samchain/econo-pairs-v1 huggingface dataset:
While the outlook for the Maltese economy remains bright, we have to acknowledge that the external environment is becoming less supportive than we expected a year ago, or even three months ago. Some of the external downside risks flagged by the Bank in recent projection rounds have started to materialise. Global economic growth has become more diverse across regions, with soft indicators suggesting that global trade is losing the buoyancy seen in 2017. Partly in response to the less benign economic conditions abroad, activity has also softened in the euro area. The less favourable international environment partly reflects new restrictions on trade and the response of businesses’ capital spending plans. In late 2017 and also in the course of 2018, the United States introduced additional trade protectionist measures, which have been followed by a degree of retaliation. Although these actions mostly concern trade between the United States and China, the overall impact may be considerably broader once global value chains and the effects of uncertainty on private spending are taken into account. This assessment is broadly confirmed by the latest assessments published by the IMF in October, and by the OECD a week ago. Indeed, year-onyear growth in world trade has slowed to 3.2% in the first half of this year, from the relatively fast  Page | 2  growth of 5.0% recorded in 2017, while growth in container port traffic averaged 3.9% in the first nine months of this year, down from 6.5% in 2017.

That the Riksbank should aim to stabilise inflation follows from the Act’s price-stability objective, which the Riksbank has chosen to specify as an inflation target of 2 per cent. That the Riksbank should stabilise resource utilisation follows from the fact that the preparatory work for the Act states that the Riksbank “without prejudice to the price-stability target, should support the goals of general economic policy with a view to maintaining a sustainable level of growth and a high rate of employment”. 3 So what can the Riksbank do in order to achieve sustainable growth and high employment without prejudicing the price stability objective? Well, the best thing the Riksbank can do is to attempt to stabilise resource utilisation around a normal level. But why around a normal level? Surely, a higher level of output and employment than normal would be better? Yes, but it is beyond the power of monetary policy to increase the average level of output and employment and thus increase average resource utilisation. To increase the average level of resource utilisation one would have to use areas of policy other than monetary policy, for example a structural policy designed to improve competitiveness and the workings of the labour market. Unfortunately – as 40 years of experience have shown and 30 years of research have explained – attempts to use monetary policy to keep resource utilisation above the normal level only result in average inflation being higher than the target without raising the average level of resource utilisation.
That being so, the question is what to do about the possibility that, occasionally, stimulating demand to offset macroeconomic damage from the crystallisation of one set of imbalances can fuel a new set of imbalances. The question is posed most pressingly about the US. But, in the UK’s recent monetary history, one finds a parallel in the debate in the early 2000s about whether or not there were limits to a strategy of stimulating domestic demand – principally household spending – in order to offset the effects on the medium-term outlook for inflation of pronounced weakness in external demand and business investment after the bursting of the Dot.Com bubble. Seen in that light, the central question becomes whether the authorities should have tools to check the evolution of stretched balance sheets, particularly in the financial sector, in the face of robust credit growth and asset price appreciation. This goes some way towards making the case for the “cyclical” elements of macroprudential policy. And that, of course, is a key destination for me this evening. When, more than a decade ago, the Draghi Report exhorted domestic and international authorities to monitor and maybe manage national balance sheets, the term “macroprudential” was used only by Andrew Crockett, Claudio Borio and their colleagues at the BIS.22 Now it is a buzzword – planned in the West and used already in parts of Asia and Latin America. Macroprudential policy: tempering but not obstructing financial liberalisation Plainly finance got out of hand. Not for the first time in history.

