samchain/econo-pairs-v1 huggingface dataset:
The ability of British manufacturing industry to provide strong impetus to private sector growth will be an important offset to the drag to domestic demand from the rebalancing of public finances over the next few years. There is also evidence that strong growth in the global economy is benefiting parts of the services sector. Earlier this week, the airport operator BAA reported a 7.6% annual rise in traffic volumes at Heathrow Airport in September – driven by strong business travel growth to Asia and other emerging markets. From the position a year ago – when demand had fallen sharply at home and abroad in the wake of the financial crisis – this turnaround is impressive. So my verdict on the recovery would be “so far, so good”. But we have to recognise that we are still at an early phase of the upswing. It is not surprising, therefore, that growth is uneven across sectors and from quarter to quarter, and that confidence is still somewhat fragile. The state of confidence is not helped by the negative tone of much of the economic commentary at present – which seems to reflect a high degree of nervousness about the  3  Data is latest available: for manufacturing it relates to the three months to August and for services to the three months to July. BIS Review 134/2010  3  progress of the recovery. But this raises the obvious question: if things are so good, why do they feel so bad – to some people at least?

But the planned reduction in the deficit set out in the Budget plans is comparable with the fiscal consolidation we saw in the mid-1990s, when the public spending share of GDP was also cut significantly as the economy recovered, as Chart 6 shows. Though the latest Budget plans imply a somewhat bigger fall in the public spending share of GDP than in the mid-1990s, this is offset by a smaller rise in the tax burden. Taking tax and spending together, the projected impact is broadly similar. Public borrowing fell by over 8 percentage points of GDP between 1993/4 and 1998/9, compared with a 9 percentage point fall projected in the latest Budget over the next five years. 6 That period of public spending squeeze in the mid-1990s was also accompanied by a significant reduction in employment in the public sector, not dissimilar to the figures currently being discussed in the context of the current spending review. 7 However, the UK economy grew reasonably healthily over that period, with annual GDP growth averaging nearly 3.5% a year in the five years 1994 to 1998. Unemployment also fell because the private sector generated many more jobs than were lost in the public sector. As Chart 7 shows, the private sector created around 2 million extra jobs in the mid-1990s, dwarfing the reduction in public sector employment.
Also, moderate growth of monetary indicators, low increases in global prices and well-anchored inflationary expectations have generated contained inflationary pressures. In general, this situation is expected to continue over the period ahead. Data on third-quarter economic activity are partial and are based on indirect indicators. Their analysis suggests positive but low growth of the domestic economy over this period. Industry, agriculture and services are the sectors that have supported the economic growth, while construction does not highlight any signs of improvement in the current and expected activity. In the aggregate demand, foreign demand remained the main driver to economic growth in the third quarter. The domestic demand appears to have weakened due to lack of fiscal stimulus and sluggish private investments and consumption. Fiscal policy was consolidating in 2012. It is reflected in the 19% decline in the budget deficit of the first ten months of the year, leading to maintaining of fiscal indicators sustainability over this period. On the other hand, the performance of expenditure and budget deficit did not support the aggregate demand growth. Public spending for the first ten months of the year resulted 0.2% less than a year earlier, reflecting the low increase in the budget revenues. The latter increased at low annualised rates during the year, resulting at the end of October only 2% higher than a year earlier.

Notwithstanding all the efforts, challenges remain ahead and we will continue to address them with an aim to increase the stability and resilience of the banking system, as the key pillar of the financial system and thus contribute to stronger, but sustainable financial support of the real sector. In this light we will proceed with strengthening the supervision on systematically important banks, enhancing our macro – prudential capacity, modernizing the organizational and analytical infrastructure for crisis preparedness and resolution, contributing toward further development of alternative financial instruments, innovative financing, deepening of financial markets, and encouraging non-disruptive entrance of fintech services. Last but not least, let us not forget that investors’ decisions are information and data based. A strong portfolio of high – quality data, in line with the data international standards, is a prerequisite for investors to make their first steps in making due diligence and decide on the comparative advantage of the country. Our adherence to the highest IMF SDDS Plus standard this year, made us part of a small pool of 18 countries globally, assuring for the quality of our data and contributing to the health of the overall business environment. Of course, there are many gaps on the structural front that should be addressed, to allow for faster growth and convergence. I am more than confident that with strong commitment of all stakeholders involved, in conjunction with accelerated EU accession process, we will achieve our milestones, contributing to the wellbeing of the overall society. Thank you. 2/2  BIS central bankers' speeches
Jean-Claude Trichet: Completing the creation of a fully integrated European capital market Speech by Mr Jean-Claude Trichet, Governor of the Bank of France, at the Finance Foundation, Venice, 19 June 2003. *  *  *  Ladies and gentlemen, It’s a great pleasure to be here with you today. Let me start by expressing my thanks to the Finance Foundation for inviting me to speak at this conference in Venice. I would like to take this opportunity to share with you some thoughts on the creation and the completion of an integrated European capital market. One may first recall all the rewards of this march towards a truly integrated European capital market. The creation of this market is indeed the third layer of a process that began at the end of the eighties, with the Single European Act which formed the basis for the establishment of the internal single market for persons, goods, services and capital. The second layer was obviously the creation of the euro and the launch of the Monetary Union. And it is not a coincidence that the ambitious Financial Services Action Plan, which serves as the framework for conducting this integration, was launched precisely in 1999. Clearly, achieving a full integration of financial markets will allow our countries to reap the full benefits of these initial steps through a reduction in the cost of capital for businesses, a wider range of investment opportunities, an increasingly efficient allocation of capital. Ultimately, the positive contribution to economic growth can be hardly disputed.

