samchain/econo-pairs-v1 huggingface dataset:
And although in the end a different approach prevailed, the force of this conviction explains why the EU Treaty left open the possibility – through Article 127(6) – to give supervisory powers to the ECB based on a unanimous decision of the Member States. At least to clear-sighted observers, it was evident that at some point this article would have to be activated. The late Tommaso Padoa-Schioppa, who preceded me as the member of the ECB´s Board responsible for financial stability, wrote in 1999 that: “I am convinced that in the future the needs will change and the multilateral mode will have to deepen substantially. Over time such a mode will have to be structured to the point of providing the banking industry with a true and effective collective euro area supervisor. It will have to be enhanced to the full extent required for banking supervision in the euro area to be as prompt and effective as it is within a single nation”.2 That said, those like Padoa-Schioppa could not have complete foresight about how monetary union would evolve. We have meanwhile learned a lot that is new from the crisis. The events of recent years have revealed a variety of weaknesses in the governance of the financial sector that were not foreseen before 1999 – and that also need to be addressed through common solutions. Hence, the Banking Union we are aiming for today goes beyond purely banking supervision: in my view it must comprise five elements. First, a single rulebook for banks.

These figures show not only that the absolute level of the euro area’s deficit is half what it is elsewhere, but also that the pace of fiscal consolidation is actually faster. While these efforts are absolutely crucial, there are concerns that too abrupt an adjustment in public finances will be detrimental to growth and, ultimately, to fiscal consolidation itself. In the current circumstances facing Europe, I believe these concerns are misplaced. We have to look at the counterfactuals: delaying consolidation would expose our economies to even greater risks. At current debt levels, economic agents are very “Ricardian” and would react to fiscal permissiveness by delaying their own private expenditure. Financial markets would continue to impose very punitive interest rates on our countries to compensate for the uncertainty in the fiscal outlook. Overall, the confidence and financial benefits of fiscal consolidation far outweigh its negative effects on effective demand in the short run. In addition, everyone knows that there are ways to boost growth strongly and durably even in times of fiscal consolidation: through structural reforms. Here as well, the progress already made in many countries is impressive. In recent history, European economies have never reformed so extensively in such a brief period of time. I could cite many examples: the labour market reform in Spain and now in Italy, the pension reforms in Italy and France, privatisations, public wage decreases in Ireland, etc. Some positive effects from these measures are immediate, but naturally, most of the impact on competitiveness and growth will take time to materialize.
If we look far enough ahead, however, we will be able to cover a smaller share of our imports using current petroleum revenues and drawings on the Petroleum Fund. Competitiveness will then have to be improved.5 In March 2004, the nominal krone exchange rate was at its weakest level since summer 2001.6 Since spring 2004, the krone has appreciated. The appreciation of the krone through 2004 was undesirable because it delayed the pick-up in inflation. It also came as somewhat unexpected. The krone was partly influenced by persistenly low international interest rates. In retrospect, it would also appear that high prices for oil and gas and other export goods have contributed to a fairly strong krone. Higher oil prices entail higher current-account surpluses and higher income for oil companies and the state. Oil companies’ additional income and surpluses will largely be channelled abroad. The additional petroleum revenues accruing to the state will essentially be invested abroad through the Government Petroleum Fund. The capital outflows through the oil companies and the Government Petroleum Fund contribute both to keeping down the value of the krone and to stabilising it. Even though surpluses deriving from petroleum activity are largely invested abroad, more oil money has been put into circulation in the Norwegian economy than earlier. Petroleum investment show a pronounced increase this year. Moreover, government petroleum revenue spending has increased in recent years. There are indications that the oil cash flows into the Norwegian economy may diminish in the period ahead.