The respective slopes of these two schedules depend on the relative impact of the policy rate and the macroprudential tool on aggregate demand and on the quantity of credit. A well-chosen and well-designed macroprudential tool is one that has a relatively large effect on the quantity of credit but only a modest impact on aggregate demand. That would generate a relatively flat FS schedule. Moreover, since changes in policy rates also affect aggregate demand through routes other than the credit channel, such as the exchange rate, it seems reasonable to assume that the PS schedule is relatively steep. That is the configuration of relative slopes shown in the Chart. Provided the two schedules do not coincide, both price and financial stability objectives can be achieved simultaneously. With this configuration, it is natural to assign the monetary instrument to the pursuit of price stability and the macroprudential instrument to the pursuit of financial stability. Moreover, with these slopes and this assignment, no active co-ordination in the setting of the instruments is strictly necessary: a process whereby each instrument is set independently, taking the other as given would converge on the equilibrium, A. That said, appropriate co-ordination and information exchange is desirable to achieve it efficiently and is facilitated in the real world by housing the MPC and the FPC in the same institution, with overlapping memberships, and the scope to meet jointly when required. Some sorts of shocks will involve a tightening in both instruments.
A strategy based solely on closer ties with these countries, therefore, would tend to condition Malta’s development to proceed at a slower pace than its own potential would justify. Furthermore, although efforts are being made to create a Euro-Mediterranean free trade area (FTA) by 2010, this date appears rather optimistic. This was confirmed by the Spanish Presidency last March, which noted that a critical mass of implemented FTAs between the partners themselves has yet to be  5  Singapore has recently also initialled a bilateral agreement with Japan. 6  Indeed, these are the precise reasons put forward by the Minister of Industry and Trade of the Republic of Tanzania during the 47th session of UNCTAD’s Trade and Development Board where he noted that: “We do not believe that we can enter into the international arena under today’s rules if we do not go through these steps at regional level”. 7  Of these arrangements only 141 have been notified to the WTO. “Regional Trade Integration Under Transformation”, WTO Secretariat, 2002, preliminary draft prepared for the Seminar on Regionalism and the WTO on 26 April 2002  8  These include members of AFTA, the Andean Community, CARICOM, COMESA, ECOWAS, the EU, MERCOSUR, NAFTA, SADC, CACM, LAIA, ECO, GCC and the Bangkok Agreement. This does not include countries which have stand-alone FTAs/Association Agreements with another country or regional grouping. 9  The ANDEAN Pact, for example, also deals with biodiversity, electronic commerce and the protection of indigenous knowledge.

If this agreement is to be upgraded, however, Malta would have to make commitments over and above those it has today. Indeed, many of the countries with whom the EU has a comparable agreement have managed to obtain a better deal than Malta not only because they are much larger in terms of market size, but also because they have entered into additional commitments. EEA countries, for example, do indeed participate in EU programmes, but they have also offered substantial rebates on loan-related interest payments and committed nearly ECU 500 million in direct grants for projects in specific EU regions. In other words, EEA countries contributed to the EU’s financial resources, and specifically to the EU’s regional policy, without being members of the EU. In addition, it is well known that membership of the EEA implies taking on a large part of the EU acquis, whether past, present or future, without having any say in the decision-making process. Nor is the obligation to come into line with the acquis unique to the EEA. As is the case with Switzerland, which is an EFTA but not an EEA country, the EU’s trading partners are increasingly being required to approximate their national laws with those of the EU as a precondition for access to 13 its market .
As students at the AMSE and as future economists, analysts and researchers, you will have a big role to play to ensure that, irrespective of the big changes to come in tomorrow’s financial intermediation, our compass continues to point toward the common good of financial stability. 3 4  The Road ahead, 1995 Madre  9/9

Faced with such swings in sentiment, I want even more to stress today two ideas that are constant and consistent: (A) the ECB has been an innovative and efficient inflation-targeter, including in the Covid-crisis; (B) beyond Covid, the ECB has a powerful “quartet of tools” to keep its monetary policy as accommodative, and for as long as necessary. A. The ECB as an innovative and efficient inflation targeter In the first part of my remarks, let me try to answer three questions: is the ECB clear in its objective? is it consistent in its instruments? and is it efficient in its results? Page 2 sur 9 I. Is the ECB clear in its objective? For the ECB, like all other major central banks, our inflation objective is our lodestar. That means our definition of price stability should be simple, symmetric, and medium-term oriented. However, not everyone may perceive it this way. Hence, in the context of the Strategy Review launched by Christine Lagarde, we are currently reflecting on whether it can be communicated more clearly. To make it even simpler, we should reexamine the overly sophisticated qualifiers attached to the 2 % figure (“close to but below”). There is no benefit in appearing ambiguous about what we are aiming at. “Symmetric” refers to the fact that our objective is a target and cannot be a ceiling. Looking backwards, a central bank that has been successful in achieving its target on average will have had roughly as many episodes of inflation above its target as below.
I would like to remind you that as far back as this summer the oil price exceeded $ Therefore the baseline scenario is built on the basis of the average annual oil price in 2015, which will be slightly below the average price in 2014. Further on, we project a gradual downward  2  BIS central bankers’ speeches  adjustment of the average annual oil price. If necessary, we shall review the base assumptions of oil price before submitting the final draft of the document to the State Duma. Another difference of the forecast prepared by the Ministry of Economic Development is in the fact that its projected 2015 inflation is 5.0–6.0%, which is higher than the forecast of the Bank of Russia. In our assumptions we expect the exhaustion of the factors that have caused the rise in inflation this year, and in the baseline scenario, we assume that the inflation will reach 4–4.5%. According to our estimates, the difference between the key parameters of the federal budget, calculated on the basis of the forecast of the Ministry of Economic Development (this is the way the draft budget is calculated) and the one calculated on the basis of the Bank of Russia forecast, is also insignificant. The federal budget deficit in 2015–2017 will remain low.

