samchain/econo-pairs-v1 huggingface dataset:
Chart 11 Distributions of cumulative 3-year GDP growth under typical conditions and with elevated debt and a wide current account deficit Distribution with typical conditions  Probability density 0.12  Distribution with elevated debt and wide current account deficit 0.10  0.08  0.06  0.04 -0.3% 0.02  0.00 -8  -6  -4  -2  0 2 4 6 8 10 12 Cumulative GDP growth over 3 years (%)  14  Notes: Chart shows the predicted distribution of the cumulative GDP growth rate over 3 years. The blue line is the predicted distribution when the change in household credit-to-GDP, the change in corporate credit-to-GDP and the current account deficit are at their historical average in the UK. The red line shows how this distribution shifts when household and corporate credit have increased by 10pp relative to GDP, and the current account deficit has widened by 2pp. Our work finds that if the economic earthquake comes after a 10% increase in household debt relative to incomes, the cumulative loss of output over the 3 years after the quake is 1.5%. If it comes after a 10% increase in corporate debt, the cumulative loss of output is 1%. And for every 1% of current account deficit before the quake, a further 0.5% of output is lost after the quake (Chart 12).

Market-based debt has accounted for all of the growth in the stock of debt to UK businesses since end-2007. Overall, that shift is positive for the resilience and stability of the system. Other things equal, £ of loss incurred in the non-bank financial system is almost certainly less disruptive to the wider economy than £ of loss incurred in the banking system. But without the right resilience, could the non-bank system also result in some damage to the economy in an economic earthquake? How should financial building standards adapt to the changing nature of the buildings in our economic city? 15  All speeches are available online at www.bankofengland.co.uk/news/speeches  15  Keeping up with a changing financial system Given the non-bank system’s growth and new-found importance, we face a challenge. There is little evidence of past performance to guide any assessment of the non-bank system. And it would not be sensible to wait until we have some. Our solution is to replace wait with simulate. So this is yet another area where we are developing cutting-edge work, this time to simulate how an economic earthquake could play out in the non-bank system.10 It is our version of what earthquake engineers call a ‘shake table’: a device for testing how models of new structures respond to tremors. The simulator considers generic markets – for equity, corporate credit, government bonds and some key types of funding and derivatives – and representative insurance, hedge fund and mutual fund sectors.
A weakening in domestic demand already reduced export quantities in the first half of the year, and we forecast that they will contract for a wide range of goods as of the yearend. The deterioration in the global growth outlook also affects investment plans. Though, certainly, 1/3  BIS central bankers' speeches  business sentiment depends not only on external factors but also on the business environment as a whole. In the first half of the year, growth in fixed capital investment slowed considerably, which is associated with, among other things, a rather sizeable drop in public investment. According to our estimates, even with a revival in national project expenditures in the second half of the year factored in, total growth of gross fixed capital formation will come in at no higher than 1% as of the year-end. Consumer demand continues to make a positive contribution to GDP growth. This year, the expansion of lending continues to offer strong support to consumption growth. Loans, however, cannot be the main driver of growth in demand. Consumption growth will remain slack as household incomes stagnate. This year, we expect it to come in at 1-1.5% range. We have also updated our medium-term baseline forecast. Now, we expect the dynamics of domestic and external demand to be more moderate in 2020–2021. The most notable revision has been made for export growth rates. This reflects the deteriorated world economic outlook amid rising trade tensions.

