samchain/econo-pairs-v1 huggingface dataset:
I quote: “A transfer of production and employment between firms and industries may occur through higher domestic cost pressures” … and further … “How strong the pressures will be depends in particular on how strongly Norwegian business and industry is involved in petroleum activities and the scale of revenues that are used domestically”. The report underlines the responsibility that economic policy would have for developments. Fourteen years later, in 1988, former central bank governor Hermod Skånland summarised the experience gained up to that point in time.1 He was pessimistic. We had spent a large share of the cash flow from the petroleum sector on costly counter-cyclical policies and a rapid expansion of welfare schemes. Internationally exposed industries were scaled back, and it seemed that the economy was unstable. Inflation had taken root. Skånland concluded the lecture as follows: “We will be facing greater challenges with regard to demand management than countries with a broader industry base. It still remains to be seen whether we are more capable of addressing these challenges.”  Experience of other countries The experience of other countries that had received large, unexpected income from natural resources was not encouraging. The classic example is Spain’s substantial revenues from the colonisation of America in the 1600s. The historian David Landes summarised the Spanish experience as follows: Landes stated that easy money is bad for a country. It is very tempting to live comfortably on this income and be less concerned about safeguarding other revenue sources.

One cannot rule out the possibility that investors might reduce their holdings or perhaps no longer wish to own Swedish mortgages through covered bonds when housing prices are falling heavily. Although the risk of direct loan losses on the banks’ mortgages is initially small, investors who perceive the uncertainty to be great and who have poor knowledge of the credit risk might wish to sell their holdings. If a general expectation of increased sales pressure also builds up, a large number of more well-informed investors 4  BIS central bankers’ speeches  might choose to sell their holdings of Swedish covered bonds to avoid large falls in value. This type of herd behaviour could create very negative price fluctuations on the bond market and perhaps even disrupt the functioning of the market. The stress tests carried out by both the Riksbank and other analysts indicate that the Swedish banks would be able to cope with a large fall in housing prices without the earmarked collateral declining significantly. But regardless of this, we can be sure that the uncertainty regarding the covered bonds would increase if housing prices were falling and it is always international confidence in the Swedish housing market that is important here. However, it is difficult to predict at what loan-to-value ratio the Swedish covered bonds would begin to be perceived as less safe by the market. Perceptions of what is acceptable may suddenly change.
In any case, I would like to stress that, from my perspective as a supervisor, Pillar 1 should remain risk-based and that we should move beyond the somewhat artificial opposition between green and brown exposures, by assessing transition risk more on the basis of transition plans. As regards the digitalisation of finance, in addition to contributing to the development of regulations such as DORA (Digital Operational Resilience Act) and MiCA (Markets in cryptoassets), which aim to facilitate the development of innovations in a framework that improves confidence and financial stability, we can, as a central bank, play a positive role from an operational point of view by reviewing our offer of monetary services. In this perspective, the Banque de France has successfully conducted nine experiments with central bank digital money (CBDM) for the purpose of interbank settlement, securities transactions and cross-border payments over the past two years. They will continue in 2022 in two major areas: -  The first area concerns the settlement in central bank money of securities issued on new distributed ledger platforms, which will be governed by the pilot scheme from 2023. New technologies offer opportunities to facilitate the trading of financial securities and improve the functioning of markets. However, central banks are careful to ensure that they do not lead to market and liquidity fragmentation. Following the example of what has been done for TARGET2-Securities, the Eurosystem could therefore adjust the means of access to its settlement asset to secure trading of tokenised assets.

