially affecting a small number of countries in a situation of relative vulnerability, it spread to others with sounder economic fundamentals, duly turning systemic. The fresh downturn in the euro zone not only detracted from the area’s recovery but was also one of the main determinants of the halt in the ongoing pick-up in world growth begun a year earlier. Two main factors lay behind the crisis. First, the insufficient adaptation of domestic economic policies to the demands of monetary union membership, which translated into a build-up of major imbalances that placed some economies in a position of vulnerability. And second, the lack of political consensus at the European level to tackle the weaknesses of the euro’s institutional design, which largely explains the spread of the tensions to countries whose misalignments were on a lesser scale.

The adjustment of unit labour costs is being achieved primarily thanks to the high productivity  2  BIS central bankers’ speeches  gains brought about by job destruction, while the easing in inflation has corrected to a lesser extent the gap built up during the upturn. This behaviour highlights the slow and imperfect functioning of the competitiveness channel, which should in principle lead to a containment of prices and costs in those economies that accumulate bigger external misalignments. Indeed, achieving lasting improvements in competitiveness requires greater cost and price adjustments and productivity gains associated with genuine improvements in productive efficiency. However, since 2007 the Spanish economy’s external deficit has been substantially corrected, dipping from 10% of GDP in 2007 to 3.4% of GDP in 2011. Underpinning this narrowing of the deficit has been the buoyancy of exports and the sluggishness of imports, in step with the weakness of domestic demand. Notwithstanding, the culmination of this adjustment is conditional upon certain elements such as the deficit on the energy balance and the magnitude of the investment income payments component, with a negative balance equivalent to 2.7% of GDP in 2011, which is very closely related to the high level of the International Investment Position. These factors all accentuate the importance of those reforms contributing to correcting the deficit through the boosting of sustainable competitive gains in the medium and long term.
Gent Sejko: Transparency, communication and the importance of the media partnership Address by Mr Gent Sejko, Governor of the Bank of Albania, at the end-of-year meeting with the media and the Governor’s Award ceremony, Tirana, 13 December 2019. * * * Dear ladies and gentlemen, Welcome to the Bank of Albania, to spend some time together as the year end approaches. Sadly, the atmosphere at the end of this year is different from previous ones, following the devastating earthquake, which hit Albania in late November. In the aftermath, we are all heartbroken by the tragic loss of 51 lives, with hundreds of others injured and many buildings, which have collapsed or have been heavily affected by the strongest quake in decades. Yet, beyond the material consequences and psychological shock, this tragic event foregrounded another – somewhat dormant – dimension of our society: solidarity and unconditional support for each other. We all witnessed an impressive demonstration of voluntary support from fellow citizens to those affected by the devastating earthquake. In this extraordinary situation, the media played a key role in promoting solidarity and alleviating the human pain caused by this natural disaster. In light of this event, and in retrospection of 2019, let me express my sincere thanks and heartfelt gratitude to the media, to those who are present here tonight, and those that were unable to attend, for their invaluable work, reporting news truthfully and in real time.

Demographic developments will, inter alia, make it particularly challenging to achieve and maintain sustainable fiscal balances in the period ahead. As regards product markets, a number of studies have shown that the potential gains from creating truly integrated and competitive European markets could be very large. On the one hand this would require further progress with regulatory reforms at the national level in order to intensify domestic competition. On the other hand it needs the full EU-wide integration of markets. Regarding the latter much progress has been achieved in integrating EU goods markets, largely driven by the completion of the Single Market. The integration of services markets however has been more limited due to a large number of obstacles, whether legal, cultural or inherent to the nature of some segments of the service sector. Specific areas for further reform efforts include: •  The full implementation and enforcement of the existing Internal Market legislation. The extension of the Single Market to areas, which were so far not or only partially covered, for example many service sectors. Furthermore, the integration and reform of a number of network industries (e.g. energy, transport and postal sectors) needs to be continued. •  Ensuring effective competition within and across Member States. This requires a continuous review of the powers of regulatory and competition authorities at both Member State and Community level. •  The legislative and regulatory framework of the European economies should be reviewed at all levels of government in order to create a more business-friendly environment.
Outside the UK, the model of independent regulators with mandates making rules is common practice in most other jurisdictions. The need for operational independence is reflected in the Basel Core Principles for banking supervision.8 All jurisdictions represented in the Basel Committee implemented the Basel 3 reforms through regulators’ rules or guidelines rather than primary legislation, with the exceptions of the EU, with its very specific supranational structure, and Switzerland, with its unique federal structure. Details of the FPC’s objectives and primary responsibilities are set out in section 9C of the Bank of England Act 1998. In particular, the FPC is charged with ‘the identification of, monitoring of, and taking of action to remove or reduce, systemic risks with a view to protecting and enhancing the resilience of the UK financial system’, but this does not ‘require or authorise the Committee to exercise its functions in a way that would in its opinion be likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term’. For a more detailed discussion of the FPC’s mandate, see my colleague Alex Brazier’s May 2019 speech, ‘Citizens in service, not people in power’, available at https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/citizens-in-service-not-people-in-power-speech-byalex-brazier.pdf.

