samchain/econo-pairs-v1 huggingface dataset:
This response by the prudential authorities, along with the monetary and fiscal policy measures adopted, has allowed the initial impact of the shock to be absorbed, it has smoothed the provision of credit to the economy and it has prevented the materialisation of  3  See the speech by the Governor of the Banco de España “Retos y políticas para la estabilidad financiera ante la pandemia”, October 2020. 5  a systemic risk in the financial system that would have heightened the crisis further and made it more persistent Looking ahead, however, set against the uneven and uncertain recovery I described earlier we cannot rule out two outcomes: that the risks identified materialise, and that their impact and persistence are greater than expected. In this respect, the economic and supervisory authorities must continue to closely monitor banks and financial markets so that they may continue providing the necessary flow of credit to the economy. We must continue adopting measures to mitigate the risks and, naturally, we must stand ready to respond appropriately should these risks materialise. In the banking area, this response can only be pan-European, given the commitment to the Banking Union and the need to avoid the financial fragmentation problems that might stem from an exclusively national response. European fiscal policy The ECB’s monetary policy measures and action taken by the regulatory authorities have been forceful, aimed at delivering a common, truly European, response to the economic crisis associated with the pandemic.

Further, it is necessary to equip the European regulatory framework10 to deal with a hypothetical systemic crisis, to address the problem of the liquidity of institutions under resolution, and to analyse the possible role of asset management companies in the event of severe impairment of European financial institutions’ balance sheets. EU Member States should also move swiftly to reach an agreement on creating a common European procedure for the administrative winding-up of credit institutions. Lastly, we should not overlook the importance of making headway on the agenda of measures for the capital markets union project. In October, the European Commission launched a new action plan, identifying 16 areas for action to drive the project forward. I would like to highlight some of the most significant ones: supervisory convergence; sustainable finance to consolidate European leadership worldwide; changing the regulatory treatment of securitisations to strengthen banks’ lending capacity; or promoting market financing to SMEs and the development of venture capital markets. In general, progress on these and other key matters, such as the creation of a European safe asset, is a complex task that requires the adoption of measures and regulatory changes in a wide variety of areas, and entails the full implication not only of EU authorities, but also of the Member States. It is crucial that the authorities concerned have the firm political will to implement the required measures and do away with barriers and red lines. In short, to avoid a piecemeal approach and the loss of momentum, the utmost political ambition must be mobilised.
This, however, does not mean that we should be complacent. In the case of the Bank of Thailand, we have asked banks to carry-out stress-tests to ensure that bank’s Board and management are fully alert to the increased risk, have the strategy to manage it, and have adequate capital and liquidity even in severe risk scenarios. The result of the stress-tests shows that the system remains resilient, but we will continue to monitor developments closely, and stand ready to take necessary actions to ensure financial stability. Why have both financial institutions and regulators in mature economies and elsewhere not been fully prepared for such a challenge? First, there were many factors that caused the deterioration in the credit discipline, including financial innovation such as the originate-distribute model of securitisation which tends to lessen governance in credit process. The key lesson here is that financial innovation can be a mirage which misleads us into disbanding the fundamental discipline required for good risk management and governance. This lesson is not new; it re-emerges with different variants over the years. Therefore, going forward, we need to continue to be vigilant of this risk. Secondly, as risk-profiles become more complex, so too must risk management and riskbased regulatory framework. Here, the lesson from CDOs is clear in that the regulatory framework, even at the level of international standards, have not properly converged, and there are regulatory arbitrage which resulted in excessive risk taking, to the detriment of the overall financial system.

