samchain/econo-pairs-v1 huggingface dataset:
7  The main measures with a direct budgetary impact include the € State-funded discount available to all citizens on every litre of fuel purchased (from 18 April to 30 June), the existing discounts on energy taxes being extended to 30 June, the offsetting measures and direct support for the transport sector and electricity-intensive industries (amounting to € billion) and the plan to take in refugees (with a budget of € billion). Need for an incomes agreement There is an additional dimension to the response to the current situation, one that is highly specific to the present shock and of the utmost importance. Specifically, as I have explained, the attack on Ukraine has exacerbated the geopolitical tensions that were already driving steep price rises in energy commodities, the bulk of which we import from abroad. This increase in the price of imported energy amounts to a loss of income for the Spanish economy. And as I have reiterated on a number of occasions, lower income for the economy as a whole inevitably entails a reduction in its agents’ income. Against this background, these agents (essentially firms and households, but also general government) would be well-advised to internalise this reduction in national income and reach a burden-sharing agreement, so as to avoid triggering a price-cost feedback loop.

It calls for an incomes agreement between workers and employers under which everyone emerges better off in the medium-term, although everyone must take a hit in the short term. The widespread use of automatic indexation clauses in public expenditure must also be avoided. In a climate as uncertain as the current one, an agreement of this nature would provide a very valuable dose of stability and certainty, allowing the duration and costs of the current inflationary shock to be kept to a minimum and paving the way for the necessary economic adjustment, generating more jobs and improving the welfare of the general public. The performance of our economy in the coming years in large part rests on our ability to reach these difficult agreements.
For Bank A, not knowing the links in the chain means that judging the default prospects of Bank B becomes a lottery. Indeed, in some ways it is worse than a lottery, whose odds are at least known. In this example, Bank A faces uncertainty in the Knightian sense, as distinct from risk, about the true network structure. Counterparty risk is not just unknown; it is almost unknowable. And the higher the dimensionality of the network, the greater that uncertainty. It is possible to formalise this intuition with some simple numerical examples. 17 Consider two states of the world, pre-crisis and crisis. And consider the impact of network complexity on CDS pricing. Once we introduce Knightian uncertainty, asset prices are no longer determinate; they are defined by a range rather than a point. So the range of equilibrium CDS spreads can be taken as a metric of the uncertainty, and hence distortion, arising from different network structures. Chart 4 plots a pre-crisis world where it is assumed that counterparty default probabilities, and the uncertainty around them, are low. Subject to those assumptions, it illustrates how the range of CDS spreads is affected by Bank B’s number of counterparties. Larger numbers of  17  The following is based on work in progress at the Bank on asset pricing under network Knightian uncertainty, by Sebastiano Daros and Kemal Ercevik. 8  BIS Review 53/2009  counterparties are marginally beneficial. There is a “law of large numbers” benefit.

The real exchange rate of the króna is somewhat below its likely long-term average, although it has risen in the past year. 6  BIS Review 138/2010  As economic recovery gains pace, the outlook for capital account liberalisation improves. Recovery tends to be accompanied by increased inflow of foreign capital in the form of credit or direct investment. Significant inward foreign direct investment could set the stage for removal of the controls. Although suggestions that recovery began late in 2009 or in the first half of 2010 have proven to be a mirage, a number of indicators imply that Iceland has hit bottom or is close to it, and that growth will resume in the latter half of this year. But the pace of the recovery will depend greatly on our success in attracting foreign capital for exportgenerating investment. The main objective of the IMF programme is to build confidence in Iceland’s economy and economic policy. If that confidence existed now, it would be possible to lift the controls today. Considerable discussion has been devoted to the instability of foreign capital that could flee as soon as the controls that hold it in place are reduced or eliminated. Although the magnitude of foreigners’ frozen ISK assets is broadly known, information on non-resident retail owners of ISK assets is largely hidden.
I don't know whether or not this is a good comparison, but it is certainly a huge project. Starting on 1 January next year, almost 15 billion banknotes and 50 billion coins will be put into circulation. Up until 28 February the euro banknotes and coins and the old national ones can be used parallel to one another, but with effect from 1 March the euro, and only the euro, will be legal tender throughout the euro area. The changeover is not merely a question of replacing old banknotes and coins with new ones in euro; it also involves all manner of changes from parking meters and new values on stamps to converting prices and wages. The fact that the euro will soon make the transition from the electronic world to the more tangible world of physical notes and coins has a strong symbolic value for the political endeavour to bring the countries of Europe closer together. It will also make it easier to compare prices of goods and services across the entire spectrum throughout the euro area. It will be interesting to see how this contributes to reduced price differentials. Firms will need to consider their price-setting strategies and costs in the production and distribution chain. At the same time, it is important to emphasise that the major step in the economic integration process was taken back on 1 January 1999, when eleven countries irrevocably fixed their exchange rates and the euro began to be their currency.

