samchain/econo-pairs-v1 huggingface dataset:
According to this source, the households that have the larger debts are those less likely to lose their income. Meanwhile, after the global crisis of 2008–2009, estimates suggest that the fraction of households in a situation of financial risk is around 4 percent, close to where it was in 2007. 1 Information made public point to severe problems in the corporate governance of this company, with irresponsible lending policies and major abusive deficiencies in the information on their credit portfolio that was delivered to investors and supervising organizations. It is also likely that the law has been broken with respect to the delivery of information and the operation of the lending activities. This has triggered a discussion over the role that different organisms should have played, including management, the board of directors, auditors and risk-rating agencies. Certainly there have been grave irregularities that need clarification. It is also necessary to establish any potential flaws of our regulatory and supervisory framework. I would like to say, however, that at this time we must let the mechanisms of supervision and sanction provided for in the laws governing the securities and stock markets do their work. Also, those responsible for the damages caused must be investigated and punished with all the rigor of the law for their wrongdoing. Episodes like this one should never occur again. This case brought to light two important flaws from which we must draw lessons in legislation, regulations and control. What we have now is obviously insufficient.

In short, diversification strategies by individual firms generated a lack of diversity across the system as a whole. So what emerged during this century was a financial system exhibiting both greater complexity and less diversity. Up until 2007, many participants in financial markets would have viewed that network evolution as the inevitable by-product of technical progress in finance. Until then, complexity plus homogeneity equalled stability. But in just about every non-financial discipline – from ecologists to engineers, from geneticists to geologists – this evolution would have set alarm bells ringing. Based on their experience, complexity plus homogeneity did not spell stability; it spelt fragility. In understanding why, it is useful to explore some of the wider lessons from those disciplines, taking in turn the effects of complexity and diversity on stability. Complexity and stability Tropical rainforests are a complex adaptive system. In the immediate post-war period, these eco-systems were often used as a case-study when demonstrating why complex systems tended to exhibit greater stability. 3 In Elton’s (1958) words, this was because there are “always enough enemies and parasites available to turn on any species that starts being unusually numerous”. Complexity strengthened self-regulatory forces in systems, so improving robustness. This was the prevailing ecological wisdom up until the early 1970s. That conventional wisdom has since been turned on its head. From the 1970s onwards, orthodoxy was altered by a combination of enriched mathematical models and practical experience.
Perhaps this is because the structure of the European model - the only successful example - requires convergence as a pre-requisite. As I mentioned earlier, in many respects, Asia is much more heterogeneous than Europe, so that convergence realistically will take time, even if there is agreement to converge. But my view is that since it takes so long - 50 years in the case of Europe - we’d better start at least the thinking process early, hadn’t we? And we can also afford to be imaginative if it is something that aged people like us won’t see in our lifetime. The flexibility of Asia is well recognised. We only have to look at how individual economies bounced back after the Asian financial crisis. Perhaps they are flexible enough for convergence to be forced onto them by just plunging in. And to ease the way, how about an interim arrangement that provides intra-regional exchange rate stability through hard pegs to a synthetic, floating Asian currency unit? Perhaps the International Centre for Banking and Monetary Studies has wise observations to offer. I myself have found it difficult and a little frustrating to go beyond articulating the problems and the unsustainable nature of Asian finance, raising interests and asking questions. China Let me now turn to China. I notice that there is considerable interest in the international financial community in the banking and monetary developments there.