Challenges associated with climate change and the digitalisation of finance To conclude these remarks, I would like to say a few words about the role we can play as supervisors and central bankers to help banks on the path towards a sustainable economy and the digitalisation of finance. On the first point, the recent publication of the latest contribution to the IPCC’s1 6th Assessment Report reminds us of the urgent need for a transition to carbon neutrality. Supervisors have already started to assess the exposure of financial institutions to the resulting transition risks, in order to encourage them to identify, assess and manage these risks in the  1  Contribution of Working Group III of the IPCC published on 4 April 2022  4  same way as traditional risks - and the ACPR has played a pioneering role with the first stress test on climate risks. Climate risks will be gradually integrated into the prudential framework, starting with requirements under Pillars 2 and 3. Banks need to prepare for these future regulatory requirements, including those relating to climate risk stress tests and to transition plans. The latter are part of the CRD6 proposal, which is currently under negotiation. As regards Pillar 1, the integration of climate risks continues to be the subject of intense debate and I hope that the publication of an EBA consultation paper will enable us to move forward. However, the many methodological and data limitations will need to be addressed before new requirements are implemented.
Having said that, policy makers and regulators do have a crucial role to play in respect of Policy Headroom and Infrastructure, which are the first two elements of “PIPs”. Let me elaborate further. 7. Clearly there could not be any offshore RMB markets if the Mainland did not make a move in 2009 to change its policy of not allowing the use of RMB in cross-border trade and other transactions. But of course, the Mainland authorities were and still are understandably wanting to open up the capital account on an incremental basis, taking one step at a time. When one looks back at the last five years, the scope and breadth of the cross-border flow of RMB have been progressively and steadily expanded. While we have come a long way from 2009 and there have been many policy changes in this period that help the offshore market to move forward, I would like to highlight four major milestones of policy headroom expansion that made it possible for the incremental development of RMB markets offshore. The first one is the RMB trade settlement pilot scheme I mentioned at the beginning. Then comes the relaxation in the use of RMB for foreign direct investments into the Mainland and outward direct investments by Mainland corporates starting in 2011. Then channels for RMB portfolio investment flows have also been created, such as the RMB Qualified Foreign Institutional Investors (RQFII) scheme, so that offshore investors can invest in the onshore bond and equity markets.

As this new era of RMB internationalisation has just begun, we still have a long, long way to go as the offshore RMB markets continue to grow and mature, while the capital account controls in Mainland China are being gradually relaxed or lifted. In the early stages of this new era, the primary task of Hong Kong is to develop the CNH market and at the same time work with other financial centres such as Sydney, London or Paris to grow the pie, leading to win-win outcomes. As we move into the more mature stages of the internationalisation of RMB, the available policy headroom should be quite ample for the markets to flourish. At that time, the 2nd and 3rd elements of PIPs, i.e. Infrastructure and People/Products, would matter a great deal more if Hong Kong wishes to retain its competitive edge over the others. It will be up to our industry, financial firms and market practitioners to out compete the other centres in terms of product innovation and distribution of various financial products and services that best serve the needs of their clients. I am sure that the TMA, with the support of its members and the financial industry, will continue to play a leading role in developing the professionalism of the practitioners and in facilitating product innovation. Thank you. BIS central bankers’ speeches  3  4  BIS central bankers’ speeches  BIS central bankers’ speeches  5  6  BIS central bankers’ speeches
BIS Review 22/2008  1  it was felt that, unless an effective strategy is adopted to alleviate poverty among those who could not get integrated to the market economy policies, the country was within sight of another socio-economic explosion similar to the one which it experienced in 1971 in the near future 4 . As a counter strategy, several poverty alleviation schemes were initiated by the government with focus on the poor. Along with these schemes, the Central Bank too entered the foray by implementing some pilot projects based on microfinance and support services so that it could develop microfinance techniques and systems for others to emulate. One such project, funded by the International Fund for Agricultural Development (IFAD) and Canadian International Development Agency (CIDA) was implemented by the Central Bank in four districts where the incidence of poverty was the highest under the title “Small Farmers and the Landless Credit Project (SFLCP) or Isuru Project. To supplement this project, another initiative was taken to introduce a Forward Sale Contract Scheme for agricultural produce to facilitate farmers to obtain a pre-agreed price for their major agricultural crops. This paper will cover the strategy, methodology and the techniques adopted in these initiatives so as to develop a sustainable socio-economic security system in Sri Lanka. The paper is organised into four parts. Part I will critically review some aspects of the current theoretical knowledge on socio-economic security systems from the point of view of costeffectiveness and sustainability.

