samchain/econo-pairs-v1 huggingface dataset:
Other features of our expansionary phase were, however, more specific. In Spain, productive factors and financial resources were overly concentrated in the real estate sector. Further, some of the structural constraints of our economy, such as productivity and the functioning of the labour market, did not show sufficient improvement. Another singular factor has been the position of relative strength from which the Spanish financial system has faced the crisis. Spanish banks continued to pursue a “traditional” business model during the entire upturn, focusing on retail financial intermediation. This is certainly the main reason why, as is widely known, the role of Spanish intermediaries in the generation, acquisition and financing of toxic assets has proven negligible. As the system’s supervisor, the Banco de España also contributed to entrenching this relative strength, through a policy that focused on the cyclical pattern of building up provisions and on the rigorous definition of the scope of consolidation of financial groups. The Spanish financial system was thus able to ride the first wave of the crisis – the nature and origin of which, let me remind you, were strictly financial – and readapted its sources of funding to the new market situation. Loan securitisation therefore left centre stage to deposits, short-term commercial paper issues and bank resort to the new abundant liquidity provision policy implemented by the ECB for the whole of the Eurosystem.

Our transition into the flexible regime with China allowed for us to achieve it without being destabilised by the financial markets. Bank Negara Malaysia also became one of the first Asian Central Bank to be accorded the QFII status in 2009 as we took steps to diversify our reserves into Chinese and other Asian denominated papers. While China in the current environment is being confronted with challenges as it addresses its areas of vulnerabilities and as it takes steps to rebalance and reform its economy and financial system, it is these very actions that will provide the ground for a more sustainable China that will in turn become a source of stability for the region and for the global economy. Looking ahead, there is much to be done by all of us. I have said that the business of Central Banking is an unfinished business. In view of the highly dynamic environment, there will always be new challenges on the horizon. For Asia, it is the future challenges that we now need to be concerned with. And it is what we do now that will prepare the ground for us for the future. There has been too much focus on the present. In Asia, while we have successfully prepared ourselves for the current environment, we now need to prepare ourselves for the future.
Long-term unemployment is a significant problem in the broader economy, and something that I will discuss in more detail later in my remarks. Next, we will take a tour of the American Job Center, an organization that provides workforce assistance to job seekers in conjunction with local businesses. Later we will attend, a roundtable lunch with members of the Bridgeport Regional Business Community. And, finally, we will meet with leadership from the Housing Development Fund, New Horizons and NeighborWorks America to hear about the state of affordable housing and community development in Fairfield County. These trips are valuable to us, and represent one of the many ways in which the New York Fed engages with people and businesses in our region. Another one of our efforts in this vein is our Small Business Credit Survey – the latest version of which was released last month. This survey – which includes responses from across 26 states – helps us understand the challenges facing small businesses in the region, focusing on financing needs and impediments to obtaining credit. We partnered with multiple organizations throughout Connecticut to produce this survey – some of which are right here in Bridgeport – and received responses from nearly 200 small business owners from around the state. I’d like to personally thank those who participated in the survey. The remainder of my remarks will focus on recent developments in the national and local economy.

Recent data show core inflation, which excludes volatile food and energy prices, running at about 3-1/2 percent, which is well above the Federal Reserve’s longer-term 2 percent goal. Taking a closer look at the data, it’s clear that this spike in inflation largely reflects the transitory effects of the rapid reopening of the economy, which is pushing supply and demand in extreme ways. As the economy gets through these unusual dynamics, I expect inflation to come back down to around 2 percent next year. Given the complexity of this topic, I’ll go into this in more detail. I find it helpful to view recent developments in terms of three categories. The first is related to prices for goods and services that underwent huge declines during the pandemic but are now rebounding as the economy reopens. For example, in the first year of the pandemic, prices for airfare and lodging fell sharply as people cut back on travel. Since then, we’ve seen these rebound toward their pre-pandemic trends, pushing the inflation rate up. One simple way to get a better read of inflation that is not overly influenced by these big swings in prices is to take the average inflation rate from the start of the pandemic. That calculation shows that core inflation has averaged 2-3/4 percent since February of last year. But even that number is heavily influenced by the effects of the pandemic on the second category: used vehicles.
Fritz Zurbrügg: Presentation of the Swiss National Bank’s Financial Stability Report Introductory remarks by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 16 June 2016. *  *  *  In my remarks, I will start by looking at the key points addressed in the Financial Stability Report, which was published today. I will then finish with a review of the launch of the new banknote series, which commenced in April. Big banks: Capital situation further improved – SNB welcomes regulatory reforms Let me begin with the situation of the Swiss big banks. Over the past year, they each improved their capital situation further, as regards both risk-weighted capital ratios and leverage ratios. Both big banks are already almost fully compliant with the requirements of the current Swiss ‘too big to fail’ regulations (TBTF1), which will apply in full from the beginning of 2019. The Swiss National Bank acknowledges the progress made in this area. These regulations were revised over the course of the last year. The revised regulations (TBTF2) envisage a significant increase in requirements on the loss-absorbing capacity of the big banks and will come into effect in a little over two weeks from now. With a phase-in period until end-2019, the requirements will be gradually increased to the definitive level. Both big banks are already fully compliant with the revised requirements that come into effect on 1 July.

