samchain/econo-pairs-v1 huggingface dataset:
François Villeroy de Galhau: France – economic developments and reforms, where are we heading? Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at The Economic Club of New York, New York City, 18 April 2018. * * * Accompanying slides of this speech. Ladies and Gentlemen, I am very pleased and honoured to give this speech to the Economic Club of New York. The theme of my speech is “economic developments and reforms in France”. One year ago, you would probably not have suggested it. This shift tells something: France is currently going through exciting times and deserves a close scrutiny. [slide 1]. Before addressing the subtitle of my speech “where are we heading?” I would like to ask “Where are we starting from?” As about everywhere among the advanced economies, France experienced a decline in its potential growth from 2% in the 1990s to about 1.3% currently. Potential growth could be higher, as in several other advanced countries. An increase would indeed be necessary to face the headwinds of high public debt, ageing and environmental transition, while safeguarding the European social model. If funded, this European social model is a long term economic asset, while bringing more education and more cohesion [slide 2]. There are two other more specific challenges for France. The first one is a persistently high unemployment, which never fell below 7% since 1983. The second one is high public expenditures, the highest among EU countries in 2016 (as a share of GDP).

Under such circumstances, the central bank’s unambiguous commitment to attaining its objectives is an indispensable anchor. A credible central bank with a clear commitment to price stability can, and must, provide such a haven of trust and confidence within the complex and uncertain web of interrelations in a modern economy. This is precisely what the ECB is seeking to do. Our track record over the past, almost six, years shows that we have been rather successful. Thank you very much for your attention. BIS Review 66/2004  7
An area of focus has been in green finance, with over RM2.5 billion in financing extended from the financial sector to companies that promote clean and efficient energy from sustainable sources. There are many ways in which we can better protect our environment. Art provides a sober reminder of this, as depicted in one painting from the Bank’s collection which captures the KL Banjir of 1971, by Mohd Hoessein Enas, showing the iconic Merdeka Square under several feet of water, just a stone’s throw away from the location of the Bank’s headquarters which had moved only shortly before the event. Another exhibit at the BNM Museum and Art Gallery depicts the two major Asian tsunamis of the past 13 years. This piece of installation art by Malaysian artist Oi Nuen Sprunt was displayed here in 2014, bringing home the message of nature’s power and unpredictability, but also the healing power of human compassion and kindness. Today, we bring you a more hopeful exhibition, with works that remind us of what exists just beyond our doorsteps, to be preserved and nurtured. The artists featured here today have all created their imagery direct from the source, which says a great deal about their passion and commitment to their craft. Few of us would take the time or trouble to observe nature at such an intimate level. These works allow us to do so in some measure. I am deeply encouraged by our own Bank staff who have also submitted works for the exhibition.

Maria Merian, one such famous artist from the 17th century, was recently celebrated for her works at an exhibition at Buckingham Palace last October. Merian’s work which featured detailed drawings of plants and insects are preserved to this day in private and academic collections all over the world. I confess I knew nothing about Maria before this week. Having now seen specimens of her incredible body of work, I can only imagine the sensation she would have created in her time with the quality and eye for detail that brought her drawings to life – and on a subject like insects, of all things, which were her passion. They are immensely, strikingly beautiful. We hope the artists of ‘Nature Nurtured’ will receive the same appreciation. The artists in this exhibition do much more than record what anybody with a handphone can manage these days. They immerse us in the natural wonders that surround us, from the bustling cities to the more distant hinterlands. Whatever the setting, every one of the artists has a visual story to tell, informed by research and many hours spent to observe and understand the subjects of their artistic creations. These are not just snapshots, in many ways they tell us as much about the artist as they do their subjects. If people centuries ago could be thrilled by pictures of insects, then surely these artists can reignite a deeper appreciation in all of us of our environment.
The guideline for fiscal policy implies that the central government budget deficit shall be equivalent over time to the expected real return on the Government Petroleum Fund. The new guidelines for economic policy received broad support in the Storting. The guideline specifying that only the real return on the Petroleum Fund is to be used means that the capital in the Fund is not depleted. The capital in the Petroleum Fund will increase as long as there is a positive cash flow (to the central government) from petroleum activities. When the conversion from petroleum assets to financial wealth has been completed, the objective will still be to restrict withdrawals so that the real value of the Fund’s capital is maintained - in principle, indefinitely. The guideline thereby provides a long-term anchor for fiscal policy. The guideline provides a stable framework that contributes to curbing fluctuations in the Norwegian economy that are caused by converting petroleum assets into investment at home and abroad. The guideline has been adhered to in the past two years. As mentioned, the largest conversion of our national wealth in the next thirty years will be from oil as recoverable reserves to oil as financial wealth. The question might, of course, be raised as to whether an alternative option would be to keep our wealth in the form of oil and extract what we needed. Whether this would be profitable or not depends on oil price developments compared with the return on financial assets.