In just over three months’ time, we have got more than two million registrations for FPS. Another important development is the promotion of virtual banking. We have received about 30 applications for our virtual banking licences and we hope to begin granting the first batch of licences within this quarter. In a short span of a few years, we have gone through a very high speed journey into Fintech, and I am sure that there is a lot that we can share and discuss in the later panel on new finances. 11. Another exciting development is green finance. The French government issued the first sovereign green bonds in 2017, which set an important market benchmark. Hong Kong is also actively promoting its green finance platform. In fact, in the first three quarters in 2018, 28 green bonds were issued in Hong Kong, with an aggregate size of over $ billion. The HKSAR Government is launching a $ billion Government Green Bond Programme and the first green bond will be issued later this year. With France being a forerunner in green finance and the third largest global issuer of green bonds, we look forward to sharing experiences and collaborating with Paris in this area. 12. This is a quick overview of the recent developments in Hong Kong and the new opportunities ahead. I am sure the industry experts here today would have a lot more to share on these topics in the panel sessions, and I hope you will have a very fruitful discussion. 13. Thank you.
However, confronted with the zero lower bound – that is, the impossibility of using conventional monetary policy to do more – many central banks have supplemented their traditional policies with “unconventional” measures, often in order to impact long-term rates. Central banks do so by altering the composition of their balance sheets (credit easing), or by expanding the balance sheet, i.e. by increasing liquidity via one form or another of asset purchasing (quantitative easing, QE) (slide 7). There is evidence to suggest that these measures are having an impact on private sector borrowing costs. Often as intended, its effect has varied from one asset to the next. In the case of the Bank of England, the vast majority of assets purchased were gilts, and, analysis so far indicates that, gilt yields were some 100 basis points lower than they would have been without QE purchases (slide 8).5 Several US-centred studies6 also estimate that QE measures had a similar effect there.

These are all ways to use inflation targeting in a world of larger shocks. The key point is that they have required careful adaptation of the approach to monetary policy – evidence that the world doesn’t and should not stand still. In conclusion, I have pointed to four important areas where monetary policymaking is having to adapt. Our decision-making has become more multi-dimensional, with decisions on policy setting and the set of tools that should be available. We should always keep these decisions separate in terms of signalling. Second, the challenge currently is to raise the rate of inflation to target in the midst of a huge shock. This is just as important and underlines the symmetrical nature of our framework. Third, responding to a shock of this scale has led to debate around what it means to be an independent policymaker. This debate is misplaced – the focus must be and always is on the inflation target, the outcome. Last, central banks’ approach to inflation targeting has had to be adapted in the face of the much larger shocks we have been experiencing: But, that is in the nature of effective policymaking. Thank you. I am grateful to Andy Haldane, Andrew Hauser, Michael Saunders, Jan Vlieghe, Silvana Tenreyro, Ben Broadbent, Richard Harrison, Karen Jude, Nick McLaren and Laura Wallis for their assistance in helping me prepare these remarks. 3/3  BIS central bankers' speeches
Ils doivent poursuivre leurs efforts afin d’être capables de rejoindre l’UEM dans de bonnes conditions, ce qui est de leur intérêt et de celui des pays membres de l’Union européenne. En ce qui concerne la coopération internationale, la zone euro va également jouer un rôle essentiel. Elle représente une zone de stabilité et de croissance économique durable pour quelque 290 millions de citoyens et elle aura certainement une influence déterminante au sein de la communauté internationale. L’avènement de l’euro va faciliter la coopération internationale en matière économique entre les principaux partenaires : États-Unis, Japon et zone euro. Chacun de ceux-ci est en mesure de parler au nom de régions dont l’importance économique est significative et qui sont exposées à des degrés relativement similaires aux chocs pouvant affecter le système financier international. C’est pourquoi l’euro devrait conduire à une relation plus équilibrée dans laquelle chacun des partenaires assumerait sa part de responsabilité dans la construction d’un environnement mondial stable. Ce changement institutionnel majeur dans l’architecture du système monétaire international a rendu nécessaire une représentation internationale de l’Eurosystème. c) La représentation internationale de l’Eurosystème Le SEBC est déjà représenté auprès des institutions et des forums internationaux. Même si certaines questions sont encore en voie de règlement, des accords ont été conclus avec le Fonds monétaire international (FMI), la Banque des règlements internationaux (BRI), l’Organisation pour la coopération et le développement économique (OCDE) et dans le cadre du G7 et du G10. Plus récemment, le FMI a accordé le statut d’observateur à la BCE.

