samchain/econo-pairs-v1 huggingface dataset:
The celebrated Lisbon Strategy has turned into a farce; many of the structural reforms that it outlined would be beneficial economically, but few of them have been realised or at least enforced by the agent, the European Commission. On the other hand, the EU institutions have repeatedly shown an ability to produce bizarre pieces of legislation that would hardly ever be passed at the national level in any given member state. The famous Czech writer Milan Kundera would probably call it the “unbearable lightness of legislating”. So my suspicion is that the EU is now in a position where it is easier to integrate than to liberalise. And these are two different things in terms of long-term economic growth, as I have argued. What a shame for the EU and for us. Thank you for your attention. BIS Review 165/2009  3

In the short term, the most significant cause for concern in the US economy is that employment is still weak. Of course, the combination of rapid growth in GDP and a weak labour market mean that productivity growth is good, but the dismal labour market situation could nevertheless create uncertainty among households and contribute to subduing consumption. However, it is difficult to believe that it would put an end to the upturn we are seeing now. There are also signs of an upturn in the euro area now, although the picture is not as clear-cut as in the United States. Business tendency surveys for industry show an increased optimism, while industrial production is slowly beginning to rise. Developments in Asia, central and eastern Europe also appear to be slightly stronger than was previously assumed. However, the stronger euro may lead to a slightly slower upturn in the euro area. All in all, the picture of international economic activity now looks somewhat brighter than we anticipated in December. The upturn in economic activity appears to be proceeding roughly as we had anticipated it would. The Swedish economy has also turned We assumed in the December Inflation Report that growth in Sweden would gradually increase during the course of 2003 and would amount to 1.5 per cent for the whole year. During 2004 and 2005 growth was expected to be around 2.5 per cent, which is in total a slightly more rapid rate than the Riksbank considers sustainable in the long-term without inflation rising.
There are still expectations of an increase in international interest rates, but market participants have lowered their growth and interest rate expectations as a result of high oil prices. Growth in the Norwegian economy picked up during the second half of 2003. The low interest rate has contributed to strong growth in private consumption and housing investment. Activity has picked up in service industries and the construction sector. High petroleum investment, the global economic recovery and a weaker krone through 2003 have improved conditions for manufacturing. Profitability is improving for mainland enterprises. There are signs of renewed growth in investment in a number of industries. Imports have expanded markedly. Potential growth in the Norwegian economy is estimated to increase somewhat more than normal this year as a result of increased competition and rationalisation in many sectors. This will contribute to fairly high growth in the Norwegian economy without the emergence of constraints on the supply of labour or productive capital. The high rate of growth in output nevertheless implies that the output gap will approach zero towards the end of 2004. The output gap is a measure of the difference between the actual level of output and potential output. Developments in the output gap provide a basis for assessing cyclical developments and can thus shed light on domestic price and cost pressures in the economy. It is difficult to know how high capacity utilisation is at any given time.

Financial needs are really driven by non-financial desires. People do not desire a housing loan or a fire insurance policy. People desire a house. To provide complete, holistic solutions, you need comprehensive customer data and you need a deep understanding of the customer journey. T h e customer data that most banks have are simply not sufficient to develop a good understanding of the financial situation or needs of their customers. Customers have multiple relationships, with deposits and loans, investments, insurance policies, and retirement plans, spread across many financial institutions. How many financial institutions advising a customer have a complete picture of the customer’s balance sheet – all his assets and liabilities? Some banks have started to offer aggregator services which consolidate financial information such as bank accounts, credit cards, loans, and investments from all the financial institutions serving their customers. This allows financial institutions to provide holistic financial planning. BBVA provides its corporate customers with a consolidated view of all their financial information from about 90 financial institutions. 3 / 10  BIS central bankers' speeches  Next, understanding the customer journey. Some banks have begun to offer their corporate customers complete, end-to-end solutions, based on a keen understanding of their customers’ work processes. United Overseas Bank in Singapore provides its corporate customers an integrated digital platform that enables the customer to: generate purchase orders and invoices with a few clicks; streamline its payroll process; and get up-to-date views of its financials.
However, there is a risk that African countries could become the biggest casualties of a crisis they did not create. The impact is already severe and has dealt a huge shock to our continent while posing a great threat of reversal to the hard earned social and economic gains that most of our economies had achieved in the recent past. Ladies and Gentlemen, for more than a decade, most African countries had continued to register unprecedented economic growth rates averaging 5% and above. We saw a rise in income levels and a reduction in poverty among our peoples with improved education,  BIS Review 44/2009  1  health, water and infrastructure development. The continent also experienced a surge in investment flows in many sectors including mining, manufacturing, tourism, transport and construction. Progress in governance and accountability had also been noted in most African countries. Mr Chairman, allow me without pre-empting the deliberations to mention some problems the global financial crisis has created for most African economies. Commodity exporting countries have experienced a decline in their export receipts. This has been due to the decline in commodity prices reflecting the weak demand of such commodities arising from the scaled down output in industrialised and emerging market countries. The declining export earnings as well as changing investor sentiment toward investing in emerging markets, which has been reflected in the reversal of investment flows, have been exerting pressure on the exchange rates.

