samchain/econo-pairs-v1 huggingface dataset:
Indeed, according to these projections, in some Asian and European countries such as Japan, Korea, Spain and Italy, there will be just 3 working-age individuals for every 2 people over 65 in the year 2050, compared to an average of 11 working-age individuals for every person over 65 in 1950. Even African countries, home to the youngest populations in the world, will see a moderate increase in the dependency ratio in the years to come. I mentioned earlier that net migration inflows can help sustain the current workforce levels in Europe. However, the obvious fact that migrants become part of the retired population once they reach the retirement age implies that the benefits in terms of old-age dependency ratios are less evident. Its effect will last only to the extent that immigrant flows increase further in future. Hence, we may conclude that the role of migration, when it comes to addressing population ageing as measured by dependency ratios, is probably limited. 4  Certainly, we must bear in mind that there is considerable uncertainty over how fertility, mortality and migration flows will evolve in the coming decades. Accordingly, the point estimates of future population levels and dependency ratios must be viewed with some caution. In fact, when the analyses explicitly account for this uncertainty, the results show there is a high degree of variation in the intensity of future population ageing.

Specifically, the central scenario of the UN assumes that, in net terms, around 25 million people will come to Europe over the 2020-2050 period. Therefore, a back-of-the-envelope calculation shows that holding the working age population constant would require at least three times the net migration flow assumed in the baseline scenario. Put another way, if Europe were to offset the projected decrease in the working-age population by receiving more migrants, it would need a net influx of around 2.6 million people each year over the next 3 decades, roughly twice the net migration flow Europe has received in the recent past. We cannot overstate the challenges these magnitudes pose from an economic, social and political perspective. 3  It is worth stressing that population ageing has become a global phenomenon. A closer look at the cross-country evolution of the old-age dependency ratio, that is, the ratio of the over65s to the working-age population, is illustrative of this trend. While in 1950 no country in the world featured an old-age dependency ratio above 20%, nowadays 59 countries surpass this level, including all but one European country. In 2050, according to the UN Population Projections, the group of countries with an old-age dependency ratio above 20% will double to 118, comprising most nations in Europe, North America and Asia.
Our goal for Basel II should instead be to facilitate the application of minimum standards and to work together, across borders, to promote a more consistent implementation and application of the new framework. With or without Basel II supervisors need to enhance co-operation in a world that moves towards larger scale cross-border activities and a greater presence of systemic foreign banks in domestic economies. This enhanced co-operation is a process that will promote consistency and convergence of supervisory practices. It will help to avoid performing redundant and unco-ordinated approval and validation work in order to reduce the implementation burden on the banks and conserve supervisory resources, and will therefore contribute to a more level playing field for internationally active banks. In this regard, the Committee’s Accord Implementation Group continues to encourage practical work among supervisors on applying Basel II effectively and efficiently to internationally active banking organisations. Chaired by Nick Le Pan, the Superintendent of Financial Institutions in Canada, the AIG is currently working with supervisors in non-member countries as well to conduct a number of “real case” studies to gain better insight into the practicalities of co-operation between home and host supervisors that will be essential for Basel II’s successful implementation. So far, the AIG has identified at least two findings that are relevant to banks interested in the cross-border application of the new framework.

We might view the entire three-pillar structure of Basel II as a series of built-in reality checks for management’s decision-making. In this regard, the three pillars of Basel II are intended to make sure that management assesses and controls its risks carefully and that it takes the steps necessary to allocate the appropriate capital. As you know, in the first pillar, the minimum capital requirements focus management’s attention on identifying, assessing and quantifying risk within a specified framework. This puts the onus of analysis and decision-making on the right set of shoulders: bank managers are in the best position to evaluate their risks and are ultimately responsible for responding to them. When banks consider their risks more comprehensively and work to evaluate rigorously the magnitude of losses that they may face, they are improving the quality of the information at their disposal. That, in turn, should improve their ability to arrive at sound decisions regarding the amount of capital that they may need to weather potential losses in the future. Considerable attention has been paid to some of the formulas and techniques that we have adopted in Pillar 1 to help quantify the potential for losses related to credit and operational risk exposures. We  BIS Review 66/2004  1  must remember that these formulas are not revolutionary.
1 This index ranks countries taking into account the foreign direct investment they  attract in proportion to the size of their economy. 2 Source: 2021 annual report of Cyprus Shipping Chamber (CSC-ANNUAL-REPORT-  2021.pdf (csc-cy.org))  4/4  BIS - Central bankers' speeches