That said, I accept Hélène’s suggestion that there may be other good alternatives, such as operating with less financial leverage and the increased use of macroprudential policy, including more aggressive stress testing. Also, the current regime—in which countries mostly have to self-insure against external shocks—seems inefficient. I believe that a regime with more risksharing across countries could be beneficial for the global economy. Thank you for your kind attention. 3/4  BIS central bankers' speeches  The Andrew Crockett Memorial Lecture, 2017 1 See “Spillovers from Unwinding Monetary Support in Advanced Economies,” IMF, 2014 Spillover Report, Chapter  2. See also, “On the Receiving End: External Financial Conditions and Emerging Market Growth Before, During and After the Global Financial Crisis,” World Economic Outlook, April 2013, Chapter 4. 2 See FOMC issues addendum to the Policy Normalization Principles and Plans. 4/4  BIS central bankers' speeches
Even though the krone has depreciated from its strong level at the beginning of the year, competitiveness is still relatively weak after many years of high wage growth. In addition, vacancy rates for commercial premises are high and rents have fallen. Another risk is that wage growth may accelerate again, as it did following the interest rate reductions in 1999. This risk is also being reduced by a slackening labour market. Unemployment in 2004 will probably be on a par with the level in 1996 and 1997. Annual wage growth in these years was a little less than 4½ per cent. The low pay increases in this year’s wage settlement also indicate that the social partners have placed more weight on the effects of pay increases on future developments in interest rates, the krone exchange rate and employment. In addition, activity in public and particularly sheltered industries is probably still feeling the impact of the expensive pay increases last year and earlier years. We expect that in light of the experience gained in 2002, public entities will exercise more caution in future wage settlements. Developments in the krone exchange rate represent another source of uncertainty. The relationship between the krone exchange rate and the interest rate differential against other countries is not necessarily stable over time. Themes in international financial markets shift. However, the depreciation of the krone this year is contributing to stabilising inflation and activity in the economy.

If one also takes into account the depreciation of the domestic currency against $ as at end-November, the stock market of Thailand has fallen by 71% from its peak this year, Malaysia by 69.7%, Indonesia by 64%, Korea by 61% and BIS Review 116/1997  -2-  the Philippines by 61%. Even Singapore’s stock market suffered a 35.7% drop in $ terms, which is comparable to the 37.7% fall in the Hang Seng Index. Only Taiwan recorded a lower fall of 31%, whereas the Nikkei also lost 28%. I quoted these figures in order to illustrate the magnitude of the turmoil and its contagion effects on the asset markets in the region. Singapore, which is a strong economy and given a triple-A rating by the international rating agencies, adopts a managed floating rate regime, but such regime has not insulated its asset markets from the regional turmoil. In terms of interest rates, Singapore’s one month interbank rate rose by almost 5 times to 16% on 27 October from around 3.6% on 2 July. Singapore’s one month rate is now 6.25%, which is still significantly higher than the level in early July. In the case of Hong Kong, the one month rate rose also by around 5 times from 6% in early July to a high of 30% on 23 October. At present the one month rate in Hong Kong is around 7.5%.
Low policy rates boost credit growth and asset prices in conventional accounts of the monetary transmission mechanism, but other work has also highlighted the potential for low safe interest rates to  2  The potential role of high global savings and the consequent downward pressure on long-term interest rates is another factor often mentioned (Bernanke, 2005). 2  BIS central bankers’ speeches  encourage a shift into riskier assets (for example Claudio Borio and Haibin Zhu, 2008)3. While the contribution of monetary policy to the crisis is controversial – I shall say a bit more on this later – I find plausible the idea that the long period of relative macroeconomic stability lulled investors into a false state of security. This leads to my second lesson from the crisis: the achievement of price stability does not guarantee the maintenance of financial stability and, without further measures, may possibly even compromise it. My next lesson follows on from this and relates to deficiencies in our analytical framework. The canonical macroeconomic model for thinking about the design of monetary policy is that of the New Keynesian synthesis (see Richard Clarida, Jordi Gali, and Mark Gertler, 1999; Michael Woodford, 2003). This focuses on the consequences of real and nominal rigidities in goods and labour markets, which give rise to a short-run trade-off between inflation and activity. The dynamic stochastic general equilibrium models in use in many central banks typically embody this synthesis, though usually with quite a few knobs and whistles added on.

