samchain/econo-pairs-v1 huggingface dataset:
However, these values are far below the objective of price stability, which is defined as inflation of below, but close to, 2% in the medium term. The latest data, referring to the February estimate, for the euro area’s Harmonised Index of Consumer Prices show a year-on-year increase of 0.9%, the same figure as in January. The smaller drop in energy prices appears to have been offset, in the context of rising oil prices, by moderation in the core component (which excludes energy and food). The latter fell by 0.3 pp with respect to January to 1.1%. This outcome was determined in particular by temporary factors, such as the updated HICP weights, which since January are based on 2020 consumption patterns and which, although they will have a very marginal downward moderating effect on the year as a whole, will have a considerable impact on short-term inflation dynamics, making them difficult to interpret. Also, the pandemic containment measures appear to be changing the seasonal sales calendar in various countries. The situation I have just described is, therefore, one of a fragile, uneven and uncertain recovery in the euro area, where some of the downside risks for our short-term baseline scenario, which were identified just a few months ago, appear to be materialising. Against the current backdrop of uncertainty surrounding both the course of the pandemic and the speed of the vaccination campaigns, the best contribution that economic policy can make is to instil confidence and certainty.

Furthermore, within the larger prerogatives scope provided by the 2010 law, encompassing the functioning, surveillance, and security of the payment systems, the Bank of Algeria is currently updating the payment systems infrastructure (real-time gross settlement system for large value payments and urgent payments and clearing system) established in 2006, in line with international standards. The completion in 2014 of the modernization of the existing credit bureau and the establishment of a new infrastructure for the development of a broader credit bureau will provide an important tool to monitor credit risk as of the second half of 2015. 4  BIS central bankers’ speeches  The new risk-based, forward-looking supervision approach will be focusing on the banks’ credit allocation process in order to avoid the reemergence of credit risk concentration. Anchored within a framework of strengthened stability, the deepening of the financial sector reform as of 2014 will form the basis for a better allocation of national savings to foster productive investments and financing of nonhydrocarbon inclusive and job-creating growth, that is less dependent on the budget and is driven by SMEs development. In this regard, a series of recommendations has been formulated at the end of 2012 by a working group chaired by the Bank of Algeria, with a view of improving the financing of SMEs development, especially through better access to credit and banking services. These efforts should be sustained. For their part, banks are expected to diversify their SMEs financing tools, while continuing to improve the assessment, analysis, and management of credit risks.
It should be a given that the euro area’s monetary and budgetary policies should be shaped by the underlying trends and political objectives in Europe. So it is on the basis of those trends and objectives that the policies should be judged. That does not mean that the economic policies adopted on either side of the Atlantic cannot be compared. But for such a comparison to be reliable, its control variable needs to be precisely the underlying trends and policy objectives in the two areas. In other words, there must be a symmetrical comparison conducted on an equal footing, capable of allowing us to explain any differences encountered, including on the basis of the distinct characteristics of the two economies. 1  My thanks to Roberto Motto and to Adina Popescu for their help in preparing this lecture. BIS Review 135/2008  1  Today I would like to present an analytical model that should help us to understand whether, and why, economic policies – with particular reference to monetary and budgetary policies – have been different in the euro area and in the United States. This may prove useful to those, especially in Europe, who wonder why certain decisions are made on our continent, and the reason why they sometimes differ from those reached in the United States. 2. Monetary policy  It does not take a huge number of graphs or tables to show that monetary policies in the euro area and in the United States have partly differed over the past ten years.

