samchain/econo-pairs-v1 huggingface dataset:
Some Member States also proved to be poorly committed to implementing domestic structural and fiscal reforms that would have created more policy space to address shocks. Collectively, the expected dynamics between peer pressure and market discipline did not work, as markets did not believe in the no-bail-out principle, and as national authorities did not really accept peer pressure, nor the implementation of the rules. The absence of coordination has a genuine economic cost. Several studies have estimated it for the EA. It includes a) the cost of crises and assistance programmes, as well as b) the impact on growth due to uneven compliance with budgetary rules before the crisis and rigidity of the rules during the crisis. Let me mention a few numbers. Banking and fiscal crises can be extremely costly: relative to the U.S. growth trajectory, the EA has fallen behind  BIS central bankers’ speeches  3  by 5 percent of GDP per capita since 2011. Both the European Commission 6 and the NIESR 7 have shown the large impact of simultaneous fiscal consolidation in Europe, with around 2% larger GDP declines due to intra-EA spillovers. Optimal policy coordination in the EA would have required differentiated consolidation efforts in line with available fiscal space, leading to better growth outcomes. A last illustration relates to asymmetric adjustment driven by current account imbalances at the country level at the beginning of the crisis and contributing to the large external surplus at the euro area level today.

But it is really for the governments to see whether these assumptions remain likely. Any debt restructuring is always very costly in terms of confidence. It is really something that you want to only use as a last resort instrument and do so in the friendliest possible way with lenders. We could wonder whether  BIS central bankers’ speeches  1  the repayment schedule is appropriate, but this is really a matter for negotiations between the lenders and the borrowers. Given that debt levels are above 170 per cent GDP, isn’t debt restructuring inevitable? C.N. It very much depends on the assumptions on Greek growth in the future, which in turn will be dependent on the pace of Greek reforms and the growth in the euro area as a whole. Is it even possible for the ECB to decide on further monetary policy easing with a possible bond purchase programme just a few days before the Greek election? C.N. Nothing has been decided yet at the ECB but we will have to take these uncertainties into account. But the Greek bond market is extremely small and so the question maybe difficult in theory but in practice it doesn’t really apply. Just to make it clear, the negotiations with Greece won’t block the ECB, will they? C.N. No, they won’t. The problem of Greece is rather minor compared to the question of whether or not and when to step in with action on further market segments in our unconventional monetary policy.
In early March, the Bank of  8  BIS Review 41/2009  England cut its policy rate to 0.5 per cent and is thus also close to zero. Many other central banks, including the Riksbank, have also reduced their policy rate to all-time low levels. When the central banks' traditional tools for influencing demand in the economy can no longer be used – when no further cuts in the policy rate are possible – then other options have to be found. In both the USA and the UK, as in some other countries, the central banks have begun to conduct monetary policy using unusual, and in some case untested, methods. It may be worth pointing out, however, that there may be good reasons for implementing a lot of what the central banks have done irrespective of whether the policy rate is close to zero or not. This relates to various measures that aim to improve the functioning of the financial markets and ease the supply of credit. One way of trying to illustrate the course of events is to study the central banks' balance sheets. The exact form of these balance sheets varies from country to country, but they have a number of common features. For the sake of simplicity, and without claiming to present an exact picture of reality, allow me to assume a stylised balance sheet. On the asset side there are foreign and domestic assets and the lending to the banks.