There are serious political choices here, and they are not for the central bank to make. I have set out in this talk many of the things that a central bank can do with its balance sheet. It can create central bank money, and does so in implementing monetary policy. It can also support financial stability. The Bank can use its operations to distribute money around the banking system when the inter-bank market is not operating properly. And it can provide emergency short-term liquidity support for the system or individual banks under operational and market stress by changing the size, the maturity and the type of collateral taken in its operations. And can even supply foreign currency in extremis. But, being without access to private sector savings, the Bank can not provide sustained, medium-term funding for banks, nor lend directly in size to the non-financial sector on a sustained basis. 16  More information is available at http://www.fsa.gov.uk/pubs/international/uk_rcb.pdf. BIS Review 126/2010  7  Credit supply and syndicated loans Finally, and especially given the nature of this conference, I want to touch on the supply of credit more generally. Despite various forms of support from the Bank of England and from Government, it is clear that the lending capacity of the banking system, in the UK and elsewhere, is impaired and will take some years yet to recover. Some banks need to continue de-risking and de-leveraging. Others, including new banks, are likely to grow.
Looking back over the past twelve months, nearly 400,000 jobs have been created across the economy as a whole – which compares very favourably with the rate of job creation in the decade before the recession.1 Chart 1 UK employment in recessions and recoveries Numbers employed rebased to 100 at cycle peak 102 101 100 99 98 97 96 95  1977 Q4 - 1983 Q4 1988 Q2 - 1994 Q4 2006 Q2 - 2011 Q1 *  94 93 92  -8  -6  -4  -2  0  2  4  6  8  10  12  14  16  Number of quarters from cyclical peak  *: Numbers employed for Q1 2011 proxied by that between Dec 2010 and Feb 2011. Source: ONS Labour Force Survey  As Chart 1 shows, the performance of UK employment has been much stronger through the recent economic cycle than we saw in the early 1980s and early 1990s – reflecting the flexibility of the labour market, the resilience of businesses through the recession and the impact of the recovery in demand over the past eighteen months. According to the latest estimates, UK employment is about one per cent down on its peak level in early 2008, compared to a reduction of 5–6% at the equivalent stage of the previous two economic cycles.

In response to these shock waves from the global economic and financial system, the MPC cut the official Bank Rate to 0.5% – the lowest level in over 300 years of the history of the Bank of England – followed by direct injections of money through the programme of Quantitative Easing. These policies, accompanied by similar measures around the world and government interventions to stabilise the financial system, succeeded in arresting the sharp downturn in demand in late 2008 and early 2009 and a recovery has been underway here in the UK and in other major economies since the second half of 2009. The bounceback in the global economy since the middle of 2009 has been particularly impressive, supported by strong growth in Asia and emerging markets, and stimulatory economic policies across the world economy. World GDP growth last year was 5% according to the IMF, well above the longterm average and much stronger than most forecasts were suggesting in early 2009 at the trough of the recession, when the IMF itself was forecasting that world growth would be less than 2% in 2010. Here in the UK, we have also seen the economy begin to recover from recession over the last eighteen months or so. As is the case with all economic recoveries, growth has not been even from quarter to quarter or across sectors of the economy.
This might be legal support, consultations, or any other services. We observe a variety of such services that are usually added to bank deposit and loan agreements. Currently, this right is only available in regard to voluntary insurance, that is, in a narrow range of financial services. We believe that this approach should be extended to almost all financial services. In order to mitigate such risks of incomplete information disclosure, we need changes to the laws. The second law allowing the establishment of requirements for the form of a bank deposit agreement has also been drafted. These laws were passed in the first reading. We are aware that you have a lot to discuss in the course of the spring session, especially taking into account that it will be shorter than usual. However, in my opinion, these are essential draft laws since they are socially focused. Therefore, we would be very grateful to you if you find time to consider them as soon as possible. I would like to thank you once again for the continuous and meaningful dialogue between the deputies and the Bank of Russia, in particular for the enormous work carried out last year when we needed prompt legislative decisions to protect individuals and companies against the aftermath of the pandemic. If it were not for such legislative changes, we would have been unable to make prompt decisions in our turn. Thank you for your attention. If you have any questions, my colleagues and I would be glad to answer them. Thank you.