Unicredit Group can probably be qualified as the quintessential European cross-border banking group, with operations in 22 European countries and, amongst these 22, in 19 Central and Eastern European countries. Alessandro is also the President of the European Banking Association. The last 2 to 3 years have been especially eventful for financial integration and stability, with once in a life-time developments. After Lehman Brothers filed for bankruptcy in September 2008, the global financial system experienced unprecedented stress and policy makers had to tread unknown territory in dealing with it. BIS Review 47/2010  1  The financial crisis has raised a host of policy issues that will provide food for reflection for generations to come. I will mention a few of them to set the scene and to kick-start the discussion. The first set of issues relate to the developments in the late nineties and early 2000s. The combination of high economic growth, ample liquidity, increasing financial integration and development, and “light handed” regulation sewed the seeds of the crisis to come. I believe that a number of people and organisations, including mine, identified vulnerabilities in the financial system before the crisis erupted. Nevertheless, we did not anticipate the timing and the intensity. We should ask ourselves what we missed in the run-up to the crisis and what the lessons are for the future. Once the crisis erupted in full force, a first casualty were the money markets, which provide the oil to make the banking system run smoothly. Money markets came to an unprecedented stand-still.
Investors revised up their baseline forecasts for the economy and reduced the perceived downside risks that they see around that outlook. This shift in the outlook led the market to price in the possibility of earlier increases in short-term interest rates and to scale back the size of asset purchases that they expect from the Federal Reserve. Both of those developments contributed to the significant rise in yields. In contrast, the rise in yields does not appear to be driven by the concerns expressed by some that the asset purchase program would unleash a considerable rise in U.S. inflation and inflation expectations to levels well above those consistent with the Federal Reserve’s  12  The portfolio balance channel was discussed by Chairman Bernanke in a speech at the Jackson Hole Symposium in August 2010. 4  BIS central bankers’ speeches  mandate. Such an outcome would be detrimental to the economic outlook, leading to downward pressure on risky asset prices and a substantial weakening in the value of the dollar. However, what has taken place in U.S. markets to date does not resemble this outcome. Indeed, over the period since the November FOMC meeting, longer-term inflation expectations have remained at levels consistent with the Federal Reserve’s mandate, risky asset prices have advanced and the dollar has held its ground. Overall, the broad improvement in financial conditions since last summer has been an important and encouraging development.

We have already published a preliminary report last year. We are now in the process of updating this report and most likely during the summer or at the end of the year we will be ready to publish more definitive results. But there are findings that are already in the paper that was published last year that are interesting. First, we know, and it was explicitly evidenced in the paper, that the reforms at least provided for a financial system that was more resilient than at the beginning of the financial crisis. Banks were better capitalised, better funded, and this was done globally. It was not only done by some jurisdictions rather than others but banks were more resilient globally. It is also true that banks have continued to lend to households and businesses during the COVID-19 crisis, which is a very important difference as compared to what happened in the previous crisis. Even today, if you look at the solvency and liquidity ratios of banks, they are still very high, much higher than before the global financial crisis. Of course, disentangling whether the effects of this increase in resilience were basically the consequence of our reforms or the consequence of the fact that in this crisis, as Athanasios was emphasising, monetary and fiscal policy were very active, is very difficult. There has been extraordinary support for households and firms.
It is common knowledge that a mortgage loan with a low down payment is risky, which means that people might lose their homes. The banking system would in turn have to deal with more underperforming loans, ultimately leading to a rise in interest rates for all. That is why it is in our interest to stem growth in this lending segment, in line with global practices. Therefore, we are discouraging banks from issuing such loans. Also, a housing savings project is in the works and will hopefully gain support. This is when savings for housing become a down payment. They would be kept in a special account, with the terms of a future mortgage loan to be fixed when opening this account. We have had a discussion on this subject, so hopefully this arrangement will become standard practice. Focus should also be turning to the issue of long-term housing rent, an item that should possibly be higher up on our agenda. This is in fact an alternative to mortgage loans, which enables those who cannot afford to take out a mortgage loan, but do need better housing conditions. Now let me say a few words about financial resources for the real sector. Corporates have indeed been more active borrowers this year and credit portfolios have been on the rise. Having said this, we realise that this growth has occurred on the back of the need to plug holes — to fight the consequences of the pandemic and lost revenue.