This is a clear example of how the quality of the overall statistical system is higher than what the mere sum of independent products would be, were such products not well-connected. Micro data as the Holy Grail We can all agree that statistics have been undergoing a revolution in the last few years. Important technological advances have increased the ability to process huge amounts of data and productivity in this area has surged: policymakers and analysts have more and more information and details at their fingertips and now have the possibility of applying  1  more sophisticated models, designing more refined economic policy responses and answering more complex questions. Some of these changes stem from the experience of the Great Financial Crisis of the last decade. Then it was felt that only the availability of detailed information on economic agents’ positions (including cross-border ones) would allow the relevant policy authorities to thoroughly analyse the exposures of an increasingly interconnected global financial system and to better understand the monetary policy transmission mechanism and the massive deleveraging that followed. To close these gaps, the Eurosystem promoted a number of projects based on granular information. These included AnaCredit (to build up a Central Credit Register at the European level), the Securities Holding Statistics Database (which contains exhaustive security-by-security information on European portfolios) and Money Markets Statistical Reporting, where daily information at the transaction level is collected from financial institutions. In Spain, we also learned the lesson.
In Norway, credit and capital markets nevertheless feature some weaknesses, with thin securities markets and a narrow investor and ownership base compared with other countries. The reasons, and hence the solutions, can probably be found in the structure of the taxation of dwellings, property and financial assets, in a high level of state ownership of enterprises and in the organisation of pension saving in Norway. Investing even more government capital in Norway would reduce the return on investments in the Norwegian business sector and prompt other investors to invest elsewhere. Allocating even more capital to the Norwegian economy would probably lead to a rapid relocation of jobs to other countries, as the krone would tend to appreciate. Effects on industry structure The planned use of petroleum revenues will increase demand for public and private services. The guidelines imply an increase in the use of petroleum revenues over the central government budget of around 3½ per cent of mainland GDP by 2010. This may add 2½ -3 per cent of total employment in the service sector. As long as there are labour shortages in Norway, a comparable decline in manufacturing employment is likely to occur. Although the phasing in of petroleum revenues is a gradual process, the contest for labour resources will intensify. As a result, monetary policy is likely to remain fairly tight in the years ahead. A high interest rate level may in periods result in a strong krone. This may accelerate the scaling back of manufacturing industry.

The German mark – the euro since January 1999 – has depreciated by about the same between 1995 and autumn 2000. The Japanese yen has been particularly volatile. 4  BIS Review 20/2002  Smaller countries have also experienced fairly wide exchange rate fluctuations. The Swedish krona has depreciated by more than 10 per cent since summer 2000. The Australian dollar has weakened by over 30 per cent since spring 1997. The UK, Canada and New Zealand have also experienced wide exchange rate fluctuations. The Norwegian krone exchange rate, on the other hand, has been relatively stable. Countries whose exports include a large component of raw materials tend to experience considerable volatility in their exchange rate. Australia is one example. Fluctuations in commodity prices entail changes in countries’ terms of trade, which measures the ratio of export to import prices. Changes in the terms of trade have an impact on the exchange rate, which in turn curbs the effects of changes in commodity prices on profitability in the business sector. Hence, the exchange rate serves as a buffer against changes in the terms of trade. Norway’s terms of trade also fluctuate considerably, primarily reflecting changes in oil prices. However, a substantial portion of petroleum revenues is invested in foreign equities and bonds through the Government Petroleum Fund. Changes in oil prices influence the size of the Fund, but  BIS Review 20/2002  5  have little effect on the use of petroleum revenues at home.
These are the risks, but it would also be wrong to ignore the opportunities that environmental protection can provide for banks and other financial institutions. Most obviously, the costs of cleaning up pollution and the need to invest in environmentally friendly technology imply the need for finance, either from the banks or the capital markets. Just to take one small example in the Hong Kong context, the Government’s initiative to persuade diesel taxi owners to switch to LPG taxis creates the chance for the banks to finance the purchase of the new vehicles. Banks also need to bear in mind that while there will be losers from the drive to cut pollution, there will also be winners in the shape of those companies which can exploit the new technologies to curb emissions. Another by-product from efforts to combat climate change will be the growth of emissions trading between companies. Such trading allows companies that can reduce their carbon emissions below allotted targets to sell their surplus credits to those companies that cannot reach their targets. Admittedly, the immediate future of emissions trading is in some doubt following the Hague conference, but it still has the potential to become a major commodity market. If so, there will inevitably be a role for financial institutions to broker deals between buyers and sellers of emission credits, and perhaps to take positions themselves. Finally, banks and other financial institutions can profit from the growing public awareness of environmental issues by offering “green” investment products.

