samchain/econo-pairs-v1 huggingface dataset:
And I should not fail to mention either that the recent dynamism of Spanish households' deposits and the progressive return of credit to a more sustainable growth rate has also helped cushion Spanish banks’ funding requirements. In these conditions, the Spanish credit system has found alternatives to recourse to the markets for medium-term financing to cover its funding requirements. More specifically, issuance of shorter-dated securities, such as commercial paper, has been stepped up and more intensive use has been made of the leeway provided by the Eurosystem’s monetary policy operational framework to cover liquidity requirements. In relation to the latter, I should like to emphasise that this possibility has been available to Spanish banks, as it has to all other banks of the area, since the very outset of monetary union, and it therefore comes as no surprise that it is used to a greater extent at times like the present. That said, the use currently being made of this facility remains moderate, as shown by the fact that the liquidity raised by Spanish banks as a proportion of total Eurosystem operations is barely commensurate with the weight of Spanish GDP in the euro area, or that this facility accounts, according to end-2007 data, for only 1.3% of the total bank balance sheet. Clearly, recourse to these alternative facilities is to some extent temporary; it is taking place in a situation of heightened uncertainty and it is not reasonable to think that it is going to be perpetuated.

When Paul Volker brought down US inflation from 13 % to 3 % in three years, he did it by setting a cap on Central Bank money growth. And symmetrically, when the Japanese authorities had to fight deflation, they resorted to a "quantitative easing" policy, which basically meant they were targeting a specific amount of Central Bank money. There has been considerable debate over the theoretical underpinnings of those policies: namely whether a specific channel of transmission of monetary policy, independent of interest rates, could be identified. In any case, those experiments show, in my view, that setting a path for money growth (or its level) can prove very effective in controlling expectations - or pin down the price level - in an extreme environment. •  In more normal circumstances, however, the relationship between money and prices is more subtle and uncertain. In modern market economies, the demand for money exhibits - at least in the short and medium run - some chronic instability, if not unpredictability, a point to which I shall come back later. This has led to the demise of monetary aggregates as targets of monetary policy, and, in some countries, they have been abandoned as indicators as well. But we still think, in the euro area, that Friedman is right in the very long run. Our research has established that low frequency movements in money growth and inflation are closely correlated, retaining fluctuations with a period of 8 to 10 years.
That would help to provide some protection, beyond the DGS, for users of the monetary services that banks provide via overnight and short-term deposits; it could provide a small degree of protection against runs; and there could be an element of social justice in insulating, say, small firms and charities from the first line of loss. But, I say ‘some’ uninsured deposits because I am doubtful whether very large, wholesale deposits placed at term maturities (eg billions of pounds for six months or more) should be preferred. They are not monetary deposits, in the sense of being transaction balances; and they are not placed by households or small firms or charities. Moreover, if they were to be preferred, it would be likely that a chunk of bonded finance would over time morph into borrowing-instruments that had the legal form of ‘deposits’. That would increase the cost of any residual bond issuance. 9  See Tucker, P. M. W. (2009), The crisis management menu, “Too little attention was paid to core liquidity holdings: a treasury portfolio comprising the [Floating Rate Notes] issued by other banks does not leave a distressed bank with many options in the face of system-wide stress.”  10  Of course, if the DGS is bankrupt and a country’s government is bankrupt, the DGS may not be able to pay out. That is very serious, but it cannot be solved by the design of bank resolution regime.

