samchain/econo-pairs-v1 huggingface dataset:
They enjoy the power and the virtues of an influential voice. Some of them have already been partners in reforms and will be shaping the future ones. European integration process and the Association and Stabilization Agreement that we just signed in provides nominal anchors. In addition, sovereign ratings and other independent country reports could also play this role. The Bank of Albania intends to establish open lines of communication and adopts instruments that will automatically start building up pressures before it is too late. My personal conviction is that European Accession lies out as a natural process, where central banks have a vital role to play. This approach would be of mutual benefit and it will speed up the convergence toward European standards, making the political decision a natural outcome of our efforts. To make this process more effective the central banks and the European institutions should continue the dialogue, why not even by surveillance, supporting, assisting and guiding us in fundamentals and economic financial and legal, infrastructure. This process would increase our responsibility and accountability to make Albania an eligible partner. Let me conclude my discussion quoting Euripides who says: “Much effort, much prosperity”. Thank you again. 4  BIS Review 121/2006

Just the reverse, I would say, in the light of quite a few years in the vicinity of decision-making in economic policy. Economic outlook in the coming years A suitable starting point for a discussion of the economic future is the October Inflation Report. Our assessment there assumed that international economic activity will tend to slacken but still remain relatively strong. We counted on GDP growth in the OECD area being 3.8% this year, followed in the next two years by 3.0 and 2.7%, respectively. Inflation would remain relatively low, partly in view of strong competition in the international markets. Growth in Sweden was judged to be 4% this year, 3.7% next year and 3.0% in 2002. Domestic demand growth would be relatively high for consumption as well as investment. A damper was expected, however, from an appreciation of the krona. A gradual increase in inflation was predicted, so that two years ahead the rate would be approximately in line with our target. As usual, we identified various risks in our forecast. One was the possibility of the oil price staying at a high level. We also considered that the exchange rate might be weaker than economic fundamentals in Sweden would warrant in the longer run. Another risk was that of higher wage increases. It was conceivable that the wage rise would be even higher than the annual rate of just over 4% we had assumed for the coming two years, due, for example, to far-reaching demands for compensation and parity.
Real wage increases have been on average 3 per cent a year on average, compared with 0 per cent a year in the 1980s. Of course, one can discuss how much regulatory frameworks and institutional conditions surrounding wage negotiations have meant for this development in relation to the general conditions and the increased understanding of the inflation target and of the importance of low, stable inflation. My belief is that they improve the conditions for succeeding in monetary policy’s objective of maintaining price stability. Budget consolidation Following the change of government in October 1994, I returned to the Ministry of Finance after a couple of years as adviser at the International Monetary Fund in Washington to become UnderSecretary of State to Göran Persson. There was basically one task on the agenda; to eliminate the very large budget deficit. The deficit in public sector finances amounted to around 11 per cent of GDP in 1993. After a majority of the Swedish population had expressed their support for Sweden joining the European Union at a referendum held in autumn 1994, this became an additional task, as well as financing Sweden's membership of the EU, which cost in the order of SEK 20 billion a year. The timing for dealing with the deficit was ideal from both a political and an economic viewpoint.

Still, given the rationale and the features of central banking policies, as Ben Bernanke (2015) states: “By comparison to the influence of (these) long-term factors, the effects of monetary policy on inequality are almost certainly modest and transient”. These long-term factors influencing inequality relate to globalization, technological progress, demographic trends, and institutional changes in the labor market. How should we tackle the chronic problem of uneven income distribution, which seems a symptom of many fundamental weaknesses of the system? How to return the greatness of the opportunities that modern society should bring? Should the way forward be stronger regulation, more active redistributive role of the state or as Prof. Zingales claims through harnessing the power of competition? As economists, we all know that market based system inherently brings some inequality, but its disruptive power is unthinkable when boundaries are crossed. At the current juncture, when global growth slowdown is on the horizon pro–growth and pro–equality policies seems inevitable. I am sure that distinguished speakers and panelists will reflect on the array of available policies, including improving access to markets and levelling the playing field, increasing financial inclusion, investing in human capital, regulatory and institutional reforms, that strengthen the rule of law and promote competitive and fair business environments. We, as policymakers, cannot only have the role of “innocent bystanders”, scrutinizing and stocktaking, but putting in place reforms that promote strong and inclusive growth that by its nature reduces inequality.
Because the majority are owned by institutions – banks, pension funds and insurance companies – it is hard to trace through the impact of any capital gain to its ultimate beneficiary. One thing worth saying is that, at least in terms of effective wealth, the gainers clearly include those entitled to future payouts from defined-benefit pensions. You can’t sell such an entitlement. But it does offer a guaranteed flow of future income, much like the coupons from an indexed gilt (that’s why DB pension funds are obliged to discount their liabilities using gilt yields and why, in response, they hold significant quantities of government debt). The present value of this income has therefore risen in similar fashion. To the extent they include equities, the value of defined-contribution (DC) pension funds will have performed less well. The third point is that none of this need have any bearing on the distribution of income, as opposed to that of wealth. This is an important distinction. To the extent that asset prices rise because the marginal investor is becoming more patient, lowering the discount rate (Chart 6(a)), this reflects a change in the present value of a given stream of income, not in the stream itself. Things are a little more complicated if interest rates have fallen in response to slower growth (6(b)). In that case, anyone who has locked in a future flow of income (coupons on government bonds, for example) will gain relative to others.