This is also crucial. As these restructured loans, which were totally necessary, did not deplete banks, they were able to ramp up lending. Last year, the corporate loan portfolio expanded by 9.9%, which is nearly twice as much as in 2019. In turn, the Bank of Russia pursued a policy making it easier for banks to address these two tasks — restructure loans and issue new ones. We introduced regulatory relaxations to ensure that the volatility of various financial indicators in the market did not affect banks’ balance sheets. These measures included short-term easing providing more time to banks to adjust to the situation for them to avoid camouflaging problems and toxic assets. Looking at other nations, we know how all this might affect lending conditions. Incidentally, many banks did not even use these relaxations, which also confirms the stability of the system as a whole. Nonetheless, this provided them more comfort to continue restructuring and expand lending. In addition, we released buffers — capital cushions accumulated over previous years — for consumer and mortgage loans, which increased capital for lending. In our opinion, these measures were sufficient. What is the situation in the banking sector now? By the beginning of 2021, 75% of loan repayment holidays ended. In other words, restructured loans now pose objectively lower risks to banks’ financial standing. Moreover, the absolute majority of borrowers have managed to resume their scheduled repayments. This means that they really needed loan repayment holidays and easing for that period (which was not writing-off, but easing).
The United States also has substantial structural current account and budget deficits. Sweden has been exposed to a major demand shock with a collapse of exports and a loss of demand in the export sector. Exports are now recovering again. Sweden does not appear to have any structural problems in the finance sector, or in any other sector, and has no structural budget or current account deficits. This being the case, I think one could claim that the development of Sweden’s potential GDP should in fact be better than that of the United States, not worse. The difference in potential GDP underlines the difficulties and the element of arbitrariness in these calculations. Figure 6 compares the Riksbank’s estimates and forecasts for potential GDP from two different points in time, namely September 2008 shortly before the investment bank Lehman Brothers went bankrupt and February 2011. The September 2008 forecast for Sweden’s potential GDP is rather similar to the CBO’s latest forecast for potential GDP in the United States in Figure 5. We can see in Figure 6 that the February 2011 assessment of potential GDP in the longer term is approximately 4 per cent below the corresponding assessment in September 2008. Why should a pure demand shock in the absence of structural problems lead to such a significantly lower potential GDP in the longer term?

Unemployment rose to very high levels. The stringent containment measures led to a sharp decline in private consumption. There was also a shift away from services and towards goods consumption. Travel plans had to be put on hold, and much of the cultural sector was shut down. The pandemic and the measures to contain it also dampened the willingness and ability of mainland firms to invest. Petroleum investment fell on the back of lower oil prices and greater uncertainty. Reduced travel resulted in a fall in both exports and imports. After the decline in March and April, economic activity picked up towards summer, and the recovery continued through Q3. Unemployment declined. Through autumn, infection rates increased in Norway, and new containment measures were introduced. Activity slowed in the first months of this year, and in March and April we saw a renewed rise in the number of furloughed workers. Recently, infection rates have fallen. A gradual reopening of society is underway, and a large portion of the adult population in Norway will likely be vaccinated by the end of summer. This suggests that economic activity will pick up through 2021. Following a rise over the past three years, wage growth slowed again slightly in 2020. The moderation in wage growth must be viewed in the light of a sharp rise in unemployment caused by the Covid-19 outbreak and a marked decline in business sector profitability. Inflation has varied quite markedly over the past year.
A global tax, on the other hand, has a significantly larger effect. With a global carbon tax, warming would be limited to 3O C by 2200, see the turquoise line. A global tax in line with the Swedish level is sufficient to keep the temperature increase around 2O C by 220023. The Network for Greening the Financial System (NGFS)24 has been in existence since 2017 for central banks and supervisory authorities and has grown from eight members when it was founded to 55 members and 12 observers in February 2020. Its aim is to develop and highlight best practice in environment- and climate-related risk management for the financial sector. The Riksbank has been a member of NGFS since 2018. As I have already mentioned, it is important that  22  See Hassler et al. (2018). Climate sensitivity in the scenarios (how much the temperature increases in the event of a doubling of carbon dioxide concentrations in the atmosphere) is set in the middle of the interval estimated by the IPCC. 24 See Elderson (2019). 23  11 [18]  central banks do not ignore the role of the financial system in the transition to a sustainable economy and integrate financial risk into the climate models.25 In the years ahead, the Riksbank will continue to take an active role in NGFS. We will also analyse how climate-related risks affect the Swedish economy in more detail and examine the link to the financial sector more closely.

Barring unforeseen developments, I believe that Asia and the Middle East can overcome their challenges and prosper together in this century. Certainly, we must all do what we can to make this an Asia-Middle East Century. Thank you. BIS Review 21/2007  3
The crisis revived the debate about the optimal size of the financial industry and the finance-growth nexus. Often, and especially at the beginning of the recent crisis, public opinion has blamed the excessive growth of the financial industry and the extremely advantageous remuneration packages in the sector. One argument in the debate against the traditional finance-growth paradigm is that the high wages may draw talent away from other productive sectors in the economy since financial and non-financial sectors compete for the same scarce supply of human capital. 9 Thus, an excessive growth of the financial sector may not be fully desirable. Thomas Philippon formally analyses this trade-off in his (2010) AEJ Macro paper and discusses the implementation of corrective taxes and subsidies to guarantee the optimal allocation of resources between the financial and the productive sectors. 10 Thomas Philippon’s paper published in the Quarterly Journal of Economics in 2012 11 analyses the allocation and compensation of human capital in the financial industry. Together with his co-author Ariell Reshef, he documents the pattern in wages and skill intensity in the financial industry in the US between 1909 and 2006. The authors show that this pattern is non-monotonic. High compensations in banking and the ability of the financial industry to attract the most skilled workers are not permanent features of this industry. As the paper shows, changes in financial regulation are important determinants of these patterns. Tighter regulation tends to lead to an outflow of resources from the financial sector.

