samchain/econo-pairs-v1 huggingface dataset:
12.07.2019  Youth knowledge and financial education in Spain BBVA EduFin Summit 2019 Pablo Hernández de Cos Governor  Good morning, ladies and gentlemen. I would like to begin my address by expressing my satisfaction at the organisation of this conference. Its aim is to make society and market participants aware of the significance of financial education and of the importance of improving citizens’ financial literacy. I also wish to thank the organisers for this invitation. It gives me the opportunity to set out the Banco de España’s view on such a relevant topic. It is not overstating matters to say that, in my opinion, the level of financial literacy directly affects citizens’ welfare, their capacity to choose, and the capacity of the financial sector to offer their products and to strengthen their reputation. The goal of financial education is, precisely, to ensure that people are able to take responsible financial decisions throughout their lives, in awareness of their rights and obligations as financial product users. Financial education is thus a vital tool for the authorities that oversee the protection of financial users. It adds to and complements the traditional tools of bank regulation and the supervision of bank solvency and conduct. And ultimately it also contributes to financial stability. I would like to focus today on certain aspects of financial literacy in Spain, from an internationally comparative perspective. Further, I would like to offer some conclusions in relation to youth in society.

This group is closely tied to some of the initiatives that are part of the Financial Education Plan (FEP), about which I will also speak. I shall be beginning in a somewhat dismal tone, “dismal” being the label that has been attached to those of us practising as economists since the times of Thomas Carlyle, back in the 19th century. And the situation is that, despite all the efforts made in terms of private initiatives (as exemplified by this EduFin Summit, now in its third edition) and by the public sector [specifically the FEP initiatives under way since 2008 jointly launched by the Banco de España, the CNMV (National Securities Market Commission) and other collaborators], and also despite the general increase in the educational level in Spain, we have not managed to instil the youngest cohorts with better financial literacy than we have the population as a whole. Adult financial literacy in Spain, from an international perspective We are, at least, now in a position to make this diagnosis. This is thanks to the information drawn from the recent Survey of Financial Competences, an initiative of the Banco de España and the CNMV, as part of the FEP. Thus, since last year, our knowledge on the status of Spaniards’ financial literacy and on their interaction with the financial system has improved decisively.
Further, measures have been set in place to mitigate the effects of banking crises, when they occur, on the public coffers and the economy in general. As regards solvency requirements, the reform agenda has practically concluded, while awaiting the Basel Committee’s final agreement on the so-called Basel III accord. Today I shall focus on the second objective of the international reform agenda, i.e. on the package of measures aimed at smoothing the management of bank crises while preserving financial stability and minimising the use of public funds. At the base of the regulatory reform in this area is the work of the Financial Stability Board (FSB) conducted at the behest of the G-20 following the Lehman Brothers debacle. In 2011 the FSB published the Key Attributes of Effective Resolution Regimes for Financial Institutions, which lay down the principles for ensuring an orderly resolution of banking institutions. Indeed, the Key Attributes specify the powers and tools the administrative authorities should have to see through the orderly resolution of non-viable banks, ensuring the maintenance of their core functions and their restructuring at the least possible cost to the taxpayer. The Key Attributes further envisage the availability of recovery and resolution plans for each institution that set out a roadmap ahead of a potential crisis situation. Lastly, they establish the principle whereby bank shareholders and creditors are those who should bear the bulk of the costs of the crisis.