Between December 2002 and March 2004, the interest rate has moved from a high to a low level. The real interest rate is now lower than a real interest rate that implies balance in the economy in the long term – the neutral real interest rate. A real interest rate that is lower than the neutral rate will stimulate activity and fuel pressures in the economy even after the effects of the interest rate fall have been exhausted. Calculations may indicate, on an uncertain basis, that the neutral real interest rate for Norway is between 2½ and 3½ per cent. It has probably fallen somewhat in recent years. Real post-tax mortgage rates and deposit rates at banks are also very low. Household debt is higher than household deposits in Norway. The fall in interest rates pushed up house prices. Higher housing wealth provides increased borrowing opportunities that are used. Household debt has risen by around 11-12 per cent over the past year. Household debt is now more than one and a half times as high as disposable income. The accumulation of debt partly reflects structural adaptation over time to a deregulated credit market and partly low interest rates. The higher debt burden has made households more vulnerable. A gradual normalisation of the interest rate will probably contribute to curbing the rise in house prices and gradually bring down debt accumulation. Conclusion Two and a half years after we started to lower interest rates it would appear that inflation is moving up, albeit slowly.
Exceptionally low rates weigh on interest rate margins largely as a result of liability margins coming under pressure, as slide 5 illustrates. 4 This is because deposit rates (yellow) that are already close to zero react less strongly to an interest rate cut than market rates (red) – indeed, in extreme cases, deposit rates do not react at all. The main reason for this is that in such cases, banks do not pass on lower interest rates to private customers, or only to a very limited extent, since doing so would expose them to the risk of customers withdrawing deposits and investing them at another bank, or hoarding them as cash. Banks wish to avoid this, because otherwise they stand to lose a source of financing for their business activities which is stable and convenient in the long term. 4  Furthermore, past experience has shown that the interest rate curve tends to flatten in periods of falling interest rates. This, in turn, weighs on structural margins. Cf. Borio, Claudio et al. (2015), The influence of monetary policy on bank profitability, BIS Working Paper, 514 and Claessens, Stijn et al. (2016), Low-for-long’ interest rates and net interest margins of banks in Advanced Foreign Economies, IFDP Notes. Page 5/10  The negative interest rate has put renewed pressure on liability margins, which have since even turned negative, as shown in the blue shaded area on this slide.

The quarterly assessment in mid-March 2008 will provide the opportunity to assess the inflation and economic outlook on the basis of new data. BIS Review 13/2008  1
This process must be grounded on prudent macroeconomic projections, involve all tiers of general government and translate into a medium-term plan detailing the government receipt and expenditure measures aimed at ensuring a gradual reduction in the imbalances. This would shore up the sustainability of public finances and bolster the credibility of, and confidence in, economic policies. The fiscal consolidation should also go hand-in-hand with an improvement in the quality of public finances, boosting their contribution to the economy’s potential growth. And it must take into account the impact of structural aspects such as population ageing, which will exert upward pressure on public spending on pensions and other expenditure items. At the same time, addressing social imbalances is also essential as increasing inequality could undermine social cohesion and foment social conflict, with adverse repercussions for the security of investments, the incentive to work and opportunities for future generations.25  25  Grossman (1991), Dijkstra, Poelman and Rodríguez-Pose (2020), Persson and Tabellini (1994), Alesina and Rodrik (1994) and Corak (2013). 8  In recent years, the Banco de España has actively contributed to identifying sources of inequality. One factor that crucially affects productivity is educational inequality.

Spain's per capita income today stands 17% below that of the euro area, a gap that is 4 pp narrower than was the case in 1978, but 8 pp wider than in 2005. Behind this persistent negative gap lie two well-known shortcomings in the Spanish economy: low productivity and a low rate of employment, which have moreover historically been negatively correlated. 1  Today, if I may, I will focus on the first of these factors, since productivity is the only failsafe means of improving living standards.1 What's more, our low productivity issues are very closely related to some of the weaknesses of our labour market, which, in turn, condition our ability to converge in terms of the employment rate. Second, it is well worth stressing that the convergence of the Spanish economy should be sustainable over time. With this in mind, it must be acknowledged that some of our economic problems these past few decades have stemmed from a failure to understand the obligations and restrictions that come with forming part of the European integration process and, in particular, of the euro area. This led, for instance, to the build-up of serious financial imbalances after joining the euro, which meant that our economy was particularly hard hit during the global financial crisis. Since the outbreak of that crisis, the Spanish economy has displayed a healthier pattern of growth that has, in fact, partly corrected the imbalances built up over the previous upswing.
Long-term real interest rate in Sweden and abroad 4  United States United Kingdom Euro area Sweden  3  4  3  2  2  1  1  0  0  -1  -1  -2  96  00  04  08  12  16  -2  Note. Per cent. The long-term real interest rate is calculated as the HP trend (lambda = 1600) for the average of 1 month’s real interest rate between 5 years ahead and 10 years ahead (5y5y) adjusted for the forward premium. Sources: Own calculations, Macrobond, Statistics Sweden and the Riksbank  This means that on the one hand lower birth rates, as in China for instance, lead to the working age share of the population increasing and therefore to an increase in saving. On the other hand, a large share of old-age pensioners in the population leads to a decline in saving. But a larger proportion of old-age pensioners in the population also means that the supply of labour declines. This dampens the need for investment, that is, the demand for savings declines. Another effect of the ageing population is that the average life expectancy of the population increases. This means that the working age population need to save more to manage a longer period of time as old-age pensioners, which could be an important factor behind the increase in the willingness to save.