The first is the need to further redress public finances, so as to afford budgetary policy room for manoeuvre ahead of any future negative shocks. Moreover, the fiscal consolidation process should be compatible with an improvement to the quality of public finances that helps contribute more to the potential growth of the economy. The second is the resumption of the structural reforms in the factor and product markets with a view to contributing to better resource allocation and to improving our economy’s competitive capacity. Thank you. 6/6
By component, BANCO DE ESPAÑA  8	 TESTIMONY BY THE GOVERNOR OF THE BANCO DE ESPAÑA BEFORE PARLIAMENT IN RELATION TO THE DRAFT STATE AND SOCIAL SECURITY BUDGET FOR 2019  PUBLIC SPENDING IN THE DRAFT STATE BUDGET  CHART 8 PENSION EXPENDITURE (a)  PRIMARY EXPENDITURE (a) As % of annual change  As % of annual change  Projections  Projections  10  10 5  8  0 -5  6  -10  4  -15 2  -20 -25  0 2010  2011  2012  2013  STATE  2014  2015  2016  2017  2018  2019  2010  2011  2012  2013  2014  2015  2016  2017  2018  2019  GENERAL GOVERNMENT  SOURCES: IGAE, Plan Presupuestario 2019, State Budget 2019 and Banco de España. a Cash-basis outturn data, 2018 Budget outturn projection and initial 2019 Budget, except general government spending, which is National-Accounts-based. among the payments subject to greater discretionality, purchases of goods and services will grow by 2.7%; capital expenditure by 7.9%; and expenditure on staff by 4.8%. Among the expenditure items influenced by the behaviour of the financial, macroeconomic or demographic fundamentals, interest payments in cash terms will grow by 4.6% in 2019, while, in the social security budget, spending on contributory pensions will increase by 5.3% and that on unemployment benefits by 1.2%.

GENERAL GOVERNMENT DEBT IN THE DRAFT BUDGET PUBLIC DEBT  120 100 80  CHART 11 BREAKDOWN OF GENERAL GOVERNMENT DEBT  % of GDP  60  2017  2018  2019  Debt as a % of PIB  98.3  96.9  95.4  Debt change (as GDP pp)  -0.7  -1.4  -1.5  Balance  3.1  2.7  1.3  GDP nominal rate of change  -4.2  -3.6  -3.7  Flow-stock adjustment  0.5  -0.6  0.9  Due to:  40 20 0 75  78  81  84  PUBLIC DEBT  87  90  93  96  99  02  05  08  11  14  17  2019 STATE BUDGET FORECAST  SOURCES: Banco de España and 2019 State Budget. subject to a set of rules restricting fiscal policy which, in Spain’s case, would mean that: first, the structural government deficit would have to be reduced each year by 0.5 pp of GDP, under normal conditions, until the medium-term objective (MTO) of structural balance were achieved; second, the annual growth of general government spending would have to be less than or equal to the economy’s potential medium-term growth; and, finally, the government debt-to-GDP ratio would have to be reduced each year by one twentieth of the difference between its level and the target of 60%.
After all, reputation and legal risks can be costly too. 20. The MAS expects boards and senior management to have ownership and oversight of ML/TF risk control issues. FIs therefore must put in place an effective reporting framework to keep board and senior management well apprised. In turn, Board and senior management must oversee proper resolution of ML/TF risk control concerns as flagged out internally by your staff, by auditors or regulators. 21. The next area relates to risk culture. Clearly, culture is not easy to prescribe as a practical matter. Every staff in the FI, not just its management, contributes to its culture. However, management usually has decisive influence on a firm’s overall culture by setting the right “tone from the top” which must be reinforced through supporting actions to secure the commensurate “echo from the bottom”. Those in the various lines of defences must be empowered and recognised for doing their jobs well. 22. My remarks so far have discussed the MAS’ approach to Regulations and Supervision. Let me now touch on the next element of our framework – Enforcement. No matter the amount of regulations and notwithstanding the heightened intensity of our risk-based AML supervision, those bent on breaking our ML/TF laws will always try to find ways to exploit any weaknesses in control systems or practices. This can happen especially if an FI’s governance and culture fall short and appropriate due diligence is overlooked in lieu of business motivations.

