samchain/econo-pairs-v1 huggingface dataset:
The latest information shows that global activity slowed across the board in the second quarter and the highest frequency indicators point to persistence of this weakness over the coming months. Meanwhile, the decline in world trade appears to have steepened, against a background of heightened uncertainty regarding the trade policies of the United States and China and intensification of geopolitical risks. Although the decline in activity has been particularly strong in manufacturing, the slowdown in recent months in the global services output PMI, which remains in expansionary territory, is indicative of an increase in the risk of a greater slowdown in global activity. Given its degree of openness and the existence of certain idiosyncratic factors, the euro area economy has been one of the most affected by these international trade developments. Specifically, there was a significant slowdown in the euro area from the beginning of 2018, mainly due to the sharp moderation in its exports. As a result, in 2018, GDP grew at an average rate of 1.8%, 0.7 percentage points less than in 2017, while year-on-year growth fell to around 1% in late 2018 and early 2019. The latest information shows that euro area GDP growth in the second quarter, adversely affected by export weakness and sluggish investment, was only 0.2% quarter-on-quarter, down from 0.4% in the first quarter. By contrast, private consumption continued to grow, driven by the relative strength of the labour market. On the supply side, industrial activity contracted in this period, while services continued to behave more favourably.

In any event, in order to assess the overall effect of interest rates on the profitability of banks, it is necessary to take into account that interest rates not only impact the net interest margin but they also impact other items in the income statement. In particular, lower interest rate levels help to lessen losses in the credit portfolio due to their favourable effect on borrowers’ repayment capacity associated with both the lower cost of credit, and higher income and lower unemployment tied to the macroeconomic impact of lower interest rates. These effects may be particularly important in countries like Spain where the banking system started out with a high level of non-performing loans and where short-term or variable rate lending was prevalent, since this results in movements in market returns passing through rapidly to the costs of outstanding debt2. Thus, part of the fall in the non-performing loans ratio in recent years can be explained by this effect. Furthermore, declines in interest rates contribute to increasing the prices of financial and real assets. This effect is immediate for fixed-income securities, particularly long-term ones since prices are more sensitive to changes in yields. Valuations of equities and real assets, such as housing, are also boosted by the fall in interest rates due to the effect on the discount factor, although the price of these other assets is influenced by other conditioning factors such as macroeconomic expectations.
Some people argue that the dollar will move proportionately with the size of the import tax, so the import prices won’t go up at all in dollar terms. But, you know, that’s theory, and people worry about how it will actually work in practice. So, I think this is just going to be a very heavily debated topic in Washington in the coming weeks and months. Maureen O’Hara: I think we have time for maybe one or two more. Let’s let some people in the back again. Audience Member: Hi, Mr. Dudley, nice to hear from you. I’ve got lots of questions, but I guess everyone gets to only ask one. President Dudley: You can ask more than one, but I’ll only answer one. Audience Member: Okay, so, I was going to ask some sort of structuralist post-Ricardian question, but I’ll set that one aside. President Dudley: Thank you. Audience Member: On a similar vein, to what degree do you think that this challenging of facts and these threats about what is truth and, you know, journalistic integrity, to what degree did this affect the financial system and to what degree did this confidence in what the Wall Street Journal might say or the New York Times might say as a fact can affect confidence in financial institutions? And what remedies do you have, or does the Fed have, to combat that? President Dudley: 12 / 13  BIS central bankers' speeches  I don’t think I have any good real answers to that.