Thus, even in an economic boom, employers can hold back wage increases without the risk of losing valuable labour. Of course, these changes in wage formation may vary considerably in different economies. But they interact with each other due to the global 2 Read more at: https://www.riksbank.se/sv/finansiell-stabilitet/det-finansiella-systemet/betalningar/  3 The risk of unemployment is one of many factors behind wage expectations. The experience of unpleasant mac-  roeconomic events characterises the behaviour of different age categories, as discussed, for example, by Malmendier and Nagel in “Depression babies: Do macroeconomic experiences affect risk taking?” (The Quarterly Journal of Economics 2011)  3 [5]  market for goods and to a growing part of the service sector also being traded globally. The increase in the number of self-employed people, the many part-time positions and the changed wage composition are factors that tend to crop up as explanations for low wage growth in other economies but which I consider to be less important for understanding wage formation in Sweden. On the other hand, what is special for Sweden is that we have become many more on the labour market. The number of persons between 15 and 74 in the labour force increased by just over half a million between 2006 and 2016. This increase is largely due to high immigration but the labour force is also growing due to changed rules and reforms on the labour market and to tax, benefits and pension rules.
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.

Such assessments are further complicated by the fact that there have been a number of important structural changes in the mortgage markets. Without going into detail, weighing the available evidence together, we do not think that residential property in Sweden is significantly overpriced in general. Nor do we believe that households in general are overly indebted. However, this does not preclude the possibility that there are other countries where house prices and household indebtedness have risen to levels beyond what can be fundamentally motivated. Yet, even if we don’t believe that house prices and household indebtedness have been disconnected from their fundamental drivers, there are still reasons for us to be concerned by the rise in property prices and household indebtedness. In the last years, in Sweden as elsewhere, household debt has grown much faster than disposable income. Obviously, this is not sustainable in the long run, as households then ultimately would be unable to service their debts. In the long run it is likely that indebtedness and house prices will increase roughly at the same rate as the nominal growth of the economy. This type of adjustment, to more restrained growth rates, will normally occur smoothly, as households begin to feel that their finances cannot tolerate a higher level of indebtedness. However, if there is an overly sharp correction or “hard landing” if you like, it could lead to weak growth in the economy for a long period of time. In this case, it would also have effects on inflation.
The Code of Practice provides guidance on a number of areas, including how the SRR objectives are to be achieved, factors guiding the choice between different tools, how to determine that it is not reasonably likely that action can be taken by or in respect of a bank to bring it into compliance with the FSA’s threshold conditions – ie how to determine that the SRR should be triggered, how to determine the basis for calculating compensation where applicable, and the principles by which the Bank of England should run a bridge bank. Beyond all of these provisions, the Banking Liaison Panel, whose members include industry bodies, lawyers and insolvency practitioners, in addition to HMT, the Bank and FSA is responsible for providing advice on the wider effects of the resolution regime. The resolution of the Dunfermline Building Society The first, and so far only, use of the resolution regime was for the Dunfermline Building Society at the end of March. Our tally of one is in sharp contrast to the US, where to date this year the FDIC has carried out 124 resolutions of failing banks. The US does, of course, have a much less concentrated banking industry. Dunfermline was, almost needless to say, a very instructive first case to handle. We achieved the key objective of a weekend transfer of depositors, branches and the head  4  BIS Review 157/2009  office, on this occasion to Nationwide Building Society.