While pursuing our primary objectives of safety and soundness and policyholder protection, we also have regard to a number of important considerations, including the competitiveness of the sector and the contribution it can make to long-term economic growth. We are also mindful that as part of its review of the Future Regulatory Framework, the Government has proposed to give the PRA a new secondary objective to promote long-term economic growth and international competitiveness, alongside our existing secondary competition objective. With all of those factors in mind, we think we can deal with the risks we are worried about while also supporting the government’s wider objectives. Specifically, some in the insurance industry have the impression that we are opposed to any release of capital requirements for insurers. I want to be very clear that that is not the PRA’s position – indeed, following a lot of work and examination of the evidence over the last year or so we think that a substantial capital release should be possible while continuing to protect policyholders adequately.
Kerstin af Jochnick: Unusual measures in unusual times – experiences with the Riksbank’s unconventional monetary policy Speech by Ms Kerstin af Jochnick, First Deputy Governor of the Sveriges Riksbank, to SACO (Swedish Confederation of Professional Associations), Stockholm, 29 January 2016. *  *  *  Accompanying charts can be found at the end of the speech. I would like to thank Carl-Johan Belfrage, Hanna Köhler and Cecilia Roos-Isaksson for helping me with this speech. The start of a new year – particularly after such an eventful year as 2015 – can be a good time to look back and try to learn a few lessons from the past year’s experiences. I will therefore focus today on the reasons for the new monetary policy ground broken by the Riksbank in 2015. This includes our introduction of a negative repo rate and our initiation of government bond purchases as a complement to repo rate cuts to further boost demand in the economy and increase inflation. The inflation target is worth defending. This is why we have taken to unusual measures under unusual circumstances and these measures seem to have contributed towards good growth and a rising inflation trend. At the same time, there is reason to remember that the low level of interest rates is leading housing prices and mortgages to develop in a dangerous direction. I also intend to present a few preliminary reflections on the recently published assessment of the Riksbank’s monetary policy. Why is the inflation target so important?

But who could have foreseen in 1990 that we were on the brink of a golden decade that would see a boom in the IT and communications industry? And who would have imagined in 2002 that Norwegian manufacturing would experience a new wave of growth? Fortunately, there are also many examples of innovation, particularly when times have been bad. Nokia managed to make the transition from rubber boots to new technology when the Finnish economy collapsed at the beginning of the 1990s. In Norway, the Norwegian telecom system was deregulated and Telenor developed into a large international company. During the downturn at the end of the 1980s, Tandberg started developing video conferencing systems. In the industrial centres Mo i Rana, Raufoss and Kongsberg, rich technological communities emerged after the collapse of government enterprises in the 1980s. The merchants behind the grocery chains Rimi and Rema started business on a small scale during the downturn at the end of the 1970s. The furniture producer Stokke – makers of the world-famous Tripp Trapp chair for children – started operations in western Norway in the midst of the economic crisis in the 1930s. Economic policy The measures now being implemented are intended to provide a bridge until market economies generate new growth under their own steam. The authorities in many countries are now testing the boundaries of active economic policy. And some have overstepped them.
However, indicators still pinpoint to existence of significant gaps compared to EU-28 in this area. Improvements in fiscal institutions, fiscal rules, public-private partnership, foreign financing partly in form of grants, improvements in public investment management frameworks are some of the possible “remedies” that might generate improvements in the infrastructure in the CESEE region. When it comes to the private sector, the focus has been put on innovative companies, which can fill the gaps in more sophisticated investments that can elevate the potential growth of the economies. Given the more limited access to banking finance for this corporate segment, alternative sources of financing are being explored, which requires concerted policy and private sector action in further and stronger development of financial markets and mobilizing available finance in a more efficient way. Bibliography 1. Transition Report 2015-2016 “Rebalancing Finance”, European Bank for Reconstruction and Development. 2. Central, Eastern, and Southeastern Europe - How to Get Back on the Fast Track?, Regional Economic Issues May 2016, International Monetary Fund. Winds of Change: Investment in Central, Eastern and South Eastern Europe, European Investment Bank, September 2017. 3. The Western Balkans: Reviving up the Engines of Growth and Prosperity, World Bank Group, 2017. 4. Report by the Working Group on Capital Markets Union, 2018, London. 5. Iorgova, S., Ong L.L., (2008), “The Capital Markets of Emerging Europe: Institutions, Instruments and Investors”, IMF working paper No. 08/103, International Monetary Fund. 6.