Ladies and gentlemen, The significant importance of “credit reporting” is widely recognized today, particularly in assessing borrowers’ credit risk, reducing loan defaults and expanding access to bank financing. Experience has shown that countries with credit bureaus have been able to address the problem of “asymmetric information” and substantially improve the quality of credit institutions’ portfolio. However, the recent crisis has highlighted the limited knowledge of counterparties’ real health and revealed the pressing need for more granular, interconnected and flexible statistics. For central banks and supervisors, this need is creating a new paradigm for monitoring and evaluating financial stability, based on an integrated infrastructure of credit information sharing. This infrastructure is based on two core pillars:    the first is a “credit bureau” system that helps credit institutions to assess risks; and the second is a “central credit registry” managed by central banks for their institutional functions. Ladies and gentlemen, Let me give you a brief overview of the steps that Bank Al-Maghrib has undertaken over the last ten years to develop its financial information system and enhance its convergence towards international standards. In close cooperation with the IFC, the Bank put into operation in 2009, under the first pillar, the 1st Credit Bureau. This was a decisive step towards the establishment of a modern and state-ofthe-art credit reporting infrastructure. Indeed, the credit bureau has become an essential tool for lending decisions for individuals, businesses and micro-credit associations.
During the previous discussions I had the opportunity to point out that these questions had been raised at least twenty years before, and they have been answered repeatedly, even in the last months and weeks. For example, just a few months ago the Economic and Social Council to the National Assembly approved an analysis about the implications of Bulgaria's euro area accession for the economic development, inflation and incomes in the country. This analysis was conducted at the request of the Speaker of the National Assembly and was brought to the attention of the members of Parliament. Let me highlight that by law the Economic and Social Council is a consultative body expressing the will of civil society organisations regarding the economic and social development, with its members representing trade unions, employers, industry organisations, organisations of pensioners, the socially weak and the disabled, women's organisations, as well as distinguished independent scientists who are specialists on the issues of the economic and social policy. The conclusion made by the Economic and Social Council, which represents such a wide variety of civil society organisations, is that the benefits from Bulgaria's euro area membership far outweigh the risks and costs. 1/5  BIS - Central bankers' speeches  Quite recently, a collective monograph 'Challenges facing the Bulgarian economy on its way to euro area membership' was published by Sofia University to mark the 120th anniversary of the Department of Economics within the Faculty of Economics of Sofia University – the oldest department of economics in Bulgaria.

We are about a month and a half behind schedule only on this issue. The consultations that the Minister of Finance and I had last week show that the signing of such a Memorandum is still possible but this will urgently require at least two things: firm political support and a clear mandate of the central bank governor. The political decision on this issue comes with a price. Over the last months, and especially the last weeks, markets have been giving us very clear and warning signals. The price of Bulgaria's newly issued debt has been rising at an unprecedentedly high rate. This implies an enormous additional financial weight in the medium term, which  3/5  BIS - Central bankers' speeches  more acutely than before poses the question about the terms of funding Bulgaria's budget and economy. What is the connection with the topic under discussion? The connection is direct. If you read credit rating agencies' announcements, you will see that the key factor for Bulgaria to get a rating upgrade, i.e. for improved terms of its funding, is the successful implementation of the euro area accession process. As a reference point, after the decision on Croatia's accession was made, two credit rating agencies upgraded its credit rating by two notches even before Croatia actually joined the euro area. Thus Croatia's credit rating, which before the decision was one notch lower than Bulgaria's, now is one notch higher than Bulgaria.
Indeed, monetary policy was getting boring. 5 Monetary policy was unencumbered by financial stability considerations. To be fair, central bankers were not unconcerned about financial stability. But financial stability was seen as the preserve of prudential regulation and supervision. Academic thinking reinforced policy practice: the macroeconomic models central banks relied on did not map clear linkages between financial and real variables. 6 Economists warned that it was difficult to identify a financial bubble. How does one tell if the value of an asset reflected economic fundamentals or speculative fever? So, when faced with potential financial vulnerabilities, it was deemed better to clean up after a bubble had actually burst than to try to lean against suspected bubbles. 7 But beneath the still waters of macroeconomic stability, deadly financial whirlpools were forming. Financial imbalances built up steadily in the advanced economies from the mid-1990s to mid-2000s and culminated in the Global Financial Crisis of 2008/2009. The Crisis sent financial systems into a tailspin and plunged economies into recession. The cost of cleaning up after the bubble had burst proved extremely high. The “clean versus lean” debate has been re-ignited, and within the “lean” camp there are differences over how to lean. Monetary policy has become interesting again. Financial stability: what we know and what we don’t know 8 Following the Crisis, there has been growing consensus that it is important for central banks to pay more attention to financial stability. We know now that macroeconomic stability does not guarantee financial stability.