In Zambia, the effects of the global financial crisis have been generally felt in our mining industry, securities market, and the external sector of the economy. The drop in copper prices has led some mines closing while other have been placed on care and maintenance with massive job losses while the mining subsectors and mining related industries have also seen loss of jobs. The tourism industry is adversely affected with low occupancy rates while the horticulture industry has also recorded losses due to low export volumes as result of low demand and low commodity prices of vegetables and fresh flowers in European markets. The exchange rate has also come under severe pressure as foreign exchange inflows declined reflecting the deterioration in the balance of payments position. This is partly a consequence of reduced earnings from copper exports arising from the fall in copper prices. Further, the weakness of the local currency is a consequence of increased risk aversion to emerging and developing economy financial assets. Chairperson, the challenges arising from the global financial and economic crisis are huge but surmountable. Major economies of the world are putting in place various stimulus packages, which are expected to take the world economy out of the crisis. Without doubt, these measures will benefit emerging and developing economies as well, provided that were main committed to pursuing strong socio-economic policies. I urge all of us here present to be part of the solution and contribute to the economic recovery and prosperity of this continent.
The prize will be an integrated framework, covering all our lending to the banking system and one that I hope, by making clear the terms on which liquidity will be provided in times of stress, will focus the minds of banks long before those stresses emerge. During my second term as Governor I would like to see us establish a framework for financial stability that is on as sound a footing as the one we have successfully established for monetary stability. The measures I have described would go a considerable way to achieving that. But just as no framework for monetary policy can prevent shocks from hitting the UK economy, we need to think carefully about why financial crises have been both persistent and damaging. That leads me to one final thought on which I want to end. For reasons of historical accident we have created over many decades a financial system in which the incentives to monitor risk-taking have been sharply reduced. It is often said that the role of a central bank is to take the punch bowl away just as the party is getting going. That approach has served us well in monetary policy. But all those efforts will come to naught if the opposite applies to the financial sector. If banks feel they must keep on dancing while the music is playing and that at the end of the party the central bank will make sure everyone gets home safely, then over time the parties will become wilder and wilder.

The effects on the international financial system were thus slight, although the crises affecting both Asia and Russia led to extensive redistribution of wealth and political tumult in the countries concerned. There are probably several reasons why the effects were so limited. One is probably that economic policy has become more predictable in many countries in recent decades, with sound public finances and stable, low inflation. The markets should therefore be less sensitive to shocks. However, another reason is actually that the financial system has become more resilient. The fact that risks have a better spread makes the system more stable. The risks are also transferred to the agents who want them or should have them. There is also the fact that the banks have gained more experience of operating in deregulated financial markets. The development towards more market-based transactions means that banks can now concentrate on the risks they are best at managing. They have also become better at managing them, with well-developed risk management methods and models. So far, so good. A better spread for risks and improved risk management can contribute to better absorption of shocks to the financial system. On the other hand, there can be elements that increase the risk of more serious shocks that also spread throughout the whole system. …or have they become more prone to risk? One such tendency could be an increased propensity among market agents to take greater risks and to copy others’ actions.
Different jurisdictions will come up with different arrangements to address this issue, but I would say that every jurisdiction is going to need its own solution. And, perhaps for the first time, that has highlighted the need for some international co-ordination of policies on shadow banks. The FSB is just starting to explore this virgin territory.21 Asset managers and incentives The vast majority of the asset management world is not engaged in shadow banking and, more important, does not of itself jeopardise the stability of the system directly if it gets into trouble. The taking and absorption of risk by unlevered funds is a fundamentally healthy part of the system. But financial stability authorities cannot be indifferent to this industry. By investing in the debt and equity of banks, it is a vital part of market discipline. We do not want – and cannot have – a system where the first line of defence after the management of banks themselves is the cadre of official sector supervisors. For the system to be healthy, we need boards, auditors, equity investors and debt holders to play a big part, and for investment decisions to be subject to constructive incentives. Yet, there is relatively little debate about whether the incentives of asset managers made the system more prone to crisis. Although not a subject for today, an important part of this is the drive to develop resolution regimes that entail debt holders taking losses on their exposures to distressed banks and dealers.