Philipp Hildebrand: The Swiss National Bank’s monetary policy strategy in the financial crisis Summary of a speech by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at the University of St. Gallen, St. Gallen, 23 March 2010. The complete text in German can be found on the Swiss National Bank’s website (www.snb.ch). *  *  *  To contain the financial crisis, central banks all over the world have chosen to take advantage of the room for manoeuvre afforded by their monetary policy strategy. The major central banks were only able to act in a flexible way – at least in part – due to their high degree of credibility with regard to their goal of pursuing price stability. The monetary policy strategy of the Swiss National Bank (SNB), too, has made it possible for the Governing Board to take conventional and unconventional measures to counter the crisis. The SNB’s approach has proven viable in the crisis. But this does not mean that we can sit back now. We must first find ways to withdraw smoothly from the measures taken to contain the crisis. In addition, we need to be sure that the Swiss economy is back on a sustainable growth path. After all, the crisis has shown that imbalances in the global financial system can occur even in an environment of price stability and macroeconomic stability. The main way to counter imbalances in the financial system is through better regulation.
Although devaluation provides short-term benefits linked to the fall in export prices, in the medium term these are potentially outweighed by the negative effects, which we have tended to forget: inflation caused by higher import prices, a fall in the value of the country’s wealth and an increase in its external debt. Italian creativity, your commercial ingenuity, dating back to Venice, Genoa and Florence, all count much more than the ease of a weak lira. 2/ The second reason is the economic results. For the past 20 years, Italy and France have reaped substantial benefits from the single currency: price stability [slide], in other words a contained level of inflation that preserves household purchasing power. Before the euro, inflation sometimes reached very high levels in Europe: it averaged 8.1% in Italy in the 20 years before the euro, compared with 1.8% in the last 20 years. stable financing conditions, due to a marked reduction in interest rates and a narrowing of spreads between countries [slide]. The spread between Italy and Germany, for example, has more than halved: it averaged 5.1% over 1986–92 – a period when we had a single market without a single currency, between the Single European Act that followed the Milan European Council, and Maastricht – compared with 1.9% in 2017–18, even though it has widened again recently due to the re-emergence of uncertainties. And in France, it went from 1.9% to 0.4%.

Two are linked to the long term, to the past 20 years of the euro that we will celebrate on 1 January: the historical will; the economic results. And two are linked to the very nature of the economic policies being pursued today: the single monetary policy; and the decentralisation of other policies. 1/ First, let me just give you a brief historical reminder: from the outset, it was Italy and France that wanted the euro, much more than Germany. I remember Rome in December 1990 and the Palazzo Montecitorio, where we opened the Intergovernmental Conference on Economic and Monetary Union – chaired as it happens by Guido Carli. We then built the euro together, step by step – and since then, it has been managed much more by the French and the Italians – from Tommaso Padoa-Schioppa to Mario Draghi – than by the Germans. Yes, Frankfurt is in Germany… just as Brussels is in Belgium. But Italy and France now carry much more weight than before in the decision-making, because, in practice, at the time of the franc and the lira, our monetary policies had to more or less conform to Germany’s. We only had one freedom left: the freedom to periodically devalue our currencies; that was also humiliating, and above all left our people financially worse off.
More broadly, the international Committee on Payments and Market Infrastructure (CPMI) has launched a task force to look into the security of wholesale payments that involve banks, financial infrastructure firms and other institutions. 16  I will return later to these themes of international cooperation and shared oversight. 15  Record of the FPC meeting held on the 23 and 29 November 2016 http://www.bankofengland.co.uk/publications/Documents/records/fpc/pdf/2016/record1612.pdf 16 http://www.bis.org/press/p160916.htm 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Prudential Risk  As I have noted, financial stability authorities are more used to managing prudential as opposed to operational risks. For many of the payment and settlement layers of infrastructure, prudential risks are small. Many FMIs employ no leverage, they typically do not take deposits or investments and they are not primarily engaged in either maturity or liquidity transformation. The main prudential type risk in the financial infrastructure world arises from the CCPs in the form of counterparty credit risk and liquidity risk. The development of CCPs for financial contracts is not an accident. It is one of the cornerstones of financial stability reforms that followed the crisis. The crisis revealed a huge and hitherto opaque network of financial contracts, particularly derivative contracts, held bilaterally between institutions. As the prices of the underlying financial assets fell and as confidence in counterparties evaporated, banks withdrew trading lines from some counterparties and began to demand increasing amounts of collateral (margin calls) from each other in order to protect themselves.