He argues that monetary independence is still possible, but because of the impact of financial globalisation, monetary policy carries a much bigger burden in trying to achieve both financial stability and purely macro objectives. 26 Recent Asian experience is illustrative. The exuberance in Asian asset markets and consequent build-up of financial risk in recent years has been exacerbated by the global search for yield in a zero interest rate environment. Raising policy rates may not sufficiently alter the level of risk-taking in these economies. •  In fact, paradoxically, a central bank that tightens monetary policy to stem financial vulnerabilities could perversely attract more capital flows into the economy, resulting in stronger credit growth and rising asset prices. 27 Third, it is not clear that monetary policy can fill all the cracks. Monetary policy flows into all the cracks no doubt, but some cracks are just too big to fill. 28 Financial vulnerabilities are not evenly spread across the economy. They tend to be concentrated in specific sectors and segments, such as in real estate. So, even when monetary policy has configured overall liquidity and risk-taking settings appropriately, specific pockets of financial market vulnerabilities, e.g. a property bubble, could remain. 29 Monetary policy is too blunt an instrument for addressing such specific risks to financial stability, and it can cause significant collateral damage on the rest of the economy if it tries to do so.
Such attempts are likely to impart an excessive activism to policy-making, such that interest rate decisions add volatility to the economy rather than stabilise it. In adopting an appropriate medium-term orientation, monetary policy-makers are accorded an extra “degree of freedom” in setting the policy stance. There can be several paths of interest rates consistent with the maintenance of price stability over the longer run. At least in principle, the choice of a specific path can be used to support broader purposes, without prejudicing the outlook for price stability over the medium term. This has been recognised by the so-called flexible inflation targeting literature. 10 This framework explicitly foresees the use of monetary policy to smooth developments in economic activity over the business cycle, while anchoring longer-term inflation expectations at levels consistent with price stability. In principle, the flexibility accorded to policy-makers by the medium-term orientation of monetary policy could be used in other directions, such as to contain financial imbalances or limit asset price volatility. The feasibility and desirability of such alternative approaches rests crucially on how monetary policy actions are perceived to be transmitted to the economy in general, and the price level in particular – in other words, on the perception of the structure of the economy and the monetary policy transmission mechanism. 2. The monetary policy transmission mechanism  The desirability of flexible inflation targeting was established using the canonical New Keynesian model.

5/5  BIS central bankers' speeches
The monetary policy easing is likely to contribute to the economy – and thus also inflation – picking up again over the medium term. Risks to the global economy remain tilted to the downside. Chief among them are still trade tensions and the possibility of the persisting weakness in manufacturing activity spreading to the economy as a whole. Swiss economic outlook  According to the initial estimate, the Swiss economy grew by 1.6% in the third quarter. This growth was primarily driven by manufacturing, where value added increased significantly thanks to strong growth in the exports of pharmaceutical products. The other industries in the manufacturing sector recorded a more modest expansion, in line with the slowdown in manufacturing worldwide. The labour market continues to be a mainstay of the economy. Employment figures rose again slightly, and the unemployment rate persisted at a low level through to November. GDP is likely to expand by around 1% in 2019, and the SNB expects growth of between 1.5% and 2% in 2020. The stronger expansion next year reflects the gradual firming expected in global economic activity as well as an exceptional effect. The latter stems from the fact that the forecast includes the revenue generated by major international sporting events, which is likely to increase growth by around half a percentage point. Monetary situation and inflation expectations  Let me now move on to address monetary conditions – that is to say, exchange rates and interest rates – as well as inflation expectations.

In order to generate innovation, innovative people have to be raised in Estonia, brought to Estonia - and kept in Estonia, hence the aim should be to create more high-productivity jobs. •  I maintain that being a part of Europe, we should become quality leaders since we have already lost the price leader position to Asia. This is undoubtedly easier to say than to do. Here we face the threat of outpacing the so-called natural development, which calls for step-by-step industrial development towards manufacturing products with increased added value - such a development is in fact currently under way in Estonia. On the other hand, the payback period of such investments is very long and the experience of several countries (including Finland and Ireland) has shown that success often arrives only decades later. Consequently - if it is our goal to become a quality leader, development activities in this direction should be launched as soon as possible. •  Here we come to the question, WHERE to start? The answer requires a good prediction or even a vision: which areas have enough potential in Estonia that are worth to be given systematic development priority. It is possible that due to its small size Estonia lacks any potential for developing high-technology industry since this would require the emergence of clusters. Even if we manage to develop our own high-technology industry, sufficiently high-level know-how will most likely emerge only in few fields. However, this does not mean that we should develop just a few areas.
MONETARY POLICY REPORT PRESENTATION BEFORE THE FINANCE COMMISSION OF THE HONORABLE SENATE OF THE REPUBLIC  Rosanna Costa Governor Central Bank of Chile 7 December 2022  The December 2022 Monetary Policy Report can be found at http://www.bcentral.cl  Introduction Mr. President of the Honorable Senate’s Finance Commission, senator Juan Antonio Coloma; senators members of this Commission, ladies and gentlemen, One more time, I begin by thanking the Commission for inviting the Bank to present our views on recent macroeconomic developments, their outlook and implications for monetary policy. It is this view that is presented in detail in the December 2022 Monetary Policy Report that we released this morning. This background is also the rationale behind the Board's decision at yesterday's monetary policy meeting. This is my fourth Monetary Policy Report, and I would like to pause briefly to look back at my first few months as Governor of the Central Bank of Chile. During this period, the institution has been significantly renewed. In February, Luis Felipe Céspedes joined the Board, followed in May by Stephany Griffith-Jones, two professionals with outstanding careers in the economic field. We have lived through a very difficult year in terms of inflation. In the March Report presentation, I stated that inflation and its outlook continued to rise and that it would reach around 10% by the middle of this year and then decline to 5.6% by the end of 2022.