Chart 14 Strong growth in public demand. Public consumption and investment. Share of mainland GDP. Four-quarter moving average. Percent 36  36  35  35  34  34  33  33  32  32  31  31  30  30  29  29  28 1990  1995  2000  2005  2010  2015  28 2020  Source: Statistics Norway  14  The main responsibility for restructuring rests with the business sector. The recent years’ improvement in cost competiveness is a good starting point for stimulating growth in new activities (Chart 15). In combination with moderate wage settlements, the krone depreciation has made it cheaper for foreigners to buy goods and services from Norway. At the same time, higher import prices have given Norwegian customers an incentive to shift demand towards domestic producers. Thanks to inflation targeting and a floating exchange rate, cost adjustment took place much faster than would otherwise have been the case. NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  Chart 15 Is Norway competitive enough? Labour costs.1) Index. 2013=100. Trade deficit. Share of mainland GDP. Percent 120 13 12  Trade deficit excluding oil and gas (l.h.s.) Labour costs in a common currency (r.h.s.)
A vital plank was to encourage greater central clearing of OTC trades, which prior to the crisis had been largely unregulated, unreported and bilaterally settled. When Lehman fell, uncertainty about these exposures sparked panic. Routing bilateral trades through central counterparties untangles this tangled web. Globally, the stock of centrally cleared derivatives has more than doubled since the crisis.1 And around two-thirds of outstanding interest rate derivatives in the UK and Europe are cleared through CCPs.2 Of course, central clearing means that CCPs are sources of systemic risk, which is why Benoît led efforts to build their resilience and improve their resolvability. As Chair of the Committee on Payments and Markets Infrastructure (CPMI), he oversaw the implementation of the Principles for Financial Market Infrastructure – a set of demanding, international standards for payment, clearing and settlement systems that ensure CCPs are robust to shocks. As a result, an additional $ trillion of collateral is now held globally against all derivative trades. Under Benoît’s leadership, the CPMI has worked with other authorities to finalise and implement global standards for resolution. And he has consistently encouraged greater cross-border cooperation, better information sharing and more coordinated stress testing. Whilst the infrastructure that underpins our markets is now in much better shape, nascent risks remain that, if left unchecked, could bring new problems. Consider market liquidity. During the crisis, liquidity dried up, particularly in the interbank market, as cash-rich banks hoarded excess funds.

Sustainable investing must go mainstream. In short, every financial decision must take climate change into account. Achieving that requires improvements on three Rs: reporting, risk management and return.   On reporting, TCFD standards must be enhanced to be as comparable, efficient and decision-useful as possible. And we need to develop pathways to mandatory climate disclosures.   To manage risks, disclosures need to go beyond the static to the strategic. We must assess the resilience of the core of the financial system to transition risks, including through stress testing. The Bank will publish a discussion paper on our planned climate stress test tomorrow and we look forward to taking this forward internationally through the Network for Greening the Financial System (NGFS).   On returns, asset managers and asset owners will increasingly have to assess the transition paths of their investments and report their impact to their clients. Our citizens need to be able to see whether their investments are consistent with the path to net zero. Central banks cannot stand on the side lines of this revolution. And with Benoit’s research and Christine’s leadership, I am confident that the ECB will be at the vanguard. Conclusion 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  Benoît, on behalf of everyone here tonight, I’d like to thank you for your tremendous work at the ECB and as Chair of the CPMI. The flood of acclaim you’ve received is rightly bestowed.
In the current geopolitical environment, such risks are, unfortunately, not as remote as they once were and need to be taken seriously by European policymakers. Conclusions We have laid the groundwork by providing safe and efficient market infrastructure, and this should be used as a basis for innovative, user-friendly solutions. The way to protect the integrity of European payment services is not by closing them off to the world, but by making them global players. Building on local or national solutions is anachronistic and will not meet the needs of the market. If we are to succeed at a global level, the issue of domestic governance needs to be addressed. Our reliance on non-European card schemes for domestic payments in Europe is suboptimal. European card schemes should make interoperability and full pan-European reach their main priorities, enabling any card to be used at any terminal. At the same time, governance arrangements need to cater for European needs, given that cards are the single most important electronic payment instrument in Europe. However, protectionism should not be used to artificially promote European innovation in payment services. We should remain open to global players, but should focus more on addressing the reasons for the lack of major European providers in the payment market. It is important that European payment service providers are active at a global level. Rather than establishing national solutions, we should seek to develop global solutions based on European open governance that use European infrastructure.