A more detailed description will be provided by Professor Lars Jonung. Economists of the time could not, based on historical evidence, predict that national and international monetary systems would be facing substantial disturbances that would push up the price level considerably and lead to extensive instability. With the First World War, the gold standard was suspended and the money supply and price level rose sharply. The deflationary policy of the 1920s brought the price level down, but probably also contributed to instability. The price level rose again during the Second World War, when the occupying powers used the printing press to finance a substantial portion of their expenditure. The economic policy of the 1970s and 1980s contributed to high inflation. So, how well would economists in 1905 have predicted the Norwegian level of real income in 2005? BIS Review 43/2005  1  They would have been off the mark here too. They were not in a position to predict that the growth rate in the Norwegian and global economies would rise as a result of considerable technological progress, restructuring and higher productivity. On the other hand, they could to some extent have predicted our current industry structure based on their economic history. From 1865 to 1900, primary industries’ share of total GDP fell from about 34 per cent to 22 per cent. In the same period, manufacturing, other goods production and service industries accounted for an increasing share of total GDP.
Temporary price level target Yellen's predecessor as chairman of the Federal Reserve, Ben Bernanke, has proposed a solution that can be regarded as a special application of a makeup strategy. 24 This is based on the central bank under certain circumstances not having a target for inflation, but instead for the development of the price level. The difference may appear subtle, as inflation is the change in the price level, but it is potentially quite important. Let us assume that both the inflation target and the target increase for the price level is 2 per cent. If, in an inflation-targeting regime, one has an inflation rate that undershoots the 2 per cent target for a period of time, it is the central bank's task to bring it back on target. The fact that inflation has deviated from the target before is not important – “bygones are bygones”. But if it is instead the development of the price level that is the target and inflation deviates from 2 per cent, then this must be “made up for”. The principle is thus the same as Yellen's makeup strategy, but here one has clarified in advance that the target refers to the price level rather than inflation. The differences between a price level target and an inflation target is illustrated in Figure 7. 25 If something unexpected occurs in an inflation-targeting regime that causes inflation to be lower than the target, it is enough to bring inflation back to 2 per cent again (the bottom right figure).

The current inflation rate does not provide sufficient information to determine the level at which interest rates should be set now. Our analyses indicate that a substantial share of the effects of an interest rate change will occur within two years. Frequent and marked interest rate changes can keep inflation under tight control, but will lead to wide variations in output and employment. This can be called a strict inflation target. Theoretically, we could also have chosen to stabilise output without taking into account variability in inflation. This can be called a strict output target. In Norway, as in a many other countries, we have chosen an intermediate solution. Interest rates are changed more gradually with less impact on output than under a strict inflation target, and inflation is allowed to deviate from the target over a somewhat longer period. This is called flexible inflation targeting.44 A two-year horizon in interest rate setting will also contribute to smoothing fluctuations in output and employment. Two years is therefore normally a reasonable time horizon for achieving the inflation target. The most important monetary policy instrument is the interest rate on banks’ sight deposits in Norges Bank. Short money market rates will shadow changes in Norges Bank sight deposit rate. The shortterm nominal interest rate in Norway is now very low historically. With reduced pressures in the economy and the prospect of an inflation rate below target at the twoyear horizon, Norges Bank has over the past year reduced the key rate on a number of occasions.
In real terms, this corresponds to growth rates of 4-5%, which is relatively high by historic standards. Differences across euro area countries have been considerable: while in Spain, France, Ireland and Italy, residential property prices were rising on an annual basis by between 11% and 17% in 2002 and 2003, they have been falling slightly in Germany and Austria in the last four years. The dynamism of property prices in several euro area countries is very much related to the very low levels of interest rates brought about by the introduction of the euro. For several euro area countries, the adoption of the euro marked a significant fall in real interest rates, as it implied a “regime change” towards a more stable macroeconomic environment. The fall in interest rates, in turn, allowed households to borrow more and accumulate more debt. As a consequence, household indebtedness in the euro area has increased significantly in recent years. In 2004 it is estimated at 54% of GDP, up from 46.5% in 1998 and 43% in 1995. The rise in household debt has not, however, been accompanied by higher interest payments as a ratio of disposable income in the euro area as a whole. This ratio amounted to 4.6% in 2003, similar to the 4.8% observed in 1998. However, the strong rise in house prices and the substantial increase in household indebtedness have raised some concerns. Given the differentiated path of house price increases across countries, this concern is obviously more relevant and stronger in some countries than in others.

