samchain/econo-pairs-v1 huggingface dataset:
Both happened in a critical moment, only a few months before our accession to the ERM II, at the time when we were taking the last structural reform measures that we were obligated to implement. Additionally, the pandemic caused the EU focus to shift to other pressing issues. It is with great effort that we managed to overcome all these shocks and obstacles that spring. However, just as we thought that everything was under control, we were taken by another surprise: our project was once again subjected to a test. In the second half of 2021, due to an uneven post-pandemic recovery and supply chain disturbances, global inflation picked up and inflation rates became much more dispersed across EU member states. The unfavourable inflationary dynamics was further exacerbated by the Russian aggression of Ukraine in February 2022, which happened only a few months before Croatia's fulfilment of the nominal convergence criteria was to be assessed by the Convergence Report. Given that the Maastricht price stability criterion was a moving target, the situation was tense until April last year, when we finally received positive news that this criterion had also been fulfilled. Some might call this a final stroke of luck, but it was well-deserved, especially considering all the effort, commitment, organisational skills and discipline demonstrated throughout the life cycle of the euro project. Saying goodbye to the Croatian kuna was perhaps a more sentimental moment for me than for other citizens.

So far we have had less room to influence domestic monetary conditions due to a high degree of euroisation, while having to ensure monetary and financial stability, often a very challenging and expensive task for a nonmember of the euro area. Also, the ECB's monetary policy has had a dominant influence, leaving us no room for manoeuvre. Of course, it goes without saying that in this new role we will continue to be dedicated to maintaining price stability and financial stability as well as to perform all tasks we have performed so far in line with the common procedures of the Eurosystem, where applicable. Finally, let me thank and congratulate each and every one of you who participated in the complex process of currency changeover. In the earlier phases of the process Croatia had to prove itself ready for the introduction of the euro, whereas in its final phase it had to ensure that the changeover proceeded smoothly, easily and to the satisfaction of citizens and businesses. I am grateful to and would like to congratulate our colleagues in the private sector, especially banks, on bearing the brunt of the work and being well-prepared for the conversion so that it unfolded so smoothly in the first day of January. I would also like to express gratitude to my colleagues in the public sector and our friends at the European Commission and the European Central Bank, and, finally, to Croatian citizens, for the way they have accepted our new currency.
We need measures, and the possibility to follow them up, to ensure a system that is sustainable in the long term As I said earlier, the new data means that we have taken several further steps towards seeing the risks associated with household debt. However, I would like it to make it clear that there is still a long way to go. We still do not have the entire picture. An important area where we need more data is the asset side, where we have information on the overall situation in the household sector but not broken down at the individual and household levels. In order to be able to follow developments it is of course also important to have long, continually updated time series. The analysis of the new data that we now have access to shows, all in all, that households in general are highly indebted in relation to their incomes, and this applies above all to low and middle-income earners. It also applies irrespective of where the borrowers live and how old they are. The analysis also shows that many borrowers do not reduce their debts over time and that those who do reduce them very slowly. I find this situation worrying. It is not mainly those with high incomes and those who can be assumed to have considerable wealth that have the largest debts in relation to their incomes. To a rather large extent it appears to be those who probably have less financial scope to manage potential shocks.

That said, private sector actors do not need to wait for public authorities to do everything before starting to think about consolidation strategies. Lastly, we also need to ensure that institutions are treated equally under international regulations. If we are to reach an agreement, two conditions must be met. The transposition of Basel III must be reasonable and take into account the application of the “output floor” at  Page 4 of 5  the highest level of consolidation. Above all, the transposition must be fair and applied to the letter in all jurisdictions, including in the United States. Let me be clear about one thing, however: the solution to our banking challenges is not deregulation but rather innovation; not a step backwards – towards the financial crisis – but a leap forwards. III. We need to remain fully mobilised with regard to two deadly risks: ALM/CTF and cyber-security  The fight against money laundering and terrorist financing (ALM/CTF) calls for unwavering commitment. The 23 inspections carried out by the ACPR revealed major failings in supervised entities’ compliance with their AML/CTF and asset-freezing obligations. In 2018, the Sanctions Committee imposed nine sanctions, one of which amounted to EUR 50 million. In parallel with the Financial Action Task Force’s assessment of France in 2020, the ACPR will be closely involved in the implementation of a robust and renewed AML/CTF system at the European level.
These doubts are founded on an incorrect understanding of the guarantees that are requested by the national central banks to protect against the risk that central bank liquidity is not repaid. In particular, the discount applied to the nominal value of credit claims provided as security in refinancing operations is very high. This means that, for credit claims deposited as collateral with a nominal value of € the national central banks accepting the new collateral provide, on average, the equivalent of around € in liquidity. This discounting represents a powerful method for absorbing the credit risk involved in such operations. It is also worth highlighting the fact that the main elements of risk control continue to be shared by the Eurosystem: the criteria for acceptance and measures for controlling risk are approved by the Governing Council, which is also responsible for the continuous monitoring of the effectiveness of all of the measures for mitigating risk. With regard to the third point, it is undeniable that, in some countries in particular (especially Spain and Italy), banks used some of the liquidity acquired via the three-year long-term refinancing operations for temporary investments in government bonds. Today, central banks do not have an instrument for the precise and targeted allocation of credit to a sector or in favour of a specific financial use.