But it’s unlikely the effect would endure for a very long time: the only lasting impact would be on inflation. And, in the real world, that’s not what’s happened – inflation has remained broadly close to target even as real interest rates, long as well as short, have trended downwards. This bears out, for me, that the real task for policy is to understand – and then adapt to – economic forces affecting the natural, or equilibrium rate of interest.13 For a variety of reasons, and over a long period of time, this underlying rate has been driven remorselessly downwards. An official interest rate that might once have been considered inflationary is now contractionary; failing to adapt to these changes sufficiently quickly would have depressed output and pushed inflation below target. And sharp falls in the equilibrium interest rates – which have probably not yet fully unwound – can be thought of as a significant driver of the substantial cuts in interest rates undertaken by the MPC in 2008 and 2009. As I say, those forces seem to have been at work for a long time, before as well as since the financial crisis. Over that time they have had differing effects on the performance of risky assets. During the 1990s all asset classes did well – bonds and equities alike. At least in terms of wealth, that will have benefited anyone who happened already to own long-dated assets, mostly older people. But over the last 15 years, equities have done poorly.
The buffer requirement (size of the buffer) should be viewed in the light of other requirements applying to banks, particularly when new requirements are introduced. One of the most important purposes of the capital buffer is to alleviate stress in the financial system. History shows that the groundwork for banking crises is laid during upturns. When financial imbalances build up, this increases the likelihood of substantial losses in the entire banking system. In an environment characterised by large losses, insufficient equity capital may force banks to curtail lending to households and enterprises, amplifying a downturn. Banks should therefore hold larger capital buffers when financial imbalances are building up or have built up. Norges Bank’s advice regarding the buffer will primarily be based on four key indicators: Total credit as a percentage of mainland GDP, the wholesale funding ratio of Norwegian credit institutions, the ratio of house prices to disposable income and commercial property prices. Both economic theory and historical experience from a number of countries provide support for the view that these indicators capture systemic risk. The chart shows the indicators along with an estimated trend and a mean. 2 The greater the positive gap above trend, the stronger is the signal of vulnerability and imbalances. In line with the recommendations from the Basel Committee on Banking Supervision and from the European Commission, there should not be a mechanical relationship between developments in the indicators and Norges Bank’s advice on the buffer.

The key policy rate is set with a view to keeping inflation close to 2.5 percent over time without triggering excessive fluctuations in output and employment. Monetary policy also seeks to be robust and take into account the risk that financial imbalances in the economy build up. Even though the objectives differ, both of these instruments work through banks’ responses. The level of the countercyclical buffer may therefore affect the conduct of monetary policy. Increased buffer requirements may induce banks to increase their lending margins or restrict access to credit in other ways. More restrained lending growth will dampen economic activity. This will in turn contribute to lower inflation. Thus, an increase in capital requirements resulting in rising lending margins suggests, in isolation, a lower key policy rate. Other developments in the economy may amplify or dampen this effect. Allow me to refer to a recently developed version of our model for the Norwegian economy, NEMO, to illustrate this point. In this version of NEMO, the credit market is modelled explicitly. 6 Households and enterprises can borrow from banks, but only against equity. For a household, the value of their dwelling is important as collateral. A rise in house prices can thereby allow households to borrow more, increasing their debt. This mechanism is an example of what is referred to in the literature as a financial accelerator. 7 In the model, banks also face capital requirements that affect their capital costs.
Howard Davies: Is the global regulatory system fit for purpose in the 21st century? Address by Mr Howard Davies, Chairman of the Financial Services Authority, UK at the Monetary Authority of Singapore Lecture 2003, Singapore, 20 May 2003. *  *  *  I am greatly honoured to have been invited by the Monetary Authority of Singapore to deliver their 2003 Lecture. Over the eight years for which I have had responsibility for banking supervision in the UK I have come greatly to respect the Authority’s skill and dedication, through some difficult times in the region. Your Chairman, Deputy Prime Minister Lee, and your Managing Director Koh Yong Guan, have both been wise advisers to me over the years, and we have shared many useful discussions here and in London. In 1995, when I was still at the Bank of England, we were handling the aftermath of the Baring’s collapse. Since then, we have worked on many issues together in many places, particularly in the informed international group of integrated regulators, which is proving to be a valuable forum for the exchange of ideas and experience. I shall be leaving the FSA at the end of September to move to the London School of Economics. But that will not break my links with Singapore: there are very many LSE alumni in the MAS, and in Singapore more generally, so I will continue to have a sound excuse to visit. You were kind enough to give me the freedom to choose my subject today.