The estimates reveal shortfall, meaning that after the crisis, the investment in the 1  The only exception is Macedonia, given the strong investment cycle after the crisis, driven by public investments and structural reforms in the export segment. 2 Transition report 2015-2016 “Rebalancing Finance”, European Bank for reconstruction and development. 4  region is lower than in the peer countries, in the range of around 3 to 6 percentage points of GDP. Similar inference is drawn by the IMF (2016)3, pinpointing post-crisis gaps in the capital stock in the CESEE region compared to estimated benchmarks, being reflection of lower savings rates in the region, narrower borrowing space after the crisis and lower return on investment. This notion is confirmed with the data on the real capital stock in the region, as well, which is around 40% of the EU-28 average, with the SEE region lagging behind significantly. Though this ratio is rising, yet it clearly indicates large scope for improvement. Chart 5: Real capital stock, per capita in CESEE region vis-à-vis EU28 0.70 0.60  0.50 0.40 0.30  2014  2012  2013  2010  SEE  2011  2008  CEE  2009  2006  2007  2005  2003  CESEE  2004  2001  2002  2000  0.20  Baltics  Source: Penn World Table, version 9.0 and NBRM calculations  2. Investment financing Many policy measures for unleashing investment growth are suggested in this context.
At the same time, we must ensure that banks, especially the larger ones, go back to their core business of extending credit to the real economy and refrain from engaging in the kind of risk-taking that gave rise to the recent crisis. Priority must, therefore, be given to the one measure that is most likely to influence the banks’ ability to take risk, that is the BCBS proposals on bank capital. Capital buffers must henceforth be commensurate with the degree of risk undertaken. It is no longer acceptable that profits are privatised and losses socialised. In a broader context, another important challenge is to ensure that systemic risks are addressed without unduly constraining financial innovation and integration. Finally, the opportunity provided by the current period of reflection should also be used to examine the possible consequences of some of the reform proposals for the functioning of financial markets and for the implementation of monetary policy, and by extension also for the real economy. References 1. European Central Bank, The Incentive Structure Of The “Originate And Distribute” Model, 2008. 2. Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research, “The Challenge of Central Banking in a Democratic Society”, 1996. 3.  http://www.reuters.com/article/idUSN0132320120071003  4. The High-Level Group on Financial Supervision in the EU, 2009. BIS Review 67/2010  3  5. Basel Committee on Banking Supervision, “Strengthening the resilience of the banking sector”, 2009. 6. Basel Committee on Banking Supervision, “International framework for liquidity risk measurement, standards and monitoring”, 2009. 7.

