samchain/econo-pairs-v1 huggingface dataset:
The reduction in the IIP to less vulnerable levels will require running current account surpluses for a prolonged period. The continuation and deepening of the gains in the economy’s competitiveness posted in recent years should, along with healthier public finances, contribute to entrenching a sustained path of external surpluses. Closely related to the foregoing point, the second factor of vulnerability of the Spanish economy is that arising from the imbalance in public finances. The sectoral breakdown of the net IIP shows how, since the onset of the crisis, the general government’s net liability position has increased notably, with the liabilities position of the monetary financial institutions and the rest of the resident sectors declining. Despite the considerable reduction in the budget deficit relative to GDP from its peak of 11% in 2009 to 23.1% in 2017, Spanish public finances continued to evidence a high level of structural deficit (estimated by the European Commission to be 3% of GDP, the highest in the euro area) and of public debt, which currently stands at around 98% of GDP. Against this backdrop, it is worth bearing in mind that maintaining a very high level of public debt over a prolonged period may not only hamper economic growth but also lessen the stabilising capacity of fiscal policy in the face of future recessions. Spain must therefore harness the current, favourable economic setting by launching a medium-term programme to reduce the vulnerabilities of its public finances and thus generate budgetary room for manoeuvre, enabling it to face future crises.

Against this background, it should be stressed that notable headway has been made in recent years in correcting some of the imbalances that had built up in the Spanish economy during the expansion prior to the crisis. Contributing factors here, in addition to the more temporary factors I have just mentioned, were certain structural reforms introduced during the crisis. Of note, first, is the intense deleveraging, carried out by households and non-financial corporations. Specifically, the corporate debt/GDP ratio has fallen by 42 percentage points (pp) from mid-2010, when it peaked, to 2018 Q3, meaning that this indicator now stands some 2 pp below the related figure for the euro area. In the case of households, the process has been slower (partly on account of the greater average life of the debt incurred), but also very significant. Over the same period, households’ debt ratio fell by 25 pp and its level is but 3 pp above the related euro area figure. Accordingly, in both cases, the deleveraging 3/7  process is at a very advanced stage, although some heterogeneity is evident. In particular, in the two sectors, certain agents continue to face situations of high financial pressure as a result of debt incurred. In parallel, the banking sector has been subject to an intense process of clean-up, recapitalisation and restructuring. And in the past four and a half years its basic parameters – such as asset quality and profitability and solvency levels – have improved notably.
They can be targeted to specific member countries or sectors to address the build-up of local imbalances, which cannot be addressed in an efficient way by the single monetary policy. Macroprudential measures have already been proposed or implemented in some euro area countries. Authorities have taken decisions to calibrate the systemic risk and countercyclical capital buffers, as well as sectoral capital requirements for real estate and housing, and to introduce caps on loan-to-value ratios to counteract emerging risks. Conclusion Our monetary policy measures have proven effective in sustaining a resilient recovery and addressing the risks to price stability. This in turn provides a strong contribution to financial sector resilience. Looking ahead, significant monetary policy stimulus is still needed to support the gradual build-up of price pressures for inflation to return to levels below, but close to, 2% in a durable fashion. At this stage of the cycle, careful monitoring of the risk-taking channel of monetary policy is important. While there is no evidence of excessive misalignment across asset classes in the euro area right now, there are signs that valuations are stretched in specific market segments. 4/5  BIS central bankers' speeches  Macroprudential instruments are best placed to counteract the emergence of specific financial imbalances in an efficient and targeted manner. Macroprudential policy and monetary policy thus complement one another in pursuit of their respective objectives. 1 For a comprehensive overview, see Carmen M. Reinhart and Kenneth S. Rogoff (2013), “Banking crises: An  equal opportunity menace”, Journal of Banking and Finance Vol. 37.