It can be said, in simple terms, that the application of quantitative easing entails a focus on the liability side of the balance sheet, while the state of the asset side becomes less important even though this is also reflected in the balance sheet. The express purpose of this shift from price to quantity is usually that "the price" can no longer be affected as the policy rate is zero. It could therefore be said that quantitative easing is a type of monetary policy that is more directly dedicated to dealing with a zero interest rate than credit easing. The latter focuses more directly on reducing the spreads and improving the supply of credit in the economy. It should be emphasised, however, that a zero interest rate is not necessarily a precondition for either quantitative easing or credit easing and it may sometimes be possible to find a use for both methods even when the policy rate is positive. The measures that the Bank of England began to implement at the beginning of March can be characterised as quantitative easing. In its communication, the Bank of England has  12  BIS Review 41/2009  talked about injecting money directly into the economy. This is done by buying government securities and, to a certain extent, securities issued by private players, for example corporate bonds. The latter implies that the strategy also includes elements of credit easing in the sense that the supply of credit to companies is eased.
Why has the outlook deteriorated so quickly? The banking crisis dealt a severe blow to the availability of credit. Growth in secured lending to households fell to an annualised rate of 1.9% in the three months to August, its lowest level in more than a decade. The Bank of England’s survey of credit conditions suggests that the terms on which banks provide credit to companies have tightened even further. And, on some estimates, the supply of finance to the UK corporate sector has ground to a halt. This credit shock has come on top of a fall in real disposable incomes resulting from the rise in energy and food prices earlier in the year. So, taken together, the combination of a squeeze on real take-home pay and a decline in the availability of credit poses the risk of a sharp and prolonged slowdown in domestic demand. Indeed, it now seems likely that the UK economy is entering a recession. At the same time, consumer price inflation, our target measure, has risen from around the 2% target at the beginning of the year to a worryingly high rate of 5.2% in September. Oil and other commodity and food prices have all been rising very rapidly. In those circumstances, it was sensible to allow those price changes to be absorbed by movements in consumer prices. The alternative would have been an even sharper slowdown in the economy. Central banks in other countries also find themselves in a similar position.

The Committee must balance the risk that a prolonged slowdown in domestic demand pulls inflation materially below the target against the risk that today’s high inflation rate becomes embedded in inflation expectations. During the past month, the balance of risks to inflation in the medium term shifted decisively  BIS Review 128/2008  3  to the downside. And the MPC – in an action co-ordinated with six other major central banks – cut Bank Rate by half a percentage point to 4.5%. Looking ahead, the outlook is obviously very uncertain – both for the world as well as our own economy. The MPC cannot simply extrapolate the past into the future. The prospects for oil and other commodity prices are difficult to assess. So too are the period over which bank lending will return to normal and the extent of the damage to business and consumer confidence. Moreover, the credit crunch affects not just demand but also the supply potential of the economy, complicating the assessment of the inflationary impact of changes in the level of demand. The associated shift of resources away from those parts of the economy that have flourished in recent years towards other areas of economic activity will moderate the increase in potential output while that adjustment is taking place. The MPC must monitor carefully all the available evidence about fast-changing patterns of spending, supply and prices. It will act promptly to ensure that inflation remains on track to meet our target.
Some increase in the transparency both of the strategy and objectives of the funds and of recipient countries’ approach to inward investment should help dispel concerns and ensure they are a force for greater global financial integration rather than a prompt for a new wave of financial protectionism. SWF’s recent investments in global financial institutions have been helpful in easing the current financial market turmoil. And the fact that they, and their central banks, are looking for higher returns and greater asset diversification should be beneficial both to the EMEs and to the recipient countries since it should improve the efficiency of global asset allocation. But that positive story should not conceal that the growth of SWFs is also a result of persistent global imbalances in trade. These imbalances have helped create vulnerabilities in financial markets and in the wider economy. Our current experience is one more illustration of how painful the unwinding of such imbalances can be.