Zdeněk Tůma: Forecasting and its role as an information source in the decision-making of the central bank Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Forecasting Dinner 2005, Czech National Bank, Prague, 18 February 2005. *  *  *  Ladies and gentlemen, Last year when I was speaking on the occasion of the Forecasting Dinner, I discussed several points connected with the forecasting processes at central banks and at the CNB in particular. Tonight I shall talk about some aspects of uncertainty in forecasting and in particular about the role market forecasts can play as an information source in the decision-making of the central bank. The essential question I have in mind is to what extent should the central bank follow market forecasters’ expectations about the future development of the economy. In other words, should the central bank, in order to achieve its target, follow the market’s expectations or can it surprise the market from time to time? To your common knowledge, the CNB nowadays operates under the inflation targeting regime, which is a monetary policy regime that considers the forecasting process to be the heart of monetary policy decision-making. Although the forecasting process pays main attention to the future development of prices, this does not necessarily mean that central bankers are obsessed with inflation. In fact, inflation targeting requires us to look for and use a broad range of information, including market expectations.
The magnitude, composition, speed, form of financing and focus of these reconstruction expenditures can have substantial effects on the baseline scenario in terms of output,  BIS Review 61/2010  5  inflation and the performance of financial markets. There are also risks associated with the time that it will take for productive activities to return to normal and for agents to materialize their expenditures. This has a direct incidence on the assessment of the immediate effects of the catastrophe in the first and second quarters. In any case, this risk is partly mitigated when considering that before the earthquake and tsunami, domestic output and demand were already showing a higher velocity than had been forecast. The external scenario shows a better outlook, although some risks persist. The fiscal situation of developed economies – especially in some European countries – is cause for concern because of its effects on the perception of risks and on the financial system, and its possible implications on the path of recovery of global growth. There are also risks associated with the administration of monetary stimulus packages, either if they are withdrawn sooner than necessary – considering that some countries’ financial systems remain weak – or later than advisable. As usual, the persistence of global imbalances entails risks because of both strong capital inflows to emerging economies and significant changes in the evolution of currency parities. The realization of some of these risk scenarios will have direct consequences on the country’s growth and inflation forecasts.

Yves Mersch: Digital transformation - Europe's integrated market of tomorrow Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Joint ECB and European Commission Conference "Into the future: Europe's digital integrated market", Frankfurt am Main, 31 January 2017. * * *  Introduction For over a decade the European Commission, the Eurosystem and the market have been working towards transforming what has up to now been a very fragmented financial market infrastructure in Europe into a more integrated one. This work is still ongoing and requires more effort. However, we are at a point now when progress has become tangible. In the first part of my speech, I will briefly take stock of where we stand, particularly with regard to the post-trade area. I will then address two areas where I still see gaps that are in the way of our achieving a truly integrated European financial market. The first area is securities issuance, the second instant payment settlement. In both these areas, digitalisation is opening up new opportunities, which requires action. We at the ECB stand ready to take action accordingly. Integration in the post-trade area Following the launch of T2S in summer 2015 and two further migration waves in 2016, the German market is due to migrate to T2S in less than a week’s time. This latest development is expected to bring a big increase in the volume of securities transactions being settled on the platform.
It could become one of the convincing responses of the European banking industry to the competitive challenge posed by PayPal and similar new types of payment service providers. I would explicitly like to encourage the banking industry, and especially the EPC, to step up the work on the new payment methods. 2. Mobile payments  This is a market segment where the development in Europe is still in its infancy – although high expectations had been raised a few years ago. On a global level, m-payment initiatives have now gained strong new momentum. The GSM Association has announced the next steps of its Pay-Buy-Mobile initiative. This initiative builds on the infrastructure of the major credit card companies and aims at enabling global interoperability between contactless chip cards and point of sale terminals. 4  BIS Review 134/2007  At the same time the EPC is looking for viable models of m-payment solutions for the SEPA market. Potential benefits could be for example an even higher level of payment convenience, speed and security experienced by the users. These types of benefits are the reason why I think that the EPC’s official dialogue with the mobile industry should start soon, to define viable cooperative models and standards for this area. 3. E-invoicing  I mention e-invoicing in the context of eSEPA because it offers a vast potential of benefits to users and providers alike.