The essence of the With Profits contact as I understand it is that the provider offers a guaranteed minimum return, variously structured , plus the prospect of additional returns derived from the return earned on a pooled fund that combines many contracts including over different generations of policyholders. There is of course a logic to pooling returns, but for the policyholder the return can be complicated, and sometimes made opaque, by the practice of pooling different generations of policyholders who may have different expectations on their returns (conditioned, for instance, on changes in the external  BIS central bankers’ speeches  3  environment); and by the practices of smoothing returns and of charging differentially for the economic value of the guarantees. Additionally, problems have arisen because the funds are made up of many different groups of policyholders with different guarantees, some of which, essentially on the annuity side, became increasingly valuable as nominal interest rates fell from the mid 1990’s. The existence of these guarantees was often, at best, unclear or, at worst not disclosed to new joiners to the fund. Bear in mind also that these contracts are long-lived with maturities typically of 25 years of more; and that the With Profits insurers themselves have often built up over many years through the take-over or mergers of many smaller providers, each with their own distinct products, associated policyholder expectations, and administrative “legacy” systems.
And the Governing Council underlined at its recent meeting that, should it become necessary to further address risks of too prolonged a period of low inflation, it is unanimous in its commitment to using additional unconventional instruments within its mandate. Thus, many of the necessary conditions to restart credit growth are now in place. Yet, I think it would be short-sighted to claim that these alone will be sufficient. Coming out of a major financial crisis, it was always clear that repairing the bank lending channel would be a longer process, and the measures I have just described would only be the first steps in that process. One of the most important issues now in the repair process is how banks adapt to the challenging business environment that has been bequeathed by the crisis. The banking sector in transition The euro area banking sector remains in transition. At present banks generally have low revenues and profitability arising from several factors, including legacy factors such as loan losses during the crisis; cyclical factors such as the weak macroeconomy; and in some cases regulatory factors such as the costs of adapting to new legislation. This is reflected in historically low returns on equity: the median return on equity for euro area significant banking groups is currently 5%. It is unlikely, and indeed undesirable, that we will see a return to the high returns on equity we saw before the crisis, which were distorted in particular by excessive leverage and maturity mismatch.

Results of the survey show that more than half of interviewees (54%), in terms of a 500 Lekë banknote, in an instinctive manner either wrongly identify or read its value, by adding a “0” to turn its value into “old lek”. The situations or sets where the interviewees, more than 80%, responded that habitually speak with the outdated term “old lek”, are mainly informal or family ones: small shops or fruit and vegetables markets; conversations with family members, friends and colleagues; followed by means of public transport. On the other side, data show that the wrong communication of Lek value occurs very rarely across financial institutions (banks, non-banks, etc. ), only 28.1%, or in the offices of public administration (39.4%), although it might be expected 1/2  BIS central bankers' speeches  these figures would have been even lower In addition to public and financial institutions, another strongminded factor affecting the communication of public is media, the written and audio -visual media. According to 20% of public perception, media always or frequently communicate prices and monetary values in “old lek”. This percentage, though a low one, sheds light on the need for a higher inclusion of media in the efforts to completely eliminate this phenomenon, particularly by bearing into mind its mission to transmit the information truly and accurately to the public, coupled with its educational role.
To add something else would be to double-count the effect. Macro models and the determination of demand As an undergraduate one of the books I had to read was a collection of essays about monetary economics by one of my lecturers, Frank Hahn. It begins with this rather provocative sentence: “The most serious challenge that the existence of money poses to the theorist is this: the best developed model of the economy cannot find room for it”. As a newcomer to the subject I found this a bit concerning (not to say alarming). If economics can’t even say why money exists how can it hope to explain what it does? Reading on, one’s concern subsided a bit. Hahn was, by training and inclination, a general equilibrium theorist. For him, as he explained in the very next sentence, “the best developed  Page 8  model of the economy” was the highly stylised description developed by the great economic theorists Ken Arrow and Gerard Debreu. For all its sophistication, the Arrow-Debreu model is one in which, by assumption, trade is entirely costless. In this perfect economy there’s a market and a price for the exchange of any two goods or services – including those for future delivery – without the need for a medium of exchange or any sort of costly financial architecture. So it’s not a huge surprise that, having ruled out at the start the conditions that might require it, this model should “have no place” for money.