It is also necessary to take steps to restore the banking system to health as soon as possible. This means forcing banks to cut their capital distributions early and to raise new capital in a timely way even if such capital-raising results in the forced dilution of existing shareholders. With respect to bank capital, we saw two unwelcome behaviors during the crisis that central banks and other banking regulators need to lean against. Banks were reluctant to cut their capital distributions because of worries that this would signal weakness. Of course, these capital distributions just made the banks and the banking system weaker. Also, we saw that banks were reluctant to raise capital to guard against particularly bad states of the world because they thought this might unnecessarily dilute their shareholders should such bad states of the world not materialize. Of course, the collective action of banks to not raise this additional capital made the banking system weaker than it would otherwise have been. This in turn made the possibility of the particularly bad states of the world more likely. In such circumstances – which the U.S. faced in 2009 and arguably the Eurozone faces today – it is essential for the authorities to force sufficient capital into the system. The subtlety here is that in a time of stress it is necessary to overcapitalize the banking system relative to the base case scenario in order to ensure financial stability and an ongoing supply of credit to the real economy in a stress scenario.
7  9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  Chart 5: Households and businesses have consistently expected increases in interest rates to be gradual and limited Per cent 6  2014 Q1 Pre-crisis average level of Bank Rate (5.2%)  2015 Q1  5  2016 Q1 2017 Q1  4  2018 Q1 3  2019 Q1  2 1 0 0  1  2  3 Years ahead  4  5  6  The experience in the euro area and UK demonstrates how guidance can be effective in managing expectations as circumstances change. As intended, “limited and gradual” guidance has dampened interest rate volatility (Chart 6) and reduced the correlation between interest rate volatility and economic uncertainty (Chart 7). Both developments have increased the degree of monetary policy stimulus, thereby reinforcing the recovery during turbulent times. Chart 6: Interest rate volatility has remained low since guidance was provided Standard deviation of option-implied distributions for 3m Libor in 12 months' time, UK and US August 2013 guidance issued 3m US LIBOR (12m ahead)  Basis points 200 180 160  standard deviation February 2014 guidance issued  140 120  EU referendum  100 80 60 40  3m UK LIBOR (12m ahead) standard deviation  20 0  2000  2002  2004  2006  2008  2010  2012  2014  2016  2018  Sources: Bloomberg Finance L.P., Chicago Mercantile Exchange (CME), Intercontinental Exchange (ICE) and Bank calculations.

In the months leading up to June 23 there was a tight correlation between the value of the currency and the perceived likelihood of a “remain” vote (Chart 1). That’s why the MPC, in conditioning its May 2016 forecasts on that outcome, assumed a  Chart 1: Sterling sensitive to expected result well before the referendum itself  higher path for the exchange rate. It’s also why the Committee suggested there might be a “sharp correction” in sterling’s value in the event of a leave vote. And in the event that’s what we got. On June 23 and 24 sterling fell further against the dollar than over any two-day period since the devaluation of 1967. You didn’t need any economics to make this prediction – the relationship in in Chart 1 was enough. But you probably do need some economics if you want to understand why the currency reacted this way. While we don’t know  Source: Bloomberg, Thomson Reuters Datastream, Betfair  precisely what’s in the collective mind of the foreign exchange market, in my view there are two broad possibilities: Brexit is expected either to weaken domestic demand or raise the cost of exporting. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  To understand these effects remember first what the real exchange rate is: the relative price of consumption 1  here compared with that in our trading partners .
First, I would like to draw your attention to the benefits and challenges of globalization from the perspective and actual experience of Thailand. Second, I want to identify the main challenges of globalization and how to meet them. And last, I would like to conclude with a discussion of how Thailand should position itself in order to reap the benefits of globalization while avoiding its pitfalls in the long run First, I wish to emphasize that globalization brings both opportunities and challenges to small open economies. Thailand is no stranger to this reality and successive administrations have shown strong commitment to supporting the progress of global economic integration. Nevertheless, we should also put the issue of benefits and challenges of financial and economic globalization into a proper perspective. I would like to do this by examining the experience of Thailand during the past two decades. Over the past twenty years, it is an undeniable fact that globalization has brought substantial gains to Thailand. The evidence is all around us. International trade and investment have boomed. Thai exports expanded by over 11 percent per year during the same period. Our large and vibrant export sector sends goods all over the world. And, in turn, Thai consumers enjoy goods from all corners of the globe. On the investment side, healthy joint ventures and foreign investment abound. Interaction at the person-to-person level has also grown, underlying the fundamental importance of the sharing of knowledge and skills between nations.