I also hope that the European Commission will soon formulate its view on interchange fees, so that uncertainties in this field are removed. Before I conclude, I would like to concentrate on an important additional issue: innovation. Innovation As I stressed at the beginning of my speech, SEPA is all about harmonisation, modernisation and innovation. The SEPA project has come a long way, but the process is far from being completed. More modernisation and innovation is needed. The information and communication technology is continuously evolving and we cannot lean back and watch. SEPA must evolve, and the SEPA products should be complemented with value-added services allowing customers to make payments, fast, easy and secure and, most importantly, as much as possible paper-free. I am here talking about initiation and confirmation services. Combining these services with the SEPA payments will make the payment process fully electronic. End-users will spend less time on payments – and less time also means less money! We refer to this perspective as the next stage of the SEPA project: eSEPA. eSEPA promises significant financial benefits for banks and customers via: •  Cost savings  •  Added revenue  •  Customer retention through value-added differentiation. Let me quickly run through three examples: 1. SEPA online payments  The European Payments Council (EPC) has worked on a project that enables online merchants to offer their customers a convenient, well-know payment solution.
It does not itself have the force of law, but failure to adhere to the standards may call into question whether the bank continues to satisfy the criteria for authorization laid down in the Banking Ordinance. The draft guideline describes the general responsibilities of the board, the legal obligations of directors and the use of auditors. It then goes on to specify detailed guidelines to which locally incorporated authorized institutions are expected to adhere. Let me summarise these for you. While I will refer to  BIS Review 24/2000  2  the guidelines in relation to banks, most of them are also applicable to restricted licence banks and deposit taking companies. •  First, the board should ensure that the bank establishes policies, procedures and controls to manage the various types of risk with which it is faced. Altogether the HKMA has identified eight types of risk for the purposes of its supervision. These are credit, interest rate, market, liquidity, operational, reputation, legal and strategic risk. The board should approve the relevant policies while management should put them into effect. It is important that the policies should not exist merely for form’s sake - in other words, just to keep the HKMA happy - but should dictate how the institution is actually run in practice. •  Second, the board should ensure that the bank fully understands the provisions of section 83 of the Banking Ordinance on connected lending and establishes a policy on such lending.

François Villeroy de Galhau: The role of monetary policy Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Global Interdependence Center – Central Banking Series “Inflation expectations, implications and policy response in a new paradigm for commodities”, Session I “Central bankers outlook”, Paris, 21 March 2016. *  *  *  Since the financial crisis, central banks have been tested on several levels: their ability to keep the transmission channels of monetary policy active; their ability to deliver on price stability; their ability to support the economy. Central banks in many jurisdictions have done a lot to reach their objectives. And their role has largely been hailed as positive in exiting the crisis. But faced with inflation remaining below the target, commodity markets going persistently through bear territory and growth momentum losing steam, central banks’ action is now called into question: how effective is monetary policy and how effective can it be in the future? Aren’t central banks running out of ammo? Monetary policy faces challenges, that is true; but these challenges can be mitigated. Central banks have proven that they were ready to do their part; but my conviction is that they cannot remain the only game in town. Let me focus my remarks today on the case of the euro area. Jeffrey [Lacker, President of the Federal Reserve Bank of Richmond] will certainly give you more insight into the US situation.
Chart 6 GDP response to demand and supply shocks (y-axis: percentage change in response to one-standard deviation demand and supply shocks, x-axis: months)  Sources: ECB staff calculations. Notes: The Bayesian SVAR includes monthly interpolated GDP, HICP, ten-year OIS rate, HICP energy and PMI suppliers’ delivery times. The SVAR is estimated using the Minnesota prior with the dummy coefficient prior. Shocks are identified using sign and narrative restriction methods. Technical details on the method can be found in De Santis, R. A. and Van der Veken, W. (2022), “Deflationary Financial Shocks and Inflationary Uncertainty Shocks: An  SVAR Investigation”, Working Paper Series, No 2727, ECB. This leads me to believe that supply factors will remain, overall, the dominant determinant of inflation going forward. The persistence of the shocks When inflation is driven mainly by supply shocks, monetary policy should respond when the shocks are persistent to keep inflation expectations anchored and avoid that inflation becomes entrenched. Understanding the reasons for the persistence of current shocks and whether they may permanently lower potential is also crucial for designing the adequate policy response. There are two alternative explanations for the persistence of the supply shocks we have experienced. The first is that the economy has been hit by a sequence of temporary supply shocks, which have jointly created a persistent effect on inflation. In this case, potential output should remain broadly unchanged. And the lingering effect of the supply shocks on economic activity through real incomes and confidence could result in a negative output gap.