One point that is particularly relevant to banks that finance companies or projects in countries like China is that the rules of the environmental game can change very quickly. The authorities in China are getting serious about cutting emissions and pollution, as the requirement by the Beijing Municipal Government on the Shougang Steel Group to cut back its output has shown. The problem in China is that regulations are not always strictly enforced. But this can change overnight, resulting in major compliance problems for the companies concerned and increased risk for the banks that have lent to them. Hong Kong banks which lend into China would therefore be well advised to keep this in mind. Finally, banks should pay close regard to their own “corporate ecology”. Banks can contribute to environmental protection by the way in which they manage their use of resources in their own operations. In this way banks can be responsible corporate citizens while at the same time reducing business costs. The type of measures that can be adopted include saving on energy consumption, recycling of paper, waste management, purchasing environmentally friendly products and use of video conferencing to cut down on unnecessary travel. Use of office automation such as email can also help to reduce the consumption of paper, provided of course that staff can be encouraged not to print out the messages.
Lorenzo Bini Smaghi: The challenges of surveillance and coordination Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the International Symposium of the Banque de France: Regulation in the Face of Global Imbalances, Paris, 4 March 2011. *  *  *  Introduction There is a broad consensus that the crisis we’ve been living through the last three years is the result of imbalances accumulated both at the macro and micro level, mainly in advanced economies. Surveillance of these imbalances was clearly insufficient. Any prescription to improve the resilience of our economies must thus include a strengthening of surveillance. I will concentrate in my remarks on macroeconomic issues. There has been a lot of discussion on what went wrong with surveillance, in particular at international level. The IMF should be praised, in particular, for having its own surveillance process independently evaluated. The results of this analysis were published in January this year.1 Maybe in Europe we should follow the same transparent and open procedure to get a better understanding of what didn’t work. The recommendations offered by the Independent Evaluation Office are mainly procedural and concern the workings of the IMF. They included creating an environment that encourages candour and diverse or even dissenting views; overcoming the silo mentality; speaking truth to power; and delivering clear and consistent messages. These are recommendations which should probably be taken to heart by other institutions too.

The purpose of the HKMA intraday liquidity facility is to promote more efficient RMB payment flows between banks; and  (b)  The HKMA will also designate a number of banks active in the CNH market as Primary Liquidity Providers (PLPs). Banks that are designated as PLPs are committed to using and developing Hong Kong as the global platform for supporting their offshore RMB businesses. They are also committed to expanding their market-making activities in CNH market. In return, the HKMA will offer a repo line to each of the PLPs so as to facilitate more efficient liquidity management when they carry out market-making and other business activities in the CNH market. This bilateral repo line can be used by the PLPs as intraday or overnight liquidity management purposes. The HKMA is now finalising the list of PLPs and the necessary documentation. We hope to be able to announce the list of PLPs very shortly. Ladies and gentlemen, let me conclude by saying that the competitive edge of a successful financial centre depends crucially on its soft powers, not just on hard infrastructure. Hong Kong is uniquely well positioned to take advantage and play a pivotal role in the new era of China’s growth story and in the internationalisation of RMB. Hong Kong enjoys both first-mover advantages as well as many irreplaceable structural advantages, given Hong Kong’s very close links with the Mainland in trade, investment and finance under the “One Country, Two Systems” principle. However, there is absolutely no room for complacency.
Some observers make the point that, if we look at historical frequencies of cycles and recessions, it is much more likely than not that interest rates may need to return to zero at some point in the future. “Nonconventional policies” may then become part of central banks’ standard toolkit, rather than a unique exception. Second, one legacy of the crisis will be the size of central banks’ balance sheets. A central bank’s balance sheet is the foundation on which it conducts its policies, through its monopoly to create base money. An expanded balance sheet can be seen in two ways. Either as a problem because the central bank leaves too big a “footprint” on money and financial markets; and this could impair their normal functioning. Also, by holding and actively managing a portfolio of public debt, central banks take quasi-fiscal responsibilities that must be avoided. Alternatively the current situation may be seen as an opportunity, at least in times of crisis. Central banks can use their expanded balance sheet to develop a richer set of tools and better address the challenges they are facing. Finally, the pre-crisis, inflation-targeting regime, was closely associated with the “Great Moderation” when inflation was low and output growth stable. This period of sustained growth and limited volatility was considered normal at the time. We know now that it was very exceptional from a historical perspective.