Similar weakening has taken place in the euro area, the United States and the United Kingdom. 14 There are several explanations for this  13  See, for instance, Faust and Leeper (2015) and Hansson et al. (2018). 14 See, for instance, Cunliffe (2017). 9 [24]  development, even if there is no consensus in the literature regarding the underlying causes. Here I shall take up a possible reason that does not seem to have been given much attention in the general debate and may therefore be of interest. The first thing to note is that it is not surprising that the covariation, or, as we economists say, the correlation between economic variables varies over time. If we were to study two random economic variables over a longer period of time, it is probable that the covariation between them would vary between different points in time because the economy is constantly changing. For a central bank, however, it may nevertheless seem slightly worrying that it is the slope of the Phillips curve that has changed, as it has such a prominent role in monetary policy analysis. A common reasoning by a central bank might be: “We have seen an increase in unemployment recently. This has led to the labour market becoming less tight and to companies now being able to find new staff more easily – the competition for jobs has thus become greater. This dampens wage increases, which in turn pushes down prices.
Due to the ongoing weakness in food demand owing to the tourism sector that will persist in 2017 coupled with the measures taken by the Food and Agricultural Products Markets Monitoring and Evaluation Committee (the Food Committee), we expect food inflation to be lower than its historical average in 2017 as well. Accordingly, we revised our assumption for food inflation downwards from 8 percent to 7 percent for end-2017. Our medium-term forecasts are based on an outlook that adjustments to taxes and administered prices will be consistent with the inflation target and automatic pricing mechanisms. For medium-term fiscal policy stance, we use the MTP projections covering the 2017–2019 period. 3. Inflation and the monetary policy outlook Esteemed Guests, Now, I would like to present our inflation and output gap forecasts based on the outlook I have described so far. Given a cautious policy stance that focuses on bringing inflation down, we estimate inflation to approach gradually to the 5-percent target. Inflation is likely to be 7.5 percent in 2016, falling to 6.5 percent in 2017 and stabilizing around 5 percent in 2018. Accordingly, we expect inflation to be, with 70 percent probability, between 7 percent and 8 percent (with a mid-point of 7.5 percent) at end-2016 and between 5 percent and 8 percent (with a mid-point of 6.5 percent) at end-2017 (Chart 17). 8 / 10  BIS central bankers' speeches  The Turkish lira fluctuated following the July Inflation Report, while oil prices increased.

Consumer inflation was in line with the forecasts of the July Inflation Report in the third quarter of 2016, with core goods and unprocessed food pulling underlying inflation down. Domestic demand was subdued in the third quarter but leading indicators signal that economic activity will pick up by the fourth quarter of the year. Moreover, despite downside risks to external demand due to geopolitical tensions, the external trade balance continues to improve amid increasing EU demand. On the other hand, developments regarding tourism revenues cause a slight widening in the current account deficit. 1. Monetary policy and monetary conditions Esteemed Guests, We continued with monetary policy simplification in the third quarter on the back of improved core inflation indicators, the favorable course of the global risk appetite and the effective use of monetary policy tools. Accordingly, we lowered the marginal funding rate to 8.25 percent by three consecutive 25 basis point reductions in July, August and September. On the other hand, in October, we left the policy rates unchanged in view of less tight financial conditions and spillovers of other cost factors to the inflation outlook. Hence, we kept the marginal funding rate, one-week repo auction rate and the overnight borrowing rate constant at 8.25, 7.5 and 7.25 percent, respectively (Chart 3). As you all know, with simplification, we aim to provide funding via a single rate, which will bring short-term market rates closer to the funding rate.
Some transactions are not registered at all, for example, those in the underground economy, some imports and so forth. The decomposition of nominal GDP into a change in real output and a change in the price level is not a trivial exercise even in advanced market economies. But in these countries, e.g. in Germany or USA, the prediction of real GDP rests on more solid grounds - one knows approximately what is the “potential output” as the starting point for some guessing as concerns the development in the medium term. In transition economies, in the period of deep structural changes, the estimate of both real GDP and potential output is much more difficult. BIS Review 25/1997  -7-  The traditional unidirectional link from money to income is blurred in advanced market economies by the existence of many forms of financial assets with different degrees of liquidity. In transforming economies, the scope for reserve assets (Treasury bills) and investment assets (bonds, shares) is still limited but is widening step by step, thus weakening also the links between the money stock and expenditure flows. What is probably even more important, at least in the Czech Republic, is the financing of receivables and current liabilities through quasi-commercial credits (inter-enterprise indebtedness). There is a scope, created by enterprises themselves, for offsetting the potential effects of monetary stringency on spending plans.