Maureen O’Hara: Well, I think, I hope you’re right that we’re reaching a new awareness of the fact that some behaviors just can’t be accepted. You know, I don’t care whether they’re legal or not. They’re over any kind of ethical lines. And we shall see, it’s a new world, isn’t it? President Dudley: Yeah. It’s very important that people understand that the idea is not to just perform to the regulation and the legal law. And one of the things we have, because we have a very legalistic system with lots of regulations with banks – people sometimes feel like, “Oh, well, given that, I can do anything within those parameters." Well, the world changes faster than the regulations and law can sort of keep up. And so, using that as your guide in terms of what’s good behavior, permissible behavior, I think is a very bad, bad guide. Maureen O’Hara: Well let me turn to one last question, and then we’ll open it up to all of you. Would repeal of parts of Dodd-Frank, the Volcker Rule, be a good thing for the financial system? Any predictions about what’s going to happen with financial regulation going forward? President Dudley: Well, I think that it’s certainly going to be looked at, and obviously we’ll have to see how it makes its way through the House of Representatives and the U.S. Senate.
When these young economists returned home, they had learned that another world was possible. They had received key inspiration about the proper business of a central bank and the proper conduct of monetary and credit policy. Today, the Bank has a Research Unit. The research is useful but it is a drop in the ocean compared with the research taking place in the wider world. But the Research Unit is important for ensuring that we are vigilant. It is the Bank’s bridge to the academic world inside and outside Norway. Internationally recognised scholars visit the Bank on a weekly basis to relate the latest news from the research front and challenge our perceptions and ways of thinking. The actual presence of in-house researchers with specialist expertise in central banking sharpens the minds of other Bank staff. The Research Unit ensures that as an institution the Bank does not isolate itself and become inward-looking and self-satisfied. The third measure is to ensure that the Bank’s governing bodies and Bank staff work together as a team. Most of the literature on “making good decisions” focuses on the composition of the governing board (external vs. internal and governance by experts vs. general governance expertise) and work structure (collegial committees vs. individualistic committees). Just as important is how the governing board manages to make the most of staff expertise. If an institution like the central bank slowly slips into mediocrity, it will not be discovered until it is too late. 12  BIS central bankers’ speeches

We will carry out more thematic reviews of financial advisory firms’ consequence management frameworks to assure us that investor complaints are investigated in a fair and timely manner. 13 The reality of course, is that no amount of regulations nor supervision can prevent wrongdoings. To try to do so would require a large volume of pre-emptive rules as well as unlimited supervisory resources. Both situations are neither possible nor desirable. 14 This is why MAS also places importance on our enforcement actions. We will not hesitate to investigate and take errant financial institutions or their representatives to task for breaches of our law and regulations. We have issued prohibition orders against individuals for a range of misconduct, from mis-selling to dishonesty and fraud. Our message is clear— improper or illegal conduct have no place in our financial sector. Importance of market discipline 15 This brings me to the second topic. Market discipline. 16 As with our enforcement actions, market discipline can play an important role in shaping behaviour. It creates a strong incentive for financial institutions to conduct their business in a fair, transparent and responsive manner. A firm or its representatives with a poor record will deter prospective clients and investors. Similarly, investors will avoid companies that have poor standards of governance and disclosures. In other words, investors will penalise those that have fallen short, and reward those that have fared well. 17 To allow market discipline to work, different participants in the eco-system must play their part.
UK inflation performance That brings me to the final area where the UK economy has performed very differently to expectations last summer – headline inflation. The UK has just experienced the second significant upward spike in inflation in the last couple of years. Since the beginning of 2008, when the financial crisis and the ensuing recession might have been expected to push down inflation, consumer price inflation in the UK has averaged 3% – above the 2% target and more than one percentage point higher than average CPI inflation in the pre-recession period of growth. Our inflation rate is clearly influenced by external factors in the world economy, such as a volatile oil price, and these have clearly made the control of inflation more difficult over the last two or three years. But if these global forces were solely to blame for higher inflation, they would be having a similar effect in other major economies. As Chart 6 shows, the US and the euro area have seen lower and more stable inflation over the last couple of years, with inflation averaging around 1¾% since the beginning of 2008. US inflation has recently been pushed up to over 2% by higher petrol prices, but to a much lesser extent than in the UK. 5  According to the Labour Force Survey measure, unemployment peaked at 11.9% in mid-1984 and 10.6% in early 1993. Approximately two years after the start of the recession in both cases, unemployment was 10.2% at end-1981 and 10.4% at end-1992.

