samchain/econo-pairs-v1 huggingface dataset:
It peaked at 13%, which is very high, at the height of the crisis and now it’s at 9.8%, so it’s below 10%. The euro area has created 4 million jobs in four years, that’s not bad. Yes, this morning we have to say “Thank you, ECB”. The Banque de France has just said this morning that it is lowering its growth forecast for France to 1.3% for 2016 and 2017, and then to 1.4% in 2018 because of the worsening international environment. Is the Banque de France more pessimistic than the ECB? Because you are saying that the growth situation isn’t bad in France. No, we agree with the Banque de France – growth will be weaker in France than in the rest of the euro area, unfortunately. 1.3%, 1.4%? Yes, 1.3% in France, 1.7% in the euro area, so France is lagging behind in terms of growth. And what does France have to do to recover or catch up with the other countries? When you read the programmes of the candidates for the presidency, whether on the right or the left, do you ever say to yourself that this one or that one would enable France to catch up? The ECB doesn’t get involved in politics...  Of course. So don’t expect me to express a preference for one of the candidates. However.

According to the forecast of Statistics Sweden, the population will only increase by around 0.1-0.2% this year and during the first decade of the 21st century. With GDP growth of 3% and a population increase of around 0.7% a year, a rough measure of productivity is obtained which shows that it has increased on average by 2.3% per year during the 20th century as a whole. Nowadays, the figure is lower; most analysts estimate that trend productivity is under rather than over 2% per year, although there has been some improvement in recent years. The standard of living has accordingly not risen as quickly during the 1990s as it did during a number of earlier decades during the century. Figure 3. GDP per capita  3. GDP per inhabitant Average annual percentage change of GDP per inhabitant in 1990 prices in US dollars 4  3  2  1  0 1820-50 1850-70  1870-90 1890-10 1910-30 1930-50  Sweden  1950-70 1970-90  UK  In order to obtain an idea of developments in Sweden we can look at the United Kingdom. Sweden is considered to have become industrialised about hundred years after the UK. GDP per capita therefore grew more quickly in Britain than in Sweden during the first half of the 19th century. From 1870 onwards, however, the relationship between the two countries changed. Growth per capita became the same in both countries and after 1890 and up to 1970, Sweden took the lead.
Markets worry that the next chapter will be another unfortunate event. I would call this the “slow healing” story. Recoveries from financial busts tend to be slow and painful. Indeed, that is why it is worth doing all that you can – in advance and in good times – to avoid financial crises. The academic literature suggests it takes an average of eight years to recover.2 If in the meantime you are hit by other bad surprises it can take longer. And in this  1  “A Series of Unfortunate Events” is a series of children’s novels written by Daniel Handler (using the pen name of Lemony Snicket). 2  This finding refers to recovery in real per capita GDP to its pre-crisis level rather than to making up lost output relative to precrisis trends. See Reinhart, C.M., and Rogoff, K.S. (2014) “Recovery from financial crises: evidence from 100 episodes”, NBER Working Paper No. 19823. Reinhart and Reinhart (2015) report that ten years after the fifteen worst financial crises of  BIS central bankers’ speeches  1  story most of the events are related. As many commentators have observed, as well as country-specific factors, many of the stresses now seen in emerging markets are knock-on effects, if not from the financial crisis itself, then from the responses to it in the post-crisis recession. One can tell a version of this slow healing and unfortunate events story for the world economy as well as for the UK.

