samchain/econo-pairs-v1 huggingface dataset:
This is achieved through the hard work, dedication and ingenuity of our manufacturers, who have seized the opportunity to exploit the synergy between Hong Kong and the Mainland China by relocating the land- and labour-intensive processes north of Hong Kong while retaining the servicing and supporting base in Hong Kong. 8. Finally, I would like to close by echoing what Mr. C.H. Tung said in Vancouver during the APEC meeting. Hong Kong, given its sound fundamentals, robust monetary and banking systems, huge foreign reserves, flexibility and resilience in coping with external shocks, would be the first economy to rebound after this episode. We should have confidence that, while in the short run the markets may become more volatile or they may overshoot from time to time and there may be pain involved during the adjustment process, economic fundamentals should prevail in the end. We should be confident that, as we have done on so many occasions in the past, we shall be able to overcome this difficult period and emerge as a stronger and more competitive financial and servicing centre in Asia. We have done it before and we can surely do it again. BIS Review 116/1997

A key past case is the boom in issuance of Collateralised Mortgage Obligations (CMOs) in the run up to the 1994 mini-crisis, an episode that I tried – too timidly – to highlight in 2006.3 Of many examples from the run up to the recent bust , a great one is the late-cycle CPDOs – constant proportion debt obligations – which were rated AAA, paid around 200bp over money market rates, and had a big exposure to tail risk.4 And on the great awakening, Shleifer himself gives the example of a realisation about ABCP, ABS and so on in mid-2007 after subprime delinquencies had risen and faith – note, faith – in rating agency ratings of structured finance securities had evaporated. This exactly chimes with the market intelligence that the Bank was picking up in August 2007. I well remember Stuart Gulliver, now CEO of HSBC, saying to me very early on something to the effect of “anything with “ABS” or “securitisation” in the label is now toxic”. Indeed, Shleifer’s story, and the broader one told by Adair this evening, fits with the thrust of the Bank of England’s strategy towards Market Intelligence, framed in around 2002/03. This amounted to saying that we needed to think about markets somewhat differently when we are doing monetary policy and financial stability. For monetary policy, in most circumstances a reasonable default assumption is that core markets are more or less efficient most of the time.
This would translate into an acceleration of wage and price inflation and unstable conditions in the foreign exchange market. The Petroleum Fund is designed to channel the revenues resulting from an increase in the oil price to the Fund for investment abroad, in order to prevent an increase in oil prices from influencing the budget. The increased revenues would thus not have an impact on the domestic economy, but be invested abroad through the Petroleum Fund. The current account balance and government budget surplus show that Norwegian consumption has adjusted to petroleum wealth by increasing net imports and by maintaining a budget deficit excluding petroleum revenues. At the same time some of the wealth is saved abroad to redistribute income between generations. This means that there has already been a gradual resource reallocation from the exposed to the sheltered sector. As long as consumption is fairly well adjusted to the expected level of the petroleum wealth, there may not be a need for substantial exchange rate movements in the near future to achieve further adjustment. 5. Stability of the Norwegian krone  Let us turn to the stability of the krone. People in the banking industry often suggest that the krone is a petro currency fluctuating widely with the price of oil. Is this the case, or has stabilisation policy been successful in Norway so far? Looking at the data, we note that the krone exchange rate has been fairly stable over time. Since 1986 the authorities have focused on stability of the krone exchange rate.

Conclusions  Oil and gas provide substantial wealth for the Norwegian economy, while fluctuations in the price of oil give rise to variations in the value of this wealth. Norwegian economic policy is organised so as to maintain stability in the face of these variations. Fiscal policy carries a responsibility for stabilising the real economy, while monetary policy is aiming at price stability and preventing a deflationary recession with a view to maintaining exchange rate stability over time. Changes in the price of oil may influence expectations about future economic development in Norway independently of how much of the petroleum revenues are absorbed into the economy in the short run. However, successful use of the Petroleum Fund will provide financial leeway for an active stabilisation policy, the redistribution of wealth between generations and to a large extent protect the Norwegian economy from oil price fluctuations. 15  BIS Review 121/1999
However, the development of the CPI cannot always indicate what monetary policy is needed at a particular time – no single inflation measure can do this. The Riksbank therefore uses different measures of underlying inflation to describe the trend rate of inflation and to justify the monetary policy decisions. Our most commonly used measure, with the rather difficult to pronounce name of UND1X, consists of the CPI adjusted for certain items that are affected by fiscal policy and monetary policy in a direct way. There are educational gains with using measures of underlying inflation. However, it can also create uncertainty as to how the inflation target is defined, even if we try to be clear about why a particular measure has been highlighted at a particular time. Such experiences have given us reason to think about how the need for various adjusted inflation measures can be reduced. One possibility could be to make forecasts covering longer periods. For the Riksbank the need to emphasise alternative measures of inflation growth has declined in that we have for some time now published forecasts of developments three years ahead instead of two years ahead. With a longer forecast horizon it is possible to illustrate more clearly when various shocks have effects that are temporary and how they dissipate over time without having any lasting impact on inflation. This makes it easier to explain whether or not the interest rate needs to be changed.