We are already clear that we stand ready to act as settlement agent both for regulated systemically important schemes supervised by the Bank, and, on a case-by-case basis, for other new systems. 9 The Bank will use this to enable innovation and competition, without compromising stability. The third way the Bank is enabling the FinTech transformation is by exploring the use of Distributed Ledger (DL) technology in our core activities, including the operation of RTGS. If distributed ledger technology could provide a more efficient way for private sector firms to deliver payments and settle securities, why not apply it to the core of the payments system itself? The great promise of distributed ledgers for central banks is their potential to enhance resilience. Distributing the ledger means multiple copies of the system. It can continue to operate if parts get knocked out. That removes the single point of failure risk inherent in a centralised system. But if we are to entrust the heart of our financial system to such technology, it must be robust and reliable. The payments system we oversee processes £ trillion of bank transactions, equivalent to around 1/3 of annual GDP, each day. Disruptions are potentially costly. That is why, in payments and settlement, the Bank has an extremely low tolerance for any threat to the integrity of the economy’s ‘plumbing’. We won’t beta test RTGS. To help distinguish DL’s potential from its hype, the Bank has set up our own as a Proof of Concept.
BIS Review 38/2003  1  At its monetary policy meeting in August, the Federal Open Market Committee decided to keep its target for the federal funds rate unchanged at 1 per cent. The Committee perceived that the upside and downside risks to the attainment of sustainable growth for the next few quarters were roughly equal. The Committee judged that, on balance, the risk of inflation becoming undesirably low is likely to be the predominant concern for the foreseeable future. In these circumstances, the Committee believed that policy accommodation can be maintained for a considerable period. Asia is showing signs of recovery. China is leading the field with economic growth approaching 10 per cent and Thailand is showing strong growth. But the picture is not all positive. South Korea has experienced slower growth this year. South Korea is one of the countries that is particularly affected by the competition from China. In Japan, where growth has been low for a long period, there are indications that growth is picking up, although it is still too early to say whether it is sustainable. The key rate in the euro area has been reduced to 2 per cent. Forward rates imply that interest rates are expected to remain at 2 per cent to the end of 2003, before rising slightly next year. GDP growth in major European countries is low or negative. In the Netherlands, GDP has dropped for three consecutive quarters, and Germany has recorded a decline over the past two quarters.

From this point of view, I share the doubts expressed in the latest BIS Annual Report about “whether central banks stripped of supervisory responsibilities will be able to obtain the information they require, when they need it, to use their emergency liquidity support powers wisely and effectively in a market-driven world.” One of the arguments of those who would like to see the institutions of regulator and lender of last resort clearly separate is that too close a relationship may give rise to serious conflicts of interest which could prove costly to the public purse in terms of over-generous support operations. However, the arrangements which I have described here ensure that there is no use of public funds, except those which are fully collateralised, at least until referral to the Financial Secretary has been triggered. To conclude, I should like to repeat the simple statement that I made in 1994: that there is an official lender of last resort in Hong Kong, and that this is the HKMA. My speech this evening, and the policy statement soon to be circulated, will, I hope, help put a speedy end to the doubts and uncertainties about this point and about whether our role as lender of last resort is consistent with our role as operator of a Currency Board system. The detailed policy statement has also set out, more clearly and precisely than ever before, the circumstances in which lender of last resort support will be extended, the preconditions for obtaining support, and the mechanics for arranging it.
When inflation is high for a long period of time, an important role for monetary policy is to ensure that inflation expectations remain anchored as the shocks work their way through the economy. If expectations become de-anchored and trigger a wage-price spiral, it can lead to inflation becoming persistent even after the shocks disappear. Raising interest rates has a mechanical effect on demand and inflation, and thereby on inflation expectations. But when interest rates are starting from unusually low levels, rate hikes are more powerful if they also create signalling effects that influence expectations directly. In this context, especially compared with the traditional focus on 25 basis-point increments, adjusting the pace of rate hikes is a key tool to signal our determination to fulfil our mandate and keep inflation expectations contained. And moving faster at the start of the hiking cycle clearly conveys our commitment to bring down inflation to our medium-term target. At present, inflation expectations remain relatively well anchored across a range of measures. But there are two reasons why it would be unwise to take this for granted. First, the shock is severely affecting the prices of those consumption items, such as groceries and petrol, that have the greatest influence on households’ inflation expectations. [15] The ECB’s Consumer Expectations Survey shows that, since February this year, both mean and median expectations for inflation three years ahead have risen by around 1 percentage point.