On the government level, borrowings would really be handy when it wants to keep up public expenditure and to enhance welfare payments, healthcare and the military. This would not only improve the standard of living and employment, but also help boost national power and speed up economic growth. The list of wonders that borrowed money can bring goes on, but we almost forget there is a catch, that is, debts must be repaid somehow some day; and the higher the interest rates, the more we will have to pay back over time. For individual borrowers, except for those with a handsome pay rise, they can only hope to pay off earlier debts by reducing consumption in the days ahead. Well-run enterprises should have no problem servicing their debt if their business expansion financed by loans does indeed enhance their productivity and competitiveness. Likewise, heavily indebted governments will be able to service their debts only when they have sustained economic growth and rising tax revenues. In other words, the ability to repay debt hinges on increased productivity and improved income, or otherwise, reduced future spending and increased savings. But despite the substantial GDP growth in major industrialised countries in the past 30 years, debts in these countries have piled up concurrently at an even more alarming rate. Advanced economies from across Europe and the US to Japan have all sought to boost economic prosperity, standard of living and employment with ever more borrowings and increased consumption and public spending.
4 I would like to take some time this afternoon to explore some of these issues, many of which will resurface over the course of this two-day conference. 2. Early demands: the historical context  5 First some history. How did central banks come to assume their “central” role in the financial infrastructure? 6 Internationally, Venice claims a key role in the story, but I will start later with the activities of goldsmiths in 17th century London. Starting from their custody business, goldsmiths began to settle transactions between merchants, across their books or via the transfer of deposit receipts – the early bank notes. Merchants were thereby able to settle obligations with one another without having to carry, count out and value coins: a welcome development, considering that a £ sterling bag of silver coins – a commonly used value for notes – weighed over 30 pounds (14kg for those in the audience baffled by imperial measures)! 7 Over time, so as to accommodate transfers between customers of different “banks”, the banks started accepting claims on each other and, once they found ways to settle these claims, established the first British interbank payment systems. 8 So what were these early settlement mechanisms? At first, banks started settling interbank claims using gold and silver coins. But these were in short supply and, again, costly to transport and exchange. 9 Banks thus eventually innovated by switching to settlement in assets convertible into gold and silver.

I will start by discussing issues of financial stability, but at the end I will also talk about questions concerning the inflation target. The property market consists of two markets; a market for commercial property and a market for houses and tenant-owned apartments. I intend to begin by discussing the commercial property market. Commercial property The commercial property market has in important link to financial stability. The reason for this is that property companies are the largest individual borrowers from the banks, which in turn play a central role in the financial system. Approximately 20 per cent of the four major banks’ lending to the Swedish non-bank public is to property management companies. If property management companies experience payment problems, this could have serious effects on the banking system in the form of loan losses, like those we experienced at the beginning of the 1990s (Figure 1). Experiences have shown that financial crises often stem from property companies with substantial loans and a stock of commercial property. The high exposure and the fact that property is often used as collateral for loans justify regular analyses of the property sector by the Riksbank. These analyses focus on the markets for commercial property in Stockholm, Göteborg and Malmö, as office premises in these metropolitan areas are predominant in the Swedish property companies’ property stocks. In recent years, turnover of properties has risen significantly. The buyers are not solely Swedish investors; foreign investors have also showed considerable interest over the past few years.
First, and as already stated, low risk premiums and very low volatility led to a strong increase in leverage on international financial markets and a big appetite for risk in the search for high yields, a tendency in which certain financial institutions in some countries participated. Also, and in relation to the foregoing, the development of a banking model focusing on the origination of loans for their subsequent distribution on the financial markets, underpinned by the securitisation of assets through certain complex structured products and by the use of off-balance sheet investment vehicles, introduced inappropriate incentives as regards the granting of financing and the subsequent management of the associated risks. In my view, it is these latter elements which explain the intensity and speed with which the turbulence has spread. Starting from this idea, I shall draw five lessons which I consider highly relevant for the future. I will then evaluate the Spanish banking system in relation to each of them in order, finally, to identify certain tasks which we should, each from our own area of responsibility, address so as to limit the adverse consequences for the Spanish economy of the international financial market turbulence. First lesson: on the originate-to-distribute model In recent years some banking systems have developed a banking model based on the origination of loans for subsequent distribution on the financial markets. This type of model has been largely underpinned by asset securitisation, a process that enables bank loans to be batched and converted into marketable products.

It’s useful that governments look into that and look at the various tools that could be effective and which could correspond to the various goals that they want to pursue, including making sure that the policies followed by member states receiving EFSF support are aimed at restoring a sound fiscal and the appropriate competitiveness. 2  BIS central bankers’ speeches