samchain/econo-pairs-v1 huggingface dataset:
Instead, the value of the notes was set, for instance, by royal decree, that is the king or queen simply decreed what value the notes should have. Such money is sometimes called ”fiat money”. This is money that has no link whatsoever to metals or other material objects. Faith in such money must thus be created in some other way. We can view money as a "good" with special properties. It can be used to pay for things and it has a special information value, it is a measuring stick that makes it possible to compare prices. It also acts as a means of preserving value, it can be stored and saved to be used for future consumption. It is in this context that price stability comes into the picture. If inflation rockets, the money we have saved loses purchasing power. It was therefore quite natural  BIS Review 135/2009  1  that the central banks – when they were eventually given the monopoly for issuing notes – were also given the task of safeguarding price stability. In Sweden, the state, in the form of the Riksbank, first acquired the sole right to issue notes in 1903. One of the reasons the Riksbank was given this sole right was the desire to create a uniform and stable payment system. Previously, the banks had been able to fund their operations by issuing their own notes. However, when a bank went bankrupt its notes became worthless.

Apart from the fact that it was difficult to value the instruments themselves, the complex links between the banks and their special companies made it difficult to see the actual exposures of the banks. Eventually, no one knew where the risks  BIS Review 135/2009  3  were. The increasing amount of loans not only made investors highly indebted in relation to their equity, many banks also did not really have enough capital in relation to the risks they took. When economic activity began to decline in the USA and prices fell on the US housing market, many institutions suffered major losses. Uncertainty about who might be exposed to impaired assets led to trade petering out on a number of financial markets. Many banks now found it difficult to find funding on these markets. In September 2008, the major US investment bank Lehman Brothers filed for bankruptcy protection. This had extensive repercussions throughout the world. The global financial crisis escalated and the Swedish banks were also seriously drawn into the crisis. All over the world, banks and other financial institutions began to cut back their exposures and reduce their level of indebtedness. The decline in lending reinforced the downturn in global economic activity. This in turn accelerated the decline – many assets fell dramatically in value and the banks' loan losses increased. A vicious circle arose in the global economy in which the financial turmoil aggravated the weakening of the real economy and vice versa.
But Asian economies are in a relatively stronger position to absorb these financial shocks. Economic fundamentals in Emerging Asian economies are stronger since the taper tantrum in 2013. 2 / 11  BIS central bankers' speeches  Foreign reserves and bank capital buffers are larger while financial regulatory frameworks are more robust. And policymakers in Asia are more prepared to make macro-policy adjustments as needed, including pre-emptive interest rate hikes to support exchange rate stability. The second risk to the global economy is rising protectionism. Protectionism is rearing its ugly head on three trade fronts: US-China; US-EU; and USMexico-Canada. Thus far, the US has imposed tariffs on solar panels, washing machines, steel and aluminum imports from all major trading partners. It has announced tariffs of 25% on $ billion of imports from China, and has threatened tariffs of 10% on another $ billion of imports from China. Both China and Europe have announced retaliatory tariffs. The immediate effect of these trade restrictions is limited and does not threaten global growth … yet. The announced tariffs are estimated to shave around 0.1% point off China’s growth, with the US economy similarly impacted by China’s retaliatory measures. The real risks from the tariffs are spillover effects, escalation, and economic uncertainty —all of which could severely undermine global growth. First, spillover effects. The impact of the tariffs will be felt not only in the countries involved but across the value chains that span several countries. Second, escalation.