With assets managed by SWFs estimated at 3,000 billion dollars, this category of investors represents twice the value of assets managed by hedge funds. 1 It is estimated that they will continue to grow in the future, to reach from 12,000 to 15,000 billion dollars, depending on estimates, in 2015. Consequently, they play and will continue to play an increasing role in the global financial system. As SWFs have long-term and diversified investment strategies and are not subject to sudden fund withdrawals by customers, they are usually considered to have a stabilising effect on the global financial system, despite their lack of transparency. Consequently, developed countries have an interest in attracting their investments. During the crisis, the behaviour of SWFs has differed according to the country of origin, but in general, it appears that their tendency to invest more than before in domestic and regionally close markets during the first stage of the crisis has come to an end, and that they have now resumed investing principally in OECD economies. 2 This is particularly true for Gulf sovereign funds, where diversified domestic investment opportunities are scarcer than for Asian sovereign funds, for example. In the first quarter of this year, Europe was by far the leading destination for Middle-Eastern and North African SWF investment. 3 Muslim countries, in particular oil-exporting ones, represent as much as 51% of total sovereign wealth funds’ assets.
Section 4 highlights the  1  “Innovation and Integration in Financial Markets and the Implications for Financial Stability”, Rob Hamilton, Nigel Jenkinson and Adrian Penalver, pp. 226-250, The Structure and Resilience of the Financial System, eds Christopher Kent and Jeremy Lawson, Reserve Bank of Australia, November 2007. 2  See for example, the Bank of England Financial Stability Report, October 2007 and the Bank of England Financial Stability Report, April 2008. 3  See for example World Finance and Risk Management, delivered at Lancaster House 25 September 2002. 4  Referring to derivatives in the Berkshire Hathaway Inc. 2002 Annual Report. BIS Review 93/2008  1  obstacles to fulfilment of that vision given the imperfections in financial markets. Lessons for the future and possible policy responses are discussed in Section 5, while Section 6 concludes. Section 2: Trends in financial innovation 5 The pace of change in financial markets in recent years is truly remarkable. A few statistics help to illustrate this point and set the scene: •  The outstanding value of interest rate swaps and other derivatives reached almost $ trillion or some 11 times annual global GDP by the end of 2007, according to the BIS. Ten years ago the value was around $ trillion (2 ½ times GDP) (Chart 1). The global derivatives market expanded almost 50% during 2007.