8  The trigger for statutory resolution would be, broadly, that the conditions for the group being authorised as a bank or dealer were no longer met and there was no reasonable prospect of repair. It should be underlined that what is described here is nothing to do with so-called ‘contractual bailin’, which has been a source of confusing distraction over the past year or so. ‘Contractual bailin’ typically refers to bonds that convert into equity or write down under a trigger establishes purely in the contract documentation. But if the trigger is the firm’s capital ratio dipping below a high threshold, the bond is in fact for recovery not for handling abject distress. If, at the other end of the spectrum, the trigger is falling below a low capital ratio, there can be no assurance that the firm would survive in the markets long enough for the bond to be triggered before the firm had to go into statutory resolution. And if the suggestion were that the contractual trigger should give the regulators discretion, most Resolution Authorities would want to avoid writing down or converting bonds outside the statutory resolution process, since that provides protections for creditors, and gives the RA protections and powers for the achievement of a clear statutory objective established by the legislature. Bailin is not about a specific type of bond – a so-called ‘bailin bond’ – but about the application of a statutory resolution power to bonds of any kind within a statutory resolution.
Andrew G Haldane: Credit is trust Speech by Mr Andrew G Haldane, Executive Director, Financial Stability, Bank of England, at the Association of Corporate Treasurers, Leeds, 14 September 2009. I would like to thank Paul Fullerton, Simon Hall and Salina Ladha for help in the preparation of this speech. *  *  *  It is good to be back in Yorkshire. I say back because I grew up around 10 miles north of here. When I left over 20 years ago, Leeds looked and felt very different to today. Nowhere is the contrast greater than in the financial sector. In 1995, almost 74,000 people were employed in financial and related business services, accounting for around 20% of employment in Leeds. By 2009 this had risen to over 116,000, or around 30% of employment. Today, Leeds has a legitimate claim to be the UK’s second largest financial centre. A short history of banking in Yorkshire The foundations for this success were laid much earlier. The history of banking in Yorkshire dates back over 250 years.1 Pease and Co of Hull, established in 1754, are thought to be Yorkshire’s oldest private bank. In the same decade, banks were founded in Leeds and Bradford. By the end of the 18th century, Yorkshire had a well-established network of over 40 banks in around 16 regional towns and cities. In the first two decades of the 19th century, private banking in Yorkshire continued to thrive, spreading to around 30 towns and cities.

Meanwhile, it is clear that all models – no matter how good they are – need interpretation from the perspective of the events that the moment poses and in the view of the dominant phenomena of time. Dear participants, COVID-19, coupled with the issues it has caused and the restrictions taken to contain it, continues to dominate both our economic and social life and activity. It has also certainly become an important part of the analysis and research work of the central bank. This is not a surprise. I think that the shock triggered by the pandemic and the related effects will continue to be part of the research agenda for a long time, even after the pandemic is over. However, recent developments show that the research agenda of the central banks have been enriched by the study of other risks, such as those related to climate change and environmental protection, demographic risks, digitalisation and digital currency. These have been identified as big and long-term challenges to both the global economy and the authorities of every country. The Bank of Albania has started to work on to establish the infrastructure for modelling and analysing these phenomena. It is crucial to not think of these topics only for the purpose of testing assumptions or academic discussions, but rather to consider them in the concrete framework of policy making and decision taking. I am confident these topics will become important themes for discussion themes in our Research Workshop in the future.
In particular, with an ever globalised world, competition is no longer local – the private sector cannot just compete locally when the flows of goods, capital and talent are global. Furthermore, in a global stage, long-term relevance can only be sustained through genuine competition-driven competitiveness rather than through public sector support. To develop both an appropriate incentive structure and a market-driven environment, it is crucial that market and price distortions are removed and greater competition is introduced, such as through deregulation, liberalisation and greater transparency of rules and regulations. While the government moves towards this, the private sector must be ready to operate in this more open and competitive environment. An example of an industry within Malaysia in which a private sector-led competitive environment is being developed is the  BIS Review 158/2009  5  financial sector. Over the last several years, the domestic financial sector has been gradually liberalised and subjected to greater global competition, with the dual aims of enhancing the role of the financial sector as a source of growth and as a key enabler and catalyst of economic growth. Growth of the financial sector also strengthens Malaysia’s economic interlinkages with other economies. Liberalisation is done after ensuring that the financial institutions are in a state of readiness to compete in a more competitive and challenging environment.

I noted particularly that the Association could play a role in three main areas: by acting as an industry representative and interlocutor with regulators; by establishing common standards and documentation; and by promoting market transparency and efficiency. I am glad to say that the Association has delivered on its promises in each of these areas. Its website is, for example, now up and running, and is an important source of information for both members and non-members. If I could put in a plea, however, it would be for more market statistics to be made available on the parts of the website that are open to non-members - or honorary members such as the HKMA. In its representational role, the Association offered very helpful comments last year on the draft guideline that the HKMA prepared on the management of the risks associated with syndicated lending. Our initial draft generated a certain amount of heat. This was I think largely due to a feeling on the part of the industry that we had overplayed the inherent risks of syndicated lending. We therefore made it clear in the final version of our guideline - which we issued in non-statutory form - that syndicated loans are not necessarily riskier than other types of lending. Indeed, the distribution of lending among participants is designed to reduce risk by sharing it.
It’s this widening dislocation that has depressed real incomes. One way to measure the strength of “second-round effects” is to ask how changes in the “wedge” between output and consumer prices affect near-term nominal wage growth. Are external hits to real income absorbed relatively quiescently, without much of an effect on domestic inflation? Or is there sufficient resistance that people want to claw back in higher nominal pay what they’ve lost from higher import prices? This was something that received quite a bit of attention from labour market economists during the 1980s and 1990s. It was clear then that external influences on real incomes – from changes in import prices or taxes – could have significant second-round effects. Using data from 1956-85, the economists Layard, Nickell and Jackman estimated that a 1% hit to real incomes pushed up near-term nominal wage growth by somewhere between  Bank of England  Page 13  0.5 and 0.6 percentage points5. The rapid response of pay growth to the big hike in VAT in 1979 was one example. Over time, however – and above all during the inflation targeting period – this sensitivity seemed to decline. Chart 7 plots rolling estimates of this coefficient over the past thirty years. According to these, nominal pay growth during the inflation targeting era has become increasingly desensitised to shifts in the wedge between consumer and output prices. There were periods when it might have responded. After the financial crisis, sterling fell, pushing up the cost of imports, and productivity growth declined.