That might have been for any number of reasons. One contributory factor may have been that the additional deposits were held disproportionately by people less likely to be “liquidity constrained” – older and better-off households – and therefore less likely to spend them. (The very existence of money probably reflects financial frictions of this sort. It wouldn’t therefore be surprising if the distribution of a monetary “windfall”, across a diverse population, had some bearing on its effects.) Whatever the reason, this makes it difficult to see these additional deposits as the principal cause of the inflation that’s followed. It is precisely those subsequent (and very large) jumps in import prices, and their second-round effects, that seem the more likely cause. This explanation would also accord much better with the very large changes we’ve seen in relative prices. Finally, let me end with a more open question, one that’s more about the future than the past. I’ve not addressed this directly today but it’s certainly relevant. As Chart 3 illustrates, household deposits (and aggregate M4) have actually been declining for some time since mid-2021, relative to household income. The levels of these aggregates, on the other hand, are still higher than in the pre-pandemic period. Which of these matters more – a still-high level but a negative growth rate – depends a bit on your view of how households behave and how their demand for money is determined.
To achieve this, the priority is to boost business investment – in France it is currently forecast at +3.4% for 2016. This depends on economic levers, to be strengthened through structural reforms. But it also depends on financial levers – the core challenge being equity financing, which is key for innovation. In this respect, Europe is lagging far behind the US: the equity share of corporate financing in the euro area is 52% of GDP compared with 121% in the US. BIS central bankers’ speeches  1  France and Europe do have substantial strengths to meet this investment challenge. Let me focus on two of them today: –  First, savings are abundant. In France, the household saving rate is high: 14.1% of gross disposable income in 2015, second only to Germany (17.4%) among the main European economies. In the euro area, the current account surplus is substantial: more than 3% of GDP in April 2016 – meaning that savings exceed investment by nearly EUR 330 billion. This gap needs to be closed by fostering investment rather than by reducing savings. –  Second, our financial system is solid. The regulatory and supervisory frameworks have been considerably strengthened since the crisis, both at the international and European levels. Today, the French banking system is one of the soundest in Europe and in advanced economies: between 2008 and 2015, the CET1 solvency ratio of France’s major banking groups more than doubled, from 5.8% to 12.6%, which is EUR +143 billion of core capital.

Therefore, we urge the EPC and CAS members to swiftly agree on concrete proposals for a permanent governance structure with regard to security certification for cards and terminals. Last, but not least, I would like to stress that, from a European perspective, it is of strategic importance to adopt a more coordinated approach to global standard-setting bodies, such as the ISO and EMVCo. These requirements should lay the foundation for a competitive European cards market. However, I personally believe that the European cards market would also benefit from the power of choice. Therefore, a duopoly in the European cards market is not the outcome that I would prefer to see for the SEPA project, which brings me to New Year’s resolution number three. New Year’s resolution number three: let’s move forward with an additional European card scheme The Eurosystem has been calling for an additional European card scheme for four years. Therefore, we are closely monitoring the work of the three initiatives that have been launched. It is important to emphasise that we have not selected any “favourite” out of the three projects, but treat all three equally. All three face some of the same challenges: the  2  BIS Review 159/2010  main challenge is certainty as regards the potential business case. Some clarity has been provided with regard to the sensitive issue of multilateral interchange fees (MIF) thanks to the agreements reached by the EU Commission with VISA and MasterCard.
Global data reveal that close to 95 million people during 2020, fell below the threshold of the poverty line, more that it was expected or projected at the start of the crisis. In this context, labor market data clearly indicate that youth, low skilled workers and women particularly in emerging and developing economies, have been hit harder. There is statistics pointing to a global employment rate for men below the pre-pandemic level by about 5 percentage points, while the women employment rate is still 7 percentage points below the prepandemic level. Given the nature of the crisis, Western Balkan region was not shielded from this global shock. Economies in the region are small and highly open in trade and financial terms, heavily exposed to external developments. GDP in the region declined by 3.4% in 2020, but with intensity that differs across counties in the region, ranging from –1% in Serbia to –15.2% in Montenegro. Henceforth, the disproportionality of the impact of the crisis pertains to the region, as well. Let me use labor statistics to illustrate some important aspects of how COVID affected women. First of all, in general, I can say that this crisis hit women more heavily than men, and this has come on top of the fact that women faced pre-crisis gaps in many respects on the labor market. Couple of numbers in this segment.