Regional and international policies on environmental management, governance, and conservation have an important role to play in this area, as environmental decisions of one economy may adversely affect other economies. The achievement of environmental goals will facilitate the achievement of other MDGs. Equally important are transfers of technology that is friendly to the environment as globalisation takes root. 8  BIS Review 74/2004
What was new prior to the crisis was the extent to which maturity transformation and financial intermediation began to take place outside of commercial banks. This activity occurred largely without the types of safeguards – robust prudential regulation, deposit insurance, lender of last resort – that have safeguarded the commercial banking system from the types of widespread panics and runs that are capable of destabilizing the entire financial system. The risk created by this gap in coverage was not well recognized by regulators or the private sector. Market participants had little incentive to internalize the negative externality of run-risk created by their collective choice of finance and made erroneous assumptions about the liquidity of asset markets and the capacity and willingness of banks to distribute central bank liquidity to the wider financial system during periods of stress. 3  A repo is a sale of securities coupled with an agreement to repurchase the securities at a specified price on a later date. 4  Market makers are institutions such as securities brokers and dealers that buy and sell securities on behalf of customers. Market making accommodates the asynchronous arrival of sellers and buyers, thus providing liquidity to financial markets. 5  Conduits are bankruptcy-remote, special purpose vehicles that fund pools of securities in short-term funding markets. The securities might consist of loans, mortgages, receivables and securitized products such as asset-backed securities (ABS).

François Villeroy de Galhau: Challenges for France’s economy and financial sector in 2016 New Year Address by Mr François Villeroy de Galhau, Governor of the Bank of France, Paris, 18 January 2016. *  *  *  Ladies and gentlemen, Thank you for coming here today to this magnificently restored Golden Gallery. This is the first time that I am giving this address as Governor of the Banque de France, but it is an auspicious tradition that brings us together. I would like to start by extending my warmest wishes to you, your colleagues and your institutions. 2016 has already been marked by volatility: weak financial markets and commodity prices, from China and the Middle East; political uncertainty in Europe, in Southern Europe, in Eastern Europe, North-Western Europe with the British referendum, and even in Central Europe with the refugee crisis. It is our duty to be vigilant, but we must also, on the one hand, distinguish real information from background noise and real challenges – and there are no shortages of them – from the sensational and sometimes excessive statements at this start of this year; on the other hand, in the face of current volatility, we must stick to our mediumterm objectives. This evening I will not discuss the Eurosystem’s monetary policy as we are in the “silent period” leading up to the Governing Council meeting this Thursday. Such longterm strategies also apply to the reforms in Europe and in France.
1  Testimony of Ben S. Bernanke, Nomination hearing before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, November 15, 2005. 2  Remarks by Governor Edward M. Gramlich, Federal Reserve Board, “The Politics of Inflation Targeting”, Paris, France, May 26, 2005. BIS Review 80/2006  3  Norges Bank’s practice in this respect is in line with the recommendations of leading academics in the field of monetary policy, such as Professor Lars Svensson 3 : “… announcing the optimal projection – including the instrument-rate projection – and the analysis behind it would have the largest impact on private-sector expectations and be the most effective way to implement monetary policy.” Norges Bank’s interest rate projection is based on seeking to achieve an interest rate path that provides a reasonable balance between the objective of stabilising inflation at target and the objective of stabilising developments in output and employment within a reasonable time horizon, normally 1 – 3 years. Interest-rate setting is also assessed in the light of developments in property prices and credit. Norges Bank forecasts inflation, output and the interest rate simultaneously. There is considerable uncertainty associated with the estimates of capacity utilisation in the economy (the output gap), and there is no simple relationship between developments in capacity utilisation and developments in inflation. It cannot therefore be argued with great conviction that it is possible to identify one particular interest rate forecast that provides the indisputably “best” trade-off in monetary policy.

The inflation target may be formulated as an interval, for example 1-3 per cent, as in New Zealand or, as in Norway, as inflation of close to 2.5 per cent over time. Partly owing to various disturbances to the economy, inflation cannot be expected to remain at target constantly. Central banks have somewhat varying formulations as to how rapidly inflation should be brought back to the target. Some central banks state that inflation should be brought back to target within a “reasonable time horizon” or “over the medium term”. Others have quantified that the inflation target should normally be attained within two years, as in Sweden, or as in Norway, where the interest rate is set with a view to stabilising inflation at the target within a reasonable time horizon, normally 1 – 3 years. In practice, the monetary policy conducted by most central banks is nonetheless similar. They orient monetary policy towards maintaining low and stable inflation. All central banks will reduce their policy rate when there are prospects of low inflation in the medium to long run and raise it when there are prospects of high inflation. What distinguishes Norges Bank from other central banks? Monetary policy in Norway is in line with the monetary policy conducted by a number of central banks in the OECD area. One difference, however, is that Norges Bank is conducting monetary policy in an oil economy.
Chart 10 Survey measure of businesses’ price expectations Balance of respondents expecting higher prices, BCC Survey Manufacturing  50  Services  40 30 20 10 0 -10 -20 -30  1997  1999  2001  2003  2005  2007  2009  2011  Source: British Chamber of Commerce  7 8  12  See Sentance (2011) for example. For example, Orphanides and Williams (2005) argue that changes in the unemployment rate provide a better guide to demand pressure than the level of unemployment because of uncertainty about the equilibrium rate of unemployment. BIS central bankers’ speeches  What we can observe more clearly is how the pricing intentions of businesses and the rate of price increases they are able to secure are responding to changes in the demand climate. And this evidence does not seem to support the view that the pressure of demand is bearing down heavily on inflation at present in the UK, even when allowance is made for cost increases. Chart 10 shows a survey-based measure of pricing intentions from the surveys conducted by Chambers of Commerce around the UK. This shows that expected price increases are currently running at relatively high levels in both manufacturing and services, and that there has been a significant turnaround in the pricing climate since the trough of the recession in 2009. Another indicator which suggests that domestic demand pressures are exerting limited downward pressure on inflation at present is the rate of inflation in the services sector.