Rather the reverse; the weak labour market and the unusually low resource utilisation point to low wage increases. This, combined with the fact that productivity usually improves when economic activity turns around, implies that unit labour costs will be weak in the coming period. We are also assuming that the krona will strengthen, which will hold back import prices. It is also difficult to believe that demand would become so strong that it pushes up inflation. It is considerations like this that are behind the assessment that I made in July; that the repo rate will probably need to remain at a low level for a long time to come. Resource utilisation will remain low during the foreseeable future and it is difficult to envisage any inflationary pressures. At the same time, borrowers should be aware that the current situation is an extreme one and that at some point in the future we will need to raise the interest rate back to a more normal level. Concluding remarks I have now described the Riksbank’s view and my personal view of developments in Sweden and abroad. Despite GDP falling heavily this year, employment falling and unemployment rising, there are now signs that an improvement is on the way. The situation in the financial markets has improved and the new information received during the summer confirms the view that the deep recession has bottomed out. But the improvement is from unusually low levels and the recovery will probably be weak.
The fixed exchange rate was an intermediate target for achieving low and stable inflation. The exchange rate remained stable up to autumn 1996, partly because wage growth was low and overall demand did not generate pressures in the economy. Gradually, the krone began to show wider fluctuations. The experience of the last half of the 1990s demonstrated that monetary policy cannot fine-tune the exchange rate. Developments in international financial markets led to more pronounced fluctuations. And more fundamentally, when labour market pressures rose and incomes policy failed, exchange rate developments no longer provided signals for wage formation and fiscal policy. High petroleum revenues, fiscal slippage and expectations of increased use of petroleum revenues contributed to this. The exchange rate was therefore no longer suitable as a nominal anchor. Towards the end of the 1990s, increased emphasis was placed on the fundamental preconditions for exchange rate stability. Monetary policy instruments were oriented with a view to bringing price and cost inflation down towards the price stability objective of the European Central Bank (ECB). BIS Review 34/2004  1  Monetary policy In most countries, price stability, or low and stable inflation, is the objective of monetary policy. Historical experience from Norway and other countries has shown that the absence of price stability has resulted in unstable output and employment. History shows that higher growth cannot ultimately be achieved in exchange for higher inflation. An economic policy that fuels inflation does not generate higher economic growth. On the contrary, it paves the way for subsequent recession and unemployment.

The economy is probably approaching a normal rate of capacity utilisation. When inflation increases from a very low level, this will provide a basis for gradually moving towards a more normal short- term interest rate level in Norway. This may counter excessive credit growth and excessive pressures on domestic resources in the medium term. Interest rate developments abroad may have a considerable influence on movements in the krone exchange rate. The inflation outlook in Norway implies that Norway will not be the frontrunner when other countries increase interest rates. Interest rates were left unchanged at Norges Bank’s Executive Board meeting on 26 May 2004. Norges Bank’s key interest rate, the sight deposit rate, therefore remains at 1.75 per cent. According to Norges Bank’s assessment, with a sight deposit rate of 1.75 per cent at present, the probability that inflation two years ahead will be lower than 2½ per cent is greater than the probability that it will be higher. 3  Adjusted for the effect of the interest rate’s direct impact on house rents, changes in parental payments to day-care centres and for special factors relating to indirect tax changes earlier in the year. 4  Seasonally adjusted, three-month moving average recalculated as an annual rate. 6  BIS Review 34/2004