samchain/econo-pairs-v1 huggingface dataset:
6  region has a notably high number of small and informal firms), lower rates of investment and the loss of sectors with higher than average rates of productivity growth. In such a complex setting, Latin American economies could benefit considerably from the design and implementation of a broad reform agenda to drive the region’s competitiveness and productivity, seizing the opportunity to transform productive structures. Government infrastructure spending can play a significant role,12 against a background of low private investment demand, which should come alongside reflection on the composition of government expenditure. On the education front, the challenge is more qualitative than quantitative for countries such as Argentina, Brazil and Mexico, which continue to lag behind in terms of educational quality despite spending no less on education as a share of GDP than OECD member countries.13 Authorities could pass legislation to improve general institutional quality. More specifically, they could also facilitate entrepreneurial initiatives by easing burdensome regulations and working to reduce the informal sector, which would also drive up the revenue-raising capacity of tax systems. Likewise, the region would benefit from greater trade integration, both internal and external. For example, the 2019 ratification of the trade agreement between the European Union (EU) and MERCOSUR should, on the estimates available,14 have significant positive effects on trade flows and on GDP in both areas, particularly in the MERCOSUR region. Within the EU, where the impact is likely to be more modest, Spain is among the countries whose economies will benefit most from the agreement.

For a more detailed analysis, see Banco de España (2020), “Recent developments in the most important Latin American banking systems for Spanish banks”, Box 2, “Report on the Latin American economy. Second half of 2020”, Analytical Articles, Economic Bulletin, 4/2020. 8 For a stress test analysis of the 61 largest banks in Latin America, see Annex 4 of the IMF’s Regional Economic Outlook (2020), Pandemic Persistence Clouds the Recovery. 9 See A. Werner, A. Ivanova and T. Komatsuzaki (2021), Latin America and Caribbean’s Winding Road to Recovery, IMF blog. 5  First, in addition to the human cost in lives, the effects on poverty and income distribution have been very severe.10 Indeed, during 2019, bouts of political tensions and social unrest in several countries, partly related to this situation, fuelled economic uncertainty; this in a region where numerous elections are due to take place in the coming quarters. A second challenge is that posed by shrinking fiscal space following the increase in government debt in the region during 2020, positioning it as the emerging region with the highest government debt-to-GDP ratio and, where debt refinancing is concerned, leaving it highly vulnerable to changes in investor sentiment. Against this background, monetary policy is supported by the accommodative policies of the main developed economies and by low inflationary pressures.
For this reason, as part of the 2015 preparations for the Own Risk and Solvency Assessment (ORSA), it asked insurers to conduct an in-depth analysis of the impact of persistent low rate scenarios on their solvency, finances and ability to meet their commitments. In addition, this year EIOPA is conducting a Europe-wide stress test. For France, the scope of this exercise is particularly broad: the ACPR has extended it to cover 90% of the market, compared with the 75% specified by EIOPA. Unlike bank stress tests, insurance stress tests are not “fail or pass” and as a result will not lead to the application of additional capital requirements. The findings, to be published by mid-December, will make it possible to determine precisely how exposed the insurance market is to the risks linked to the low rate environment. The ORSA exercise and stress-tests will enable the ACPR to identify weaknesses, and we fully intend to discuss any counter measures to be put in place with the establishments concerned. Lastly, there is the proposal, under the draft Sapin law, to extend the powers of the French macroprudential authority, the HCSF, to the insurance sector. There is no point trying to turn this into a controversy; indeed doing so would only be counterproductive for the protection of policyholders. Let me say this  Page 5 sur 7  unequivocally: there is no threat to the savings of French investors, and no question of making changes to the terms of their policies.

