samchain/econo-pairs-v1 huggingface dataset:
Up to that point, growth accounting analysis generally indicates that a country tends to register high economic growth through vast capital accumulation, rapidly rising total factor productivity and continued increases in labor input. Once such a point has been reached, however, growth is likely to decelerate. Nevertheless, it is still possible for a country reaching the Lewisian Turning Point to continue growing, although at a somewhat decelerated pace, through technological advances and cultivation of new markets. In the region, Japan and the NIEs managed to overcome this trap and join the group of highincome countries in the 1970s and the 1990s, respectively – as you can see in the right-hand panel of Chart 4 again. China and some ASEAN countries, including Thailand, have already reached the upper middle-income stage, which means that they have great opportunities to advance further toward high-income status. Moreover, there are many other countries in the region that are still at the lower middle-income stage, but with great potential for continued growth for years to come. The second challenge is the “demographic trap.” A number of economies in the region, particularly those at the high-income stage and, to a lesser extent, at the upper middleincome stage, are experiencing, or about to experience, population aging: the result of longer life expectancies combined with lower fertility rates. From the view point of per-capita income growth, which I believe is an appropriate measure of “living standard,” what really matters is the proportion of the working-age population to the population as a whole.

It also becomes easier to work on prevention and in various ways to counteract a serious crisis from arising. The developments include methods regarding what are known as stress tests, which analyse what happens to the banks during various sequences of events and crisis scenarios. Such models are of course important tools when it comes to crisis exercises and to adapting our preparedness for managing real crisis situations efficiently. Challenges along the way A lot has changed, both compared with when I first began at the Riksbank and over the past six years. We have better conditions for managing various challenges so that we can attain our inflation target and safeguard financial stability in the best possible manner. It is also largely a case of learning by doing. I would therefore like to take up some of the challenges  BIS Review 155/2008  3  that we and other central banks have had to deal with in recent years. These are challenges we have learnt from when we were forced to deal with them. They are also challenges that in one way or another will stimulate future developments. Rising commodity prices,… In May of this year I held a speech on the upward pressure on international commodity prices that had been exerted for some time. This applied to both traditional commodities, such as oil and metals, and to foodstuffs, such as grain. The boom in commodity prices had pushed up inflation both here and abroad, and inflation was clearly overshooting our target.
In particular, and in keeping with previous communications, the Governing Council acted – with a package of expansionary measures – in response to inflation rates, both realised and projected for the coming years, which have remained persistently below the ECB’s aim, in line with its commitment to symmetry in relation to this aim. In this context, symmetry means that the ECB undertakes to act with the same determination whether inflation is persistently above or below 2%.1 In particular, the Governing Council of the ECB took the decision to decrease the interest rate on the deposit facility by 10 basis points to -0.50% and reinforced its forward guidance on interest rates by indicating that they will remain at their present or lower levels until it is seen that the inflation outlook robustly converges to a level sufficiently close to, but below, 2%. Such convergence should also be consistently reflected in the observed behaviour of underlying inflation. The ECB also agreed to restart net purchases under its asset purchase programme (APP) at a monthly pace of € billion as from 1 November and without a defined time limit. In order to preserve favourable bank lending conditions, the modalities of the new series of quarterly targeted longer-term refinancing operations (TLTRO III) were also changed, eliminating the 10 bp spread established on the interest rates applied to them and extending their maturity from two to three years.

Yet on the other hand, adopting technological innovation may also mean efficiency improvements for banks, although it is true that in the short term adapting to the new way of providing financial services and managing their assets will entail hefty costs for established banks. For society as a whole, the use of new technologies in finance may mean significant advantages in terms of cost savings and financial inclusion. As regulators, we have to promote the adoption of innovation while continuing to treat all participants symmetrically so that regulations governing the same activities are comparable, irrespective of the type of company providing the services. As I mentioned earlier, the decrease in non-productive assets has been one of the main factors which has contributed to the return to profitability of the Spanish banking system in recent years. Nevertheless, although it has decreased significantly, the share of these assets in banks’ balance sheets continues to be historically high and, consequently, banks should take advantage of this point in the cycle to make further progress in this area. Another important challenge for Spanish banks relates to the need for them to achieve reputational improvements. After the economic crisis, litigation increased notably, resulting in sizeable costs for banks which have a negative effect on their profitability. This increase in legal costs is not confined to the Spanish banking system but has also been observed in other jurisdictions.
Central banks had to react to unforeseen developments with very little recent historical experience to guide their decisions. Overall, the response to the crisis was largely a “learning-by-doing” process. With hindsight, however, there appears to be an underlying logic to all these interventions. First, after the bursting of the credit bubble, all advanced economies entered a phase of deleveraging, in an attempt to reverse and absorb the excesses of the pre-crisis period. Deleveraging, which is basically a balance sheet contraction, has affected almost all sectors in our economies: banks, obviously, households (in the United States and United Kingdom) and, now, governments. Deleveraging is unavoidable and necessary. Both borrowers and lenders need to re-establish sustainable debt positions in order to restart credit and restore the normal financing of the economy in the long run. But deleveraging creates huge difficulties in the short run. It may be extremely deflationary as it involves both a contraction in credit and money and an increase in savings rates. To some extent, central banks have counteracted this development. By expanding their balance sheets, they increased their leverage when other economic agents (with the exception of large corporates) were all deleveraging simultaneously. Second, the uncertainty created by the crisis has led to an increase in the demand for safe and liquid assets. At the same time, the supply of these assets has been significantly reduced, especially in Europe, since credit risk has appeared on government debt.