The MPC’s central estimate that QE had a total peak impact on GDP of around 2.5% in 2013 implies that adjusted Bank Rate fell below 0.5% during the depths of the crisis. In the May 2014 Inflation Report the MPC judged that maintaining the stock of asset purchases at £ would provide continued, albeit declining support to activity implying that adjusted Bank Rate is still currently below 0.5%. BIS central bankers’ speeches  5  natural rate of interest will not rise to pre-crisis levels which is why we believe increases in Bank rate will be both gradual and limited. Moves in financial markets may also be signalling nervousness in the slow healing story. Financial markets drifted down in the second half of 2015 and they fell quite sharply in the first months of this year. Some of these moves have recovered a bit in the last week or so. But nevertheless current market signals seem to be suggesting a structurally weaker economic picture. UK 10-year real yields are negative. And yield curves are flat as far as the eye can see – the 5-year point on the UK forward market interest rate curve has fallen by around 0.8 percentage points to 1% in the last month.8 It is difficult to identify any really major economic news in 2016 that might underlie this. Rather it may be that markets are shifting to a new perception of the world economy and risks, and of policy-makers’ ability to respond to future challenges.
2  BIS central bankers’ speeches  Regarding global activity, a stronger growth outlook has consolidated in developed economies together with a slowdown in the emerging world. Still, some downward adjustments are being made to the projections for this year, mostly driven by actual first-quarter data, leading to a marginal adjustment in the overall figure. Thus, it is expected that in the period 2014–2015 our trading partners will grow 3.7 percent on average, a tenth of a point less than was expected in March. In Latin America a less favorable picture emerges. Downward revisions in Argentina, Brazil and Mexico stand out in these settings. The price of copper has fluctuated significantly in recent months. After coming close to $ per pound, it returned to the order of $ The baseline scenario assumes copper prices of 3.1 and 2.9 dollars per pound in 2014 and 2015, respectively. The terms of trade would fall this year slightly less than projected the March IPoM, but somewhat deeper in 2015 (table 1). Inflation has remained well contained in developed countries, while in emerging markets, particularly in Latin America, the short-term outlook has been revised upwards, reflecting the depreciation of Latin American currencies in the past year. This, plus the changes in parities mean that foreign dollar inflation this year and next will be somewhat higher than forecast in the last Report. The Board estimates that in the baseline projection scenario, inflation in Chile will remain above 4 percent still for some months, ending 2014 around that figure.

10  BIS central bankers’ speeches  Table 2 Domestic scenario (annual change, percent) 2012  GDP Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports Current account (% of GDP) Gross national savings (% of GDP) December CPI December CPIEFE  2013 (e) IPoM Dec.13  5.4 6.9 7.1 12.2 5.6 1.1 5.0 -3.4 21.7 1.5 1.5  4.2 3.9 5.1 3.9 5.4 5.3 4.4 -3.2 21.1 2.6 1.9  IPoM Mar.14  2014 (f) IPoM Dec.13  IPoM Jun.14  4.1 3.4 4.2 0.4 5.4 4.3 2.2 -3.4 20.5 3.0 2.1  4.1 3.4 4.2 0.4 5.4 4.3 2.2 -3.4 20.5 3.0 2.1  IPoM Mar.14  3,75-4,75 4.8 4.5 4.1 4.7 3.1 4.6 -3.7 20.6 2.5 2.9  IPoM Jun.14  3,0-4,0 3.3 3.3 0.8 4.1 3.2 2.4 -3.6 19.5 3.0 2.8  2,5-3,5 1.7 2.4 -0.7 3.4 3.2 -1.1 -2.5 19.9 4.0 3.7  (e) Estimate. (f) Forecast. Source: Central Bank of Chile.
That said, this increase eased to 7.2% in July. One of the key factors behind the rise in credit over these months was the progressive activation of the Official Credit Institute’s guarantee facility for NFCs and individual entrepreneurs, which proved particularly favourable to SMEs. In fact, of the € billion lent to NFCs from December 2019 to June 2020 via new lending business, € billion (41%) corresponded to guaranteed loans. As a result, the sector’s aggregate debt-to-GDP ratio has risen for the first time since 2010, to 82% in 2020 Q2 (the highest level since 2017), owing both to the increase in debt and to the decline in GDP. True, the intensity of these rises will be corrected to some extent when the GDP data for the coming quarters are incorporated. But the simulations by the Banco de España also suggest a deterioration in the financial position, measured as each firm’s net debt relative to its net assets. This would be greater in the SME segment and in the sectors most affected by the pandemic. As was the case with firms, households’ financial position improved significantly following the previous global financial crisis. At the same time, mortgage-related lending standards have been much more prudent, although consumer credit has been growing at high rates in recent years and certain groups of households have remained in a situation of vulnerability. However, household income has been considerably cut in the current crisis, owing to the reduction in hours worked and the increase in unemployment.