In Africa, new stock markets have been established in countries such as Ghana, Malawi, Swaziland, Uganda, and Zambia. Stock market development has assumed a developmental role in global economics and finance following the impact stock markets have exerted in corporate finance and economic activity. Stock markets enable firms to acquire much needed capital at relatively lower cost, hence facilitating capital allocation, investment and growth. The stock market also plays a resource mobilisation role by encouraging savings through the purchase of equities that meet investors risk preferences and liquidity needs. On the important role of stock markets in financing development, it is noteworthy that some studies undertaken by the IMF have shown that the stock markets have contributed to the financing of the growth of large corporation in certain African countries such as Ghana, South Africa, Zimbabwe and Mauritius. It is therefore imperative for African countries to develop this avenue of financing development to enable companies to raise capital at relatively lower cost. Furthermore, the development of a well functioning stock and capital market can help Africa access long-term debt in local currency thereby providing much-needed financing for the constantly growing infrastructure needs in the African continent. Developing national and regional bond markets and secondary capital markets in general can also help in channelling excess banking sector liquidity into productive sectors. (d)  Natural resources  There is little doubt that natural resources in Africa will continue to play a significant role in Africa’s development efforts.
Without this exchange rate support, we would undoubtedly have had to impose bigger changes in interest rates. Prior to the launch of the euro, we made it abundantly clear that in the event of a massive exchange rate distortion, which would have posed a serious threat to internal stability, we would be ready to take action in the foreign exchange market. We have not had to make use of this measure of last resort at all. CHF Exchange Rates 1.85 1.80 1.75 1.70 1.65 1.60 1.55 1.50 EUR/ CHF 1.45 USD/ CHF 1.40 1.35 1.99  3.99  5.99  7.99  9.99  11.99  1.00  3.00  5.00  7.00  9.00  11.00  1.01  Finally, not even the marked decline of the USD in the past months has led to any undesirable tremors. The effect, registered fairly regularly in the past, that a weakening of the USD is reinforced by an appreciation of the SFR vis-à-vis the DM, has been almost absent. It remains to be seen whether this undoubtedly destabilising "coffee cup effect" has disappeared for good with the advent of the euro. Do we want to maintain our own currency even in 10 or 20 years' time? That is certainly a good question. In economic respects, it seems advisable to remain noncommittal for the time being. Not only on the financial markets do available options have a positive value. They should not be given away lightly.

The Swiss franc is trading currency number 5, ranging behind the Big Three and Sterling, but well ahead of the currencies of much larger countries like Australia and Canada. Economically more important than the trading volume is - second - the position of a currency held in international portfolios. Relative to the size of our country, the SFR occupies an unusually prominent position in international institutional and private portfolios. This position is the combined result of an above-average stability record, an efficient financial centre and the commitment to an independent monetary policy which lends the SFR special diversification characteristics in global portfolios. This certainly is a sign of strength, a sound basis for value creation, especially in our financial industry. At the same time, its strong position makes the SFR particularly sensitive to global capital movements. Thirdly, due to relatively low interest rates, the Swiss franc - like the yen - periodically plays an important role in the short-term financing of trading positions. Currency and securities traders take short positions in our money market to finance long positions elsewhere. This is a rather volatile game, often reinforced by herd effects, which comes and goes with short-term exchange rate expectations. These so-called carry trades from time to time generate a significant amount of short-term exchange rate volatility. In the recent past, however, such strategies have lost their appeal, probably as a combined consequence of last year's increase in money market rates and the appreciation of the Swiss franc.
This could also potentially reduce the cost of trade finance of which according to W TO, has surged by 30% on average over the past year as well as eliminate fraud and increase transparency. The Bank, in recognising the potential of digitalisation in advancing the delivery of meaningful access to consumers, provides an enabling environment for financial institutions to foster innovation through the fintech regulatory sandbox and facilitation of pilot projects. Such avenues enable us to identify potential adjustments or responses to the existing regulatory framework, commensurate with the risk and scale of activities. One such initiative is the development of proof-of-concept for double invoicing detection carried out by selected financial institutions, which is now being enhanced by PayNet for commercial use. In closing, I would like to share an excerpt from the book of (Musnad) of Ibn Hanbal – The Prophet (peace and blessings be upon him) was once asked about the best kind of earnings, of which he replied, “That for which a man works with his hand. And honest trading. "6 Trade is held in such high regard in Islam, and hence we should always strive towards betterment in its execution. Thank you. 1 Source: MATRADE article, 29 July 2021, “Double-digit growth in exports in major markets” 2 Source: World Bank Islamic Trade Finance Report 2021. 3 3/4  BIS central bankers' speeches  3 Source: World Economic Forum article, April 2021, “Economists support ‘immediate and drastic action’ against  climate change” 4  Source: Standard Chartered (June 2021).