Even though during the early years of the Exchange Market’s operation in the 1860’s, the amount of foreign direct investment in Turkey was negligible, foreign capital was being encouraged to form joint stock companies. Up until the beginning of the 20th century, the Market helped the government find funds to finance its obligations. In 1906, the Istanbul Exchange Market was re-organised and once more became a source of new capital for young private ventures. BIS Review 42/1997  -2-  Without giving the whole history of the Istanbul Exchange Market, I want to emphasise that Turkey’s experience with free markets did not begin in 1980 but goes back more than a century before. What the reforms of 1980 did accomplish was to institutionalise the markets and put them on a solid legal footing. Besides liberalisation, the structural reforms begun in 1980 included measures providing investment and tax incentives. I would like to review these issues briefly. The aims of these incentives were to encourage activities that would earn foreign exchange on the one hand, and to help foreign sources of capital finance investments in Turkey on the other. It can be said that by liberalising its capital account and introducing structural tax changes to improve investment returns, Turkey issued an invitation to foreign capital.
Even with the improvements of the past few years, including under the auspices of SWIFT, there is still considerable potential for efficiency gains. At the same time, new money and payment systems entail a number of challenges. Individual users will face new security risks. Privacy may be at issue. If they become large enough to attain market power, these systems may become a source of systemic risk. For some countries that are vulnerable to a transition to payments in foreign currency, national room for manoeuvre and the ability to conduct monetary policy may be weakened. Norges Bank is currently assessing whether the existing regulatory framework, such as the emoney rules, is an adequate response to the challenges these new systems raise. The new systems may either fall outside the scope of the existing framework or they are not sufficiently addressed by it. We must therefore consider adjustments to the rules and whether new regulations are needed. It is likely that a broader collaborative effort among policymakers at both national and international levels is needed to formulate a robust response. Another possible response to new private digital currency is a central bank digital currency. The 4/5  BIS central bankers' speeches  central bank money currently available to the public takes the form of banknotes and coins. Cash has important attributes. It needs to be available and easy to use in order to fulfil its role in the payment system.