Against this background, it is timely that SEACEN Centre has initiated this course to explore the nature of financial intermediation, the role of financial markets in the allocation of resources and the need for appropriate regulatory framework. As regulators, we need to understand the concepts and the basics of the working, the pricing and trading strategies of the derivatives markets and instruments, how financial entities use them in risk management, as well as their potential impact on financial system stability. But more importantly, in these two weeks, we will benefit from the presence of a number of distinguished speakers that have kindly given up their time to be with us. I hope we will use this opportunity fully. On this note, I would like to thank Mr. Sunil Sharma, Chief, Asian Division, IMF Institute, for his efforts to coordinate this course with the SEACEN Centre and the Bank of Thailand. I trust that this course will be most fruitful and rewarding for all the participants, but above all that the interaction among yourselves will provide an opportunity for you to learn from one another, and strengthen the bonds of friendship that bind the works of our institutions for many years to come.
429-448. [14] See Ruge-Murcia, F.-J. (2006), “The expectations hypothesis of the term structure when interest rates are close to zero”, Journal of Monetary Economics, 53, pp. 1409-1424. [15] See Lemke, W. and Vladu, A. (2017), “Below the zero lower bound: a shadow-rate term structure model for the euro area”, Working Paper Series, No 1991, ECB; Rostagno, M., Altavilla, C., Carboni, C., Lemke, W., Motto, R., Saint-Guilhem, A., Yiangou, J. (2019), “A Tale of Two Decades: the ECB’s Monetary Policy at 20”, ECB mimeo; and Bottero, M., Minoiu, C., Peydro, J.-L., Polo, A, Presbitero, A., Sette, E. (2019), “Negative Monetary Policy Rates and Portfolio Rebalancing: Evidence from Credit Register Data”, IMF Working Paper 19/44 and Wu, C., Xia, D., (2018), “Negative Interest Rate Policy and the Yield Curve”, NBER Working Paper W25180. [16] For a summary of the potential complementarities between negative rate policy, forward guidance, asset purchases and TLTROs see the respective matrix in Chapter 6 of Rostagno et al. (2019), op. cit. [17] See, for example, Ryan and Whelan (2019), “Quantitative Easing and the Hot Potato Effect: Evidence from Euro Area Banks”, Research Technical Paper, Central Bank of Ireland, Vol. 2019, No 1 on the hot potato effect. [18] For an overview on the working of TLTRO, see European Central Bank (2017), “The targeted longer-term refinancing operations: an overview of the take-up and their impact on bank Intermediation”, Box in Economic Bulletin, Issue 3.

Ravi Menon: Securing price stability as Singapore restructures Speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Asian Bureau of Financial and Economics Research (ABFER) Opening Gala Dinner, Singapore, 21 May 2013. *  *  *  Professor Bernard Yeung, Dean, NUS Business School, whose tireless efforts have brought to fruition the Asian Bureau of Financial and Economics Research, distinguished guests, ladies and gentlemen, good evening. Interesting times again Monetary policy has become interesting again. The Great Moderation, beginning in the mid-1980s and spanning two decades, marked the triumph of monetary policy over the scourge of inflation. The formula worked brilliantly – independent central banks, with clear mandates to pursue price stability, and doing so with consistency and credibility, ushered in an era of macroeconomic and financial stability supporting steady economic growth and rising prosperity. Then came 2008/2009 – unleashing a financial crisis of unmatched scale and impact, and a global recession deeper than any seen since the Great Depression. We are still living in the shadows of these two shocks, with the global economy stuck in a hesitant and uneven recovery and financial market stresses resurfacing from time to time. Monetary policy in the advanced economies has entered unchartered waters, in a valiant effort to support economic growth, which was being weighed down by deleveraging. In the emerging economies, central banks and governments have had to be equally nimble in their policy responses, as they grapple with the spillover effects of these unconventional monetary policies.
We already have the essential ingredients – the presence of the world’s largest global players in our takaful market, deep Shariah knowledge within our domestic takaful and retakaful companies, and an entire Islamic finance ecosystem that can be tapped into to really push the frontiers in 2/6  BIS central bankers' speeches  building retakaful capacity. We just need companies that are willing to lead the way. Building this will take time, resources and a long term perspective, but this may be a small price to pay to build scale, generate critical mass and position takaful as a credible solution for large and specialised risks. There is also a big opportunity in halal trade facilitation, especially in serving SMEs. The global halal industry is valued at around USD2 trillion. The takaful industry however, has to be more committed and visible in serving local and international halal businesses. After all, takaful has its roots in the Nusantara, when Muslim merchants who plied their trade in the Far East centuries ago were protected by early forms of takaful. This is why the takaful industry must join the banking industry in participating at the upcoming Malaysia International Halal Showcase. Participation will indicate intent, non-participation reflects poorly on the takaful industry, showing the lack of commitment or ability to spot opportunities, or maybe even both. This certainly has to be addressed if the industry is to make any meaningful progress, this sort of things matter.