This is unlike various financial crises in the past 25 years or so – which tended to have certain recurring themes, and which tended to begin in emerging economies before their knock-on impact was felt internationally. The analytical tools and policy prescriptions for dealing with such crises became more tried and tested over time, even if applied in too dogmatic a fashion at times. Global institutions, whether it was the IMF, developed nations, or a consortium of strong international banks, had the wherewithal to bring sufficient resources to bear on the problem. Crisis resolution was never easy but did not quite look insurmountable. Not so this time. The epicenter of this crisis is the US – it is the world’s largest economy, holder of the international reserve currency, and home to the largest and most sophisticated financial system. So we are talking about the core of the global financial and economic system where severe problems arose and have since spread across borders. In the US, the “shadow” banking system grew rapidly but was quite opaque in the way it operated. Before long, problems built up and spread to engulf the “traditional” banking sector. Within a short time, commercial banking operations were severely impaired. Right now, we are dealing with the bursting of multiple, overlapping bubbles – the housing bubble, the household credit bubble and the consumption bubble. Cutting across all three bubbles was leverage – households overstretched themselves; the financial institutions which were extending this credit to households were themselves taking on excessive leverage.
In any event, as the author points out, what is true is that the shift to protectionist-style policies – commercially and geopolitically – threatens to break the multilateral global governance arrangements in force. Paradoxically, the United States had led these arrangements over recent decades. Now, there is a consequent danger for global prosperity. The redistribution of power among a growing number of players entails the 1  replacement of the multilateral international cooperation arrangements with a new, more fragmented, decentralised and informal system as regards decision-making, in which bilateral and regional solutions trump multilateral agreements. Another characteristic feature of globalisation recently has been the onrush of the digital revolution and the roll-out of new communication and information technologies. These are driving radical changes in the economy, in society, in how we understand labour relations and in investment and consumption decisions. As the author indicates in the book, we are yet to fully discern the possibilities that artificial intelligence, robotisation and quantum computing can offer in the different facets of our lives. Professor Ontiveros also emphasises the risks and threats the application of these new technologies entails, e.g. the control of individuals, the invasion of privacy, the concentration of market power in the Big Tech companies, inequality and the exclusion of those who fail to adapt. Adding to globalisation and technical change is the demographic challenge. This poses fundamental challenges to growth, productivity and the sustainability of public finances in numerous economies.

This is what the Riksbank began doing with effect from the first Monetary Policy Report published this year. I will talk about this a little more in a moment. Let me take up a final argument in favour of transparency that I believe should not be underestimated. It is that by being open and clear towards the outside world we also become better in our analysis within the walls of the Riksbank. As transparency makes it easier to evaluate how well monetary policy functions, it quite simply increases the incentives for us to do a good job. The objections are not convincing However, not everyone is agreed that transparency is a general blessing. Academic research shows both advantages and disadvantages with transparency. A theoretical result from this research that has received much attention is that more public information from central banks and other authorities can in some cases be a negative element 2 . However, this result is based on the public information being of low quality. If the economic agents attach greater importance to poor public information than to their own better private information, the economy as a whole may suffer losses. However, this assumes that the public information is much poorer than the agents’ own information – an assumption that is hardly true in practice 3 . A more reasonable assumption, in any case with regard to central banks and monetary policy, is that public information is not poorer than the assessments made by private agents.
It is possible to direct part or all of a failing bank’s business to a private sector purchaser after a sale process has been undertaken. Second, it is possible for the Bank of England to take control of part or all of a bank’s business through a bridge bank controlled and owned by the Bank. A special bank administration procedure can be used in combination with a partial property transfer or bridge bank. This administration procedure is broadly the same as a conventional administration save for the very important difference that the administrator has a statutory objective to support the transferred business with any infrastructure left in the insolvent rump. Finally, under the SRR provisions, it is possible to take a bank into temporary public ownership. For this approach, the Treasury would be in the lead, and there is a higher test of systemic importance to be passed (there must be a serious threat to financial stability) for this approach to be used. As I have indicated, the SRR contains important roles for all of the authorities. The FSA is responsible for triggering the SRR by determining, broadly, that a bank no longer meets its threshold conditions for authorisation, and there is no reasonable prospect of it taking actions to correct the situation within an acceptable timeframe. The FSA is also responsible for approving the transfer of business to another institution that it authorises.

The second credit-related measure adopted was to step up the work currently under way to design a programme for the purchase of asset-backed securities. This market was heavily affected by the crisis, and its underdevelopment in Europe is constraining the greater diversification of sources of corporate finance, particularly for SMEs. Initiatives such as this may stimulate the deepening of this market, although they are unlikely to be decisive if not accompanied by further action in equally important areas, such as that of regulation. To sum up, the situation of the euro area justifies the differing conduct of its monetary policy which, as I have attempted to explain, is still at the stage of scaling up its expansionary action, in contrast to the likely winding-down of stimuli prevalent in other advanced economies. This adds complexity and uncertainty to the exceptional situation of abundant liquidity and low interest rates prevailing in the markets. Thank you. 4  BIS central bankers’ speeches
We have taken several progressive measures to communicate more information, including cut-off yield rates of the OMO auctions and overnight liquidity estimates with a view to encouraging more efficient price discovery in the money market and promoting informed decision making by market participants as well as to improve market signaling of OMO. The Central Bank will continue to actively engage in liquidity management, while guiding the short-term interest rates along a desired path. Several measures, such as reviewing the compilation methodology of benchmark interest rates, strengthening the operational framework pertaining to the Intraday Liquidity Facility (ILF), introducing a rule-based code of conduct for Authorised Money Brokers and promoting market development will be taken to improve the efficiency and compliance in respect of money market operations. 11  As announced last year, the Monetary Policy Consultation Committee (MPCC) was reestablished in mid-2017 to draw on external expertise to support the conduct of monetary policy. We will continue to take on board stakeholders’ views and align our policies in a way, which is mutually beneficial for stakeholders and the Central Bank. As the conduct of monetary policy is dependent on an effective and prudent exchange rate policy, the Central Bank has introduced a more market based exchange rate system. It has allowed more flexibility in determining the exchange rate based on the market conditions and has intervened only to smoothen volatility and to build up reserves.