But the very fact that there is such a discussion is an interesting and healthy sign. Thank you. 3  For example, there are a number of papers from the Centre for Economic Policy Research in London, (CEPR) that raise the issue. These include Monetary Policy Rules, Asset Prices and Exchange Rates (Discussion Paper 4114, November 2003), Boom-Busts in Asset Prices, Economic Instability and Monetary Policy, Discussion Paper 3398, May 2002, and Financial Asset Prices and Monetary Policy: Theory and Evidence, Discussion Paper 1751, November 1997. 4  BIS Review 28/2004
One concern at the time was that we were facing a global capital shortage, with increasing demand from the emerging, transitioning and developing countries at a time of strengthening economic activity and large government deficits across the industrial world. Referring generally in my remarks this morning to 10 year maturities, real yields - measured by our own indexed gilts - had indeed risen in 1994 by ¾% or more to close to 4%. But nominal yields had risen by substantially more - by something like 2% in the major markets - reflecting increased uncertainty no doubt, but clearly also worsening inflationary expectations. In my remarks on that occasion, I ventured to suggest that bond markets might just be exaggerating at least the inflationary risks, by underestimating three factors in particular: First, the commitment of governments and central banks all around the world to disciplined macro-economic policies. Secondly, the restraining effect of both the level of real yields and of structural unemployment particularly in Europe. And thirdly, the counter-inflationary effect of global competition and technological innovation. Now I seem to recollect that this suggestion was met with a degree of scepticism. That was not at all surprising. You had all heard that sort of optimism from the authorities before! But the fact is that since around the time of that first Euromoney Congress bond yields have nevertheless trended fairly consistently lower, and are now in many cases close to or even below the low point they had reached around the end of 1993.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, to the CBI, Institute of Directors, Leeds Chamber of Commerce and Yorkshire Forward at the Royal Armouries, Leeds, 21 October 2008. *  *  *  My first memories of Leeds are from a wet summer in 1958. I was ten years old, we lived on the moors above Hebden Bridge, and my father took me to my first Test Match –England against New Zealand at Headingley. It rained all day on both Thursday and Friday, and, when play started in mid-afternoon on Saturday, on a drying wicket New Zealand were bowled out by Laker and Lock for 67. So I became a slow bowler. I was taught to bowl – slow left arm – at Old Town primary school by the headmaster, Alfred Stephenson. During the morning break he would mark the wickets in chalk in the playground, and draw a small circle exactly on a length. If we could pitch the ball within that circle he would give us a farthing. As we improved, and the payout of farthings increased, the morning break became shorter and shorter – my first lesson in economic incentives, or what is known in the trade as “moral hazard”.
The lack of clarity about the capitalization plan announced for the Spanish banking industry, its difficulties to meet the fiscal targets given the gloomy growth outlook and its impact on its sovereign debt are still cause for concern. Similarly, apprehensions have increased about other countries in the region, such as Italy, because of the bulk of its public debt and its slow growth. The coupling of risk premiums in Spain, Italy and France provides evidence of this risk. Also possible is a reversal of current tensions, for instance if there are agreements favoring compliance with the adjustment measures agreed or new announcements of support by economic authorities in the zone, 4  BIS central bankers’ speeches  that could buy time to advance in the necessary structural changes. The outcome of yesterday’s elections in Greece where the winner was the political option whose program is more in line with the country staying in the Eurozone, mitigates somewhat the eventuality of a Greek default triggering a crisis in the rest of the Eurozone. However, it is still premature to draw any conclusions. But undoubtedly the coming days will bring important news and we must be watchful of its effects on our economy. Additionally, other events will bring new information. More detail about the capitalization plan of Spain’s banks and the EC meeting later in the month may shed some light on new bailout measures. Other risks have to do with world growth prospects beyond the Eurozone.

An important objective of such regulatory convergence is to ensure that crossborder financial linkages act to foster regional growth, while mitigating the propagation of systemic risk across borders through such linkages. The convergence of standards has proceeded in different ways in different parts of the world. In Europe, regulatory convergence has been driven by EU-level bodies and agencies, including the European System of Financial Supervisors and the European Systemic Risk Board. The EU-wide prudential rules are formulated and implemented through directives and regulations legislated by the European Parliament and European Council, with limited room for member states to apply “national discretion”. Recent proposals to establish a single supervisory mechanism for banks led by the European Central Bank, and a single resolution mechanism, will further  2  BIS central bankers’ speeches  reinforce the role of EU-level institutions in the management of financial stability in the Euro area. With significantly more diverse economies and financial systems, promoting greater regulatory convergence in Asia is more likely to proceed on the basis of a set of shared principles for developing and maintaining sound financial systems, while providing for the unique and distinct legal, financial, social and economic structures of individual countries within the region. It will be important to have clarity around the key principles, an inclusive process in agreeing on these principles, and mechanisms that support their effective implementation in individual countries.
This strategy would enable the target of 25 terminals per 1,000 inhabitants by 2020 to be achieved. Debit card transactions on the other hand, are likely to maintain its double digit growth rate of about 40% in 2015 (39% in 2014). Despite the encouraging progress, we are still a long way from achieving our target of 30 debit card transactions per capita by 2020. Moving forward, we need to drive the use of debit card by capitalizing on the enabling environment created by the Payment Card Reform Framework. We need to put in more efforts in this area. Of collaborative efforts and strategic tool Banking industry It is estimated that the cost of handling cash and cheques to the banking industry is about RM2.4 billion annually. This is sheer wastage when a cheaper alternative is readily available. There is substantial room for our banks to strengthen their operational efficiency through rationalization of business model and internal processes by emphasizing the use of epayments, instead of the more manually-intensive paper-based payment methods. This would enable banks to achieve a lower cost-income ratio, thus enhancing productivity and competitiveness. For this to happen, it is critical that, banks should upgrade their management information system (MIS) to fully capture the cost of different payment methods and identify areas with potential for greater operational efficiency. In addition, banks should foster better coordination between their respective revenue and cost centres to achieve optimal financial performance.