As the MPC highlighted again in the Minutes of its February 2021 meeting, if needed the Bank could re-evaluate some of its self-imposed constraints on gilt purchases to create more headroom. As I noted earlier, the MPC has asked the PRA to engage with firms to ensure they could be ready to implement a negative Bank Rate at any point after six months, and has asked Bank staff to commence internal technical preparations to deliver the option of a tiered system of reserve remuneration that could be ready to be implemented, should it be judged appropriate, alongside a negative Bank Rate. At the same time the Committee also agreed to ask Bank staff to reconsider the previous guidance on the appropriate strategy for tightening monetary policy should that be required in the future. But none of these requests are intended as a signal about the future path of monetary policy – they represented transparent contingency planning for possible future uses of our monetary policy tools. 28  In my speech ‘The Monetary Policy Toolbox in the UK’ 14  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  14  As for the immediate future: in November 2020 the MPC voted unanimously for a further £ of government bond purchases, to be implemented throughout 2021 and to be completed at around the end of the year.
29.10.2019  The Spanish economy: outlook and challenges Third Economic-Insurance Meeting: “Economic future and insurance industry trends” Pablo Hernández de Cos Governor  Ladies and gentlemen, good morning. I should like to start by thanking the president of the Lawyers’ Mutual Society, Enrique Sanz, for his kind invitation to deliver the closing address to this third economic-insurance meeting. It is an honour and a pleasure to participate in this event and to share with you some reflections on the economic outlook for the immediate future and, especially, on the main medium and long-term challenges facing the Spanish economy. The degree of vulnerability of the Spanish economy to possible shocks and, ultimately, the well-being of the Spanish people will largely depend on how the economy’s main structural problems are addressed. The economic situation The global economic expansion in weakening against the background of the downturn in international trade…  The international economic environment in which the Spanish economy operates has become more unfavourable over the past year, with a slowdown in growth and, in particular, in international trade. Global GDP growth continued to moderate, to a rate of 2.8% year-onyear in the second quarter of 2018, down more than one percentage point (pp) from a year earlier. In addition, growth projections have been revised downwards in most economies in recent quarters. Indeed, global GDP growth is projected this year to be at its lowest level since the international financial crisis.

8/18  There thus seems to be a need to improve the employability of this more vulnerable group notable for the presence of very young and very old workers, as well as individuals with fewer skills. To do this, it would be desirable to increase the human capital of these workers, a task which, in particular, would need training tailored to employers’ requirements. Furthermore, it should not be overlooked that the higher inequality in household income emerging in the crisis was, above all, a consequence of job destruction, which underscores the need to ensure that these people can get a job as soon as possible. In addition, the incidence of temporary employment remains very high (nearly 27% in the third quarter of 2019), which, among other things, makes for high employment volatility and reduces worker productivity. Main vulnerabilities of the Spanish economy  A second source of vulnerability originating as a legacy of the crisis is the high government debt, which in the second quarter of 2019 stood at around 99% of GDP, more than 60 pp above that in 2007. It is in this terrain where headway has been less satisfactory in the last few years, as evidenced by the fact that the budget deficit continues to have a high structural component, estimated by the European Commission at above 2.5 pp of GDP.
Well, returning for a moment to our earlier discussion. The owners, now in the form of hundreds of thousands of shareholders, have only limited “skin in the game”. Their personal or family wealth, outside of their bank shares, is not at stake if the bank fails and they can now in most cases exit from their shareholdings swiftly through trading on a stock exchange. So their perspectives can now be much shorter-term and, as they alone benefit from increases in a firm’s “value”, they may actually favour greater risk-taking to maximise share price valuation in that shorter-term. This “short-termism” mindset is more pronounced amongst some asset managers and hedge funds, which in recent years would appear to have accumulated increasing amounts of bank shares and become more proactive in  3  Capitalist Fools. Joseph E Stiglitz January 2009 (The Great Hangover: 21 Tales of the New Recession from the Pages of Vanity Fair). BIS central bankers’ speeches  3  exerting pressure on bank management. As these asset managers are themselves rewarded on the basis of the annual valuation of their funds’ holdings, including the bank shares, they have every incentive to push the banks to achieve higher profitability. So board directors and senior management were, and still are, under constant pressure to pursue higher RoEs. It is not difficult to see why capital raising, which improves the resilience of banks, is often rejected or delayed as it is negative for share prices in the short term. The result?

I was really encouraged by the implicit acceptance, in putting this on the agenda of a banker’s summit, that it is primarily for the industry to seek to regain the moral and ethical highground it once enjoyed. I wholeheartedly agree. This is not something which can, or should, be regarded as a “policing” or “enforcement” matter for the regulator. Getting caught out, taking the fine as a “cost of doing business” and moving on with making money, is just not acceptable as a sustainable banking business model going forward. I do not subscribe to the view that banks’ primary role is to generate maximum shareholder value, leaving the regulator to worry about the safety of deposits and the interests of the banks’ customers. Now, don’t get me wrong I am not thinking of banks as break-even utility operations but, making a reasonable return should be a result of what banks do – to quote Jack Welch when talking to the FT a few years ago “Shareholder value is a result not a strategy”.1 3. Having a licence or franchise to take deposits, which represent the hard earned savings of millions of people, and use these funds for private gain is a privilege conferred by society on a bank, which merits exemplary professional and ethical behaviour. Moral and ethical highground: trust and respect 4. Returning to the theme of the Summit “regaining the moral and ethical highground” – what do we really mean here? I think, in a word, “trust”. With “trust”, comes “respect”. 5.
As undertaken by him at the time of appointment, exactly after three years, he relinquished his responsibilities as governor to pave way for a Sri Lankan to occupy that high post. The Central Bank is, forever, deeply indebted to John Exter. The rationale and philosophy of the central bank which he evinced in his report in the late 1940s are equally valid for today as well. His report is unique in that sense, because it carries a justification of each and every section of the Monetary Law, so that the later generations of central bankers would not have any ambiguity of what was meant by them. As a result, even today, the Exter Report is used by both central bankers and academics as their bible. Hence, by any standard, Exter is a central banker for all times. The appointment of John Exter to a one man committee on the establishment of a central bank is also marked by an interesting legend. Edmund Eramudugolla, a former Senior Deputy Governor of the Central Bank, has narrated this legend in his Reminiscences of the Central Bank of Sri Lanka. According to him, the government of newly independent Ceylon decided to replace the Currency Board System which it had inherited from the British with a more flexible central bank. Accordingly, the government decided to seek foreign assistance to prepare a blueprint for a central bank based on the country’s specific position and future prospects.