In a quarter of the cases, which were mainly countries with limited real exchange rate depreciation, annual GDP growth fell by 3½ percentage points on average. 11 There are dangers too for surplus countries. Large foreign exchange inflows are not easy to sterilise. They tend to contribute to asset price bubbles and higher inflation which itself can undermine economic and financial stability. The effect of such inflows into China and oilexporting countries have been compounded recently by their exchange rates being pegged or managed against the falling dollar. This has contributed not just to the build up of reserves and SWFs but also to the build up of inflationary pressures within these countries. No one would blame EMEs for the current turmoil in Western financial markets. It has been generated at home by the widespread mispricing of financial assets; this has been most obvious among the assets based on the US housing market but it is not confined to that sector. However the way that the boom developed did owe a great deal to global imbalances. The “savings glut”, to quote Ben Bernanke 12, that developed in the oil exporting countries and China contributed to the fall in real long-term interest rates. 13 In the UK, for example, real long-term interest rates, measured by the difference between the nominal 10-year government bond yield and the annual rate of inflation, fell from around 3.9% in 1997 to 1.6% in 2005. A similar pattern was also evident in the US (Chart 6).
This can prove very demanding, particularly since data quality management in micro data is a very cumbersome process. Let me be clear here: micro data per se do not ensure highquality statistics. But it is true that if you have micro data you can check the quality of the data, pinpoint where the problems are and potentially revise them. In the case of aggregate data, you may not have the adequate means at hand to check their quality and correct them. An important issue for ensuring data quality is the proper identification of economic agents. In a complex and globalised world (and in particular in a monetary union where domestic transactions correspond to an area larger than your own country), the identification of counterparts to maintain high-quality statistics is simply essential. Since the European National Central Banks can only properly pursue their functions by previously identifying the financial corporations under their scrutiny and the non-financial counterparts of financial  2  market transactions, they have created their own register: the Register of Institutions and Affiliates Database, (RIAD). A key step forward to ensure there is adequate identification of agents at the European level would be to enhance cooperation in this field between the European Statistical System and the Eurosystem. This could be done, for example, by integrating their reference data directories (such as the ESCB’s RIAD and the ESS’s Euro Group Register).

For many statistical products and for different stages of the statistical process, central banks mainly rely on their own capabilities, running different IT systems and developing autonomous projects in each country. Here, some synergies can probably be harnessed and costs reduced if collaboration between central banks is further strengthened in that statistical process. Concluding remarks Allow me to conclude. Modern technologies offer a wide range of possibilities for obtaining and assessing information at much lower costs than in the past. Here we have a technological challenge, but another we face is to recruit our staff and to provide them with the skills needed to address these new issues. This may be a long process but we need to tackle it now. As I have tried to explain today, the potential benefits for economic policymaking are very significant. At the same time, there are other obstacles in the way of improving our knowledge of the rapidly changing world. These have more to do with institutional factors and even some cultural traits. They are not easy to remove, either; but we cannot deny we have a major role to play in gradually changing our mind-set and overcoming the barriers which today hamper, for example, data-sharing among institutions and open data for scientific purposes. My impression is that we need to be very ambitious if we do not want to miss that train. We also have more possibilities of succeeding if we join forces with other institutions, both at the national and the international level. 8
Countries in Asia in turn import intermediate goods from, for example, Sweden. Sweden is thus exposed not only to the direct effect but also to indirect so-called third country effects because the downturn in the United States affects Asia and other parts of the world. When we at the Riksbank produces forecasts for Swedish exports we take into account both direct and indirect effects. The forecasts are based on growth on the Swedish export market and take into account the growth in imports in the recipient countries as well as how much Sweden exports to the respective countries. The latest forecast for Swedish exports and the growth of the Swedish export market is shown in Figure 2. Swedish exports grew rapidly in 2010 and during the early part of this year, but already in the July Monetary Policy Report it was stated that growth was expected to enter a calmer phase. Since then, demand abroad has weakened which, in combination with the recent international financial turbulence, led us in September to believe that exports would grow even more slowly than previously calculated. This is because Swedish exports consist to a large extent of investment goods and in times of unrest companies in Sweden as well as abroad often choose to postpone their investments, which has a negative impact on Swedish exports.

