samchain/econo-pairs-v1 huggingface dataset:
As can be seen in this graph, the Spanish construction workers had to face a sharp contraction of the share of employment in that sector, from 13% of total employment to 5% and find a job in other sectors. The decline is less significant but still relevant in countries which experienced a construction boom. More generally, according to a Banque de France research paper 2, the Beveridge curve has shifted in the euro area and the United States, with more vacancies associated with a similar level of unemployment, pointing at an increase in structural unemployment. These effects of the crisis on human capital would fade away only slowly, with the arrival of new cohorts on the labour market. However, they could be mitigated by active labour market policies, such as an appropriate training policy, which have a very effective and targeted impact on human capital depreciation. 1.2. Second, in Europe, the ECB has significantly loosened monetary policy in recent years even after the limits of conventional monetary policy have been reached. But this has been no ordinary recession. It has also been associated with an acute financial crisis and history has shown that recessions associated with financial crises can have an even longer lasting impact on economic performance. During financial crises, credit constraints can tighten drastically for banks and for firms and households which in turn harms physical capital and labour productivity growth. Financing constraints may lead to increased firm defaults.

7  P. Aghion, P. Askenazy, N. Berman, G. Cette and L. Eymard, 2012. “Credit Constraints And The Cyclicality Of R&D Investment: Evidence From France,” Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1001–1024, October. 8  P. Aghion, D. Hémous and E. Kharroubi, 2014. “Cyclical fiscal policy, credit constraints, and industry growth,” Journal of Monetary Economics, Elsevier, vol. 62(C), pages 41–58. 9  A. Bergeaud and G. Cette and R. Lecat, 2016. “The role of production factor quality and technology diffusion in 20th century productivity growth,” Working papers 588, Banque de France. 10  C. Reinhart and K.S. Rogoff. 2010. “Growth in a Time of Debt.” American Economic Review, 100(2): 573–78; Lane, Philip R. 2012. “The European Sovereign Debt Crisis.” Journal of Economic Perspectives, 26(3): 49–68. BIS central bankers’ speeches  3  impediments to the flow of resources, in particular in the labour market and in the way credit was allocated between sectors, hence revealing that a malfunctioning of the financial sector can reinforce structural weaknesses. 11 In some cases both were present at the same time. Of the uttermost importance were the structural changes targeting an improvement in the monitoring and the resilience of our financial system. Arguably the financial crisis partly resulted from excess risk taking and overinvestment in low productivity sectors. 12 The Basel 3 framework worldwide and the Single Supervisory Mechanism in the euro-zone provide new supervisory and prudential tools to mitigate these risks in the future.
As a result, they are finding our country no longer profitable to operate in, especially when compared to locations in Eastern Europe, North Africa and Asia. For them, as the recent painful examples of plant closures have shown, Malta fails to offer the right combination of productivity, skills, innovative ability and cost to justify their investment. There are other early warning signals. The economy’s 0.2% average real growth rate over the past two years is the lowest of all the acceding countries. It is also low compared to that of the existing EU member States. The experience of those two years may well have been exceptional, but it nevertheless serves to remind us that the economy needs to grow consistently much faster if Malta is to catch up with average EU per capita income levels within a reasonable period of time. I strongly believe that the factors making for high costs and weak growth rates should be addressed as a priority. As I have observed on other occasions, strategies to improve competitiveness in a globalising world can be devised. Other countries have shown the way. What is needed is the political will and the effective collaboration of all the parties concerned. Population Ageing Perhaps there exists no clearer example to illustrate the kind of challenge the country faces than the issue of population ageing. The impact of a rapidly ageing population in the context of a generous welfare system is inevitably a dramatic rise in spending on pensions and health care.

