samchain/econo-pairs-v1 huggingface dataset:
And it gives the funding fathers of the European Union the most extraordinary reward they could have dreamt of fifty years ago. Had we told Jean MONNET in the fifties that one day the six would be twenty-five, that we would not only have a single currency for 306 million people but also a single market for 450 million European producers and consumers and that the reconciliation between Germany, France, Italy and the BENELUX countries was only the prelude for a future intimate Union between a large part of the East of Europe and the full body of the West of your continent, what would have he been likely to say? Perhaps, as is reflected in his memories: It is an extraordinary historical achievement but we will be in the future even more surprised: “the historical evolution of United Europe is unpredictable because nobody can say which new bold changes will be triggered tomorrow by the effects of today's changes”. Whatever new achievements are likely in the future, today the ten new Member States together, with 75 million people, will increase the EU population by about 20%, to more than 450 million people. The economic weight of the new Member States is lower. Their total GDP represents, at market exchange rates, around 5% of that of the current EU. Looking beyond these numbers, the largest ever expansion of the Union in terms of new countries will bring important economic benefits.

A problem that is potentially relevant in systemic terms is the availability of intraday liquidity in foreign currencies, which is typically restricted, if not non-existent. This restriction hampers liquidity management in an integrated multi-currency environment. Nowadays, there is a much more urgent need for market participants to make time-critical payments than previously. Moreover, they must be 5  The Committee of Wise Men (2001): Final Report of the Committee of the Wise Men on the Regulation of European Securities Markets, Brussels. 6  A. Lamfalussy (2001): “Reflections on the Regulation of European Securities Markets”, Société Universitaire Européenne de Recherches Financières, SUERF Study N° 14, Vienna. 7  A. Crockett (2002): Introductory speech at the Third Joint Central Bank Research Conference on Risk Measurement and Systemic Risk, Basel. BIS Review 37/2002  5  able to react simultaneously in several currencies even in troubled circumstances. Their liquidity management could be facilitated and strengthened significantly if they were able to obtain short-term liquidity in the required currency through a cross-border collateral pool. Such a collateral pool would boost the ability of the large market participants to react, thereby reducing the system’s vulnerability to disturbances. In addition, this would result in efficiency gains, as maintaining a pooled collateral portfolio would certainly be less costly than keeping several currency-specific portfolios. In view of the manifold legal and technical obstacles, one is tempted to deem such a collateral pool a vision.
This explains to a large extent the opposition to globalisation and international cooperation. The current trade tensions are also about power and influence. Many Asian countries are emerging as important drivers of the digital economy. In Europe, we have long looked to the United States for new technology trends. China is now sailing forth as a competitor. The country is rapidly adopting artificial intelligence and using big data. 5  Exports are shifting from simple to more complex products (Chart 4). Coloured pencils and textiles are being replaced by mobile phones and advanced MR scanners. Chart 4 China exports more advanced products. Share of China’s exports1) 100  ECONOMIC PERSPECTIVES 14 FEBRUARY 2019  100  Less advanced products Advanced products  80  NORGES BANK  80  60  60  40  40  20  20  0  0 2000  2015  1) The data are from Chapter 2 of the OECD Economic Outlook, June 2017. Sources: OECD and Norges Bank  China is now the world’s next largest economy1 and is competing with advanced western countries in many arenas. This has prompted discussions about market access, intellectual property rights and trade balances. Global economic integration is not straightforward, but the shortcomings in today’s framework for global trade must be dealt with through reform and not increased protectionism. New barriers will not help poor regions or those that have been left behind in western economies. For Norway, exports of goods and services account for more than a third of GDP.