But it can certainly help, and is in fact the best contribution that monetary policy can make to the sustained growth of output, high levels of employment, and rising living standards. It helps particularly where there is supply-side flexibility and sectoral diversification. Birmingham, and the West Midlands more generally, have made – and are making – considerable strides in those directions, building on existing strengths certainly but also developing new skills and new activities. Birmingham City 2000 has, I know, played an important role in this forward-looking approach. I congratulate you and encourage you to persist in your endeavours – in conjunction with the West Midlands Regional Development Agency – well into the next millennium, despite your apparently non–Y2K–compliant title. 5  BIS Review 56/1999
Becoming a member of the European Union does not mean that Estonia has become ‘ready’. Every other Estonian resident believes that by becoming a fully-fledged member of the European Union, Estonia will be able to influence the decisions of the European Union in the future. Having faith in the possibility to influence decision-making largerly shapes the attitutes of Estonians regarding the European Union as a whole. The Estonian country and society have changed profoundly during the past 10-15 years maybe even faster than we would have believed, and others would have expected us to change. Does anyone still remember that in 1992 the inflation rate in Estonia stood at 1,077 per cent? In 2003 prices rose by just 1.3 per cent. In place of long waiting lists for having a telephone installed, Estonia has evolved into a country enjoying one of the best communication networks in Europe with diverse mobile telephony and Internet solutions, with active use of such facilities surpassing that of many European Union member states. The daredevil slogan of 1988, 'An Independent Estonia to the 1992 Olympic Games', has been replaced by actual membership not only in the Olympic family or the UN, but also by full membership in the European Union and NATO... •  On the 80th anniversary of Eesti Pank five years ago I spoke about the broader economic policy role of our central bank. The right and obligation of the central bank to contribute to shaping Estonia’s economic policy has been set down in the Bank of Estonia Act.

It could undermine banks’ profitability and their ability to meet regulatory requirements, and ultimately affect their capacity to finance the real economy. The issuance of a CBDC could alsoreduce the role of banking intermediaries in client relationships, depending on the architecture chosen by the Eurosystem, which could restrict access to client information. To avoid these undesirable consequences, it is essential that commercial banks be involved. Their input is needed, for example, to set limits and/or remuneration disincentives for CBDC holdings. In addition, choosing an intermediated architecture would allow us to exploit financial intermediaries’ expertise in customer interface management, and thus preserve the essential role they play in this field. b- Avoiding impediments to the conduct of monetary policy  Choices will also need to be made to avoid any adverse consequences for monetary policy conduct. The introduction of an unremunerated retail CBDC with no holding limit could make it difficult for central banks to pursue a negative interest rate policy, as market participants would prefer to hold the CBDC instead of assets remunerated at negative rates. This effect could be avoided by setting an appropriate level of remuneration for the CBDC. c. Improving the efficiency and integration of payment solutions Choices will also need to be made to ensure that the CBDC complements existing payment solutions, so that it can increase the efficiency and integration of certain market segments. This notably applies to cross-border payments.
The three darkest of these clouds come from the rising number of Covid infections and the accompanying re-tightening of some lockdown restrictions across the UK; the threat from further job losses, including from the closure of the CJRS; and the risks from the transition to the UK’s new trading arrangements with the EU at year-end. All three of these risks - the unholy trinity - are clear and present dangers to the UK’s recovery. They are the reason why, in its August projections, the MPC included a significant downside skew to demand. At the same time, these risks need to be put in proportion and in context. While recognising their gravity, my concern is that perceptions of these risks among household and businesses are, at present, exaggerated. By creating excess caution, this has the potential to restrain unnecessarily the recovery. Levels of anxiety among the general public ratcheted-up dramatically in March and April, by a factor of twothirds. Despite falling gradually, anxiety has remained at elevated levels, a third above pre-Covid levels (Chart 1). Measures of confidence among businesses and households have followed a similar pattern,  5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  spiking sharply downwards and largely remaining at those low levels, despite the sharp economic recovery (Chart 2). This suggests a persistent, and perhaps puzzling, degree of pessimism.