During the crisis, some examples of bad incentives that sustained the boom included: 2/7  BIS central bankers' speeches  1. Compensation practices at financial firms that rewarded volume and short-term performance over longer-term, sustainable returns; 2. The conflict of interest inherent in the willingness of the credit rating agencies to designate tranches of subprime mortgages triple-A in exchange for fees; 3. The ability of Fannie Mae and Freddie Mac to use their implicit government support to take on large amounts of mortgage risk with very little capital backing; and, 4. The ability of AIG to use its triple-A rating to provide credit protection to banks and securities firms against complex mortgage obligations with little direct capital support or an adequate liquidity backstop. Culmination of the crisis Once the housing bust got underway, stress on the financial system increased sharply as asset prices fell and bank earnings plunged. In the spring of 2008, such pressures led to a forced sale of Bear Stearns to JPMorgan Chase. Later in the year, the government placed Fannie Mae and Freddie Mac into conservatorship. In September, Lehman Brothers failed. And, a day later, AIG was rescued in order to protect the rest of the financial system against further losses and even broader contagion. With confidence in financial markets and financial intermediaries badly frayed, the Federal Reserve and the U.S. government intervened and provided a range of liquidity backstops, debt guarantees, and capital infusions to forestall a complete collapse of the financial system and the economy.
Historically, the most drastic processes of deleveraging, including the post-war episodes and the recent post-crisis episode in the US, have relied on both mechanisms. But the contribution of nominal growth has always been decisive for success. In the euro area, until recently, real growth and inflation were too low to foster macroeconomic deleveraging, so balance sheet repair had to take place through the more painful channel, conflicting with the objective of macroeconomic stabilisation. Rising nominal growth is now helping to reconcile those two goals. Nevertheless, further efforts are still needed to work through the legacies of the crisis, especially in parts of the euro area banking sector where nonperforming loans remain high. The third important feature of the recovery is its broadness across sectors and countries – which is to say, it has not only strengthened but become more homogenous across the euro area. This reflects above all the effectiveness of our measures in narrowing financing conditions across different economies. If one looks at the percentage of all sectors in all euro area countries that have positive growth, the figure stood above 80% at the end of last year – above its historical average of 73% and the level observed during the 2009–11 recovery. Similarly, the dispersion in growth rates across both sectors and countries has also narrowed significantly and both are now at their lowest level since 1997. The same story is visible for employment. In early 2014 the vast majority of euro area headcount growth was coming from Germany.

2 See Draghi (2015), “Monetary Policy: Past, Present and Future”, speech at the Frankfurt European Banking  Congress, 20 November 2015. 3 Using the Phillips curve approach presented in Box 2 of the ECB Economic Bulletin, Issue 3 / 2016. 6/6  BIS central bankers' speeches
The relaxation on the policy on payment gateway would promote greater competition in the payments system while the flexibility accorded on the issuance of credit cards would enable the partnering of licensed institutions with non-banking institutions in offering greater choices to consumers. Ladies and Gentlemen, In conclusion, I would like to re-emphasise that banks should continuously seek to educate and familiarise consumers in the use of electronic and other technology based banking applications which are more efficient and cost effective. The occasion today is an important step towards maximising banking convenience that technology can offer to the consumers. I am delighted to take part in today’s  2  BIS Review 22/2003  launch and would urge the participation of all financial institutions in this effort to promote the use of electronic payments in the country. Thank you. BIS Review 22/2003  3

It would ensure regular supply of international liquidity, but could only provide partial protection against exchange rate volatility and valuation losses. There is an important trade off, there , which is the essence of a new “Triffin dilemma” and which cannot be avoided when looking at the public supply of international liquidity, whether by one nation or within a multilateral framework.   More fundamentally, a new currency which would provide a reliable store of value would, in fact, grant its holders a collective guarantee against exchange risk. That guarantee would benefit surplus countries and would be given by deficit countries. This issue was intensely debated when the substitution account was discussed and negotiated within the IMF, more than 25 years ago. It became clear, at the time that it would not be accepted by many countries unless some explicit, binding and symmetric rules on balance of payment adjustments were agreed upon simultaneously. Most likely, those questions would be raised again today and the creation of a new reserve currency would have to be part of a broader framework. Conclusion and provisional policy lessons Looking at the next decade, one can project two alternative – and polar – scenarios for the evolution of the international financial system. First, a scenario of progressive and partial fragmentation: no significant capital account opening would occur in many parts of the world.