The first authorised in Bulgaria providers of the two new payment services started their activities in 2020. In conclusion, we can sum up that the trends in Europe are related to the development of a single European payments infrastructure based on common standards and instruments, aiming to ensure a pan-European scope and reach. Instant payments, which are in a process of introduction also in Bulgaria, open banking, and the increasing use of mobile technologies are topical issues both in the country and in the European Union, issues that we will continue to talk about. The payment services in Bulgaria are evolving in line with the dynamic processes in Europe, gathered around digitalisation, new technologies, and the ensured security of the payment process. 1 Contactless Payments on consumer off-the-shelf devices (COTS) and Software Based PIN Entry on COTS 2 Payment Card Industry Security Standards Council (PCI SSC) 3 Commission Delegated Regulation (EU) 2018/389 of 27 November 2017 supplementing Directive (EU)  2015/2366 of the European Parliament and of the Council with regard to regulatory technical standards for strong customer authentication and common and secure open standards of communication (RTS on SCA and CSC) 4 www.eba.europa.eu/regulation-and-policy/payment-services-and-electronic-money/eba-working-group-on-apis-  under-psd2 5 Opinion of the European Banking Authority on obstacles under Article 32(3) of the RTS on SCA and CSC 6 www.eba.europa.eu/single-rule-book-qa  3/3  BIS central bankers' speeches
Thirachai Phuvanatnaranubala: Asian Bond Fund Speech by Mr Thirachai Phuvanatnaranubala, Deputy Governor of the Bank of Thailand, at Euro 50 Group Roundtable, Tokyo, 12 June 2003. *  *  *  Mr. Chairman, On the issue of Asian Monetary Cooperation, Thailand is certainly of less importance than Japan; therefore I have to apologize for speaking before Director-General Watanabe. Since it is late in the day and time is short, I will try to make it interesting by going directly to the Question and Answer session. However, I will be the only one asking the questions, and giving the answers. But I will restrict myself to only five. The first question: There are a lot of initiatives on financial matters going on in Asia. Does it mean that we are aiming for a monetary union of sort in Asia soon, or something leading up to a single Asian currency? I cannot speak for other Asian countries, and I do not know whether something is being planned for the more advanced countries, like Japan and Korea, or not. However, looking through the eyes of someone in Thailand, which is part of ASEAN, the final goal of monetary union, should it exist, is still around many corners. In my opinion, the level of economic integration in Asia is still much looser than Europe at their early stage of integration. You may point to the rapidly expanding inter-regional trade in Asia.

Academic studies indicate that an inflation rate that is on average higher by 10 percentage points may cause, on average, a quarter point decrease in the long term growth rates of the countries.1 While the average inflation rate in Turkey during 1974–2003 – the period with chronically high inflation rates – was 56%; average real growth per person was a mere 2%. On the other hand, during the period of 2004–2011, when inflation was expressed with single digits, average real growth per person increased to 3.3%. Our inflation target for the 2013–2015 period is set as 5%. Loans, exchange rates and inflation expectations are three crucial variables that are the determinants of price stability. Therefore, decreasing excessive volatility in the credit growth rate and exchange rates highly contributes to price stability. The second area of central bank responsibility is financial stability. The loss of financial stability has deep and long-term impacts on both growth and employment.2 The cost of preventing a financial crisis is much lower than the cost of the crisis itself. Turkey’s recent history is a very good example of this statement. The economic crisis Turkey went through in 2001 increased the country’s sovereign debt by 30 percentage points and severely affected growth and employment prospects. As of 2002, Turkey focused on establishing price stability, financial stability and introducing structural reforms aimed at increasing productivity. As a result, while the economic prosperity of the country increased rapidly, the financial sector gained resilience to exogenous shocks.