Yet there was almost no perceptible response of nominal pay and domestic prices. Economists attributed this decline either to the change in monetary regime itself, or – more often – to greater flexibility in the labour market. Chart 7: Lower sensitivity of wages to real income shocks during inflation targeting period  Rolling coefficient on wedge between consumer and output prices using 18-year regressions. Dotted line shows coefficient estimated by Layard, Nickell and Jackman (LNJ) on 1956-85 sample. Source: Layard, Nickell and Jackman (1991), ONS and Bank calculations. But it was hard to be confident about these estimates. Labour-market flexibility isn’t set in stone. In a speech in 20066, Charlie Bean suggested that increased ease of migration, in both directions, might have reduced the sensitivity of real wages to shifts in labour demand. It’s possible that, by adding a degree of friction to  5 Layard, Nickell & Jackman (1991), ‘Unemployment: Macroeconomic Performance and the Labour Market’. 6 Bean (2006), ‘Globalisation and Inflation’. Bank of England  Page 14  the inflow and outflow of migrant workers, the combination of Brexit and the pandemic have made the labour market less adaptable than it was a few years ago. There may be other reasons why susceptibility to second-round effects can vary. During the one period in which higher import prices seriously impinged on real incomes, following the financial crisis, unemployment was also much higher than it is today.
Since the single European currency was introduced on 1 January 1999, the Swiss franc's nominal appreciation has been more than offset by the inflation differential between Switzerland and the euro area. The competitive position of our exporters has thus improved against their European counterparts. The dynamism of the Asian economies has boosted demand for commodities, notably oil. The soaring price of this "black gold" continues to pose a serious threat to the recovery of the industrialised economies. Guardedly optimistic outlook for 2005 As it is benefiting from price stability, low interest rates and a strong competitive position, the Swiss economy is well placed to profit from the world economic upturn. However, the outlook for the global economy in 2005 is not quite as good as it was in the past year: growth is put at around 4%, down from 5% in 2004. Growth will continue to be driven by Asia and America. Europe – and especially  2  BIS Review 30/2005  Germany, our biggest market – will continue to chug along with a growth rate of between 1.5% and 2%. In this slightly less dynamic environment, the Swiss economy is unlikely to exceed its 2004 growth figure. Business activity has fallen off slightly since the autumn but should slowly gain momentum again in the next few months. Overall, we are expecting GDP to grow by about 1.5%.

Jean-Pierre Roth: Review of the Swiss economy Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Bank’s Annual General Meeting, Berne, 29 April 2005. *  *  *  Dear shareholders Dear guests  2004: the economic upswing continues The economic upswing that began in summer 2003 continued last year. Economic growth moved into the positive zone and came close to its potential level once again. While growth was slightly negative in 2003, it reached 1.7% for 2004 as a whole. The recovery in Switzerland is due in large part to the rebound in global economic growth, which reached its highest level since 1976. Swiss companies have benefited from this situation: last year, exports rose by 6.7% – a significant increase compared with the 2003 figure. This figure reflects our exporters' continuing wish to adapt to changes in demand, as well as the untiring efforts to streamline Swiss industry and maintain Switzerland's appeal as a location for business. The Swiss economy's strong presence on the international markets has been a reality for a long time. As our direct investments abroad have grown, however, it has taken on a new dimension in recent years. Not everyone is aware that while Switzerland is a champion in savings, it also boasts a performance in the area of foreign investments that is unrivalled. In 2003, we invested some CHF 20 billion abroad – a sum equivalent to almost 20% of national savings.
It is already easy to open an account with another bank and to  9 See, for instance, BIS (2018). 10  See Juks (2018). 11 This is highlighted by among others the BIS (2018) and Camera (2017). 5 [9]  rapidly transfer money there electronically, so this risk does not increase with an e-krona. Another possibility is of course to invest the money in short-term government securities. If people stop trusting the banking system as a whole, it is of course more attractive to invest in an e-krona than in cash, which is the only alternative today in such a situation. However, the Riksbank already has a large toolbox to manage situations with a confidence crisis in the banking system. An e-krona would moreover make it possible to rapidly deal with such a situation by supplying e-kronas to those who want to withdraw money from their bank accounts. This would be more effective than it is with cash today, which could reduce the contagion risk between banks. 12 If people know that it is easy to withdraw their money, the risk of a bank run should decline. It may also be the case that the banks become less likely to take risks if they know that they must take better care of their deposits. 13 Many people react at the very idea of a central bank being able to issue digital money. They are afraid that it would entail a major change, a new role for the Riksbank.