In the debates we have had within the MPC over the past year, there appear to be four key areas where these differences of judgement arise, and which – so far at least – have led me to a different conclusion on monetary policy from the majority on the Committee. These are not new issues in that they have featured throughout my time on the MPC and in many earlier debates on UK monetary policy. But the current economic situation has brought them into sharper focus. Issue 1: The powerful influence of the global economy The first of these key issues I would highlight is the way in which the MPC takes into account the powerful influence of global economic trends and their impact on the UK economy. The way in which the global economy affects the economic outlook for the UK has been a major theme of my speeches and interviews since my very earliest days on the MPC. The UK economy is very open to international trade, with imports and exports combined accounting for over 60% of GDP. We are also the second most important global economy after the US in terms of flows of international direct investment. The UK is home to one of the most important global financial centres in the world – London.
Chilean exports performed well during 2018, partly reflecting an increase in volume exports from all economic sectors in general. Worth noting were shipments manufacturing products, which reached their highest nominal growth since 2011, supported also by the favorable evolution of the international prices of many of these products (figure 7). IV. International scenario  Internationally, there has been a more marked slowdown in growth in the main economies. The data was particularly weak in the Eurozone, with a significant adjustment of trade inside and outside the region in the fourth quarter of 2018. In China, growth went from 6.8% in the first quarter, to 6.4% in the fourth. Moreover, concerns about how intense this global deceleration may become have been exacerbated. Different shortterm activity indicators underperformed the market forecast: the outlook for firms in the manufacturing sector (PMI) has deteriorated, manufacturing output has slowed or even contracted in several economies and international trade has weakened (figure 8). Preoccupation over the weakening of the economies, together with lower inflationary pressures and high financial volatility, resulted in an increase in monetary and/or fiscal stimuli in several countries. In the US, the Federal Reserve took a considerable turn in its monetary policy stance, showing itself open to maintaining its  4  expansionary orientation for some time longer, in contrast to the tighter signals emitted up to the third quarter. This led to a significant decline in US long-term interest rates. which has even translated into reversal of the US yield curve (figure 9).

Our analysis identifies three key factors: first, there are differences in the goods component of the CPIEFE, which point to a lower transfer to local prices from the peso depreciation throughout 2018. This may be explained by the fact that during this period the variation of the peso/dollar parity responded to movements of the global value of the dollar, as opposed to past parity variations (e.g. in 2017) that responded to idiosyncratic shocks to Chile (figure 2). The difference in the pass-through coefficient of forex variations to inflation according to the origin of the former was widely documented in a box in the March 2016 Report and today we see it reflected in the recent behavior of inflation. Second, there are also differences that could be more linked to supply factors in some markets of products and services. One example is the increased competition in the car industry, as well as the emergence of lowcost alternatives in passenger air transport, as seen in the behavior of the CPIEFE for services. The same applies 2  to the increased competition in special offers of telecom packages mobile phone services. Some of these phenomena have been captured by the new CPI thanks to some of its methodological improvements (figure 3). Third, the labor market presents greater slack, resulting from the massive immigration of recent years. Last December, the INE published the new population projections that use information from the 2017 Census, which ratified the significant increase in the immigrant population beginning in 2015.