36 Dealing with the magnitude of financial cycles or bubble dynamics that economies typically face from time to time requires some absolute prudential limits. In Singapore, we have employed the following limits on property loans: •  Loan tenure cap of 35 years. BIS central bankers’ speeches  5  •  Loan-to-value ratios of 80%, 50%, and 40% for the first, second, and third property loans respectively, for tenures less than 30 years; for loan tenures more than 30 years, the loan-to-value ratios are 60%, 30%, and 20%. •  Total debt-service ratio of 60%, taking into account all debt obligations and using a medium-term interest rate of 3.5% for residential properties. (Current mortgage rates are generally below 2%.) •  Cap on banks’ property-related exposures at 35% of their total exposures. 37 In fact, macroprudential policies need not even be limited to prudential tools at the disposal of central banks or financial regulators. In the face of abundant global liquidity, credit-based prudential measures may not constrain loan growth or asset price increases sufficiently. Singapore has therefore also adopted fiscal measures such as stamp duties on buyers and sellers of properties as part of the macroprudential toolkit. •  The seller’s stamp duty ranges from 4% to 16%, while the buyer’s stamp duty ranges from 3% to 18%. •  These are essentially transactions taxes that aim to curb the speculative flipping of properties. 38 Third, it is important to draw a distinction between macroprudential policies and capital flow management measures.
The British Museum holds a £ note from Henry Austen’s bank in Alton. The images of people on Bank of England banknotes are a recent addition. The monarch did not generally appear prior to 1960 and it was another decade until the first character – another great of English literature, William Shakespeare – was included. Even more unusually, the new £ joins the £ in being printed on polymer, rather than paper. Polymer marks a major innovation. It is cleaner, safer and stronger. Resistant to dirt, moisture and curry. This added strength means notes will remain in good condition for longer, with a lifespan at least two and a half times that of paper notes. When they do reach the end of their useful lives, polymer notes will be recycled. As a result, the costs of producing notes – both economic and environmental – are lower. 5 6  Mansfield Park (1814). http://libraryguides.goucher.edu/c.php?g=242484&p=1612598. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  Importantly, the use of polymer also allows the Bank to bolster the security features in our banknotes. The new £ features see-through panels, coloured foils and detailed metallic images. The design of the new £ makes full use of polymer’s potential. It features a portrait of Jane Austen, taken from an engraving by William Home Lizars, commissioned in 1870 by her nephew and based on a watercolour sketch by her sister Cassandra.

I will then highlight the financial risks that go hand-in-hand with the changes underway (II). Finally, I would like to emphasise that a safe move towards a more diversified intermediation model as we see it developing cannot be achieved without further financial integration at European level. To that end, advancing the European regulatory agenda is of prime importance (III). 1. From  bank-centric  financial  intermediation  towards  unbundled  financial  intermediation in the digital era To date, in Europe, we have been accustomed to a bank-centric intermediation model. However, this model is being increasingly challenged by new players emerging in the digital era, the so-called Fintechs and Bigtechs, as well as by the growing weight of the asset management industry. We thus need to prepare to new intermediation models, which can be classified in four categories:  2/9  -  The traditional banking intermediation model for certain financial services, like mortgages;  -  A non-bank financial intermediation model (formerly known as “shadow banking”) performed by the asset management industry, to finance in particular the corporate sector;  -  A re-intermediated model, in which Fintechs and Bigtechs intermediate the banks, on the retail segment in particular;  -  And a fully disintermediated model supported by the blockchain and the peer-to-peer economies. Let me first discuss the new models stemming from the digital era (A) and I’ll come back afterwards to asset management (B).