This complicates the compilation of balance of payments statistics, in particular on factor income and factor expenditures, and on the stock of foreign assets. Official data shows foreign assets at market value where market prices are readily available. Otherwise, assets are recorded at their book value. In an article in the Central Bank’s most recent Monetary Bulletin 1 , an attempt is made to estimate the market value of inward and outward foreign direct investment using methods developed in other countries. This is done by estimating the likely market value of assets that do not have a readily available market price. The result of the calculation is that rather than being negative by 120% of GDP, the international investment position was negative by less than 30% of GDP at the end of quarter III of 2007. The large difference stems not the least from the fact that assets of Icelanders abroad are much larger than those of foreigners in Iceland. The lower figure is not necessarily correct. However, it shows that there is an overriding likelihood that the large negative net international investment position of Iceland is exaggerated in the official statistics which are compiled in accordance with IMF standards. The Icelandic economy is at crossroads. It is quite evident that the expansion of recent years is coming to an end. The forecast issued by the Central Bank on April 10 envisages a contraction of GDP in 2009 and 2010. The Ministry of Finance forecasts a milder and more short-lived contraction.
Negative coverage of the banks and Icelandic economy went hand in hand at this time, both temporarily eroding international investor confidence. The reputation of Iceland’s economy and banks was tarnished. From an Icelandic perspective, the first months of 2006 were therefore characterised by a currency depreciation, falling equity prices and international discussion about the viability of Icelandic banks and macroeconomic imbalances in Iceland. A massive economic downswing was even predicted, possibly comparable to the southeast Asia crisis of the late 1990s. This was a development we had not particularly expected or prepared for. Interestingly, not only did Iceland feel the tangible effects of changes in sentiment in global financial markets – the turbulence in Iceland also reverberated through a number of distant countries with which we have no business contact. This shows that Iceland had become integrated into the global financial market. It was obvious that the Icelandic banks and authorities faced a major challenge that called for a serious response. The banks responded with greatly increased communication about their activities, financial position and other targets of criticism. They made various reforms, answered other points in detail, slowed down their expansion, tapped new credit markets and, last but not least, refuted predictions that the turnaround in external conditions, weaker króna, lower Icelandic equity prices, higher finance costs, etc. would have to dent their profitability severely.

Nor can we forget that the 2009 recession also disclosed a series of weaknesses in the institutional arrangements for the euro. Membership of the Economic and Monetary Union provides for extra stability and resilience. Unsurprisingly, then, at the height of the crisis when the very survival of the monetary union and the euro were in doubt, the wave of mistrust affected us most forcefully. That said, strictly domestic factors played a substantial role in the source and development of the crisis in our economy. This was because unsustainable imbalances built up, even in the absence of an international crisis, and our vulnerability to external shocks thereby increased. BIS central bankers’ speeches  1  I shall now briefly review some of these imbalances. During the prolonged expansionary phase before the crisis broke, heavy losses in competitiveness built up as a result of the growing divergence of our prices and costs relative to those of the euro area countries, with which the exchange rate had been set at the onset of monetary union. This was the outcome of the continuous pressure exerted by domestic spending on plant capacity, driven by very loose financial conditions, whose expansionary effects were not countered by a more restrictive economic policy stance, most specifically in respect of budgetary policy or supply-side policies. The financial counterpart of this excess spending was the accumulation by Spanish households and firms of excessive debt.
Credit premia also increased for other fixed income instruments, such as conventional mortgage bonds, corporate bonds and loans to emerging markets, from summer 2007, although on a far more moderate scale than for subprime-backed securities. In the last half of July, the turbulence spread to other financial market segments. The risk premium required by investors rose, and equity prices fell sharply. The contagion was due to uncertainty as to the risk subprime-backed financial products represented for the financial system, and to a lack of information about who had invested in such products. Conduits and Structured Investment Vehicles (SIVs) were among the investor groups investing in the financial products based on subprime mortgages. As a rule, these investment companies were wholly or partially owned by banks. They invested in assets with a high rating, such as the senior tranche in subprime-backed securities. These investments were debt-financed, primarily in the short-term money market through asset-backed commercial paper (ABCP). High ratings on these assets gave investment companies favourable funding rates. Due to the turbulence in the subprime market, interest rates for ABCP have risen sharply and maturities have been reduced. The flow of money to investment companies through money markets has dried up. Banks have to a large extent had to finance the investment companies themselves. However, this increases banks’ liquidity requirements. There have been examples of banks that did not have the capacity to finance their investment companies.