For example, the Basel Committee published a framework to identify optimal levels of bank capital and used that framework as an input into the calibration of Basel III capital requirements.10 This approach considered how the probability of a financial crisis varies with bank capital, the social costs of banking crisis, the link between bank capital and bank funding costs, and the impact of higher loan spreads on economic activity. Moreover, this efficient frontier is not fixed and is likely to vary over time as technology, official sector tools, and bank business models evolve. For example, technology-driven innovations that rely on bigger datasets and more sophisticated predictive algorithms might change the risk/return opportunities associated with certain intermediation services. Similarly, supervisory innovations like stress testing or more sophisticated horizontal assessments could make official sector oversight more effective. Finally, changes in business strategies like a shift to a more diversified business model might change the overall risk of certain activities. One can think of these changes as shifting the efficient policy frontier where there is more intermediation for a given level of risk. Alternatively, constraints on supervisory authorities or practices could shift the frontier in the opposite direction if use of effective tools is prohibited. Given the complexity of these relationships, it is not surprising that there is a wide range of estimates and theories about the optimal type and level of oversight of financial institutions. Nonetheless, we need to understand better these relationships in order to make policy choices more effective.
We would do well to remember, however, that people’s perceptions of the future are often shaped not so much by words as by actions. So, after a series of purposeful decisions by the Government, the Riksdag (Sweden’s parliament) and the Riksbank, economic policy’s general commitment to macroeconomic stability began to inspire confidence. Economic policy’s credibility gave the Riksbank greater freedom to act The growing confidence accordingly meant in turn that, without jeopardising the objective of price stability, the Riksbank was able to lower the repo rate relatively markedly, from almost 9% to just over 4%. Interest rates for longer maturities also fell. This led, as we have all seen in recent years, not just to higher GDP growth but also to a more uniform development of demand in different sectors. When the cyclical upswing began towards the end of 1993, most of the growth came from the export sector. However, lower levels of interest rates benefited Swedish households and firms by easing the heavily restrictive effect of the high level previously. This contributed to an increase in domestic demand as well and broadened the economic upswing. That can be said to have instigated the considerable reduction of unemployment we have seen in recent years. Neither the Asian crisis in 1997 nor the turbulence in international financial markets in the autumn of 1998 had much of an impact, thanks not least to a monetary policy realignment in many countries. The Swedish repo rate was also cut, to a low of 2.90%.

For the path of the Swedish economy in the coming years, no other single factor is therefore anything like as important as the total wage trend. The picture of the negotiations that are now beginning is mixed and tensions do exist. Since the previous survey in September, all the interviewed groups’ expectations of the annual wage rise have been revised upwards for all time horizons. Wage expectations are highest among the employee organisations. Moreover, the wage demands that have been presented are higher than before the previous round of negotiations. It is evidently becoming more difficult to find people with the appropriate competence for the jobs that are advertised. This presumably makes the risk of future wage drift greater than in previous years. All this could be a sign that we are approaching a situation where, bit by bit, aggregate wage costs in the Swedish economy start to accelerate, albeit from moderate levels. •  When it comes to judging inflationary pressure in the coming years, a central concept is total resource utilisation. The available amount of unutilised resources is crucial for the domestic generation of inflationary pressure, at least as long as inflation expectations are parked around our 2% target. In the coming years it is highly probable that, for the first time in a long while, our estimates of total resource utilisation - the output gap - will show that the gap has closed and the economy has reached or even moved above the capacity ceiling.
And there will be more to come. We look forward to the launch of the Shenzhen-Hong Kong Stock Connect, and looking further ahead, the Mainland authorities have announced plans to consider implementing the Qualified Domestic Individual Investors scheme (QDII2) on a trial basis. It’s certainly true that individuals on the Mainland have shown a great deal of interest in diversifying their investment holdings. This is an area where we see Hong Kong having a strong competitive advantage, with our strategic location, our expertise in private banking and wealth management business, coupled with our strong client networks on the Mainland. To  BIS central bankers’ speeches  1  capitalise on these emerging opportunities, we have been liaising closely with the Mainland authorities on QDII2.The second trend is that not only is Chinese capital “going out”, Chinese companies are also increasingly "going out". Outward direct investments (ODI) by China to the rest of the world amounted to RMB758.5 billion in 2014, a 63% rise over the past five years. And, it’s interesting to note that 16% of these flows are settled in RMB, up from a mere 3.7% in 2011. This “going out” trend has been continuing for some time, but has been given fresh impetus by the greater desire of Chinese enterprises to diversify into other non-RMB asset classes. New policy measures by the Mainland authorities, notably the ‘Belt and Road’ initiative, has also played a key role.