Subject to data availability, the sample is 1997–2007. The lead of monetary policy varies. Source: ECB Staff calculations. BIS central bankers’ speeches  11  Chart 11: Monetary policy accommodation and price of risk  Note: Monetary policy accommodation is proxied by the residual of an estimated monetary policy reaction function (with inverted sign). For the US it is based on G. Rudebusch (2009), “The Fed’s Monetary Policy Response to the Current Crisis”, San Francisco Fed Economic Letter. For the euro area it is based on an update of the reaction function estimated in L. Christiano, R. Motto and M. Rostagno (2010), “Financial Factors in Economic Fluctuations”, ECB WP No. 1192. The price of risk of equity is derived from the VIX-index following Bekaert et al. (2010), “Risk, uncertainty and monetary policy”, NBER Working Paper Series No. 16397. The charts are based on the historical decomposition derived from their multivariate model, extended also to the euro area. Subject to data availability, the sample is 1997–2007. Source: ECB staff calculations. 12  BIS central bankers’ speeches  Chart 12: Monetary policy accommodation and leverage  Note: Monetary policy accommodation is proxied by the residual of an estimated monetary policy reaction function (with inverted sign). For the US it is based on G. Rudebusch (2009), “The Fed’s Monetary Policy Response to the Current Crisis”, San Francisco Fed Economic Letter.
The banks’ credit assessments and housing  2  See, for instance, Assenmascher-Wesche and Gerlach (2010), Bean, Paustian, Penalver and Taylor (2010), Del Negro and Otrok (2007), Dokko, Doyle, Kiley, Kim, Sherlund, Sim and Van den Heuvel (2009), Edge, Kiley and Laforte (2008), Iacoviello and Neri (2008), Jarocinski and Smets (2008) and Walentin and Sellin (2010). 4  BIS Review 158/2010  cost calculations are actually conservative; based on high mortgage rates, from 6.5 per cent and up to 10 per cent. With an interest rate of 7.5 per cent, 92 per cent of households will have a surplus in a “left-to-live-on” calculation that includes generous standard deductions for the cost of living. Most households have very large surpluses, because it is the households with very high incomes that have the largest debts. If unemployment increases by a good 10 percentage points, that is, from almost 9 per cent to almost 19 per cent, and house prices fall by 20 per cent, according to the report only 4.5 per cent of these households will experience both a deficit in their “left-to-live-on” calculation and a loan-to-value ratio of more than 100 per cent. One important circumstance is that households’ savings ratios are currently high, from an historical perspective (see Figure 1). This indicates that mortgages are not being used to fund consumption to any great extent. Things were different prior to the 1990s crisis. At the end of the 1980s, increased mortgages were used to fund household consumption to a large degree.

In regard to, for example, bank offices, institutions should reconsider their scale and probably reduce their number, as well as promoting the productivity of those which remain operational. It is true that the proximity to customers has afforded significant competitive advantages to the Spanish banking model. But it is equally true that the potential advantages of a larger scale and proximity to customers can turn into overhead costs which are burdensome in a crisis and can weaken income statements already under downward pressure due to other factors which are hard to deal with. Having said this, my words cannot and must not be taken to mean that stricter cost management will be the cure-all enabling all institutions to circumvent the potential difficulties for their income statements. From the standpoint of business model redesign and adaptation to a new reality, it is evident that appropriate cost management is essential. But it may not be enough. I am sure that institutions are not going to disregard restructuring processes which will enable them to resize while harnessing synergies and economies of scale. Indeed, in the past, Spain has seen numerous processes of this type which have resulted in highly successful business models. Let me sum up. BIS Review 52/2009  5  The complexity of the international financial crisis and of the synchronised weakening of the real economy in numerous countries puts banking systems in a complex and exceptional position.