With this, it has undone a considerable part of its excessive rise of the second half of 2021. Meanwhile, the consumption of non-durable goods also continues to fall, while the consumption of services is still growing steadily, consistent with the elimination of supply constraints after the lifting of sanitary restrictions (figure 7). Consumption has been adjusting in a context in which liquidity has been normalizing, job creation is slow and real wages have been declining over the last year. In the labor market, total employment and the labor force have shown low dynamism during 2022. In the most recent period, the decrease in formal employment stands out, offset by increased participation of informal salaried employment and self-employment. In addition, some labor market indicators point to a further deterioration. For example, job vacancies have declined and the employment outlook for businesses and consumers remains weak (figure 8). 3  The current account deficit rose to 9.9% of GDP in the last moving year. This is high, and is associated with both reduced private savings and higher investment. In a context in which consumption has been adjusting, the lower private savings can be explained largely by the negative effect of the worsened terms of trade on national income. The higher investment, as already mentioned, is mainly related to the dynamism of the machinery and equipment component. The still high transportation costs have also contributed to this increase.
If, instead, economic growth disappoints, inflation stays unusually low and the labor market continues to exhibit evidence of considerable excess slack, then lift-off will likely be pushed back in time. 1 With respect to the trajectory of rates after lift-off, this also is highly dependent on how the economy evolves. My current thinking is that the pace of tightening will probably be relatively slow. This depends, however, in large part, not only on the economy’s performance, but also on how financial conditions respond to tightening. After all, monetary policy works through financial conditions to affect aggregate demand and supply. If the response of financial conditions to tightening is very mild – say similar to how the bond and equity markets have responded to the tapering of asset purchases since last December – this might encourage a somewhat faster pace. In contrast, if bond yields were to move sharply higher, as was the case last spring, then a more cautious approach might be warranted. In terms of the level of rates over the longer-term, I would expect them to be lower than historical averages for three reasons. First, economic headwinds seem likely to persist for several more years. While the wealth loss following the financial crisis has largely been reversed, the Great Recession has scarred households and businesses – this is likely to lead to greater precautionary saving and less investment for a long time. Also, as noted earlier, headwinds in the housing area seem likely to dissipate only slowly.

Although I expected some slowing due to the rise in mortgage rates in the middle of 2013, the extent of the slowdown has surprised me given that the recent pace of housing starts – roughly 1 million per year – is far below what is consistent with the economy’s underlying demographic trends. I think housing has been weaker than anticipated because several significant headwinds persist for this sector. First, mortgage credit is still not readily available to households with lower credit scores. Second, some people are coping with higher student loan debt burdens that have delayed their entry into the housing market as first-time homebuyers. This, in turn, makes it more difficult for existing homeowners to sell and trade-up. Third, there may be some ongoing difficulties increasing housing supply. The housing downturn was very deep and protracted. It takes time to shift resources back into this area. Also, in some markets house prices still appear to be below the cost of building a new home. Thus, in those markets, it remains uneconomic to undertake new home construction. Although I expect that  2  BIS central bankers’ speeches  the housing recovery will resume, the pace will likely be slow, especially relative to past economic recoveries. With respect to the outlook for prices, I think that inflation will drift upwards over the next year, getting closer to the FOMC’s 2 percent objective for the personal consumption expenditure (PCE) deflator.