Similarly, the factories of Giorgio Armani, Gucci, and Prada were repurposed to produce medical overalls to support the overwhelmed Italian healthcare system. 2/7  BIS central bankers' speeches  Improved visibility and transparency on shipments can help make supply chains more flexible and resilient. Of course, it is not as easy to retrofit ships to carry different types of cargo as it is for airlines to convert passenger planes to cargo planes But the shipping and logistics industries can use digital technologies to improve coordination of supply chains, have more timely notifications of shipment delays, and enhance fleet management and route optimisation. Integrated supply chains are more resilient – with more seamless solutions and end-to-end connectivity across online and offline logistics activities. The rise of e-commerce platforms has launched a move towards end-to-end supply chain integration. Alibaba and Amazon are challenging traditional logistics players by developing their own warehouses and fulfilment centres. Of course, digital connectivity cannot fully replace physical connectivity because goods still have to be moved. Businesses are therefore adopting omni-channel marketing and distribution approaches, connecting with suppliers and customers both online and offline. Integrated supply chains also mean strong inter-linkages across adjacent sectors – maritime, aviation, rail and road transport, with trading, logistics, and finance. Let me highlight a Singaporean initiative in this space. The Monetary Authority of Singapore (MAS) and Infocomm Media Development Authority (IMDA) have jointly launched a digital platform called Business sans Borders (or BSB).
The road ahead These initiatives are important down-payments towards closing the trust deficit. Yet even if these initiatives are necessary steps, are they likely to be sufficient? The Bank’s Open Forum suggested that would be an optimistic conclusion. So too would the evidence from various opinion polls and, indeed, from banks’ own assessments of their culture. If so, what further initiatives might help in closing the Great Divide? It may be tempting to conclude that the trust gap can be closed by simply having a bettereducated public, one which better appreciates the important role finance plays in supporting the economy and wider society. On this diagnosis, closing the Great Divide would call for enhanced public understanding of finance, perhaps through a targeted public education programme. Yet as Gillian Guy, CEO of Citizen’s Advice, perceptively pointed out at the Bank’s Open Forum, the perception gap may as much reflect the lack of understanding of the public on the part of those inside finance as a lack of understanding of finance on the part of the public. I think that is spot on. Closing the perception gap calls for a two-sided effort. (a)  Enhancing public education  A great many people find financial issues difficult and boring. That is a weak foundation for making good financial choices. At least some of those problems originate in the mental block many people encounter when it comes to mathematics. Finance is a numbers game.

Clearly, then, there has been a rapidly rising tide of banking information. Or has there? The Godfather of information theory, Claude Shannon, defined information in terms of its ability to reduce our uncertainty. 60 But page length and certainty are not synonyms. As even professional investors find banks’ annual reports somewhere between undigestible and unfathomable, it seems possible more banking information, in the conventional sense, may have made for less banking information, in the Shannon sense. One interesting diagnostic comes from looking at the nature of the information provided by banks’ annual reports, rather than its quantum. Linguistic analysis provides a range of metrics for determining the complexity of a language, including word and sentence length. 61 By taking a range of measures of linguistic complexity, and applying them to banks’ annual reports, we can get a window on Shannon’s measure of information-content. Chart 3 plots six metrics of linguistic complexity, as applied to the annual reports of the four largest UK banks. 62 It compares them with a series of alternative publications, specifically a UK broadsheet newspaper, a UK tabloid newspaper, a set of recent Bank of England reports, a selection of my own speeches, and a selection of speeches by the leaders of the UK’s main political parties. These comparators have no significance beyond the fact that they are examples of material written for a general audience. What this demonstrates is that banks’ annual reports rank highly on the linguistic complexity scale, well above even a broadsheet newspaper.