samchain/econo-pairs-v1 huggingface dataset:
Clearly, many people would now question the validity of this mindset. But have we learnt our lessons? Unfortunately, I’m not so sure we have. While most people would agree with the view that excessive debt and leveraging was a major factor leading to the crises in the US and Europe, many would still think it is possible to overcome the problems without having to deleverage or somehow avoid the pain arising from the deleveraging process. 8. On the subject of pain, most of us understand what happens when we live beyond our means through borrowings at the individual, household or corporate level. Without any increase in productivity or income, excessive levels of debt can lead to insolvency or bankruptcy, which entails very serious and unpleasant consequences. However, the situation is a lot less clear when it comes to a country incurring excessive debt because the usual bankruptcy rules do not apply. Indeed, when compared to households or corporates, there are two significant problems relating to governments spending beyond their means. First, there is the temptation for governments to continue to incur deficits as the market seems to be quite willing, at least for a while, to finance such deficits. In this context, Greece is a good recent example. Secondly, there is the usual political pressure for governments to spend and borrow now, and worry about repayment later.

Our goal with regional banks is to ensure that managers at those firms recognize their vulnerabilities and develop appropriate mitigation strategies to enhance their resilience. 4. Structure and Culture: The final area, or challenge, I wanted to touch on is organizational structure and culture. Firms need to ensure that business strategy, organizational structure and desired culture are aligned to successfully operate in a fast-paced, ever-changing world. Whether you are a small community bank or a large global institution, you need to be agile enough to act quickly without risking the integrity of your structure and culture. I will touch on culture again a little later. In the short term, these are issues that we see as “top-of-mind” in terms of challenges and should continue to be areas of focus for firms. I thought I would close out today with thoughts on two areas. At times I have described these as being on my list of “things that keep me awake at night,” and I think it’s fair to say that these two issues continue to be near the top of that list. They are: information technology and culture. What keeps me awake at night 1. Information technology  My first issue is a topic that I had the opportunity to address with many of you earlier this year: the broad area of information technology, which has a few dimensions to it. The first dimension won’t surprise you or your boards: cybersecurity.
2  BIS central bankers’ speeches  The sharp rise in the monetary base reflects the scale of the injected liquidity. On the other hand, the banks’ tendency to hold on to their liquidity has resulted in a growth rate in bank loans (and investments) that is considerably slower than that of the monetary base. The result is that the growth rates in bank loans (represented by the green line in the chart) as well as in M3 have been substantially slower than that in the monetary base. A return to a fully functioning monetary transmission process will increase the volume of lending that would support the resumption of economic growth. This, however, remains a challenging task while tensions continue in the sovereign debt markets. Importance of a prudent fiscal policy The creation of the euro reduced the cost of borrowing, as credit spreads narrowed and the exchange rate risk on intra-euro area borrowing was eliminated.1 The reduced cost of financing public as well as private debt led to higher government debt and private sector leverage. With the benefit of hindsight, it is clear that the first seven years of the euro would have been an ideal time for governments to engage in fiscal consolidation. Instead imbalances and vulnerabilities were further aggravated. 2 In some Member States, institutional characteristics also played a major role.

