samchain/econo-pairs-v1 huggingface dataset:
This impact will vary from one institution to another, according to the starting position of each one and their exposure to the sectors and agents most affected by the crisis. In these circumstances, we need to avoid serious damage to the stability of the financial system, as this would make the crisis deeper and longer. Accordingly, we need to step up the surveillance of risks to financial stability and be prepared to respond forcefully, at European level, in the event that any materialise. In addition, banks must address their medium-term challenges decisively, including notably their low profitability, both in Spain and across Europe. At national level, some of the measures already applied need to be extended and regularly recalibrated. Currently, these need to be focused on the most severely affected groups of households and sectors, promoting the necessary structural adjustment, and to be adapted to the rate at which the recovery is taking place. In the corporate sphere, many companies will emerge from this crisis with higher levels of debt, and this may hamper the recovery and be a source of vulnerability. Strategies therefore need to be implemented to promote corporate financial restructuring. One of the main challenges is to avoid funds remaining at companies with no prospect of viability in the post-pandemic scenario. Likewise, the European recovery fund resources should be used to support sustainable restructuring and modernisation of the productive sector.

Closing this gap will require further adjustments that will never prove easy because restoring growth will be a gradual process. We must also be mindful of the problems posed by the dynamics of the public debt/GDP ratio and its perspectives in the short term. So far, and as is usual in the initial phases of fiscal consolidation processes, this ratio has continued growing, with a forecast for 2014 of 98.9% of GDP. Reversing this trajectory is vital for ensuring the future sustainability of public finances, but it will require running primary surpluses for a prolonged period; naturally, the sooner we achieve sustained economic growth, the smoother this adjustment process will be. To tackle these challenges, institutional developments geared to ensuring budgetary rigour must be pursued. The independent fiscal responsibility authority, which will foreseeably start up in 2014, must reinforce the quality and independence of budgetary programming. Here I would like to mention the planned review of regional government financing arrangements and the creation of the committee of experts for the reform of the tax system, who are expected to submit their report in the coming months. 4  BIS central bankers’ speeches  As for the public pension system, I shall reiterate what I said before the Economic Affairs Committee last June on the presentation of the Annual Report of the Banco de España. The public pension system is a fundamental factor of economic and social stability and it is in everybody's interest to address the risks of shortfalls arising as a result of demographic developments.
The free movement of goods and services offers new opportunities for exporters, not least among them an enhanced access to an internal market of almost 500 million consumers accounting for  BIS Review 32/2005  1  one-fifth of world trade and one-quarter of global incomes, with a single set of trade rules and administrative procedures and free of tariff and non-tariff barriers. Maltese exports no longer need to adhere to the country of origin principle, which requires a minimum amount of value added to be produced in Malta, in order to benefit from preferential access to the EU. This creates opportunities for manufacturing and distribution operations, and opens up the possibility for Malta to serve as a hub for trade between the EU and North Africa. In addition, exporters can now benefit from all preferential third country arrangements which the EU has with major trading blocks around the world. Malta also stands to gain in international trade negotiations when the EU acts to stave off threats of unfair competition originating from activities such as dumping. The sourcing of cheaper imported raw materials is another advantage, though this would to an extent be eroded by the application of the common external tariff, especially in agricultural products. As an EU Member State, Malta is now also automatically included in the common Pan-Euro Mediterranean system of cumulation of origin for industrial products. This means that Malta can still retain activities associated with higher-value added components of products, such as textiles, which are more cost-effectively produced elsewhere.