And UK GDP has now risen for 38 consecutive quarters (albeit in the case of 2001 Q4, only just! ), the longest continuous expansion since post-war records began. Achieving low and stable inflation is the best contribution that monetary policy can make to the wider economic goals of sustainable growth and employment. Having an inflation target certainly does not mean that we ignore  BIS Review 18/2002  1  real activity. We have discretion over how rapidly we try to bring inflation back to target when and if it diverges from 2½%. And we regularly publish our best estimate about the likely future path of growth up to a two year horizon. But the aim of policy is clear - we do what is necessary to keep inflation on target. As you know, there are nine of us on the Bank's Monetary Policy Committee, and we meet once a month to make our interest rate decision. This is a rigorous process, and rightly so. But, of course, agreement on process need not, and does not, imply universal agreement on the appropriate stance of policy, as our minutes show. Indeed, an industry has grown up geared to guessing MPC members' personal habits, psychoanalysing our personalities and classifying us into different species of the aviary. But it is important to recognise, I think, that disagreements are evidence of the strength of the system, not its weakness.
2  Among all the scientific meetings that we have organized so far, this event holds a particular importance, in view of the strong participation of African researchers and of its focus on the economic issues of the Continent. For several years now, Morocco has been committed to a policy of openness to Africa to further reinforce their ties, already strong by history, geography and culture, and to promote a win-win co-development in all fields. As a central bank, our contribution lies in accompanying the banking system in its expansion and in maintaining a broad cooperation with several similar institutions of the continent. Today, we are pleased to pursue this contribution for the benefit of research. Ladies and gentlemen, Africa, as we know, performs poorly in the field of research. The Continent, now home to nearly 17 percent of the world's population and more than one quarter by 2050, produces only 5 percent of the wealth, measured by the purchasing power parity, and contributes to the world’s scientific publications by no more than 2.6 percent, according to the latest UNESCO Science Report published in 2015. In Morocco, we are well aware that developing human capital and research is not an easy task. Despite the strong will and a budgetary effort of around 6 percent of GDP, we still struggle to put our education system on track to provide the skills adequate for the labor market and to develop research and innovation.

In Germany, it is a widely held belief that last Thursday, the ECB changed its monetary policy paradigm, that it is no longer the orthodoxy of the Bundesbank, as promised at the time the euro was created. The German audience should acknowledge that it is not a question of a different monetary paradigm. We need to deliver on our primary mandate, which is price stability in the medium term. This is a strategy which we inherited from the Bundesbank. Only the instruments are new. This could not have been foreseen in 1992, but in the Treaty it is nevertheless clear that the ECB can conduct monetary policy by means of asset purchases. And yet the Germans are still concerned. They are rightly concerned about the possible side effects of QE: the creation of asset bubbles and reduced incentives for countries to initiate reforms and reduce their debt. However, the response cannot be to ask the central bank to internalise these unwanted consequences. We have a narrow mandate. Instead, we need strong prudential policies and, in terms of fiscal policy, the strict application of the Stability and Growth Pact. But was it necessary to humiliate the Bundesbank? No such thing occurred. There was unanimity in the Governing Council that asset purchases are a legitimate monetary policy instrument. And then we discussed when to use it and whether the situation was bad enough to decide to use it.
Similarly, crises that are preceded by a credit and housing boom tend to be longer and more severe than other economic crises.1 A fall in housing prices may lead households to save rather than consume in order to compensate for the fact that the value of their homes has fallen. If many households behave in this way, this may weaken economic activity, increase unemployment and create loan losses in the banks' lending to companies. This, for example, is what has happened in our neighbouring country Denmark in recent years. What we can note is that the credit conditions for mortgages changed in the early 2000s. Interest-only mortgages became increasingly common at the same time as the loan-to-value ratios increased. The banks also began to fund mortgages by issuing so-called covered  1  See Claessens, S., A, Kose, and M, Terrones (2011), “Financial Cycles: What? How? When?”, IMF Working Paper. CEPR Discussion Paper, NO.8379. BIS central bankers’ speeches  3  bonds on the financial markets to an increasing extent. Easy access to inexpensive funding in combination with a high demand for mortgages led to rapid credit growth. Now, the debts of the Swedish households are high in both historical and international terms. Although the rate of credit growth has slowed down and loan-to-value ratios have fallen – the mortgage cap introduced in 2010 has probably contributed to this – there are still structural weaknesses on the Swedish mortgage market.

A guiding principle for us is that the body that is given responsibility for macroprudential policy needs a clear mandate with both the right and obligation to take action against risks that arise and appropriate tools that can be used to limit the risks. The discussion of macroprudential policy also comprises the issue of the Riksbank’s balance sheet, and particularly the foreign-exchange reserve. As you know, the inquiry conducted by Harry Flam recently presented its proposals. Here too, the Riksbank is in the process of formulating its stance. The public are entitled to expect that the authorities act to prevent and manage financial crises in the best possible way All of the things I have talked about here are measures that aim to reduce the risk of a financial crisis recurring, or to limit the damage if a financial crisis nevertheless breaks out. The international process that has come to expression in the Basel III Accord is creating better regulations for the banks in all countries. This also benefits us here in Sweden. Over and above this, however, we have to manage the Swedish banking system and its special characteristics. Sweden is a small open economy with its own currency and large banks. We need special regulations. This means that we, like a number of other countries, want to proceed more quickly and impose stricter requirements than those in the Basel III  10  BIS central bankers’ speeches  Accord. However, the measures we have taken so far have already clearly strengthened the Swedish banks.