Still, further steps could be taken to improve productivity levels and increase the employment rate. Also, as I argued recently, COLA increases should not be superimposed on wage increases agreed in collective agreements, but should form part of the negotiation process, so as to ensure that firms are able to match all wage increases with productivity increases. Faster productivity growth depends on many factors, including investment, the infrastructure, the quality of the human resources and  BIS central bankers’ speeches  7  hence the quality of the educational system and its ability to meet the skills requirements of a growing economy. Measures that increase the employment rate could include further policies that incentivise a higher female participation rate, as well as measures that facilitate more flexible work conditions, including part-time employment. A further requirement for economic growth is the smooth functioning of the financial system. Particularly during these turbulent times, continued economic growth depends also on the uninterrupted supply of credit by the financial sector to firms and households, and to that end the stability of the financial system is essential. It is important to note that although its rate of growth has declined, bank credit has continued to increase in Malta, unlike the situation across the euro area, where widespread deleveraging by financial institutions has led to a contraction in the volume of credit, as shown in Chart 7.
In order to make up for this lost ground, the wage determination process needs to be reformed. While wage bargaining at the enterprise level provides flexibility, the automatic indexation mechanism through which current wages are adjusted to past inflation, even if partially, increases the downward rigidity of real wages and thus represents a permanent drag on Malta’s competitive position. ...and government budget deficits The current account deficit is mirrored not only in the shortfall in private savings but also in the budget deficit. Government expenditure has exceeded revenue in every year at least since 1995, resulting in a steady rise in the public debt from less than 40% of GDP in the mid-1990s to 69% today. The thrust of the recent Budget, and particularly the projected cut in the deficit ratio from 3.9% of GDP in 2010 to 2.8% next year, is therefore a welcome development. Continued vigilance is, however, necessary. Given the uncertain prospects for Malta’s export markets, for example, the assumed nominal GDP growth rate of 5.6% on which the tax revenue forecast for 2011 is based could turn out to be optimistic. The medium-term objective of a balanced budget, moreover, must be kept well in mind. EU rules stress the importance of achieving a balanced budget over the cycle precisely because fiscal prudence responds to a clear economic logic. In the long run, a persistent budget deficit contributes not only to a dangerous debt dynamic, but also to price pressures, a loss of market share and a trade imbalance.

Shortfalls have been recorded in every year but one since at least 1995. The deficit widened again in 2009 to 6.9% of GDP from 5.7% the previous year. A current account deficit indicates that we spend more than we produce. It also implies that domestic savings are insufficient to finance investment, even though, as we have seen, the rate of investment is relatively low. The only way in which current consumption levels can be sustained, therefore, is by raising incomes. This, in Malta’s case, requires a more dynamic export performance. For a start, this means that efforts to attract foreign direct investment, much improved in recent years, need to become even more focussed and supported with a strengthened infrastructure. The domestic private sector, meanwhile, needs an incentive to switch to producing for markets abroad. This incentive is relative profit. Export-oriented activity must become relatively more profitable than production for the domestic market alone. In a small island economy, where transport costs impose natural barriers to trade, it is easier to set up and defend monopolies. This was especially true before the liberalisation of product markets at the time of EU accession. But this is not to say that elements of monopoly power – and the attitudes this engenders – have not survived. For example, a survey carried out by  9  Securing a sustainable future for higher education, 12 October 2010, http:// www.independent.gov.uk/brownereport.
9 Figure 1 summarizes the worldwide occurrences of banking problems. All countries that are shaded dark gray have experienced banking crises between 1980 and 1996. 10 The light-gray shaded countries have had significant banking problems. As you can see, there are only a few white spots on the world map. These are often countries which lack a meaningful banking system. Some of these white spots probably shouldn’t be white. For instance, Switzerland experienced a significant banking crisis during the early 1990s. 7  See, for instance, Kose John, Teresa A. John, and Lemma W. Senbet, 1991, ”Risk-Shifting Incentives of Depository Institutions”, Journal of Banking and Finance 15, 895-915. 8  Other examples include the ECB, which has the task of contributing “to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system.” (Article 105(5) of the Maastricht Treaty). In the UK, the Bank of England was formally charged with the responsibility for the “overall stability of the financial system as a whole” by the Chancellor in a letter to the Governor on 20 May 1997. 9  See, for instance, Aslı Demirgüç-Kunt, and Enrica Detragiache, 2005, “Cross-Country Empirical Studies of Systemic Bank Distress: A Survey”, World Bank Working Paper No. 3719. 10  Taken from Charles Goodhart, Philipp Hartmann, David Llewellyn, Liliana Rojas-Suárez, and Steven Weisbrod, 1998, Financial Regulation. Why, how and where now? Routledge, London.