Yves Mersch: Strengthening the European financial industry amid disruptive global challenges Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the European Institute of Financial Regulation (EIFR), Paris, 3 September 2018. * * * Europe’s financial industry still faces a number of challenges. Its continued weak performance, with low price-to-book ratios and meagre profitability, is ample proof of that. Some of those challenges – such as high levels of legacy assets, the need for deleveraging and the burden of stricter regulation – are a result of the financial crisis. But even before the financial crisis, the industry was facing pressure on various fronts, and those challenges are still there. In particular, fundamental technological change continues to call established business models into question. Today, I will focus on disruptive challenges that are arising in a particular area of business: digital technology. Such technology is becoming ever more important in banking and is opening the door to competition from non-banks in core areas such as payments. Cascades of complementary innovations have already fundamentally altered the payment landscape, and European banks need to act now if they want to avoid losing out to bigger international players. The euro area has been very successful in providing a top-tier foundation for innovative payment services. However, this foundation has not yet been fully utilised by European players to provide true state of-the-art pan-European services.
But as students of economic history know (and policymakers learn at their cost), without the right institutions, structural changes – whether large changes to trading relationships or technological revolutions – can be painful. Whitaker recognised that “Readiness to adapt to changing conditions is a sine qua non for economic 1  success” and that adaptability required a series of changes to Ireland’s institutions. Major reforms to education were essential to match the skills of the Irish workforce to the potential jobs that increased inward investment could bring. A 1964 report on Manpower Policy, which Whitaker oversaw as chair, advocated 2  greater investment in the STEM subjects, readying a generation for the IT revolution. More broadly, Ireland repeatedly increased standards of education, beginning with the introduction of universal secondary schooling in 1967, resulting in levels of educational attainment today that exceed the OECD average. 3  Whitaker also advocated reforms of labour market institutions – to tackle restrictive work practices and ensure pay was more closely linked to productivity. 4  Emphasis was also placed on a competitive environment for business to help attract foreign capital, in part through the overhaul of the corporate tax regime. And improvements were made to infrastructure, such as power supplies and transport services. 1  Taken from “Economic Development”, a report on the Irish Economy overseen by Whitaker and published in 1958. Whitaker played a central role in improving education in the public sector.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, to the CBI Dinner, Nottingham, 20 January 2009. *  *  *  Certain truths are self-evident. One is that financial markets and the economic outlook can change quickly and in surprising ways. You in the Nottingham business community know that only too well. In line with businesses across the United Kingdom, your economic fortunes have changed markedly over four months. Before last September, the world economy was slowing and at home the Monetary Policy Committee published a central projection of falling output in the United Kingdom in the third quarter. Inflation, though, was still rising. But after the failure of the American investment bank Lehman Brothers, there was a widespread collapse of confidence in the banking systems of the industrialised world. That led to an unprecedented and synchronised downturn in business and consumer confidence around the world. Our business contacts at home and abroad, and my international counterparts, started to report that orders and confidence had, in the same telling phrase, “fallen off a cliff”. Global equity prices fell more in the month following the failure of Lehman Brothers than in any but a handful of months in the Bank of England’s 300 year history. Chinese electricity production, having risen steadily at 15% a year, fell in November to a level 8% lower than a year earlier – the steepest fall on record. Car sales in Brazil contracted by a quarter compared to a year earlier.