The reform agenda of the government includes improving financial viability of the State Owned Enterprises (SOEs) to mitigate the budgetary implications for the government. While introducing clear frameworks and reforms in relation to monetary and exchange rate policies in 2017, we have implemented several policy measures during 2017 to address the challenges in the financial sector and maintain a stable financial system for effective monetary policy transmission and to support sustainable growth. With a view to promote a dynamic and resilient financial sector, the regulatory and supervisory framework of the Central Bank was further strengthened in line with international standards and best practices. At present, our banking sector accounts for over Rs. 10 trillion in assets, while the non-bank financial institutions sector accounts for over Rs. 1 trillion in assets. The implementation of Basel III capital standards was commenced in 2017 in order to develop a more robust banking sector. The framework to regulate the non-bank financial institutions was strengthened under challenging conditions, and resolution of distressed finance companies was also commenced. During 2017, the Central Bank continued to strengthen the regulatory framework for the microfinance sector, and continued to combat the menace of illegal pyramid schemes with the assistance of other government agencies. Several measures were adopted to strengthen and modernise the payment and settlement infrastructure in order to develop an efficient and stable payment and settlement system in the country, as well as to pave the way towards a digital economy.
Even before recent upward revisions in GDP figures, Turkey easily met the Maastricht criteria for the budget deficit and debt stock. Turkey has demonstrated significant improvement in the World Bank’s Governance Index since 2000. Thanks to better governance practices, competitiveness of Turkish economy has advanced drastically in recent years as well. In the last two years, Turkey moved up a total of 18 steps in the Global Competitiveness Index prepared by the World Economic Forum. Turkey also moved up 34 steps compared to the previous year in the Ease of Doing Business Index of the World Bank. Distinguished guests, I tried to highlight some of the important developments in Turkey regarding economic governance in recent years and the resulting improvement in the economic structure. All these led to improvement in the confidence, which was instrumental in further confidence building and credibility for the economic management. These are all key ingredients of good governance. These achievements, however, are not enough. We still have much to do in terms of reaching price stability and securing sustainable high growth rates. There is still much to be done to improve economic governance and to reach a level compatible with the EU-15 average. As we are going through difficult times both internally and externally, we should not lose the momentum gained in institutional capacity building. It is even more imperative at this juncture to show and utilize the dexterity that we gained from our past experiences.

In the absence of independence, the Central Bank of Turkey would not be able to focus on its primary objective of price stability. Introduction of the free-floating exchange rate regime in 2001 and formal inflation targeting regime in 2006 can be classified as the other two key steps. The inflation targets became the new anchor instead of exchange rates and the Central Bank has started using overnight interest rates as the main policy tool to reach these targets. Communication tools of the central bank have played a key role in explaining the price developments and the monetary policy outlook to the public and also in managing expectations. The Bank’s communication policy has become more effective over time with the introduction of new communication tools, such as the quarterly inflation reports since 2006, the bi-annual financial stability report since 2005 and the monthly price development reports since July 2006. In addition, a summary of Monetary Policy Committee meetings are published on our website within 8 business days following the Committee meeting, simultaneously in English and Turkish. I believe all of these instruments have contributed to a more transparent monetary policy. After briefly touching upon the main features of the monetary policy in the context of good economic governance, I will continue with the fiscal side. The prudent fiscal policy that has been implemented since 2002 has made significant contributions to the disinflation process and the economic growth. The ambitious primary surplus targets are at the center of the improvement in fiscal policy.
Borio and White, in particular, building upon Kindleberger’s classic historical analysis of bubbles and panics,3 had suggested that periods of inflation and output growth stability may sow the seeds of future instability, by engendering in the general public the erroneous notion that a new and much more stable era had been entered, in which the old rules did not apply any longer. In this respect, it is interesting to notice that the Great Moderation period had been characterized not only by large decreases in macroeconomic volatility for both inflation and output growth, but also by a dramatic compression of risk premia across several asset classes, which is compatible with the notion that economic agents were indeed regarding the volatility decreases as part of a “new norm” characterized by permanently more stable macroeconomic dynamics. With the benefit of hindsight – and of the decisive “test” of the respective validity of the different viewpoints provided by the crisis – it is today easy to appreciate the soundness of Borio and White’s position. The Great Moderation years had been characterized, compared with the previous portion of the post-WWII era, by a significantly more frequent occurrence of asset price bubbles and subsequent crashes. A longer-term perspective focusing on the last two centuries even shows that the occurrence of asset price booms and busts under conditions of price stability, far from being a “fluke” of the Great Moderation era, have in fact been historically quite common.