While the impact on individual businesses may be large, their direct impact on aggregate activity is likely to be modest. The measures affect only a sub-set of spending, notably hospitality (7% of total consumption) and work-related travel (also 7%). If both categories were to fall to their levels at the start of summer, as lockdown began to be eased, this would take a little over 3% off levels of consumption in the fourth quarter and 2% off GDP. But there are good reasons to think this is likely to be a significant over-estimate. Measures announced so far are nothing like as severe as earlier in the year. Even during that earlier period, we saw significant substitution between spending categories, partially insulating aggregate spending. In this respect, it is notable how quickly spending in the worst Covid-affected US States bounced back recently following their second wave. Of course, it is possible the indirect effects of lockdown measures hit spending harder. The most important of those effects would arise if they caused a further significant dip in consumer and/or business confidence. But that rather underscores my central point – the importance of avoiding over-pessimistic commentary on the economic outlook which fuels anxiety, heightens caution and risks becoming self-fulfilling. On the risks to jobs, this is clearly real and it is very likely further losses lie ahead. In its August projections, the MPC expected unemployment to rise to around 7.5% (or 2 ½ million people) by the end of the year.
Table 1: General economic indicators 1996  1997  1998  1999  2000  2001  2002  2003*  Real growth of the GDP (in %)  9.1  -10.3  12.7  8.9  7.7  6.8  4.7  6.0  Number of employees (in thousand)  1,116  1,107  1,085  1,065  1,068  920.5  920  927  Unemployment percentage  12.4  14.9  17.8  18.2  16.8  16.4  15.8  15.2  17.4  42.1  8.7  -1  4.2  3.5  2.1  3.0  M3 aggregate growth  44  28  21  22  12  20  6  9.5  M3 aggregate velocity  1.82  1.72  1.92  1.73  1.64  1.51  1.58  1.66  MoB growth  14  52  -6  19  22  20  10  -3.3  New credit to the economy (Lek billion)  7.4  3.98  5.8  8  24  40.6  62.6  70.6  Inflation percentage (y-o-y)  Lek deposits (Lek million)  72,831  89,495 130,940 158,326 165,261 186,211 193,886 223,500  Budget deficit (in % of the GDP)  -11.4  -13.2  -11.3  -11.9  -9.1  -8.3  -6.2  -4.6  Domestic debt (in % of the GDP)  30.7  36.18  35.12  36.31  41.01  39.42  38.49  39.1  Current account (in % of the GDP)  -11.5  -12.03  -6.12  -7.34  -7.1  -6.1  -8.9  -8.5  Internal debt (in % of the GDP)  29.2  33.2  31.8  29.1  30.2  28.2  24.9  23.7  Average exchange rate lek/usd  104.5  148.9  150.6  137.7  143.7  143.48  140.15  123.1**  146.9  132.58  128.5  132.4  137.9**  Average exchange rate lek/euro  Note:* The GDP calculation is made by INSTAT with a different methodology, only for 1996-2000.

Chart 7 looks at the response of bank and sovereign CDS spreads around the time of bank bail-outs in a selection of crisis countries. While bail-outs lowered bank CDS spreads, as might be expected, bail-out came at the expense of a rise in sovereign CDS spreads. It is not difficult to see why. The financial crisis has caused huge damage to the balance sheets of governments in advanced economies. For the G20 countries, the IMF forecast that the debt-to-GDP ratio will rise by almost 40 percentage points between 2007 and 2016, to almost 120%. At these levels, public sector debt may be a significant drag on medium-term growth (Rogoff and Reinhart (2010)). For economies with large banking systems and without a credible resolution regime, this leaves policymakers caught between a rock and hard place. When the call comes to ride to the banking rescue, government may be unable to afford not to. But nor, at least over the medium term, can they afford to. This is just the dilemma facing advanced countries today. Structural reform One way of lessening that dilemma, and at the same making resolution and bail-in more credible, is to act on the scale and structure of banking directly. Perhaps not surprisingly, recent regulatory reforms have sought to do just that. They have taken seriously the maxim that, if a bank is too big to fail, then it is too big. The result has been detailed proposals for structural reform in a number of advanced countries.