C)  new (non-bank) market entrants  •  the digitalisation of financial services opened the doors for a wave of new market entrants;  •  there are two categories of new market entrants;  •  first, there are start-ups making use of new information technology applied to financial services (“FinTech” companies);  •  second, there are established internet companies (large US social media or ecommerce platforms);  •  In most cases, they do not offer banking services other than the initiation of payments or access to account information;  •  these new product and service providers might present a challenge to the traditional market incumbents’ revenue streams;  •  their impact on the underlying financial market infrastructure will be more limited as the clearing and settlement of payments and securities transactions still take place between the account-holding entities.
The result is that these proposals have almost all been adopted for the transposition of the 5th directive. We know how to think outside the box when necessary. However, to maintain a smooth risk management for projects that are likely to exploit huge network effects, and thus likely to create significant risks to financial and monetary stability, it would be prudent to ensure that regulation frameworks are perfectly tailored to the risks posed before rolling out these projects in the market. In order to help complete the adjustment of the regulatory and supervisory framework to these profound changes, central banks and supervisors first have the advantage of their legitimacy, which is primarily due to their institutional mandates: prudential supervision, financial stability, and conduct of monetary policy. Their legitimacy is also rooted in their experience of crises and their contributions to solving them. However, to live up to this legitimacy, it is up to  the public authorities to identify the new risks, both in terms of their nature and magnitude, and to provide clear, strong and relevant responses. (ii) An open mind is necessary to achieve this objective: it must lead us to propose frameworks that are tailored to the new challenges and associated risks.

Norges Bank will actively pursue profitable solutions in the best interest of all the parties concerned. Payments should become faster Norway’s efficient payment system is a competitive advantage for the Norwegian business sector. This is positive, but there is no room for complacency. Other countries are catching up and may be ahead of us in some areas, in particular in terms of real time payments and the infrastructure for mobile payments. We have a job to do here. The Norwegian banking industry has collectively developed a payment solution where money is immediately received by the payee, so-called instant payments. A common system offers several advantages: The solution is cost-efficient and ensures fast payment services for customers. All banks and their customers can use the solution and it is not owned by an individual private market participant. Yet, to date, few banks offer instant payment services. This may be due to technical factors, or because mobile apps need to be more user-friendly. It may also be that the competition among participants to promote their own solutions is ultimately an obstacle to an overall efficient infrastructure. Competition is best pursued in the area of customer interface. In our neighbouring countries Sweden, Denmark and the United Kingdom, the situation is different. There has been broad cooperation in the area of instant payments in those countries. Banks have been engaged in developing common solutions – not only in the development phase, but also in the application phase. In all these countries, instant payments are widely used.
Svein Gjedrem: Investing for the long run Dinner speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at The Norwegian Government Pension Fund’s Investment Strategy Summit, Oslo, 3 June 2009. *  *  *  Minister, Ladies and gentlemen, We are gathered here for a conference – and a dinner – centred on investing for the long run. And indeed, it is my expectation that the Government Pension Fund – Global will endure through good times and bad times in the markets to provide a permanent revenue stream for our children and grandchildren. I would like to thank all the participants for the good advice and interesting analyses you have presented here today. It has really been inspiring to attend, and to listen to your presentations and discussions. The oil age in Norway has spanned some 40 years, and it appears that it will continue for years ahead. The idea of a fund arose in the early 1980s. Up to 1995, all government revenues were used for investment in the petroleum sector and to cover budget deficits during the recession around 1990. The formal structure of the Fund was actually decided on in 1990 in the midst of a banking and currency crisis, with meagre growth and high unemployment. I have every reason to believe that the people that prepared the proposal did not think at the time that the savings in the Fund would prove to be of any significance.

For instance, Norwegians could only purchase foreign equities through a fixed pool established in the 1960s (by using the so-called “security dollar” market), and foreigners’ investments in Norwegian equities were strictly regulated and actually limited to NOK 50 000 per person until 1979. That ceiling was raised to NOK 1 million in 1979. Experiences over the past year may cast doubt on the effectiveness and benefits of international capital markets. Nevertheless, history has seen a number of deep financial crises, and it is my belief that market conditions will also return to normal this time. I am confident that private entrepreneurship and public limited companies will continue to exist as the primary organisational bodies for commercial activities. Owners and investors will also be needed in the years to come. But capitalism will have to adapt. After all, the willingness to trust the free play of market forces in finance has been seriously impaired. International stock exchanges lost more of their value in 2008 than in any other single year in recent history. Absolute results, especially with regard to equities, were highly unusual. Many investors have suffered losses. As a result of this experience, required returns will be higher in the future. An investor such as the Government Pension Fund – Global will earn more in the long term because of wide fluctuations in equity values. 1  2  National Transport Plan 2010–2019 (St.meld.nr.16 (2008-2009). BIS Review 68/2009  The Fund has a longer investment horizon than the vast majority of other market participants.