It is from there that he came to Ceylon as the consultant on the establishment of a central bank, still on release from the Federal Reserve System. After serving his term as Governor of the Central Bank, Exter did not return to the Federal Reserve System. Instead, in 1953, he joined the World Bank and was offered the position of the division chief for the Middle East. After a year with the World Bank, he came back to the Federal Reserve System as its Vice President on international operations at the Federal Reserve Bank of New York. His career at the Federal Reserve System ended in 1959 when he decided to join the First National City Bank which later became the Citibank. From 1960 to 1972, he was the Senior Vice President of the Citibank in charge of its relations with foreign central banks and governments. With a huge fortune made on the  BIS Review 20/2007  1  gold market by using his own expertise on the foresight of irresponsible central banking and its inevitable consequences, Exter took an early retirement in 1972 and went into private consultancy work. According to his own admission, the prospect for his fortune on gold dawned on him after a friendly debate he had in 1962 with his one time Harvard buddy and Nobel Laureate Paul Samuelson. In that debate on why the dollar was becoming weak and USA was losing gold, Exter gave his diagnosis which was based on his experience with the Federal Reserve System.
By settling payments finally and irrevocably, the SIC system provides confidence in the reliability and safety of the Swiss payment infrastructure. With the pace of innovation in the payments arena increasing due to digitalisation, retail transactions are now attracting more attention among central banks. Settling both lowvalue but high-volume retail payments and large-value interbank payments on the same platform is a unique feature of the Swiss system, which has proven effective over the years. From a financial stability perspective, the focus has long been on the safety of large interbank payments, as they make up about 90% of daily turnover in the SIC system. Retail payments, which already account for more than 95% of transactions in the SIC system, are expected to rise further, however. In addition, the emergence of peer-to-peer retail payment initiatives that cut out intermediary payment service providers, such as banks, have the potential to fundamentally change the payments landscape. This is also true for central bank digital currencies, which many central banks are exploring. The SNB has always supported innovation in the payments system. For the Swiss payments infrastructure to remain attractive and reliable over time, it must continuously be enhanced and refined – without compromising on security. The SNB has therefore constantly modernised the SIC system to ensure that it remains technologically state-of-the-art. More recently, the SNB has also broadened access to the SIC system to include licensed fintech companies. This will allow innovative firms to provide new payment technologies efficiently and securely.

News conference  Berne, 15 December 2016 Fritz Zurbrügg  Introductory remarks by Fritz Zurbrügg  In my remarks today, I will start by presenting our current assessment in the area of financial stability, looking first at the big banks before turning to the domestically focused banks. I will end my remarks with a few words on the new banknote series. Big banks  Since the Financial Stability Report was published in June, the Swiss big banks have improved their capital situation slightly; at the same time, they have substantially increased their holdings of bail-in bonds. Bail-in bonds are debt instruments that can be written off or converted into equity in the event of restructuring or resolution. They form the basis for a crisis-hit bank to be resolved or restructured in an orderly way. Alongside capital requirements, the qualitative and quantitative requirements on such debt instruments are a key component of the revised ‘too big to fail’ regulations which came into force at the beginning of July. These revised regulations envisage that the requirements will gradually be increased to the specified level over a phase-in period ending at the beginning of 2020. As regards core capital (Common Equity Tier 1, CET1), both big banks already largely meet the targets that will apply after the end of the phase-in period. There is still a need for action before the transition deadlines expire, as regards bail-in instruments and high-trigger contingent convertible capital instruments – or high-trigger CoCos.
The difficult thing about using the unemployment gap as an indicator of resource utilisation is to determine the sustainable rate of unemployment. However, this is not more difficult, in fact it is probably easier, than determining potential output and potential hours worked. On closer inspection, it can be seen that the sustainable rate of unemployment has several advantages compared to other measures of normal resource utilisation. The sustainable rate of unemployment can be expressed as a stable percentage – for example 5.5 or 6 per cent. It changes slowly and lies within a limited range. Estimating potential GDP is, in comparison, like shooting at a moving target. It grows over time, and in the view of many, can be seen as a random process, similar to a so-called random walk with drift. The sustainable rate of unemployment can be determined using several different methods – structural search models similar to those developed by the Nobel prize-winners Diamond, Mortensen and Pissarides, so-called UC-models, DSGE models and NAIRU estimates. The results of these different estimation methods can be compared and their robustness and reliability assessed. We can then calculate the average of the estimates and weight this with the assessed reliability of the various estimates. When estimating the sustainable rate of unemployment it is also important to include the assessed effects of labour-market reforms (Forslund 2008).