Globalisation and Increased International Competition Such considerations lead us to another major challenge, that of globalisation and increased international competition. Malta is particularly susceptible because it has a very open economy. Developments in the international market place are indeed likely to become even more relevant because the process of globalisation continues unabated. Facilitated by the progressive dismantling of trade barriers, this process has been characterised by a rapid growth in factor mobility and crossborder investment, and has given rise to harsh competition based on innovation, dynamism, improved  2  BIS Review 50/2003  quality and low cost. It has also become easier for new entrants to gain access to global markets, including the countries of Central and Eastern Europe, many of which are now our competitors. Globalisation has, therefore, brought more uncertainty because there will be winners and losers. Although the process probably involves more than simply a zero-sum game, it is also true that countries which adapt to the new competitive conditions more rapidly will grow at the expense of those which are slower to react. This is a crucial consideration for Malta, which is a very small player in the global market place, and therefore a price taker, but which depends heavily on exports to maintain the living standards of its people. While there are many enterprises in Malta which are rising effectively to this challenge, the cost pressures associated with the macroeconomic imbalances and the inefficient practices described earlier are proving to be too much of a burden for some others.
This pattern is embodied in the MPC’s forecasts, with wages projected to outpace productivity in the next few years (Chart 31). Put differently, growth in unit wage costs is expected to pick up and the labour share to rise fairly sharply (Chart 32). That path is certainly plausible if cyclical factors are the key drivers of the low labour share. But there may be alternative forces at play. If substitutability between labour and capital is higher than in the past, labour’s bargaining power and share of income might be commensurably lower, as we have seen across a number of countries before and after the crisis. So how different might the MPC’s projections look if the labour share was, say, flat rather than rising over the next few years? Charts 32 and 33 show the path of wage growth and inflation that would imply. Wage growth is weaker, averaging around 3¼% rather than 4½% at the year three point. So too is consumption given weaker take-home pay, though this is largely offset by stronger company profits and higher investment, leaving aggregate output little altered. The upshot is a materially lower path for inflation than contained in November’s Inflation Report: inflation reaches around 1.6% at the two-year horizon and remains around these  12  BIS central bankers’ speeches  levels. That would put the balance of risks squarely towards a more protracted undershoot of the inflation target, even without any downdraught from external prices and demand.

Research by Carl Benedikt Frey and Michael Osborne has tried to quantify this hollowing-out, by assigning probabilities to certain classes of job being  8  BIS central bankers’ speeches  automated over the course of the next few decades. Their work was initially done for the US, but has recently been extended to the UK (Frey and Osbourne (2013), Deloitte (2015b)). Using this methodology, the Bank has recently done its own exercise for the UK. Table 3 classifies jobs three ways in the US and UK – high (greater than 66%), medium (33–66%) and low (less than 33%) probability of automation. It also shows the fraction of employment these jobs represent. Chart 27 provides a more granular breakdown of these jobs. For the UK, roughly a third of jobs by employment fall into each category, with those occupations most at risk including administrative, clerical and production tasks. Taking the probabilities of automation, and multiplying them by the numbers employed, gives a broad brush estimate of the number of jobs potentially automatable. For the UK, that would suggest up to 15 million jobs could be at risk of automation. In the US, the corresponding figure would be 80 million jobs. The BBC website contains a handy algorithm for calculating the probability of your job being robotised. For an accountant, the probability of vocational extinction is a whopping 95%. For a hairdresser, it is 33%. On these numbers, the accountant’s sun has truly set, but the relentless upwards ascent of the hairdresser is set to continue.
Besides, as technology advancement permeates into all businesses, all lifestyles, and all sectors, if we also could ensure that households and small businesses that make up the majority of our economic agents can practically apply and benefit from the new technology, while being aware of its associated risks, then we could significantly raise their standards of living. Ladies and gentlemen, That brings me to the end of my talk today. To aspire for a better standards of living for all citizens of Asia for the next half century and more, we, all of us, must collectively do our part to ensure inclusive and sustainable growth. In so doing, banks and financial institutions, as the blood vessels of our economy, have important roles to play to prevent the blood from being infected as well as to ensure the well-functioning of our blood circulation for more productive, better immuned, and more inclusive economies in Asia. Thank you very much for your kind attention. 6