8 Đ Đ These factors underpin the promising economic prospects in ASEAN, with the corresponding need for regional enterprises to raise capital to support their growth. 9 Đ Đ Looking ahead, these are opportunities to be harnessed both within ASEAN and globally, and exchanges as well as clearing houses need to innovate and remain relevant to all stakeholders.Đ I will now speak about three key trends, the opportunities they present, and what MAS is doing to support the Singapore financial services industry in these areas. Trend 1: Catalysing Sustainable Finance for Growth 10 Đ Đ The first trend is growth in sustainable finance. This is increasingly an area of both concern as well as interest to financial players, especially millennial investors. 11 Đ Đ The estimated financing needs to support the greening of Asian economies are high. China has estimated that it will require $ billion of investments annually to achieve its green policy goals under its 13th Five Year Plan while ASEAN will need an estimated $ billion in green investments annually through 2030 [5] . 12 Đ Đ Sustainable finance is still at a nascent stage but we are seeing increasing focus from financial institutions to develop new environmental, social and governance (“ESG”)-related products. Similarly, with increased investor demand and awareness for sustainable financial products, exchanges like yourselves can look to expand and support product owerings that will meet the needs of socially and environmentally conscious enterprises and investors.Đ 13 Đ Đ One such area of growth is in green bonds.
How this can best be achieved is a subject for much discussion around the world at present. It is important to realise that the starting point for this discussion is somewhat different in different countries. In countries that have already been hit hard by the crisis the unthinkable has already happened, so to speak. There it is necessary to consider how to prevent this from happening again, but as housing prices have already fallen and households have already begun to reduce their debt, the situation does not appear acute. In other words, they have a little time to find a way of preventing the next crisis. The situation in Sweden is different. Here we have not had any tangible fall in housing prices, at the same time as household debt is at a high level, both from an international and an historical perspective. What we must consider is how we should try to reduce the risk of finding ourselves in the same situation as many others. In this sense, the situation here is slightly more urgent and sensitive. Norway and Canada, for instance, are in a similar situation. Macroprudential policy – but the policy rate also has a role The main line in the international discussion is that financial imbalances should primarily be prevented through measures within the new policy area known as macroprudential policy. But as I said before, this does not mean that the policy rate has been removed from the agenda.

It therefore represents an enormous potential market that remains yet untapped. Takaful operators assume an important role as economic or financial agents as they essentially mobilise long-term funds in the form of contributions and invest them in the available Islamic investment avenues. As custodians of public funds, takaful operators must ensure that the takaful funds are invested in compliance with Shariah and are soundly managed to instil public confidence. For the takaful industry to be developed into a viable alternative to the more entrenched conventional insurance industry, the need for it to be supported by the core components of a comprehensive Islamic financial system cannot be over-emphasised. As takaful operators are both mobilizers of long-term funds and fund managers to the policy holders, their ability to generate returns to fulfil the obligation to the policy holders depends very much on the range of financial instruments available in the market place. Without an effective financial system, takaful operators may not be able to perform as effectively and as efficiently in terms of delivering their promise on the profit sharing basis and to be able to keep pace with their conventional counterparts in the area of fund performance. In the absence of a viable Islamic capital market, there would not be an adequate supply of quality financial instruments for which the takaful funds can invest. It may have to depend on low yielding returns from bank deposits.
So far, however, there is simply not as much historical evidence availab le about the impact of QT, because we have observed more episodes of balance sheet expansion than of balance sheet contraction. A number of considerations support a prudent approach, since the response to QT could be stronger than the response to QE. First, the fiscal landscape has deteriorated in recent years. Public debt to output ratios have climbed sharply since the onset of the pandemic, because governments have run very large deficits over the course of the pandemic and because output has fallen. The current inflation surprise somewhat reduces the real value of this debt, but this effect is small compared with the strong increase in debt levels since the pandemic began. The greater the amount of debt that private markets must absorb, the lower the liquidity in sovereign debt markets and the higher the yields that markets will demand in order to equate supply with demand. Accordingly, this factor tends to magnify the impact of quantitative tightening on the term premium11. Second, the impact of balance sheet policies may also vary depending on liquidity conditions. In QE times, more liquidity injected into the system did not have a major impact since the market was saturated with excess cash and thus money market conditions were rather insensitive to additional liquidity injections.