At the current rate of migration, we expect to see that rate to come down much further before the end of June. Closing remarks Driving and sustaining an inclusive transformation of Malaysia’s payment ecosystem is a collective effort. Bank Negara Malaysia will continue to foster a conducive payment ecosystem, with the National Payments Advisory Council (NPAC) playing a more active role in shaping priorities to enhance and future-proof the country’s payment systems. PayNet will serve as the key vehicle for collaboration at the infrastructure level, encouraging more open competition and greater innovation in payment solutions by both banks and non-banks in serving the public and economy. The remaining piece is the continuous education of businesses and consumers to encourage the desired change in payment behaviour that will deliver important efficiency and productivity gains for our economy. 4/5  BIS central bankers' speeches  Let me conclude by congratulating MyClear and the winners of today’s awards ceremony. I hope that today’s event will inspire greater achievements in accelerating Malaysia’s migration to epayments. 5/5  BIS central bankers' speeches
But in virtually all of this literature, financial intermediaries – if present at all – are very simple  12  See e.g. Christiano, Motto and Rostagno (2008); Curdia and Woodford (2009); Gerali, Neri, Sessa and Signoretti (2008); Goodfriend and McCallum (2007), as well as the earlier work on the broad credit channel  16  BIS Review 101/2009  institutions and any incentive or information problems relate to the borrower. But much of what has happened recently is best understood in terms of frictions that lie within the financial sector itself. Models that have a role for bank capital and where the evolution of banks' balance sheets play a central role 13 , such as the recent contribution by Gertler and Karadi (2009) mentioned earlier, come closest to providing a suitable framework for analysis. However, even these contributions neglect important features of the present crisis. Developing macroeconomic models with a sufficiently rich specification of the financial intermediation sector that capture the variety of incentive distortions and information frictions I have discussed this evening represents a challenging research agenda 14 . Reintroducing the financial intermediation sector as a source of shocks, rather than merely acting as an amplifying mechanism as the broad credit channel does, would represent something of a return to older models of the business cycle, in which credit creation and destruction played a central role. There has, in particular, been renewed interest in the work of Hyman Minsky as a result of recent events (see e.g. Minsky, 1982).

Following a long period of unusually good economic performance, characterised by relatively steady growth and low and stable inflation in the advanced economies and rapid growth and development in key emerging market economies, we have seen the eruption of a systemic financial crisis of quite unusual intensity and international reach. The nearest precedent is probably the widespread closing of international capital markets on the eve of the First World War. And associated with that, we have seen the sharpest internationally synchronised slowdown in growth in the post-war period, together with an unprecedented contraction in world trade. To the public at large our present troubles are the fault of: whiz-kid financiers, who created financial instruments that even they didn’t properly understand; greedy bankers, who pursued profit and personal reward without regard to risk or common sense; somnolent supervisors, who failed to adequately regulate and restrain those bankers; and negligent central bankers, who allowed an explosion in liquidity, credit and asset prices that supported the whole rotten edifice. And all the while, the culprits were cheered on by an economics profession that was over-enamoured of theoretical models, blind to the lessons of history and subject to a severe case of “group think”. Wasn’t it blindingly obvious that the whole house of cards would come crashing down at some point? As one of those involved in responding to the crisis – and some might charge also a bit part in creating the conditions for it – I want to look this evening at how we got here.
This means that we can and do make judgments about the period over which we should return inflation to target in the wake of a cost shock, notably at present. But we are not in a position where individual members could choose to subordinate the achievement of price stability to that of stabilising output. 2  For a more extended discussion, see Tucker P M W (2007) ‘Central Banking and Political Economy: the example of the UK’s Monetary Policy Committee’ speech at Inflation Targeting, Central Bank Independence and Transparency Conference, Cambridge, Bank of England Quarterly Bulletin Q3 2007, pp 445-452. 2  BIS Review 96/2008  At the other end of the spectrum, our month-by-month votes on Bank Rate are individualistic in precisely Blinder’s sense. And, as he says, that has clear implications for how we convey those decisions. The minutes take primacy. That is partly because it is more difficult for us than for some of our peers to release an informative statement immediately after the policy meeting: if you don’t know what you’re going to decide, it is pretty hard to prepare a draft in advance! Each individual member is obviously in a position to summarise their views. But we could not sensibly have nine individual statements without risking what Alan Blinder calls cacophony. Also, such statements would have to be prepared in advance, so there would probably be less listening and engagement at the policy meeting itself.