14 Customer-oriented attitude has induced the public sector to open itself to the public and private partnership solutions. One of its manifestations in Singapore is the ability to apply for a passport at the photo-shop, immediately after the passport picture is taken. Another significant factor, which stimulates the growth of both e-administration and e-economy, is the penetration of innovation and search for new applications for technologies in use between the private and public sectors. For instance, the abovementioned RFID technology was initially used to mark goods in transport and storage, as a technique more advanced than the bar code. China, which has implemented the RFID standard as a result of the efforts of Wal-Mart, the world-largest retailer, is currently considering its use in blood banks to track the location of blood batches. Another use of the RFID technology — also in the health care sector — is currently tested at the orthopaedic ward of the Singapore General Hospital. For the duration of hospitalization, the patient receives a band that facilitates tracing the patient’s location, whereas a built-in thermosensor measures the temperature without bothering the patient. Portable devices provide the nurses and physicians with an ongoing access to information on the patients. Moreover, there is a possibility to integrate the system with 15 monitoring of the heart action and blood pressure . A completely different, although slightly controversial, use of RFID has been found at the prosecutor’s office in Mexico, whereby a chip is implanted under skin of employees that have access to secret documents.
I believe that corrective action - taken voluntarily - is not only overdue but also morally sound. This evening, I would like to focus on the effects of public policy on executive compensation. As you know, in 1993, the IRS ruled that the maximum tax-deductible salary a company can pay an employee is $ million per year. Compensation above $ million has to be “performance-related” to be considered a tax-deductible expense. This change in public policy gave firms that wanted to minimize taxes the incentive to introduce performance-related pay structures for executives earning above $ million a year. The policy change is a key reason that stock options have become the most prevalent performance-related structure for executive compensation. Option-based executive compensation raises a number of issues. For example, one feature of the 1993 IRS ruling is that the $ million salary cap for tax deductibility is nominal and not indexed. This means that as the average total compensation for executives rises over time, the incentive to use stock options increases. Another issue stems from the fact that stock options are non-transferable. Therefore, an increasingly large fraction of an executive's compensation in the form of stock options represents a non-diversified risk. Moreover, if the firm goes bankrupt, the options become worthless at the same time that the executive’s job is lost. As a result, firms may have to increase the amount of options they offer an executive to offset the increased riskiness of this form of compensation.

On its  2  BIS central bankers’ speeches  own, however, such a policy will raise difficult political questions about the capacity of the weaker sovereigns to pay for any recapitalisation of their banks. Bank and sovereign solvency concerns are inextricably intertwined. In the end, the underlying solvency concerns require countries to adopt compatible policies so that they can credibly service their internal and external debts. What does this mean for our own economy? Our objective must be to steer the UK economy slowly back to a position of more normal interest rates and lower budget deficits. With a lower level of sterling and a credible plan to reduce the fiscal deficit over the medium term, we were on track. But the problems in the euro area and the marked slowing in the world economy have lengthened the period over which a return to normality is likely. 2011 has been the year of the reluctant recovery. Growth has disappointed, both here and abroad. Business and consumer confidence have fallen sharply, not only at home but also elsewhere in Europe and the United States. And the level of world trade in goods has stagnated. A slowing of the world economy, especially in the euro area, is a threat to our strategy of rebalancing and recovery of the UK economy. Despite the more competitive level of sterling, the recovery in our trade position is at risk of stalling.