Indeed the financial sector, with the help of financial innovation and loose regulation fostered unsustainable growth and asset price bubbles, and if trade linkages have contributed to spread the crisis across countries, financial integration has fostered the contagion. So, yes finance matters and is the heart of the real economy. “Rebalancing the world economy”, next. In the years leading to the crisis, the global economy was growing at unprecedented speed: above 5% per annum in 2006 and 2007, far above the average recorded in the decade from 1992 to 2001, at 3.1%. Yet, this growth was unbalanced, both internally and across countries, such that it was, as it turned out, unsustainable. In fact, the global policy agenda in the mid- to late 2000s was dominated by the issue of global imbalances: current account positions widened to unprecedented amounts (at least by modern standards), reflecting strong saving-investment gaps: to many observers, household saving was strikingly low in the United States, while emerging Asia was characterized by a “global saving glut”, in the words of Chairman Bernanke. These global imbalances have adjusted markedly in the wake of the financial crisis, but this rebalancing has been mostly cyclical and the issue remains. Let me now turn to the third important keyword of this session, the G20 Road map. With the intensification of the crisis, it has become obvious that the G20 was the right, – because the most legitimate – forum to prepare the policy response.
One positive recent surprise has been the greater dynamism of investment, especially in machinery and equipment, which outperforms GDP growth in our projections for the period 2018-2020. The greater contribution that is foreseen for mining investment stands out, in line with the near 40% growth that it showed in the first quarter of this year. The new five-year plan announced by Codelco is added as background. In any case, generating conditions for the development of larger projects remains a challenge if we are to sustain high growth rates. This is especially relevant if one considers that the observed and projected currency depreciation in the baseline scenario will reduce spending on tradable goods, and that an important part of this greater investment is explained by capital replacement needs. On the construction side, activity shows more limited dynamism. With this, GFCF as a percentage of GDP—in both nominal and real terms—will reach 21.7% this year and will border 22% next year (Table 1). Regarding fiscal policy, our working assumption is that in 2018 the economy will receive a fiscal impulse consistent with the current budget. From then on, we assume that the structural deficit will follow the path of gradual reduction defined by the authority. Although the CBC is an independent organization and does not coordinate its monetary policy decisions with the government, it does need to anticipate the evolution of the fiscal position as part of the macro framework within which it makes its decisions.

Sunil Mendis: A brief look at financial information technology Keynote address by Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, for the Financial Information Systems Seminar, Colombo, 8 September 2004. *  *  *  His Excellency Akio Suda, the Ambassador for Japan in Sri Lanka, Mr Yoshihisa Onishi, Executive Director, FISC, other officers from the FISC in Japan, Ladies and Gentlemen, The Central Bank of Sri Lanka is happy to co-sponsor this programme together with the FISC of Japan (Center for Financial Industry Information Systems), in view of the importance of financial information technology in the financial services industry. Sri Lanka is no exception to continuous changes in the technology used by its financial services industry. In a market driven financial system, for information to be effective, there should be two vital ingredients, that is system integrity and timeliness - both of which are crucial. The more dependable your information systems are, the more efficient and competitive banks can be as a player in the financial services industry. That is why we see banks investing heavily in IT. Globally too, with the interdependence of markets their integration is facilitated through information systems which link these markets which make the world a very small place indeed on a PC monitor where the whole world is virtually at your doorstep.
Such instruments would also help to underpin the consensus that monetary policy should focus on the path of nominal demand at the aggregate level, with macroprudential policy seeking to address over exuberance in particular sectors or in credit markets generally and the resilience of the banking system. Slow moving threats to stability: a continuing challenge If the authorities could make a regime along those lines work in practice, we would reduce one threat to stability: out-of-control credit booms that undermine the stability of the financial system and so jeopardise the supply of credit that lubricates economic activity. I do think that we should direct some of our energies to that, alongside making the financial system more resilient in case, as is inevitable, “credit boom and bust” cannot be eliminated. But I should flag that this would not wave away all potential threats to stability. A lesson of this (and past) crises is that cumulative imbalances in the domestic and global economy  11  Blanchard O, G Dell’Ariccia and P Mauro (2010), “Rethinking Macroeconomic Policy”, IMF Staff Position Note, SPN/10/03, February 12, 2010. 12  A point made in conversation by, for example, Anil Kashyap. 8  BIS Review 21/2010  eventually come home to roost. That would surely have been so on this occasion even if our banking systems had proved more resilient. A great challenge for monetary policymakers everywhere is that external and internal imbalances typically grow slowly, and that the timing and manner of their unravelling is highly uncertain.