Eddie Yue: Internationalisation of the renminbi – trends and developments Keynote address by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the 5th Hong Kong - London RMB Forum, Seminar on RMB Business, Hong Kong, 11 December 2015. *  *  *  Katharine [Braddick], Peter [Alexander], distinguished guests, ladies and gentlemen, It gives me great pleasure to be hosting the 5th Hong Kong – London Renminbi (RMB) Forum. May I extend a very warm welcome to all of you attending this Seminar which forms part of the Forum, especially our guests travelling from London. This annual congregation is a reflection of the importance we place in the long-established RMB business co-operation between Hong Kong and London. And, the Seminar could not have come at a better time. Just 10 days ago, the International Monetary Fund announced its decision to include the RMB in its Special Drawing Rights basket. Naturally, the Hong Kong Monetary Authority welcomes the announcement as it represents a milestone in the development of the RMB. The IMF’s decision reaffirms the Chinese currency’s status as a freely usable currency, and enhances the representativeness of the SDR basket. Indeed, based on market projections, the RMB’s inclusion in the basket could bring up to $ trillion worth of investments in RMB assets by central banks, sovereign wealth funds, supranational organisations, large pension funds and institutional investors over the next five years.
We can take lessons from companies in other industries that have ignored these lessons and suffered as a result. A prime example is Kodak, which was the dominant name in the photography market for over a century. At its peak, Kodak’s share of the photographic film market was over 80% in the U.S. and around 50% globally. Kodak was making significant profits from the sale and development of camera films and expected this trend to continue. While the arrival of digital cameras was changing industry dynamics, Kodak didn’t want to risk cannibalizing their own Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  - 14 -  camera film business and failed to see the potential of new technology and the risk from new competitors. Instead, it chose to stay in its comfort zone, conducting business as usual, failing to understand the evolving needs of their customers. That led to its ultimate demise, as Kodak filed for bankruptcy protection in 2012. Contrast this with Apple’s launch of the iPad. Despite the iPad’s potential to cannibalize its own computer business, Apple went ahead in order to serve the needs of its customers. It was not afraid to embrace change, even at the cost of its traditional business and products, and the iPad proved to be one of Apple’s most successful products. Equally critical is to timely identify and act upon valuable opportunities amid shifting market preferences. Microsoft missed such an opportunity to dominate the mobile operating system.

In short, banks will need to either go digital or risk being sidelined. Failure to meet changing consumer expectations can have serious implications for banks. The recent history of the mobile phone industry is a case in point. In 1997, 60% of the mobile phone market belonged to the specialist mobile phone producers like Nokia, Motorola and Sony Ericsson. Today, that same market share has been captured by Samsung, Apple and Huawei. Not only are the current market leaders three entirely different firms but they are essentially electronics and computer companies, unlike the past firms that specialized in manufacturing mobile phones.12 The incumbent mobile phone companies of the 90s failed to recognize the evolving needs of their customers. Ultimately, their complacency saw them being pushed to the fringes of a market they once dominated. Something similar could happen to the banking industry. Unless it pays attention to and serves the changing needs of its customers, it might be sidelined by telecom companies or technology firms as primary providers of financial services. Take the example of Ant Financial, WeChat Pay and M-pesa, which are firms that were launched by technology and telecom companies. All three have enjoyed tremendous growth to become the largest providers of financial services in their respective markets. By leveraging technology and adopting a customer-centric approach, they have surpassed the largest banks in their markets.
As to the second phenomenon, it seems that while outside a monetary union deep current account deficits worry investors and can, in extreme situations, lead to currency crises, for countries that have already joined the common currency they do not matter much. An example of the three Baltic States (Estonia, Latvia and Lithuania), whose currency board arrangements are close equivalents of a monetary union, shows that enormous current account deficits (9-16% of GDP in 2006) have no apparent negative consequences for the economy. The case is, however, different with inflation pressure. In theory the margin for local demand-driven price increases in small member states of monetary unions is very narrow. This is guaranteed by the so called law of one price – the expectation that the same product should have the same price in various countries of a monetary union. In practice, however, there are several obstacles for this law to hold perfectly – some goods cannot be traded, most goods do not have perfect substitutes, there are transportation costs and tax differentials – so local demand pressures can play a role in driving prices in monetary union member states. As a consequence, products manufactured in these countries become more expensive and such countries loose competitiveness (e.g. Estrada, Lopez-Salido 2001). It is relatively difficult to foresee how the Polish economy will react to demand pressures once in the euro area. However, as in the case of asymmetric shocks, labor market flexibility is probably the best answer to the described phenomena.