Monetary policy in Norway is oriented towards low and stable inflation. This is the most important contribution monetary policy can make to sound economic developments in the long term. Low and stable inflation provides enterprises and households with an anchor for inflation expectations. In its conduct of monetary policy, Norges Bank operates a flexible inflation targeting regime, so that weight is given both to variability in inflation and variability in output and employment. Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to keep inflation on target and provide an anchor for inflation expectations, and the short-term objective of stabilising economic developments. Transparency surrounding Norges Bank’s assessments of monetary policy trade-offs enhances economic agents’ understanding of how economic news influences the interest rate. In recent years, it has become easier to read the Bank’s intentions. As a result, monetary policy has become more effective. The background material for the Executive Board’s monetary policy meetings is published and the assessments underlying the interest rate decisions are explained. As from last autumn, the Bank publishes its own interest rate forecast. From using technical assumptions and others’ assessments, we have taken ownership of the interest rate path in our projections. Even though  BIS Review 44/2006  1  considerable uncertainty still remains, it becomes easier for economic agents to assess interest rate developments. Weak growth in the world economy early this decade led to low interest rates in many countries.
As a central bank governor, I would certainly welcome such a development. After all, the credibility of our monetary policy ultimately depends on whether the public believes that we match our words with our actions. BIS Review 55/2006  3

2.3  The challenge for the EU institutions: enforcing economic union  The weakness of European economic union in the context of monetary union contributed to the development of the current crisis and, if we are to emerge from it stronger, real improvement is required in this area. European governments have fully understood this issue and have made concrete and significant progress towards a more integrated economic union. On the one hand, Europe has considerably enhanced its fiscal discipline framework. The legislative package (the so-called “Six Pack”) entered into force in December and considerably reinforces the Stability and Growth Pact: the surveillance powers of the European Commission over national budgets have been enhanced, sanctions have become quasi-automatic, the criteria for public debt and public spending are being more closely scrutinised and a new framework for the surveillance of macroeconomic imbalances and competitiveness developments has been put in place. In addition, 25 European Heads of State or government signed the Treaty on Stability, Coordination and Governance which establishes a comprehensive new “fiscal compact”. It includes in particular a requirement for national budgets to be in balance or in surplus, a criterion that will be met if the annual structural government deficit does not exceed 0.5% of GDP. This rule must be incorporated into the Member States’ national legal systems, preferably at the constitutional level. On the other hand, Europe has equipped itself with an instrument to combat crises.
We are raising the level of professionalism of family wealth advisers by partnering institutes of higher learning to develop and provide customised training. We are also strengthening networks between family offices in Singapore, to facilitate mutual learning and joint investments. Feeling Well: Investing for Sustainability amidst Climate Change Finally, feeling well – or investing to align with personal or corporate values, to make a positive impact, to support a larger social purpose. A growing number of investors are looking at investment through the lens of environmental sustainability – both with a view to managing climate-related risks as well as to support efforts to reduce carbon emissions. From a risk perspective, climate change can impact investments over the long term, either directly or indirectly. Weather and climate-related events can potentially result in direct investment losses. Extreme weather events like floods can impair asset values, at least in the short-term. Changing climactic conditions – like rising sea levels – can have much more lasting effects on the value of exposed assets. Dealing with catastrophic events is not new to financial markets. And not all catastrophic events can be attributed to climate change. But the frequency and intensity of natural catastrophes are increasing. According to the UN Economic and Social Commission for Asia and the Pacific (UNESCAP), the number of catastrophic events in the Asia Pacific rose from an average of 44 annually in the 1970s to 126 in the early 2010s. Investors cannot ignore the implications of climate change.