While the $ billion aggregate cap on ON RRP usage employed during exercise operations to date has generally provided sufficient capacity to establish a floor on the level of money market rates, it is difficult to know ex ante whether the same amount will be adequate once we move away from the zero lower bound. Providing capacity that market participants will judge sufficient to meet demand with a high degree of certainty can therefore enhance the confidence of policymakers and market participants that the facility will support short-term interest rates at the time of liftoff. It is important to note that allowing for elevated capacity in an ON RRP facility is not the same as offering a fixed-rate, full-allotment facility. Through testing, we’ve learned that the fixed-rate and full-allotment features are not necessary for securing interest rate control. Moreover, by supplying a perfectly elastic quantity of a risk-free asset at a fixed-rate, a fixedrate, full-allotment ON RRP facility might have undesirable effects on financial stability and the Federal Reserve’s role in financial intermediation. 9 In periods of financial stress, the availability of a fixed-rate, full-allotment facility could enable a rapid or unexpected expansion that exacerbates disruptive flight-to-quality flows by facilitating a run away from funding financial institutions and nonfinancial corporations. This dynamic could undermine financial stability.
(2017), “The treatment of global firms in national accounts,” Central Bank of Ireland Economic Letter No. 2017-1; Avdjiev, S., Everett, M., Lane, P.R. and Shin, H. S. (2018), “Tracking the international footprints of global firms”, BIS Quarterly Review, Bank for International Settlements, March; also Lane, P.R. (2020), op. cit., and Di Nino, V., Habib, M. M. and Schmitz, M. (2020), “Multinational enterprises, financial centres and their implications for external imbalances: a euro area perspective”, Economic Bulletin, Issue 2, ECB. 4. See Lane, P.R. (2020), op. cit. 5. See Pastoris, F. and Schmitz, M. (2020), “Box 5 Euro area-US current account asymmetries: the role of foreign direct investment income in the presence of multinational enterprises”, Economic Bulletin, Issue 2, ECB. 6. See Lane, P.R. and Milesi-Ferretti, G.M. (2018), “The External Wealth of Nations Revisited: International Financial Integration in the Aftermath of the Global Financial Crisis”, IMF Economic Review, Vol. 66, No 1, International Monetary Fund, pp. 189-222; and McQuade, P. and Schmitz, M. (2017), “The Great Moderation in International Capital Flows: A Global Phenomenon?”, Journal of International Money and Finance, Vol. 73, pp. 188-212. 7. See also Di Nino, V. and A. Ekstam (2020), “What value added in the trade balances of euro area financial centres?,” ECB Working Paper Series, No. 2506. 8. See Lane, P.R. (2015), “Risk Exposures in International and Sectoral Balance Sheet Data", World Economics, Vol. 16, No 4, pp. 55-76. 9.

Real yields, again measured by our own indexed gilts have fallen back to a little more than 3¼%; and the first US indexed bond issue yields much the same. And nominal yields have fallen by 200 basis points or more in continental Europe and Japan - though rather less in the United States and the UK. There has been more excitement in the foreign exchange market, with the dollar in particular first weakening against the yen and the major continental currencies until the spring of 1995 and then progressively recovering. BIS Review 22/1997  -2-  These developments were certainly influenced by the factors which I mentioned a moment ago. In particular they have been influenced by the continuing broadly-based consensus - in countries all around the world, and across a large part of the political spectrum within countries - on the importance of macro-economic policy discipline. Macro-economic policy is no longer seen as an instrument for short-term demand management, which can be used to trade-off the conflicting demands of growth and stability in the short run. It is now much more widely understood and accepted that the rate of growth that can be sustained, or the level of employment that can be achieved and maintained in anything other than the short run, depend fundamentally on the structural, supply-side, characteristics of the economy, and not just on the level of demand.
These data series R  sometimes are constructed using different base years, making comparisons of series even of the same variable problematic. Besides weak data series, there is also the problem of coping with lags in monetary data. The computation of the estimated supply of total reserves (OSR), on the day of OMO market often involves several days lag. This means that to be able to obtain OSR, where “t” is the OMO market day, the compiler must be able to project both the sources and uses of monetary base, several days prior to  2  BIS Review 45/2007  the OMO market day say OSR . The techniques for doing this are yet to be fully developed in all t-3  WAIFEM constituent countries. •  Determination of public sector borrowing requirement The primary target for OMO is the difference between the estimated supply and demand for money under equilibrium conditions. But in arriving at the ultimate target for OMO, the excess supply needs to be adjusted to accommodate public sector borrowing requirement in the period. Thus there would be need to make the problematic forecasts of government cash revenue and expenditure, including float items. In this regard some of our member countries, notably Ghana have taken considerable strides through the application of some appropriate software. •  Capacity for econometric forecasting Familiarity with the use of econometric techniques is a sine qua non for liquidity forecasting.