However, the estimated scale seems to be much exaggerated. One problematic issue is related to the  BIS Review 6/2007  1  fact that before the eurozone, we did not have examples of currency unions between developed countries. So the Rose study was based on data on currency unions involving poor and/ or small countries. As noted by Micco, Stein and Ordonez (2003), “one does not need to be a eurosceptic to wonder whether such findings are directly applicable to Europe’s single currency”. Follow-up studies (e.g. Rose and Wincoop (2001), Kenen (2002), Persson (2001)) attempted to correct the Rose estimates but arrived, rather inconclusively, at anything between a 50% and 150% growth of bilateral trade. Recently, the first studies based on euro area data emerged. These show that the trade creation effect of the euro was substantial, although (until now) by an order of magnitude smaller that the original Rose estimate (e.g. Micco, Stein and Ordonez (2003)). Our knowledge about trade creation effects of the euro is still far from complete and we will probably have to wait another 10+ years to have enough data to draw firm conclusions about its magnitude in the eurozone. Now let me move to the cost side. As already noted in contrast to the benefits, some costs have a contingent character. They are tail-events – rather unlikely but with a possibly high impact if they happen. Let me concentrate on two issues: -  asymmetric shocks,  -  arising micro- and macroeconomic imbalances.
Fritz Zurbrügg: A snapshot of the financial situation in Switzerland Introductory remarks by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 20 June 2013. *  *  *  I will begin today with the situation on the financial markets. Then I will address the management of our currency reserves, before moving on to trends in the money market, as well as the current discussion regarding reference interest rates. Finally, I will say a few words on the future of the repo market infrastructure in Switzerland. Developments on the financial markets In December, at the last news conference, I remarked on an easing of tensions on the financial markets. This easing largely continued in the first half of 2013. The government bonds of the European peripheral countries, in particular, benefited from the greater trust of investors, with Ireland and Portugal raising funds via long-term bonds on the capital market for the first time since 2010 and 2011, respectively. The buoyant mood on the financial markets was also demonstrated on the advanced economies’ stock markets. In May, there were new historical highs in the US, the UK and Switzerland. Investors’ risk appetite was encouraged not least by the very expansionary monetary policy around the world. Various central banks, including the European Central Bank (ECB), again reduced their key interest rates early this year. The prospect of low yields on bond markets induced many investors to increase their equity investments.

Lars Heikensten: Thoughts on how to develop the Riksbank’s monetary policy work Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, at the Swedish Economics Association, Stockholm, 22 February 2005. *  *  *  Introduction Allow me to begin by thanking you for the invitation to once again visit the Economics Association and speak about monetary policy. Since I was here a year ago there has been a relatively lively debate, by Swedish standards, on monetary policy. Some commentators have focused on the currently low inflation rate, but what has really added fuel to the debate is the rise in unemployment that has occurred despite record-low interest rates and strong growth. Other participants have centred on the low interest rates, voicing concerns over their implications for credit growth, household debt and the housing market. I don’t intend to enter into this discussion today, however. Instead, I would like to take advantage of the opportunity to have a more fundamental discussion about the Riksbank’s monetary policy framework, its monetary policy analysis and the possibilities to improve the material underpinning our decisions. I shall describe the changes that we are planning to make to our methods. At the same time I should stress that it is not a question of changing the Bank’s monetary policy strategy.
In the aggregate figure for Swiss goods exports, the price per kilo of Rolex can be found alongside the price per kilo of Tamiflu or per kilo of a regional train. This makes an international comparison problematic. Thus, in addition to using unit values for aggregate exports, I will also include unit values for individual sectors. Unsurprisingly, there are major differences between the sectoral unit values for Switzerland. Last year, watch exports had the highest unit value, at around EUR 7,000 per kilo. This was followed – by quite a considerable margin – by pharmaceuticals, at roughly EUR 320 per kilo. Exports of precision instruments were also somewhat above-average, at around EUR 150 per kilo. 15 Where does Switzerland stand by international standards? Compared with many other European countries, the unit value of Swiss goods exports is very high. The only other country with a similarly high unit value for its exports is Ireland. 16 When looking across sectors, it is evident that a considerable part of Switzerland’s quality advantage can be attributed to watch exports. Averaged over the last ten years, their unit value was almost 40 times higher than in the EU (cf. chart 3). But there are also several other sectors where Switzerland has a higher unit value than the EU, for example precision instruments. This is a sector where Switzerland also has a comparative advantage; partly due to historical factors, but also to continuous innovation.

Although exports in most product categories over the last 20 years have increased in absolute terms; in relative terms, we have seen a clear shift from exports of productionrelated goods to exports of consumer goods. In the last two decades, the proportion of consumer goods has practically doubled and now amounts to more than 50% (cf. chart 2). 13 With this high share, Switzerland far outstrips other industrialised countries. 10  When comparing the share of exports to Asian countries with the German economy – which also registered a significant rise – the equivalent figure for Switzerland is still roughly 50% higher. 11  In the case of Switzerland, the surplus is significant even in quantitative terms. Averaged over the last few years, the surplus in Switzerland’s goods trade with Asia accounted for just over 2% of Swiss GDP, and this trend is on the increase. 12  The picture is similar for Switzerland’s trade with the BRIC countries. Switzerland’s trade surplus with China is also a reflection of the comparatively small share of imports from China. Busch (2010) attributes this to the fact that, because of Switzerland’s specialisation in pharmaceuticals and precision instruments, the Swiss industry can find only relatively few relevant intermediate products in China. Cf. Christian Busch (2010), Die Struktur des Schweizer Aussenhandels mit China – eine vergleichende Analyse. 13  The shift from capital goods to consumer goods is a general trend in Switzerland’s export activity across all trading partners. 4  BIS Review 157/2010  Chart 2  Source: FCA.