This matters, not for issues of inclusivity or political correctness, but because common, mutually agreed standards are key to facilitating capital flows internationally. And more efficient allocation of capital internationally is vital for the developed and developing countries alike. But we have to recognise, at once, that committees composed of 150 members from every country in the United Nations are unlikely to be effective. To be effective, the standard-setting groups will need to remain relatively small, albeit differently balanced. So we must find methods, in addition to adjusting Committee memberships, which allow us to secure the benefit of the experience of others from different backgrounds. To get this benefit we must create the right sort of opportunities for dialogue, and ensure there is sufficient capacity amongst emerging market countries to propose constructive solutions. Of course Singapore, as a major financial centre, is probably in a position to share skills with others rather than require assistance. Nonetheless, the point remains that emerging markets themselves need to formulate their opinions effectively and to be listened to by the key committees. Formulating an opinion requires both technical skills and organisation. The UK has been active in strengthening the regulatory skill set in Emerging Markets. As a major contributor to the Financial Sector Reform and Strengthening (FIRST) initiative – a $ multi-donor capacity building programme for financial sectors in developing countries – we believe that resources must be both forthcoming and targeted appropriately.
9  8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  official interest rates to close to zero and expanded their balances sheets progressively by around $ trillion or 13% of global GDP (Chart 8). Chart 8: Central Bank Balance Sheets  20000  USD (billions)  18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2006  2007  2008  2009  Fed  2010  2011  2012  ECB  2013  BoJ  2014  2015  BoE  2016  2017  2018  SNB  2019  2020  Total  Source: Respective central banks and Bank calculations. Interestingly, this rapid growth in central bank money creation was not mirrored in money spending growth in the economy. In the ten years prior to the Covid crisis, narrow money globally rose by over 150%, while money spending globally rose by less than 50%. In the UK this contrast was starker still, with central bank money rising by around 200%, while money spending rose by less than 50%. 11 One way of reconciling these diffuse trends in the monetary and real sides of the economy comes from looking at a different measure of money - commercial bank money.

In 1995, the monetary strategy of stable exchange rate of the denar was formalized – a strategy for which then and now there is a broad consensus that it is one of the key pillars of the stability of the Macedonian economy. The benefits of macroeconomic stability have been enjoyed for 24 years. Our economy is small, commercial and financially open and hence, prone to external shocks. Despite the numerous external and internal shocks, the National Bank constantly succeeds to keep inflation at a moderate level, which is similar to the European level. Low inflation is extremely important for the protection of the real purchasing power of citizens, but also for maintaining the competitiveness of our exports without which small economies like ours can not achieve higher and sustainable growth. The maintenance of low and stable inflation, as the main goal of the central bank, is underpinned by the stable exchange rate of the domestic currency against the euro. The prudent monetary policy, as well as the good coordination with other macroeconomic policies, led to an almost continuous growth of the foreign reserves, which today are at the highest historical level and directly strengthen the exchange rate stability. Confirmation of the soundness of the policies implemented by the National Bank is a historic step in providing access to European Central Bank’s foreign exchange liquidity. The key to the successful attainment of the goals of the National Bank so far is its strong institutional capacity which has been built for years.
In the current uncertain environment, it is a challenging time to make predictions about the future. Nonetheless, to conclude let me say a few words on what these results might imply for the policy landscape going forward. As I discussed earlier, the new analysis presented in this speech suggests that the effects of the key drivers of Global R*, particularly increasing longevity, are expected to persist. Absent a significant reversal in the key trends that have driven down Global R*, we may expect it to remain low. So it is not unreasonable to expect that Global R*, the long-run anchor for UK equilibrium interest rates, will remain low. Therefore, cyclical adjustments in short-term nominal interest rates – like those we are currently witnessing in the United Kingdom and abroad – will for the foreseeable future continue to be played out against the backdrop of low global equilibrium real interest rates. While we have considered several important drivers of Global R* in the past, other factors may  Page 16  come into play over time. You may wonder, for example, whether the pandemic could have impacted some of the key drivers of Global R*, such as productivity growth. The simple answer, of course, is that we do not yet know. It is too soon to tell what the long-run impact of the pandemic will be for the economy.