With this, it has undone a considerable part of its excessive rise of the second half of 2021. Meanwhile, the consumption of non-durable goods also continues to fall, while the consumption of services is still growing steadily, consistent with the elimination of supply constraints after the lifting of sanitary restrictions (figure 7). Consumption has been adjusting in a context in which liquidity has been normalizing, job creation is slow and real wages have been declining over the last year. In the labor market, total employment and the labor force have shown low dynamism during 2022. In the most recent period, the decrease in formal employment stands out, offset by increased participation of informal salaried employment and self-employment. In addition, some labor market indicators point to a further deterioration. For example, job vacancies have declined and the employment outlook for businesses and consumers remains weak (figure 8). 3  The current account deficit rose to 9.9% of GDP in the last moving year. This is high, and is associated with both reduced private savings and higher investment. In a context in which consumption has been adjusting, the lower private savings can be explained largely by the negative effect of the worsened terms of trade on national income. The higher investment, as already mentioned, is mainly related to the dynamism of the machinery and equipment component. The still high transportation costs have also contributed to this increase.
Their website lists a variety of organisations that have well-established schemes ranging from the big supermarkets to local councils. 35 Within the private sector, around 70% of FTSE 100 companies already have some kind of employer-sponsored volunteering programme. 36 Perhaps unsurprisingly, that percentage is much lower for small and medium-sized businesses. This is a decent starting point. Yet my suspicion is that many companies are still not close to recognising fully the benefits from volunteering. And let me illustrate that with one startling fact courtesy of Lynne Berry, a PBE trustee and expert on the sector. Among those FTSE 100 companies, how many Board members are drawn explicitly from the voluntary sector? Precisely one. That is not consistent with volunteering having entered the corporate bloodstream. Nor is the fact that 30% of the UK’s largest companies still do not have a volunteering programme. My hunch is that, over time, more companies will need to recognise the benefits of volunteering, not just among Board members but among employees. Why? The two Rs – recruitment and retention. Generation Y, born from the 1980s onwards, place a much greater weight on a diverse career experience, with a strong social dimension, than their predecessors. And Generation Z, the Millennials, are unlikely to buck that trend. Where they lead, companies will surely need to follow. Shifting social norms Given the quasi-public good nature of volunteering, it is possible to conceive of more ambitious proposals still through which the state could encourage volunteering.

The analyses are also based on the assumption that the krone exchange rate will shadow the path for the forward exchange rate as observed on 24 June. At that time, market pricing reflected expectations of a fairly stable exchange rate ahead. 5  See Akram, Farooq Q. (2003): “Reell likevektsvalutakurs for Norge” (Real equilibrium exchange rate for Norway), in Norsk Økonomisk Tidsskrift 118, pp 89-112. BIS Review 47/2004  5  Given the assumptions underlying the projections in the last Inflation Report, inflation will be considerably lower than the inflation target in the period to the summer of 2006. Monetary policy also places emphasis on avoiding imbalances in the real economy. Capacity utilisation in the economy is rising, but the output gap, as it is measured by Norges Bank, will only be marginally positive during the period. Our assessment is that monetary policy should be aimed at increasing inflation at a somewhat faster pace than projected in the last Inflation Report. In connection with the monetary policy meeting on 11 August, the Executive Board stated that the inflation outlook may imply an unchanged interest rate for a longer period than implied by the interest rate assumptions in the last Inflation Report. On the other hand, the prospect of continued low inflation in Norway implies that Norway should not be the frontrunner when interest rates are increased in other countries.