Too often, WAIFEM has had to run courses in econometric modeling and forecasting in order to bridge these gaps and it has resorted to improved monetary and fiscal policy formulation in the sub-region. Ladies and Gentlemen, Lessons in capacity building needs I have not made any pretensions to proffering exhaustive analysis of the problems of liquidity forecasting. I believe the expert faculty at your disposal will do just that. However, from the presentation thus far, it is clear that a lot of capacity gaps will need to be filled if member countries must conduct monetary and fiscal policies at the cutting edge of best practices. An articulation of the gaps is therefore in order. •  Capacity for analysis of monetary survey Staff in monetary and fiscal policy departments must be familiar with the intricacies of monetary survey – a consolidation of both the balance sheets of central banks and deposit money banks. The monetary aggregates are summarized in the assets and liabilities sides of the survey. The financial database for liquidity forecasting is contained in the monetary survey. •  Training in macroeconomic relationships The staff of the relevant departments of Central Bank and Ministries of Finance and National Planning Commission should be familiar with macroeconomic relationships and financial programming. To this end, an advantage should be taken of WAIFEM/IMF annual courses in financial programming. •  Training in econometric modelling and forecasting Familiarity with econometric methodology is critical to effective conduct of liquidity forecasting for sound monetary policy.
In other words, the conditions exist for delegating the interest rate decision, but the central bank’s response pattern must be known, so that the fiscal authorities can take this into account. When the response pattern in monetary policy is known and remains unchanged over time, the social partners can also take any monetary policy response into account when wages are being determined. The “leader” in this interplay - the social partners - can take the “follower’s” - Norges Bank’s - response into account. This view is most relevant in centralised wage formation. In decentralised wage formation, monetary policy will instead affect wage growth via market mechanisms by stabilising aggregate demand. The current monetary policy guidelines will function well whether wages are determined centrally, locally or individually. The outcome of this year’s wage settlement, and the debate that followed, may indicate that the social partners have not yet internalised the response pattern in monetary policy ensuing from the mandate laid down by the Government and the Storting. Perhaps a stumbling block has been the choice of wage settlements at industry level and the large wage increases for employees outside the two largest employer/employee organisations (NHO and LO). On the other hand, the choice of settlement type is probably influenced by the participants’ assessment of the economic outlook. The high wage growth awarded to groups whose wages are determined through individual agreements indicates that the labour market has been tight.

Yves Mersch: Translating a shared vision into a winning story Closing remarks by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the T2S Launch Celebration, Milan, 2 July 2015. *  *  *  We chose to call this T2S launch celebration “Translating a shared vision into a winning story”. Listening to the speakers for the past two hours I believe the name was just right. We have heard how the T2S Community transformed the shared vision of an integrated securities settlement landscape into a winning story, culminating in the launch of T2S on 22 June. Stimulating views have been shared tonight and I would like to thank the speakers for presenting their perspectives on the capital markets union. It is evident that T2S, post-trade harmonisation and the CSD Regulation are among the elements that will be pushing this agenda forward. Looking around the room I am happy to see so many familiar faces. Faces of people who have been part of the project since the idea of T2S was born in 2006. The journey over the past nine years has been an inspiring one. There have been some bumps in the road, some twists and turns, but with the launch of T2S we have achieved a monumental milestone. We made the vision of a single securities settlement platform for Europe a reality.
The recovery in output has come in step with a more expansionary behaviour of employment than might have been foreseen on past patterns. According to official Spanish labour force data, from the second quarter of 2014 to the same period this year numbers employed are estimated to have increased by more than half a million, making for an appreciable reduction in the unemployment rate. 2  BIS central bankers’ speeches  The greater flexibility enjoyed by firms, following the reforms approved in 2012, in adjusting their working conditions to the macroeconomic and competitive setting has no doubt provided for the creation of new jobs and, therefore, for the expansion of economic activity. If the dynamics of the past 18 months hold, the increase in employment might place the unemployment rate at around 20% in the fourth quarter of 2016. As to prices, the increases in activity and employment have been accompanied by very low inflation rates. The fall in oil prices has prompted declines in the general level of prices over much of the past year. Yet core inflation, the indicator that excludes energy and fresh food prices, has moved on a rising course over the year. And while still at moderate levels, this indicator’s recent trajectory suggests the risks of entering an overly prolonged period of very low inflation have progressively been dispelled. While in July the overall price index posted growth of 0.1%, influenced by fuel prices, inflation at the end of the year is expected to be around 1%.