This was based on a comparison of 70 policy tightening episodes in 19 Advanced economies (AEs) and six Emerging Market Economies (EMEs). Strong growth and high job vacancies, as well as front-loaded rate hikes can help prevent a hard landing. Conversely, rapidly rising inflation, low term spreads and elevated debt levels raise the risk of a recession, especially if there are persistent negative supply shocks. Comparisons with the current conjuncture suggest a mixed prognosis across these factors. Overall, for the global economy to successfully stay on the ridge, inflation needs to peak soon, underpinned by improved demand-supply balance as multiple driving factors reequilibrate. This would lessen the constraints facing central bank’s responses – allowing the pace of monetary policy tightening to ease off by year-end. At that point, a relatively contained period of sustainable below trend growth should ensue with inflationary pressures gradually receding into 2023. If instead, the global economy veers off the ridge to a hard landing and equilibrating forces are stifled, the result will be higher inflation for longer, a more protracted period of monetary tightening, possibly higher unemployment, and mounting debt vulnerabilities. I note, but will not address here, that the Eurozone and other regions face additional idiosyncratic concerns which bear close monitoring. Singapore Economy: Some Pro-equilibrating Shifts  Some growth moderation The Singapore economy is moderating, with average growth of 4.1% (y-o-y) in H1 2022. Following the strong rebound of 7.4%, last year, the economy’s output gap is estimated to be mildly positive at mid-year.
In fact, the originate-to-distribute model has stymied one of the essential functions of banking: the extraction of valuable information to allow proper discrimination between borrowers. This business model has been highly fashionable in certain countries, but not in all. The Spanish banking system has not adopted it, and the model here has continued to be a traditional banking one with closeness to bank customers, detailed knowledge of them and the forging of links over time being some of its defining characteristics. 2  BIS Review 62/2008  True, Spanish banks have made considerable use of asset securitisation, but to a totally different end than those banks which developed the originate-to-distribute model. As conceived by Spanish banks, asset securitisation was not a business in itself but a mechanism to obtain additional funding. In this way, risks were not transferred to the financial markets but were retained on the balance sheets of the banks granting financing, and the perverse incentives under the originate-to-distribute model were thus avoided. Second lesson: on the use of complex products that are difficult to assess and lacking in transparency The process of asset securitisation has also differed across banking systems as concerns the complexity of the products developed. The second key aspect of the turbulence is that some international banks, particularly when securitising US subprime mortgage loans, used highly complex structured products that are difficult to assess and lacking in transparency.

And second, because prudential supervision was not sufficiently active in detecting and preventing this type of instrument. None of these elements has been present in the Spanish banking system, which explains why Spanish banks have no exposure to these vehicles. Spanish banks have obtained sufficient profits pursuing their traditional and typically retail activity, meaning they have had no great interest in developing either the structures or products that are at the root of the current problems. The Banco de España has been categorical regarding its requirement that these vehicles be consolidated for accounting and capital purposes. Today, following the application of International Financial Reporting Standards in 2005, this requirement to consolidate conduits and SIVs is now very clear. But even before the IFRSs came into force, Spanish banks had no incentive to develop these off-balance sheet vehicles, because the Banco de España always analysed the risks assumed by banks from a consolidated perspective. Fourth lesson: on the procyclicality of banking regulation The fourth lesson to be drawn from the turbulence is related to the debate that has reopened on international markets about the way in which financial regulation should address so-called procyclicality. In particular, concern has been raised about Basel II and international accounting standards. We should perhaps begin by acknowledging that financial market participants themselves behave in a procyclical way, as they tend at favourable times in the cycle to forget about the consequences of an excessive build-up in risks.