It needs to break out of the shadows of insurance by evolving new business and operating models. Concepts in takaful with rich potential, such as mutual takaful remain largely untested. The mutual model has a long history. It is also enjoying a resurgence with the rise of new online, peer-to-peer insurers in other countries. This is just one model. There might be others. Boards and senior management should lead the way in exploring these developments and charting new territory. This will require more active engagement of shareholders to develop a clear vision for the company and enlist support for bold strategies that will change the status quo for the better. 4/6  BIS central bankers' speeches  Various programmes such as FIDE and FIDE Forum already include content to help prepare directors in future proofing their institutions. The focus will be even stronger going forward. We are also pleased to announce that a specialised executive Islamic finance education programme tailored for directors of Islamic banks and takaful operators will be launched in the first half of this year. It will equip directors with an appreciation and knowledge of Islamic finance by incorporating practical business perspectives. With this, directors are better able to contribute towards growth and innovation, beyond their roles in ensuring that their institutions operate within sound Shariah and risk management parameters. At the level of employees, the reality is that good talent is in short supply. And so, the industry must take a longer view in its human capital strategies.
Thus, markets adjust irrespective of the exchange rate regime and the unit of account. 28. Is there any easy way of avoiding the pain of adjustment in Asia due to rising global competition? The answer is clearly no. As a general rule, the faster we adjust, the less the pain. BIS Review 109/1997  -6-  There have been different approaches to this issue. There are some who think that a floating exchange rate regime would cushion the pain, but many forget that Hong Kong has tried the floating exchange rate regime before, in 1974-83. During that period, growth was more volatile and inflation much higher than what we are experiencing now. As an open economy with trade accounting for 285% of GDP, any inflation would be immediately imported under exchange rate volatility. The recent experience in Asia actually shows that contrary to the theory, floating exchange rates requires even higher interest rates, because of the higher risks associated with exchange rate volatility. 29. Here I would like to correct the common image that the Hong Kong’s exchange rate regime is a peg. The Hong Kong dollar is a fixed exchange rate, not a peg which can be adjusted from time to time. The linked exchange rate system in Hong Kong operates as a currency board system whereby the issue of Hong Kong dollar notes is fully backed by the US dollar at the fixed rate of $ to $ Such a note-issuing mechanism ensures that currency issued is fully backed by foreign exchange.

As Chairman Greenspan said recently, "in retrospect, it is clear that more investment monies flowed into these economies than could be profitably employed at modest risk". 8. The strong Asian growth would have continued but for the fact that global competition in external trade has emerged with newly industrialized and export-oriented economies with cheap labour, such as China, India, Latin American and Eastern Europe. The failure of central planning has brought at least three billion new workers and consumers into the global market. These new markets began to benefit from the growing trade liberalization and inflows of foreign investments, thus putting greater pressure on the markets of the earlier “tigers” of East Asia, leading to a widening of their current account deficits as they continued their investments in infrastructure and real estate. Issues in Asia 9. If we look more closely at the situation in Asia, the economic fundamentals remain intact. Asia has been the fastest-growing region in the world, recording growth rates of around 5%-9%. Asian economies have low inflation rates and exchange rates were stable until recently. Current account for the region as a whole is broadly in balance, while the fiscal account, excluding Japan, is in surplus. Asia has exceptionally high savings rates of above 30% of GDP. Official savings, in terms of foreign currency reserves, were even higher. In Asia, 70% of the inflows contributed to reserve accumulation. As a result, Asian central banks are now holding about 40% of the world’s foreign exchange reserves.