Combined with higher interest rates, this may reduce profitability in the commercial property market, increasing banks’ losses. Losses on loans to the property industry accounted for a large share of banks’ loan losses during the banking crisis. Outlook for the banking industry Banks in Norway have experienced extremely favourable developments over the past few years: strong lending growth, minimal loan losses, high returns in securities markets and firm cost control. Despite lower interest margins, banks’ net interest income in NOK is rising as a result of strong lending growth. Measured in relation to total assets, however, net interest income is  6  BIS Review 100/2007  falling. In recent years, this has been offset by a reduction in costs. Today’s high debt growth is not sustainable over time, and it is unlikely that the pressure on interest margins will abate. Given these developments, banks must reduce costs or increase income from other sources if they are to maintain their current profitability. To illustrate the effect of lower lending growth on banks’ income, we have carried out a simple calculation where the interest margin is held constant. If lending growth among banks had only been 3 per cent in 2006, banks’ net interest income and pre-tax results would both have been approximately 6 per cent lower this year. The composition of banks’ income has been fairly stable in the past ten years, even though net interest income has become less important since 2002.
•  London controls more than 60 billion pounds in premiums, which makes the London market twice the size of Bermuda, three times that of Switzerland, and more than 10 times bigger than Singapore. With its wealth of insurance and specialist risk capacity, London insurance is well positioned to ride the growth in Asian demand. But insurers will benefit from closer proximity to markets, information, and talents. Global insurers and brokers are responding to a growing preference for local placements by setting up local offices in high growth markets to understand their clients better and to be more responsive to their needs. This is where Singapore and London can play complementary roles. London with its unparalleled insurance expertise and experience, and Singapore, with its market proximity and client knowledge can collaborate on providing insurance and risk management solutions that are, relevant, appropriate and responsive to Asian needs. Conclusion The fascinating origins of Lloyds, over 300 years ago – in a coffee house where seafarers gathered to swap intelligence on their trade – illustrates the enduring power of information, networking and the centrality of markets. As with Lloyd’s coffee house, the essence of financial centres lies in connecting markets and people to provide innovative solutions to further economic prosperity. The rising demand for financial services in Asia offers tremendous opportunities for London and Singapore to strengthen our connections for sustainable insurance growth. Thank you. BIS central bankers’ speeches  5

In order to support the process of fiscal consolidation, to underpin the proper functioning of the euro area and to strengthen the prospects for higher sustainable growth, the pursuit of far-reaching structural reforms is essential. Major reforms are particularly needed in those countries that have experienced competitiveness losses in the past or that are suffering from high fiscal and external deficits. Measures should ensure a wage bargaining process that allows wages to adjust flexibly to the unemployment situation and losses in competitiveness. Reforms to strengthen productivity growth would further support the adjustment process of these economies. We are now at your disposal for questions. BIS Review 104/2010  3
The ECB’s experience shows that a specific strategy to foster diversity can generate tangible benefits in the form of a better gender balance. In 2010, the ECB’s Executive Board implemented a marked shift in policy towards diversity by issuing a public statement and launching a diversity action plan. The action plan was supplemented in 2013 with explicit gender targets for the entire ECB hierarchy. The gender gap in the probability of promotion declined notably after the strategy was launched. Entry-level economists typically join the ECB at the age of 30, many of them with a PhD. They usually enter the ECB at the expert level (salary band F/G) and subsequently progress to the principal economist level (salary band H) and adviser level (salary band I). The salary bands above adviser level are for heads of division and senior management. To move to a higher salary band, economists must submit an application and be selected in a promotion campaign. 4  The study shows that the average difference between economist-level starting salaries for men and women in the period 2003-2017 was small: just over 1%.2 However, the gender wage gap widens notably over time, reaching more than 7% after ten years.3 For moves within the same salary band, however, the differences are minimal (see righthand panel). This indicates that the divergence between men's and women's salaries is primarily related to the probability of promotion over time.

7  The average gender wage gap is a commonly used measure to summarise gender differences in career progression. In recent years, this gap has stood at 17% at the Banco de España (black bar), i.e. the average wage of male members of staff is 17% higher than that of female members. This is the raw gap and could therefore be due to differences in staff’s individual characteristics causing wage differences. The gap narrows from 17.2% to 8.4% when factoring in demographic characteristics (grey bar). Family situation lies behind a portion of this difference. The gap closes to 7.9% if we factor in marital status and parenthood (blue bar). Adding in characteristics such as years of experience and area of activity narrows the gap further to 6.8% (red bar). Taking professional group into consideration, the gap closes completely (green bar). Yet it is important to take into account that, unlike the other individual characteristics that we can assume to be exogenous, an employee’s career history has a significant bearing on their professional group. Once staff members’ individual characteristics have been factored in, a significant gap only remains for women with children. In summary, when considering the underlying causes of the gender wage gap, the two usual suspects are in play: parenthood and movements between professional groups (or promotions). In these times, marked by a sense of urgency to find solutions and answers, I believe central banks must spearhead efforts to analyse and address the major challenges facing society and the economy.