After spiking over the next few months, inflation is, we believe, likely to drop below our 2% target due to the downward pressures from a weak level of demand on wages and prices (Chart 6). But it is then likely to climb back towards the target as the economy recovers. Compared with our previous collective forecast last November, there are differences of nuance in the “most likely” and “mean” paths for growth and inflation, but frankly to my mind those nuances are small beer compared to the main risks. My take on those risks is that, on the downside, the headwinds to demand and activity could prove stronger than currently foreseen. And, on the  1  See Tucker P M W (2009e), “The Debate on Financial System Resilience: Macroprudential Instruments”, Barclays Annual Lecture, London, 22 October, 2009. BIS Review 21/2010  1  upside, that we (and our peers) could prove too slow to withdraw monetary stimulus if animal spirits revive across the economy or further spikes in inflation outturns raise medium-term expectations. Meanwhile, the data are bound to be mixed. Four aspects of the conjuncture Against that background, I shall briefly review a handful of the issues that, one way or another, the MPC will face over the coming months. A balance sheet recession? I have a good deal of sympathy for those who argue that the current downturn owes a lot to stretched balance sheets – in the private sector, public sector, and the national economy as a whole.
From the start of 1999, lending to the private sector grew at an annual trend rate of about 10% in connection with the pick-up in activity, but probably also the significant rise in the prices of property and financial assets, which were very responsive in certain sectors and economies of the area, as well as the rising number of mergers and acquisitions, many of which reflected direct investment outside the euro area. In France, twelve-month growth in total domestic debt stood at 8.1% in December 1999, compared with 4.5% in 1998. Among the elements forming the second pillar, the exchange rate of the euro is an important monetary policy indicator. The depreciation of the euro seen in 1999 is a matter of concern because it causes production costs and the general price level to rise. In addition, this depreciation of the European currency simultaneously reflected and boosted the negative financial flows, in the form of both direct and portfolio investment, that affected the entire euro area in 1999. The French economy, like the euro area’s, is enjoying favourable monetary and financial conditions and high competitiveness. These factors are facilitating a durable, non-inflationary upturn in activity. However, while a sound monetary policy is a necessary condition for economic success, it is not sufficient in itself to guarantee growth and job creation.

An increase in the capital stock is necessary to achieve faster growth today and to eliminate inflationary pressure;  –  reduce the constraints on labour. In an economy, in which 42% of businesses are at present indicating that they are encountering serious recruitment difficulties, especially for skilled labour, it is necessary to not only step up training and education efforts, but also to accept the extensive use of overtime in all sectors where there is a labour shortage. Moreover, the increase in Europe’s employment ratio from 61% today to 70% in ten years time, decided upon at the European Council meeting in Lisbon in order to expand the labour force, is particularly opportune and reveals a profound change in attitude;  –  actively seek productivity improvements, which lie at the very heart of economic growth. Now is the time to embrace technical progress, the digital revolution, new information and communication technologies, biotechnology and material sciences. In a French and a European economy characterised up to now by lower productivity growth than in the United States since 1995, this openness to technical progress and rapid productivity enhancement is a crucial factor if we are to achieve our ambitions of faster growth today, durably low inflation and robust, sustainable growth. BIS Review 55/2000  4
On the contrary, the economic upturn accelerated in 2004 and growth was even stronger than expected. Last year the economy also continued to grow at a good rate. To understand the low inflation it is necessary to find other explanations than weak demand in the economy. The reasons should mainly be sought in the positive changes on the supply side of the economy, which I have already mentioned, namely high productivity growth and low import prices. High productivity growth has held down cost pressures in the economy more than expected. Production has been able to increase without any particularly high increase in companies’ labour costs per unit produced (diagram 7). During 2003 and 2004 unit labour costs in the business sector actually fell. At the beginning of an economic upturn it is normal to have a period when production increases at a more rapid rate through companies using existing labour force more intensively rather than through new recruitment. However, even taking into account the business cycle, productivity growth has been high in recent years. 4  BIS Review 12/2006  This indicates that productivity growth has increased in a more lasting manner. The Riksbank has also gradually increased its forecast for the productivity growth trend in recent years. Despite this, productivity has continued to be higher than forecast up to 2005. One difficulty in the forecasting work is that productivity growth usually fluctuates considerably even taking into account changes in economic activity. For instance, productivity growth fell heavily in 2001.