Lack of effective competition in the payment card industry had led to higher costs for payment card transactions, which would in turn raise costs for businesses and consumers. Over a period of 14 months from May 2013 to June 2014, interchange fee, that is the wholesale fee paid between banks in a payment card transaction, were hiked several times. As interchange fee is priced into the MDR, the hikes in interchange fee contributed towards an increase in the MDR for merchants. A lack of price transparency and the overall competition further weakened market pressure to lower interchange fee and MDR. BIS central bankers’ speeches  1  The highly concentrated market also discouraged merchants from switching to another payment card network given concerns over losing significant competitive advantage if they did. Clearly, left unchecked, such indiscriminate interchange fee hikes risked bringing about a broad-based increase in MDR which would in turn be passed on to consumers through higher retail prices of goods and services. To curb indiscriminate increases in payment card acceptance cost and foster a competitive payment card market, Bank Negara Malaysia implemented the Payment Card Reform Framework in July 2015. Under the Framework, the interchange fees are subject to objectively-set ceilings, while a market incentive structure was instituted to strengthen the incentives for investments in payment card infrastructure. In addition, measures were also introduced to enhance transparency and competition by prohibiting restrictive trade practices. The results of such measures are very encouraging.
Indeed, the proportion of housing loans as a percentage of total loans in the euro area increased from around 50% in 1990 to more than 70% today, which is a type of lending that tends to be associated with lower growth.2 Structurally, a smaller banking sector could – at least in theory – help to avoid those negative effects on growth and insulate the euro area from some of these risks. Still, a smaller or downsized banking sector is no guarantee for lower overall risk. The business models, risk attitudes and profitability of the banks need to be taken into account as well. Likewise does geographical expansion into foreign markets when it is not accompanied by local knowledge. Another aspect is that a downsized banking sector provides impetus for capital market development in Europe – after all, if savings are not being intermediated through banks, they must be being intermediated through capital markets. I see this as central to a more balanced and contested financing mix in the euro area. Contrary to the trend in most advanced economies, the relative importance of bank versus non-bank financing in the euro area has actually increased in the last two decades – from already high levels – and this may have given banks excessive market power.

In the case of employment, the statistics traditionally used in Chile are built by extrapolating the results of surveys to the population, using expansion factors, which in turn are based on population projections that are updated at every Census. Thus, between one update and the next, the surveys do not have the capacity to reflect exogenous changes in demographics. Therefore, a phenomenon of immigration of the magnitude that our country has experienced in recent years cannot be represented correctly until the expansion factors are updated. So, information about levels in the labor force such as employment and other aggregates delivered by the different surveys do not necessarily provide a faithful representation of the reality whenever substantive changes occur in population aggregates. As you can see in Box III.3 of the Report, using different sources of information a revision can be made of the evolution of employment, factoring in the impact of the migrant inflows we have seen recently in Chile. In particular, this exercise shows that between 2016 and 2018 employment would have grown between one and two percentage points annually more than shown by the surveys, that is, between double and triple the data obtained from the surveys over the last few years. The difference in growth originates in the assumptions made regarding the new immigrants that entered the country in the last year, which are not available as yet.
Stocks in different companies in a variety of sectors, loans to governments and corporations, and real estate investments in a number of global cities are all parts of the portfolio. At the end of 2014, the fund had investments in securities from almost 10 000 issuers in 75 countries. The fund is a global investor. Prices in financial markets carry information about the risk and return prospects of different assets, and the markets are fairly efficient most of the time. Hence, a natural starting point for the allocation across regions is the size of the different financial markets. However, the weights assigned by the fund to different geographical regions are the result of a trade-off between various considerations. The fund is a minority shareholder and dependent on good corporate governance and protection of our rights in legal systems. Regulatory conditions in investee countries must be relatively stable, and we must be reasonably sure that our investments are safe. From the start in 1998, a large share of the fund was allocated to Europe. At that time, the emphasis was on exchange rate risk related to the trade pattern of the Norwegian economy. As European countries are our most important trading partners, Europe was overweighted compared with market weights. Three years ago, the Ministry of Finance concluded that exchange risk had diminished, partly due to increased globalisation. Consequently the fund’s overweight in Europe was reduced. At the same time, the allocation to emerging markets was increased.