As a result, the increase in nominal GDP would be around 4%. At end-2015 the overall general government deficit target (4.2% of GDP) is expected to be met. For 2016, a deficit of 2.8% of GDP is targeted, which would involve attaining – for the first time since 2007 – a figure close to the 3% ceiling established in the Stability and Growth Pact. In turn, the public debt/GDP ratio would stand at 98.2% in 2016, having posted a figure of 98.7% at end-2015, which would mean a decline in this ratio for the first time since 2007. The macroeconomic scenario used to devise the Draft Budget is, as I earlier stated, and with slight upward differences, similar in terms of rates and composition to that I described when referring to the Banco de España forecasts and, more generally, to the consensus of analysts. It is reasonable to expect the improved cyclical position and the reduction in public debt yields to have a positive direct effect on public finances. In this respect, the upward revision of the Spanish economy’s growth prospects means that the budgetary drive required to further the fiscal consolidation process, measured by the change in the primary structural balance, will be very limited, in line with the latest Updated Stability Programme, which anticipated that the fiscal policy stance would be essentially neutral in the 2015–2018 period. Naturally, any slippage in growth or rise in financing costs would hamper fiscal consolidation, making the process more demanding.
Two differences stand out between Asia and Europe. The first is policy flexibility. The devaluation of the exchange rate helped restore export competitiveness of the Asian economies. However, this freedom of flexibility might not be practical for Europe given its single currency setting and political complexities. The second is the supportive global economy, which provided the necessary market for Asia and allowed Asia to export our way out of the crisis. Global GDP registered a 4.7% growth in 2000 with advanced economies, the world’s largest consumer, growing at 4.1%. In contrast, the global setting of the current European sovereign debt crisis is not  1  BOT’s staff computation from CEIC data. 2  Malaysia’s policy mix started out with an initial fiscal and monetary tightening, a conventional IMF-like measure, followed by a reversed loosening of macroeconomic policies. The insufficiency of these policies to restore confidence led the country to resort to exchange and capital control which yielded positive result. 2  BIS central bankers’ speeches  as favorable. Global and advanced economies growth turned to a negative territory of 0.6% and 3.4% respectively in 2009. Emerging and developing economies, increasingly feeling the pinch of the global slowdown, witnessed the continued slowdown of their GDP growth from 8.7% in 2007 to just 2.8% in 2009. I believe that there may be other success factors for the European story. But, we have to bear in mind that some of the success factors are not without costs that remain to be addressed.

The HKMA is delighted to work with Euroclear Bank and J.P.Morgan, the two premier global tripartite repo system operators, to bring this concept to fruition. With security pools valued at EUR 10.8 trillion and $ 17.9 trillion respectively, both institutions provide a huge reservoir and a highly sophisticated platform to support cross-border cross currency lending with ample choices of securities as collateral. Linked up by the HKMA’s Central Moneymarkets Unit (CMU) as an agent, CMU members will be able to enjoy the collateral management service of the global repo operators which include functions like auto-selection and auto-substitution of collateral, collateral eligibility filters, daily mark-to-market and prudent haircut execution, all of which will help financial institutions in their collateral management processes. As a further development, we are working with our two partners to expand the repo service to allow financial institutions in Hong Kong to use their securities kept with the CMU, Euroclear and J.P. Morgan as collateral to obtain foreign currency liquidity such as US dollars from the global broker dealers in the second half of 2012. This will help local companies and financial institutions to obtain foreign currency liquidity as they expand their business overseas. Finally, the HKMA has a long term vision for repo financing to become a more important source of funding for companies and banks in Hong Kong.
Never before in recent history have global interest rates been as low for as long as they are today. The interest rate level was moving down long before the 2008 financial crisis. What lies behind this is an enduring decline in long-term real interest rates. The decline is attributable to structural changes that have weakened the growth capacity of many economies, low productivity growth and weaker growth in the labour force. BIS central bankers’ speeches  13  In the wake of the financial crisis, interest rates fell from an already low level to even lower levels. Central banks slashed policy rates to counter the downturn. The room for further rate cuts was gradually exhausted. In this situation, central banks have shown a capacity for new thinking. They have purchased securities on a large scale. The purchases have continued to push down long-term rates. In addition, a barrier has been broken. In a number of countries, the policy rate is now negative. Negative policy rates can affect the economy via lower bank lending rates and a weaker exchange rate. These are well-known channels. But the effect of further policy rate cuts may weaken when rates fall below zero. An important reason is that banks are reluctant to set negative deposit rates, especially for households. For many retail customers, substituting cash for bank deposits is fairly inexpensive. If banks hold back on deposit rates, lending rates can only fall to a limited extent before banks’ earnings are reduced.

The economic rent should benefit society as far as possible. 3  Statoil (2016): Results for fourth quarter 2015 and capital market update 2016. 4  Norwegian Petroleum Directorate (2015): Evaluation of reserve growth for oil – 2005–2014. 5  Norwegian Petroleum Directorate and Ministry of Petroleum and Energy: www.norskpetroleum.no. 8  BIS central bankers’ speeches  Employment has been high in Norway for many years. Compared with other countries, unemployment has been low. In the competition for labour resources, oil production and oil service companies drew the longest straw. The situation has now changed. Unemployment is on the rise. Norway’s oil regions, which have long reaped the benefits of the upswing, are now struggling. The downswing is proving painful for many. But the situation is far different from the adverse conditions that prevailed in the 1980s, which resulted in a deep economic crisis in Norway. But unemployment must be expected to be higher than we have been accustomed to in recent years. Closing a business takes less time than developing a new one. Restructuring takes time. Restructuring must start in the business sector. Economic policy can only help set the stage. Monetary policy can facilitate the restructuring process by supporting a weaker krone exchange rate and thereby expedite adaptation to a lower cost level. In addition, reduced interest expenses will contribute to income growth for many households. There is still room for manoeuvre in monetary policy. When unemployment rises, as is the case today, it may be appropriate to use the fiscal space available.