Furthermore, there is a very convincing argument for the extended repo-rate path in that it provides better outcomes for both resource utilisation and CPIF inflation, which can give it just as much credibility as the lower repo-rate path. 4  BIS Review 60/2010  The extended repo-rate path also has the advantage that the monetary policy alternatives can be reduced to the question of when we should begin to increase the repo rate: in July or September or, as I advocate, in December. The monetary policy choice thus boils down to deciding which point in time for the first increase gives the best outcomes for inflation and resource utilisation. That is, which point in time gives a forecast for CPIF inflation that is as close to the target as possible and a level of resource utilisation that is as close to normal as possible. Could the monetary policy decision between alternatives be any simpler, more distinct and more transparent? Given this background I thus decided to advocate the extend repo-rate path rather than the lower repo-rate path as an alternative to the path in the main scenario. The extended repo-rate path stabilises inflation and resource utilisation better than the repo-rate path of the main scenario In my view, various monetary policy alternatives must be discussed and assessed before any monetary policy decision can be clearly justified.
Christian Noyer: Banking in the euro area Speech by Mr Christian Noyer, Vice-President of the European Central Bank, at the 30th Anniversary of the Association of Foreign Banks' Representatives, Frankfurt, 8 November 2001. *  *  *  I am very grateful for the invitation to speak to you on the occasion of the 30th anniversary of the Association of "Foreign Banks' Representatives in Germany". Your Association has 117 members from a large number of countries. Several of the member institutions are counted among the 30 major European banks, or among banks from elsewhere with important operations in Europe. For many banks represented by your Association, the topic of my speech "banking in the euro area" is part of day-to-day business. It is also day-to-day business for the European Central Bank (ECB) and the Eurosystem as a whole, as we conduct our monetary policy operations and run the TARGET large-value payment system. The further integration of the European banking system and financial markets is in the interests of both banks and the central bank. For banks, it means the liquidity benefits of deeper and wider markets and lower costs when operating in several countries. From the central bank perspective, it enhances the efficient and consistent implementation of the single monetary policy. We already enjoy the benefits of a common euro area banking system in important respects.

The average market share of foreign branches and subsidiaries established by banks from EU countries was 10% at the end of 2000, which is definitely not negligible. Also, the ownership structure of the banking sector is changing significantly. It is no longer true that only Luxembourg's banks have a significant proportion of capital owned by foreigners. In Ireland, Belgium and Portugal, and in the Nordic countries, the percentage of banks' capital in foreign hands ranges from around 40% to some 20%. France, Italy, Spain and Austria also show ratios of between 15% and 10%. For many large European banks, the holdings of stakes in other large players is sometimes associated with joint ventures in specific business lines or geographic areas – for example, in accession countries. Looking at the strategies of individual banks, some banks have already developed strong multi-country operations in the retail field. For instance, two major banking groups have retail activities in more than five EU countries. In any case, if the integration of the retail markets proceeds, more such operations could be expected to emerge. Integration could also be advanced via electronic banking, or crossborder lending, both of which are still relatively limited. In fact, e-banking could represent a forceful boost to integration, since it could allow customers to access banking services offered by banks in other countries, or it could be a powerful way to enter a new market without the need to establish a costly branch network.
20  BIS Review 101/2009  BIS Review 101/2009  21  22  BIS Review 101/2009  BIS Review 101/2009  23  24  BIS Review 101/2009  BIS Review 101/2009  25  26  BIS Review 101/2009  BIS Review 101/2009  27  28  BIS Review 101/2009  BIS Review 101/2009  29  30  BIS Review 101/2009

17 However, in line with the previous discussion, instruments other than interest rates are likely to be much more effective in avoiding excessive credit growth and asset-price booms, and should thus be used as a first best alternative. Interest rates that are high enough to have a noticeable effect on credit growth and asset prices may have strong negative effects on inflation and resource utilization, and a central bank will probably rarely have sufficient information about the likely beneficial longer-horizon effects on inflation and resource utilization for the trade-off to be worthwhile and motivated. 18  16  Walsh (2009) points out that when financial factors cause distortions, these distortions will in general introduce corresponding terms in a loss function for monetary policy that is a second-order approximation to household welfare. Curdia and Woodford (2009) present a model where the second-order welfare approximation is a standard quadratic loss function of inflation and the output gap between output and potential output, but where potential output is affected by financial factors. Then inflation and the output gap remain the target variables, with and without financial factors. The neutral rate in the model, that is, the real rate consistent with output equal to potential output, is then also affected by financial factors. 17  Adrian and Shin (2007, 2009) argue, in a model with a risk-taking channel as in Borio and Zhu (2008), that short interest-rate movements may have considerable effects on the leverage of securities broker-dealers in the market-based financial sector outside the commercial-banking sector.