As regards the Federal Reserve, although it is true to say that under the present regime chosen for our monetary policy – namely a currency board with the US dollar as anchor currency – the Fed's monetary policy has a major and direct influence on monetary conditions in Hong Kong, it was certainly not the Fed which determined that Hong Kong should operate a monetary policy of this nature. It was Hong Kong's choice, and we do not require any permission from Washington or New York to continue or discontinue it. With regard to the Legislative Council, while members of LegCo take a keen interest in monetary policy and related issues, and although the HKMA maintains a dialogue with LegCo, more particularly with its Financial Affairs Panel, over matters of common interest, LegCo has no locus under existing laws to determine monetary policy. With regard to the three note-issuing banks, that particular status confers no ability to affect monetary policy. The banks issue notes in response to the public's wishes to exchange deposits into currency, and are required to pay over backing to the Exchange Fund in such manner as the Financial Secretary specifies - which has since 1983 been the equivalent value in US dollars calculated at the fixed rate of 7.80. Within this framework the volume of note issuance itself is neutral in terms of monetary policy.
In addition, French national regulators are recognised for their credible action, and for being at the cutting edge of technological developments, as Geoffroy Goffinet from the ACPR will develop in more detail. Let me just briefly highlight one last course of action at the Banque de France. We have been a pioneer in central bank digital currency (CBDC): in addition to taking an active part in the work on a potential euro retail CBDC, as early as 2020 we launched a series of twelve experiments on a wholesale CBDC, both for payments and securities settlement. The first nine experiments have been very valuable, and the three experiments underway focus on cross-border payments and tokenised asset settlement. 4 We are keen to pursue our long-standing partnership with commercial banks, to reconcile innovation and security. To conclude, this stay in New York is also the opportunity for me to point out that the Statue of Liberty, which so forcefully embodies our common values, is the fruit of a tight cooperation between France and America. Let this fruitful cooperation carry on throughout the 21st century; we will be happy to welcome you in Paris. I thank you for your attention, and will now leave the floor to Olivier Vigna, deputy CEO of Paris Europlace. 1 ECB, Macroeconomic Projections, 16 March 2023 2 Eurostat flash estimate, 31 March 2023 3 Bloomberg, 22 March 2023 4 An updated report will be published by the Banque de France within next months.

You  can already refer to our report published in November 2021 for the key findings from our first nine experiments. 3/3  BIS - Central bankers' speeches
Christian Noyer: Demographic shifts – threats or opportunities? Opening remarks by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Montreal conference: “Demographic shifts – threats or opportunities?”, Montreal, 11 June 2012. *  *  *  Ladies and gentlemen, It is a real pleasure for me to open this session of the Montreal conference on demographic shifts. I am no demographics expert, you know, but I will try to give my opinion of central banker on this extremely important matter. There is no major uncertainty as to the demographic shifts that are in progress. We already have a clear idea of the likely demographic trends for the coming decades and, even more importantly, of their age and geographical breakdowns. We must capitalise on this knowledge to analyse the potential impacts of these shifts and determine how they could contribute to decision-making. In that regard, I would like to raise a few points that are relevant to central bankers. I will focus on the case of developed countries and more particularly on Europe, where demographic developments are mainly driven by the combination of longer life expectancy and a low fertility rate. As regards the latter, it is comforting to note that this rate in France and Canada is less problematic than those in most economies of the same group. When considering demographic developments, much attention is paid, legitimately, to public debt issues.

Dear bank executives, More than three years on from the crisis start, global economy’s perspective to leave this crisis behind remains unclear. Nonetheless, this is about a gradual and long process. Overall, financial institutions, in Europe and beyond, continue to face with the following:   High uncertainties as regards exposure value in sovereign debt securities;    Difficulties to ensure liquidity in wholesale markets;    Reduction of crediting volume and tightening of its terms to fund the domestic economy;    Higher capital requirements arising mainly from new regulatory rules by supervisory authorities. The need to reduce investment risk in sovereign debt is accompanied by huge efforts on fiscal consolidation in many countries, especially in Europe. Hence, EU economic growth expectations, including those for countries that had, insofar, posted above-average economic growth, were markedly down. It appears that the best solution for this situation will come only as a result of various countries’ ability to undertake, at this point, vital social and economic reforms as well as to provide financial support so that, on the one hand, financial stability is maintained and, on the other hand, private enterprises are provided with some relief, thus affecting their future economic development expectations. Albania’s economy maintained its positive growth rates during this period, to absorb external shocks. This flexibility is a precious characteristic that will continue to support the country’s economic development and buffer effects from various shocks, even in the future.