First, in our country the women employment rate declined by 1.2 percentage points, while the men employment rate fell less than 1 percentage point, thus further widening the already wide gender gap of 18 percentage points, much higher than in the European Union. That data show that only 38% of the women work, which is significantly lower than the employment rate of men (56%). When we look at the unemployment rate, we see similar developments. Initially unemployment rate increased more for women than for men. Then, as a result of policy support measures, the unemployment rate gradually went back to the pre-crisis level in 2019. However, the adjustment in the unemployment rate is largely related to the increased exit of females from the labor force, illustrated with the fall of their labor force 1/3  BIS central bankers' speeches  participation rate. Of course, this is not the case just in our country. It is a global phenomenon. It is a case in the whole Western Balkan region. For example, participation rate in the region on average declined by 1.5 percentage points to 51%, which is the lowest level since 2016, with a higher drop again for women than for men. Thus the female participation in the Western Balkan region fell to 41%, which means that only 41% of the working age women are part of the labor force in comparison to the 63% of men, although with large variations, from 52% of women participating in Albania, to 22% of women participating in Kosovo.
As after the previous two episodes of systemic failure, in October 1987 and August 1998, a third wave of technological transformation in the standards of risk management is now needed as a matter of priority. Firms themselves admit as much. That calls for a new agenda. I have outlined some elements of such an agenda, to address some of the failures exposed by the crisis. These measures involve a greater degree of engagement both between risk managers and senior management within firms, and between financial firms and the authorities. They would also involve much greater transparency to the wider world about risk metrics and accompanying management actions. These measures  14  Aikman, Alessandri, Eklund, Gai, Kapadia, Martin, Mora, Sterne and Willison (2008). 15  House of Commons Treasury Committee (2008). BIS Review 18/2009  9  would not prevent a next time –nor should they – but they might help make risk management roughly right. References Adrian, T, and Brunnermeier, M.K (2008), “CoVaR”, FRB of New York staff report no. 348. Aikman, D, Alessandri, P, Eklund, B, Gai, P, Kapadia, S, Martin, E, Mora, N, Sterne, G and Willison, M (2008), “Funding Liquidity Risk in a Quantitative Model of Systemic Stability” paper presented at the 12th Annual Conference of the Central Bank of Chile on Financial Stability, Monetary Policy and Central Banking (Santiago, 6-7 November 2008). Anderson H.C (1846), “The Emperor’s New Clothes”, Danish Fairy Legends and Tales (1846), Pickering. London.

A quick survey suggested  9  The KPMG survey of risk managers in October 2008 pointed to a similar conclusion, as does the FSA consultation paper on stress-testing published in December 2008. 6  BIS Review 18/2009  these were very modest stresses. We asked why. Perhaps disaster myopia – disappointing, but perhaps unsurprising? Or network externalities – we understood how difficult these were to capture? No. There was a much simpler explanation according to one of those present. There was absolutely no incentive for individuals or teams to run severe stress tests and show these to management. First, because if there were such a severe shock, they would very likely lose their bonus and possibly their jobs. Second, because in that event the authorities would have to step-in anyway to save a bank and others suffering a similar plight. All of the other assembled bankers began subjecting their shoes to intense scrutiny. The unspoken words had been spoken. The officials in the room were aghast. Did banks not understand that the official sector would not underwrite banks mis-managing their risks? Yet history now tells us that the unnamed banker was spot-on. His was a brilliant articulation of the internal and external incentive problem within banks. When the big one came, his bonus went and the government duly rode to the rescue. The time-consistency problem, and its associated negative consequences for risk management, was real ahead of crisis.
We should all accept that in a situation like the present one in which the economy is facing a slowdown, in an adverse international setting and surrounded by risk factors, it is more important than ever that economic policies be firmly geared in two directions: first, towards safeguarding macroeconomic stability; and further, to promoting the adoption of structural measures and reforms in product and factor markets, to enhance the degree of competition in the environment in which agents take their decisions, the mobility of factors of production and the flexibility of price and wage-setting mechanisms. I believe that both strategies generate substantial synergies if they are pursued simultaneously. And in Spain we have the experience of the key role they have played in the real convergence of the Spanish economy over the last decade. And this is so because it is essential that the response of supply and demand to the changes required to rebalance the various sources of spending and the various sectors of activity should be flexible, so as to ensure that the slowdown is mild and leads promptly to a new path of high growth, in line with the economy’s potential, that is more balanced and sustainable.

Miguel Fernández Ordóñez: Situation of the Spanish economy and financial sector Speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the XV Financial Sector Meeting “The way forward for the Spanish banking business model”, Madrid, 15 April 2008. *  *  *  I shall be focusing today on the Spanish economy which, naturally enough, has been affected by the changes in the international environment prompted by the further slowdown in the US economy, the rising course of oil prices and the prolongation of the bout of financial turbulence. To this end, I shall begin with a brief reference to the situation in the United States and in Europe, focusing thereafter on the macroeconomic outlook for Spain in an attempt to define its degree of exposure to the international financial turbulence. Finally, I shall offer some economic policy considerations. It is in the United States that the deterioration in macroeconomic conditions has been most marked. The effects of the sharp adjustment in the US real estate sector have been amplified by the consequences of the instability in international financial markets, severely affecting business and household confidence. The outlook of most analysts for 2008 points to a strong deceleration in the first two quarters of the year, and even to a recession at some point along the line, although any more medium-term projection is shrouded in considerable uncertainty. In the euro area, some of the risks to continued economic dynamism progressively materialised during 2007.