The reasons behind the setting of the minimum exchange rate in September 2011 retain their validity. The financial problems in many countries continue to provide a basis for potential safe haven capital flows. In addition, at its current rate, the Swiss franc remains high and is weighing on the Swiss economy. Consequently, at its most recent monetary policy assessment in September, the SNB confirmed that it would leave the minimum exchange rate unchanged and continue to enforce it with the utmost determination. 6  BIS central bankers’ speeches
The efforts based on further expanding the number of universities, technical and technological colleges as well as schools of general education; increasing admissions and offering more scholarships for study abroad and increasing budgetary allocations for promoting health and social services represent a sound strategic option for enhancing the sound march of economic development and will bear fruitful results, God willing. Custodian of the Two Holy Mosques, The economic indicators observed by SAMA indicate a continuous high inflow of direct investments in almost all sectors, and a deeper and more solid national economy. This, in turn, was reflected by the International Rating Agencies’ increase of the Kingdom’s credit rating and the remarkable interest of the world top investors in the Kingdom’s investment opportunities. Your wise directives have emphasized that the development and investment efforts should cover all the Kingdom’s regions, which were supported by Your regional field visits around the Kingdom to increase growth and investment capacities and expand the economic base. Custodian of the Two Holy Mosques, Inflow of direct investments to various productive sectors is a strong evidence of the Kingdom’s investment attraction and the interest of both local and foreign investor. Part of these investments flow through the Capital Market which plays a very important role in the economy. It provides additional channels for project financing, and, at the same time, it offers to investors diverse investment instruments.

Instead it is technological and organisational advances, together with innovations, that have largely been the driving forces behind productivity. During the 1990s a number of markets in Sweden were opened up to competition. This included the markets for electricity, telecommunications, post and a large part of the transport sector. At the same time, there was a general reinforcement of the competition policy through the establishment of the Swedish Competition Authority and the introduction in Sweden of a new, stricter law on competition. When competition stiffens, companies are forced to become more efficient and cost-conscious, which leads to an increase in productivity. Studies by the OECD indicate a clear relationship between deregulation of product markets and productivity growth. 3 This factor has probably been significant for the relatively rapid increase in productivity during the past 10-15 years. One important aspect in today’s globalised knowledge-based society is that competition promotes innovation and thereby productivity. 4 To avoid being driven out of the market companies are forced to constantly improve existing products and processes and also to develop new ones. Sweden is at the forefront in Europe and pointed out as an innovation leader alongside Denmark and Finland, for instance. 5 Another explanation for the growth in productivity in Sweden, as in many other countries, has been that the percentage of highly educated persons in the labour force has shown an increase trend, partly as a result of technological developments.
There is a need to understand our competitive position, amplify our strengths and double our efforts in areas that we need to catch up. 16. For this purpose, the Financial Secretary tasked the HKMA in 2014, with the assistance of consultants, to conduct a reality check on Hong Kong’s competitiveness vis-avis our competitors and to devise a strategy to promote Hong Kong as the CTC hub in the region. 17. The reality check shows Hong Kong excels in many of the key factors that determine the competitiveness of CTCs. In terms of strengths as a business location, Hong Kong ranks third in the World Bank’s “Ease of Doing Business” ranking and third in the 2  BIS central bankers’ speeches  Global Financial Centres Index after only London and New York. We are also a leader in terms of access to capital markets. Hong Kong is a major international banking centre, with the presence of over 70 of the world’s top 100 banks. Our equity market is one of the most active in initial public offers. Benefited from the recent launch of the Shanghai-Hong Kong Stock Connect, the market capitalization of the Hong Kong Exchange has reached almost $ trillion as of two days ago. As of March 2015, it was the third largest exchange in Asia and the sixth largest in the world.

I believe, and certainly hope that, with these latest refinements of the tax regime for CTC activities, we should be able to remove any remaining reservations that your firm may have in considering setting up CTCs in Hong Kong. 25. Coming back to my soccer analogy, setting up a CTC in Hong Kong will offer MNCs a home game advantage. For Mainland corporations, Hong Kong offers unmatched home turf advantage under the “one country, two systems” framework. They are familiar and comfortable with using Hong Kong’s financial platform to advance their global business  BIS central bankers’ speeches  3  objectives. For the other global MNCs, Hong Kong is the ideal place for centralizing their treasury operations in Asia, in particular those that are tied to the rising use of the RMB. We are right at the door step of China, the perfect spot for the CTC, the mid-fielder, to support their front line teams to strike deals and score business goals with their Chinese counterparts. 26. Looking at the very comprehensive agenda today, I am sure you will have very fruitful discussion on how to ride on the different industry trends and create cutting-edge, innovative treasury solutions. May I wish this Summit a great success. 27. 4  Thank you. BIS central bankers’ speeches