Our assessment is that the probability of this type of scenario is small at present, but that if it were to occur, the negative effects on the economy would be substantial. Given our inflation forecast and after taking into account other factors, the Executive Board’s assessment is that it is reasonable to continue gradually raising the interest rate. At the same time, it is important to emphasise that we are easing up on the accelerator, not putting on the brakes. Monetary policy is still expansionary, which is clear from a historical comparison of repo rate levels (diagram 4). Even in an international comparison, it is clear that Sweden’s key rate is still very low. The link between interest rate decisions, house prices and household debts There have recently been claims that the Riksbank’s decision to raise the repo rate was largely because we have been concerned over house prices and increased household indebtedness. This is not the case. I would like to argue that the decisions to raise the interest rate now and in January are primarily justified on the traditional basis of inflation prospects two years ahead. Inflation has been assessed as being close to the target level a couple of years ahead, given gradual increases in the repo rate. We have therefore chosen to raise the repo rate. Our monetary policy considerations have of course taken into account considerations related to risks linked with house prices and the build-up of household debt. House prices affect demand through households' decisions regarding saving and consumption.
the harmonisation of the legal, regulatory, taxation and accounting frameworks. A first challenge is the need for global oversight. This need arises from several factors. In terms of the so-called horizontal approach, trading, clearing and settlement of securities operations already occur in different institutions located in several different jurisdictions; virt-x and SIS-clear are just two examples. For the time being, cross-border infrastructures deploy their activities in complement to domestic systems, but it is very likely that they will play a significantly more powerful role in the future. Oversight authorities tend to prefer a pragmatic approach, where one regulatory authority takes on the role of a lead overseer and consults with other relevant authorities. Such a model has already been put in place among central bankers in the context of the Continuous Linked Settlement system. A second challenge that oversight authorities face lies in the risk dimension of cross-border securities operations. Indeed, whereas the nature of the risks remains basically the same, both the probability of occurrence of an adverse event and the risk exposures themselves have clearly increased. The added dimension of cross-border activities lies in spill-over effects due to direct links between systems. Credit, liquidity and operational risk events occurring in one jurisdiction may indeed trigger a systemic crisis by spilling over to foreign financial markets. These kinds of linkages among different systems explain why oversight authorities have recently focussed not only on payment systems, but also on securities clearing and settlement systems.

Securing success for the FX Global Code Speech given by Chris Salmon, Executive Director, Markets, Bank of England  TradeTech FX Europe, Barcelona Tuesday 12 September 2017  I would like to thank Tom Horn and Chris Cox for their help in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Good morning, I am delighted to be here at TradeTech FX Europe. Central banks have a deep and enduring interest in the effective functioning of markets. We sit at the heart of our financial systems, supporting their smooth running through our operations, and in turn relying on them ourselves in fulfilling our mandates. Our desire to promote effective financial markets manifests itself in many ways but we often act in a convening role – working together with the private sector to achieve the right outcome for the system as a whole. This has been enduring feature of the Bank of England’s activities, stretching back to some of our earliest efforts in the 1800s to marshal the resources of the City to rescue failing banks. Collective central bank action has long been a feature too; for example, CLS – which many you in the audience today rely on to eliminate foreign exchange settlement risk – was created at the encouragement of central bankers. 1  More recently, central banks have come together to address the systemic risks created by conduct issues within large swathes of wholesale financial markets.
Therefore, we must make sure that financial firms address these risks. In particular, we should contribute to identifying climate-risk drivers and their transmission channels, to the adequate measurement of the economic and financial impact of the different risks, and to the definition and development of the potential mitigation and riskreduction measures. If we succeed in incorporating these risks into the decisions of the financial sector, this will translate into a change in the relative prices of financial instruments. And, in turn, that will help to internalise those consequences originating from both transition and physical risks that affect directly providers and users of funds. This will be a powerful and much-needed complement to the use of the fiscal and environmental instruments that are needed to fight against climate change. In practical terms, climate risk can probably be captured in the traditional financial risk categories (credit, market, liquidity or reputational risks). However, several crucial limitations and challenges are coming to light when trying to measure these risks. In particular, there are few sufficiently deep and harmonised databases to analyse and understand the potential effects of physical and transition risks. Data granularity is particularly important given the high heterogeneity of the potential impacts. And, while we are working hard to improve available information, we lack sufficient historical depth to be able to use the past as a guide to estimate future developments.

Clearly, more time and analysis will be needed before we have better answers for this important question. Our role in climate policy action Let me now turn to the second theme of my talk, namely what financial supervisors and regulators, and central banks could or should do to assist governments in tackling climate change within our mandates. I will start with an important reminder. The main responsibility for addressing climate change resides with governments – namely, fiscal and environmental authorities– because they have the most effective tools and the legitimacy to do so. There is some consensus in the  3  literature that the most effective measure would be to apply Pigouvian taxes3 to carbon emissions. The latter, if well-designed, would lead agents to internalise the social cost of their carbon emissions, inducing a change in the relative prices of energy inputs and final outputs in favour of less carbon-intensive ones. That said, preventing climate change requires a holistic approach that involves all policies. Careful analysis should be devoted to the interactions of the various policy instruments in the economic sectors affected by transition and physical risks. The final aim should be to define an adequate “climate policy mix” that ensures the optimal achievement of environmental targets. In this context, and as part of our main responsibility to guarantee the stability of the financial system, we - regulatory and supervisory authorities - must ensure that the materialisation of climate risks does not endanger financial stability.