4.2  Financial stability  The impact of EU membership on financial stability is more challenging. Given the close integration of the UK financial sector with the rest of the EU, it is imperative that the EU has a robust regulatory framework. This is in the process of being achieved. Through its membership of the EU, the UK is promoting a strong global regulatory framework, and UK authorities have worked in close concert with our European partners to find solutions to the fault-lines of the past. Examples include moves to end Too Big To Fail by enhancing bank recovery and resolution, a solution developed locally at the Bank of England, implemented regionally in the European Union, and now agreed globally through the Financial Stability Board. Given the scale of the UK’s financial sector relative to its economy, the Bank of England also has a special responsibility to the UK, to Europe and the world. The UK must ensure that the  11  See Broadbent, B (2011), “Rebalancing and the real exchange rate”, Speech at Thompson Reuters, London. BIS central bankers’ speeches  7  system is robust to shocks and that financial institutions can be resolved in an orderly manner. After all, financial stability is a national responsibility, with the UK taxpayer serving as the ultimate backstop of the UK financial system. The comprehensive reform of the UK’s institutional framework for financial stability since the crisis creates a coherent architecture of national macroprudential and microprudential regulators and supervisors.
In the UK, for example, bank (and building society) deposits still account for 42% of personal sector liquid asset holdings against 50% a decade ago; the proportion would be very much higher if liquid assets included only those that are capital certain. And the vast bulk of the banks’ liabilities remain in the form of unsecured, short-term, deposits. Despite the rapid development of (secured) repo markets, only some 3% of the major UK banks’ funding (in sterling and foreign currency together) was secured (from information provided last Autumn) through repo; and the figure for all UK banks, including the business conducted in branches and subsidiaries of overseas banks, which have less direct access to deposits, was only around 8½%. The proportion of secured funding is below 5% for other major internationally active banks that we have looked at, with the exception of JP Morgan and Bankers Trust - both somewhat special cases - where the proportion is very  BIS Review 13/1997  -4-  much higher (25-35%). And even in those special cases it is still well below that for the major US securities firms (typically 55-80%). Banks remain, too, at the heart of payments systems. Payments may be made directly across bank accounts through instructions, for example, in the form of cheque or debit card; or they may be made indirectly, through, for example, the use of credit cards, the balances on which are subsequently settled using a bank account.

But except in the US, securitisation has in fact so far made only limited progress, and debt sales have been focused mainly on impaired developing country or corporate debt. One reason why prime corporate loans are not so far traded is the importance that both banks and borrowers still attach to their mutual relationships. My guess is that the liquidity of bank assets by these means will gradually increase; and that process may be helped by the development of techniques such as credit derivatives. But for the time being - and indeed some time to come - bank loans are, for the most part, likely to remain illiquid in most countries. BIS Review 13/1997  -5-  We can nevertheless look at the crude balance sheet data, and, for what they are worth, we have looked at the share of loans to non-banks in total assets as a measure of the liquidity of the asset portfolio for a range of different types of institution. These data show that: for some representative small, domestic, UK banks the loan ratio is still some 70-80% of the total, apparently with no particular trend; for large UK, internationally-active, banks the share of loans is currently around 50%, having fallen quite sharply from some 65-70% some five years ago, perhaps reflecting the expansion of their investment banking activity; for large continental banks the share of loans is either side of 50%, having fallen more gradually. Again JP Morgan and Bankers Trust are outliers.
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The first is that the real interest rate can be quite responsive to cyclical shocks, sometimes moving by a percentage point or more in a matter of months. Indeed, in the past few months we have seen a relatively sharp and sizable increase. Whether such movements persist depends on the underlying shocks driving real interest rates. For example, we saw a similar rise in the ten-year real interest rate after the global financial crisis and that did not persist when inflation returned to target. The second observation is that, beneath the month-to-month volatility, there appears to have been a fairly steady downward trend since the mid-1980s. As shown in Chart 2 other economies have experienced a similar trend in real interest rates. [5]  Page 5  Chart 1: The UK ten-year real interest rate has fallen over recent decades  Note: Ten-year zero coupon yield (spot interest rate) computed from UK index-linked government debt. See yield curves. Source: Bloomberg Finance L.P, Tradeweb and Bank calculations. Chart 2: There has been a trend decline in real interest rates in most countries  Note: High-income countries include Finland, France, Italy, Japan, Netherlands, Spain, the United Kingdom and the United States. See Appendix A.2 to Bailey et al. (2022) for data definitions. Source: Authors’ calculations using EU KLEMS, the Penn World Table 10.0 and the Jordà et al. (2017) Macrohistory Database. See Appendix A.1 to Bailey et al. (2022) for more details.