Chart: A countercyclical investor The long-term horizon puts the fund in a position to be a countercyclical investor on a systematic basis. This is done through rebalancing the share of the portfolio allocated to equities. According to the rebalancing rule, when the equity share increases to more than 64 percent of the fund, we sell equities and buy bonds. Conversely, when the equity share falls below 56 percent, we sell bonds and buy equities. This strategy has proved to be profitable for the fund, and has increased the average annual return by about 0.5 percentage point. 2 Chart: International real interest rates So far, the fund has earned an overall annual real return – after inflation and management costs – of 3.8 percent. The cumulative return on the fund in money terms is equivalent to  1  John H. Cochrane (2011): “Discount rates”, The Journal of Finance 66 (4), 1047–1108. 2  For an analysis of the impact of rebalancing, please see Norges Bank (2012): The history of the rebalancing of the fund, Discussion Note 4. BIS central bankers’ speeches  3  more than a third of the fund’s total capital at the end of 2014. Going forward, the returns are likely to be lower. The starting point for calculating the expected rate of return on the portfolio is the real interest rate on high-grade government bonds. In recent years, bond yields in real terms have been close to zero.
Another reason for the rapid development in Internet usage in Sweden could be connected to the structure of the Swedish banking system. The banking sector in Sweden is dominated by a small number of large operators, all listed on the stock market and with a strong incentive to rationalise their operations. They have also had the resources to rapidly implement new technology. The same applies in the Netherlands, which has a similar bank structure. The more Internet services a bank can offer its customers, and the better they are, the more customers will use the Internet bank and the cheaper the administration costs will be for the bank. If we compare this with the USA, which has a bank market consisting of a large number of small operators, developments there have not been anything like as rapid. Only a few US banks offer advanced Internet services. The range of services is also much smaller than in Sweden. 2  BIS Review 51/2002  There is a lot to be gained by making payments via the Internet, both for the banks and for their customers. Sweden, like the other Nordic countries, has a giro-based payment system. Giro payments corresponded to more than 95 per cent of the total value of payments made in 2000 and to over 70 per cent of the number of transactions. Giro instruments are traditionally paper-based. However, the Internet enables the paper-based giro system to be speeded up by making it paperless.

The Swedish Telecommunications Administration’s monopoly began to break up as early as the 1980s, but the real turning point came in 1993, when the Administration was privatised as Telia. The market was opened up and exposed to competition; new challengers could gradually take over more than a quarter of the total market and a significantly greater part of the mobile telephony and Internet telephony segment. At the same time, technical developments were very rapid. Fiberoptics enabled lower costs for long distance calls and increased the speed of transfer of large amounts of data, which benefited the development of the Internet. Together, increased competition and rapid technological developments led to a fall in prices with regard to both telephony and Internet connection. The lower prices for users have probably contributed to the widespread use of the Internet in Sweden. The new technology was perhaps available in all essentials to all developed countries, but the views on deregulation varied. Only eight of the 25 member countries, today 30, of the OECD allowed competition in the telecommunications market, while the remaining countries retained a monopoly. There is also a clear connection between use of the Internet and competition. Competition is allowed in the telecommunications markets of six of the nine countries with the highest Internet usage. These countries have also experiences an increase in access to the Internet six times as fast as countries that have a monopoly market.
The precise objective of policy - even within the confines of the concept of price stability - remains a political decision: there will always be those who argue for a somewhat higher or somewhat lower target, and the fact that the Government endorses a precise target rather than just the vaguer goal of “stability” certainly strengthens our hand by allowing us to concentrate upon our essentially technical task. I am bound to say that in practice it seems to me to be rather a second order issue anyway given the narrowness of the range of definitions of “stability” that would carry conviction with the public, including financial markets. The Act confers the responsibility for meeting the Government’s inflation target specifically on a newly created Monetary Policy Committee, comprising myself as Chairman, the two Deputy Governors, two Executive Directors appointed by the Governor after consultation with the Chancellor and four members appointed from outside the Bank by the Chancellor. The Governors are appointed as members of the Committee for their full five year (renewable) terms; the remaining members are appointed for three year terms which are also renewable. The Committee’s policy meetings are also attended by a senior Treasury Official in the capacity of an observer, who may participate in the discussion - essentially to inform the Committee of any relevant aspects of the Government’s wider economic policies and explain the Committee’s thinking to the Chancellor - but he may not express a view on the monetary policy decision or, of course, vote on that decision.

In that commentary Exter first outlines the case for the new central bank being “non-political” and having “a considerable amount of independence” - essentially on the grounds that central banking “puts the government into the business life of a country at especially critical points, namely banking and other credit activities, capital markets, foreign exchange markets and the supply of currency”, and that it “embraces problems which are of an unusually technical nature”! But Exter goes on to recognise that “there are many important problems of monetary policy, especially those relating to fiscal policy, on which a central bank must necessarily work in close harmony with the government”. Noting that many governments had learned to value the sort of independent and objective, detached, advice that central banks are able to give, Exter nevertheless acknowledges that “on matters of vital interest to the state it would be impossible for a central bank to adopt a policy contrary to the policy of the Government of the day”. His killer argument is that no central banker can help but be “acutely conscious of the fact that, since no Parliament can bind its successors, their independence is limited by the ultimate power of the Government to change the law”.