However, long periods of low interest rates unavoidably create incentives for risk taking and “search for yield”. That dilemma can, in principle, be solved through proper macroprudential policies. I will return later to challenges we face in that specific area. The meaning of price stability Let me start with a crucial point. Central banks have a strong mandate to preserve and achieve price stability. Strict adherence to this mandate – and the clear willingness to fulfil it – is their main protection against the dangers created by the zero lower bound. As we all know, inflation is ultimately driven by expectations. Inflation expectations were remarkably stable during the whole first decade of the euro. Today, the major risk in the euro area is a downward drift that would durably set long-run inflation expectations at a level below our objective of price stability. We do not know much about how expectations are formed. However, I have no doubt  BIS central bankers’ speeches  1  that the perceived reaction function of the central bank plays a major role in anchoring price stability. Second, symmetry is of the essence. For a significant period of time, we have been well below our definition of price stability in the euro area, both in terms of effective inflation and long-term expectations. There is a temptation to take a benign view of this situation and consider that low inflation is beneficial per se, irrespective of its level.
The recognition of losses was postponed and, as a consequence, capital continued to be allocated to investments with limited positive impact on Japan’s long-term growth potential, which some have called “zombie lending”4. Ultimately, this resulted in Japan’s “lost decade”, namely an extended period of anaemic growth (see Chart 3). A second lesson is that institutional and structural reforms are essential Early in the crisis, emerging Asian economies strengthened prudential regulation and supervision, together with bank governance and market transparency and discipline, in order to prevent further instability and bring domestic standards closer to the international norms.5 Furthermore, they generally acknowledged that their economic “miracle” before the crisis was not sustainable. It was driven by over-investment encouraged by Colbertist policies, implicit government guarantees, and too often, opaqueness and political interference in market mechanisms.6 As a result, at the macro level, growth was led by capital accumulation in the wrong sectors and not by a rise in total factor productivity. In Paul Krugman’s words, the Asian miracle was “the fruit of perspiration, not of inspiration”7. To address the root causes of the crisis, structural reforms aimed at improving governance and challenging vested interests, both in public policy-making and in the corporate sector,  2  See FRBSF Economic Letter (2011). “Could We Have Learned from the Asian Financial Crisis of 1997–98?”, February 2011. 3  See Lindgren, C.-J. et al. (1999). “Financial Sector Crisis and Restructuring. Lessons from Asia”, IMF Occasional Paper, 188. 4  See Fukao, M. (2003).

Further on, Bank of Albania market interventions have been practically inexistent and the exchange rate 3/8  BIS central bankers' speeches  reflected the supply and demand situation in the market. Insofar results show that Bank of Albania interventions have accomplished the objectives. The appreciation pace of the exchange rate has diminished and the activity in the foreign exchange market has returned to normal parameters. In line with these developments, the Bank of Albania kept the direction and intensity of the monetary stimulus unchanged over the second half of the year. The policy rate remained unchanged at 1.0% while the financial market was supplied with the necessary liquidity and informed through the forward guidance on the future path of the monetary policy stance. The accommodative monetary policy implemented by the Bank of Albania has proven successful for boosting economic growth, inducing better utilisation of production capacities and building up inflationary pressures in the economy. The transmission of the monetary stimulus is noted in several aspects: First, the monetary stimulus has led to the reduction of financing costs for households and enterprises. Interest rates are close to historical lows, across all the range of financial instruments. Second, the accommodative monetary policy has led to the expansion of credit in lek, and to the reduction of existing debt service costs. Lek credit to the private sector increased at 6.7%, on average, in 2018.