I have comments in three areas: the political economy genesis of the UK’s system; how it bears on the communication of monetary policy or what Blinder called the ‘cacophony problem’; and a plea for Blinder to widen his enquiries beyond interest-rate setting. Political economy and one-member/one-vote Modern Britain has no tradition of non-elected officials taking major executive decisions affecting the whole of the nation. This is in marked contrast to say the US where, at Federal level, the President is the only member of the executive to have reached office via the ballot box. Nor in the living memory of the UK people have we had any crises of democracy, so we have not developed national institutions, such as Germany’s Bundesbank, whose place in society was not mediated via our democratic processes. In consequence, when debates about the possibility of central bank independence got underway in earnest from the mid1980s, a widely perceived stumbling block was that central bank officials could not account personally for their decisions on the Floor of the House (of Commons). There was a democratic deficit. Resolution came via the political cost of the failure of other approaches to monetary policy, in which Ministers running for re-election decided rates; the happenstance of the development during the 1980s and 1990s of influential committees of Parliament, before which central  1  See http://econ2008.bankofcanada-conference.ca/wp-content/blinder.pdf  BIS Review 96/2008  1  bankers could (and frequently do) appear; and specific design features of the monetary regime itself.
We have developed our petroleum resources largely in parallel. The opening of a new gas pipeline from mid-Norway to Easington – Langeled – in October this year is yet another example of the tight bonds between us. Comparing our two countries we find strong similarities - both are affluent, growing briskly, and experiencing low unemployment. Both are open economies with a significant public sector. The UK economy is, however, nearly eight times larger than the Norwegian economy and with a very large and well-developed financial sector, while Norway on the other hand has a much larger oil sector. Challenges in an oil economy Norway ranks as the world’s third largest oil exporter after Saudi Arabia and Russia and the eight largest oil producer. Petroleum activities have contributed substantially to Norway’s GDP, exports and government revenues since the late 1970s. Petroleum activities give Norway an economic base that is not available to many other countries. But oil and gas also present Norway with considerable economic policy challenges. The experience of other countries that have received large, unexpected income from natural resources is not encouraging. Societies that suddenly gain access to huge wealth stemming from natural resources have a tendency to spend the money and then fall into decline. Spain in the 17th century provides a good example of this, as the historian David Landes observed. 1 The colonisation of South and Central America gave access to a wealth of natural resources, not least gold.

Before I turn to our most recent assessment of the stability of the Norwegian financial system, let me give a brief outline of the structure of the financial system. The Norwegian financial system is dominated by banks, with a market share of more than 56 per cent, calculated as the banks’ share of total assets in financial institutions and mutual funds. The banking system is relatively concentrated. The largest bank had a market share of 37 per cent in terms of total assets in the banking sector at the end of 2005, while the largest five had a market share of 61 per cent. Savings banks account for a substantial part of the banking sector. However, most of the savings banks are quite small. To partly compensate for that, some cooperate on a range of products which provides economies of scale while maintaining their independence. During the past decade, activities of foreign-owned banks in Norway have expanded considerably both through take-overs and organic growth. At the end of 2005, they had a market share of over 30 per cent, in terms of total assets. Their lending growth has been higher than for Norwegian-owned banks for several years. The development towards larger cross-border banks makes supervision and crisis management more complicated. In the event of a crisis, central banks, supervisory authorities, political authorities as well as deposit guarantee funds in several countries will have to be involved.
For example, on the third slide you can see that in 2013 the European Commission estimated that structural unemployment for 5 2/9  BIS central bankers' speeches  the euro area as a whole was likely to increase from pre-crisis levels of around 8.5% to 11.6%.5 Today, Commission staff believe that structural unemployment in the euro area is closer to 9% – compared with an actual unemployment rate of 9.5% in March 2017. In other words, without the significant downward revisions of recent years, we would currently face a negative unemployment gap in the euro area. And even according to the Commission’s latest estimates, policy-relevant labour market slack would have vanished, by and large. You can see what I’m getting at. If structural unemployment had indeed risen during the crisis to the extent suggested, then we would have expected inflationary pressures to emerge much more rapidly, since the unemployment gap would have been closing faster than otherwise. But this is not what we see in the euro area – or, in fact, in many other economies. Despite a rapid fall in the unemployment rate, wages have remained stubbornly low. Annual growth in compensation per employee hovered around 1.2% since mid-2014 and only increased to 1.5% at the end of last year – substantially below its historical average of 2.1%.6 And measures of core inflation – in its simplest form headline inflation excluding volatile items such as food and energy – have also remained at depressed levels of below 1% for most of the past three years.

This is confirmed by Phillips curve estimates. As you can see from the right-hand side chart on slide 3, ECB in-house estimates using a variety of slack and inflation expectations measures suggest that core inflation today is well below what historical regularities would suggest. Of course, a number of factors – such as changes in the slope, weak productivity growth or second-round effects of past low inflation – might be at work here. But in the current context this is unlikely to be the whole story. For one, there is considerable uncertainty around the slope of the Phillips curve. As we heard this morning, some estimates show that the curve has flattened in recent years. ECB research, by contrast, found evidence that inflation has become more responsive to slack lately, but with notable heterogeneity across euro area Member States.7 Blanchard, Cerutti and Summers have not found much change at all during the crisis.8 Second, our Phillips curve estimates show that even once we control for past low inflation and weak productivity growth, there is still a considerable part that cannot be explained by the model. These analyses therefore do offer one useful conclusion: that slack may be larger and that structural unemployment may perhaps not have risen by as much as some estimates suggest. This also means that policymakers should be careful in attaching too much weight to notoriously unreliable and hard-to-estimate measures such as the NAIRU.