In the euro area, fiscal consolidation must continue and crisis management mechanisms must be made operational. In other countries, such as the United States and Japan, future fiscal uncertainties must be eliminated. Finally, stable regulatory regimes, first and foremost in the financial sector, are also essential. For its part, monetary policy must be predicable, not in the sense that each and every move of the monetary authorities be precisely anticipated, but rather, that their objectives be clear and their actions fully understandable by economic agents. Strong, independent and responsible central banks are, more than ever, necessary to price and financial stability. 4  BIS central bankers’ speeches
The adoption of IRB approach would entail significant changes to their existing systems, the collection of extensive data as well as the fulfillment of many other qualitative and quantitative requirements. Such banks are advised to start building up the necessary data systems now itself in order to be able to qualify for the advanced approaches and to plan the application of the ratings for their credit management. The IRB approach will permit the banks to use their own estimates for the measurement of credit risk with regard to certain parameters. CBSL will stipulate the minimum qualifying criteria regarding the comprehensiveness and integrity of the rating systems, including the ability for those systems to produce reasonably accurate and consistent estimates of risk. This will be done in consultation with the industry and by announcing a timeframe for permitting the Foundation IRB approach and the submission of applications in 2007. Irrespective of whether the advanced approaches are used or not, the Central Bank encourages all banks to study carefully the more advanced risk management concepts and practices embodied in Basel II and consider adopting those relevant to their risk management purposes, even though they may not use them for capital allocation as such.

We will be monitoring closely the impact of tighter credit conditions on demand and output over the  4  BIS Review 114/2007  coming months. Even though inflation is close to the target and pay pressures are muted, we will continue to look ahead and monitor the risks to inflation that we identified in August: the signs from surveys and financial markets that people expect inflation to pick up; the strength of company pricing intentions, and the recent increases in world commodity prices. Keeping inflation close to the 2% target is the biggest contribution the Bank of England can make to economic stability generally. Changes in Bank Rate could not prevent the profound change in the world economy that pushed down yields on low-risk financial assets and led investors to take on more risk. They cannot now prevent the re-pricing of that risk. And just as Bank Rate was not set to insulate the manufacturing sector from the trade deficit that resulted from the earlier change in the world economy, it will not be set now to insulate the banking system from the re-pricing of risk. But you can be sure that we will do whatever is necessary to keep inflation close to the 2% target. Tonight is the first time that the Court of the Bank of England, and the Monetary Policy Committee, have gathered in Northern Ireland. So much has changed in the Province since the troubles started and I first came to Belfast to speak at Queen’s University.
Chair Yellen recently discussed this topic 3 and the recent rule that removes large, non-complex firms from the qualitative assessment of the Comprehensive Capital Analysis and Review (CCAR) is a recent example.4 This tailoring principle drives efforts to mitigate risks to financial stability, while minimizing the collective burden on financial institutions, particularly for community and mid-sized banks, and allocating supervisory resources most efficiently. As a result, the standards and expectations from supervision become more stringent as a firm becomes larger and more complex in ways that pose risks to the broader financial system. With that background in mind, I’ll turn to the question of “optimal” bank capital that is the topic of this conference. To me, the question of optimal capital implies some type of a trade-off. This thinking is not limited to bank capital, but reflects all of the potential supervisory and regulatory tools such as capital and liquidity standards or a resolution framework. One can frame this trade-off simply in terms of two objectives often attributed to supervision: ensuring the safety and soundness of financial institutions and promoting efficient financial intermediation that supports the growth and stability of the U.S. economy. Other objectives could include, for example, reducing the potential spillover costs associated with distress and promoting fair and transparent financial services for consumers. In many cases, the objectives of enhanced resilience and efficient financial intermediation are mutually reinforcing.

The systematic work of our distinguished archaeologists and of the dedicated central bank employees over the years has helped in materialising the efforts for presenting the history of the Albanian currency, from the axes of the Hoard of Torovica, to the first coins struck in Dyrrhachium, to those in circulation throughout various historic periods, up to modern days. Through over 30 exhibits and 5 educational rooms in the Museum, we show interactively the ancient history of our currency. The permanent exhibition in the lower floor displays collections from monetary systems that have existed in our territories over the past two thousand years. They are part of the numismatic collection of the Bank of Albania and the Albanian Institute of Archaeology. We have selected and studied them meticulously in a close and long process of cooperation with archaeologists, numismatists, historians and ethnologists in Albania. I take this opportunity to thank them for their valuable contribution. Our Museum, however, is not just a money museum. It is also the museum of the central bank, which considers financial education as an essential objective. The public needs to be informed in order to be able to make judicious and sound financial decisions, which, in turn, contribute to financial stability. That is why we have dedicated the upper floor of the Museum to financial information and education. Through a number of activities, educational publications, lectures, films, and applications, irrespective of their age, visitors learn about financial products and system.
Under this scenario real GDP grows by only 1.3% in 2022, contracts by 1.7% in 2023 and, despite recovering in 2024 when it grows by 3%, remains significantly below the baseline level throughout the projection horizon. The inflationary episode Since mid-2021 we have witnessed a global inflationary episode that has proved more persistent than initially expected. This inflation has intensified in recent months as a result of the war in Ukraine, and has spread to numerous components of the consumption basket. In June euro area inflation rose again, reaching 8.6%. This is the highest figure for the euro area overall since the launch of the euro and up from 1.9% just one year earlier. The energy component remains the main factor behind this increase. However, food inflation also continued to rise, standing at 8.9% in June, partly reflecting the importance of Ukraine and Russia as agricultural goods producers. The persistence of industrial supply chain bottlenecks and the recovery in demand, particularly in the services sector, are also contributing to the current high inflation rates. Further, the inflationary pressures are spreading to a growing number of sectors, partly due to the indirect impact of the high energy costs across the economy. In consequence, most measures of underlying inflation have continued to rise. The increase in inflationary pressures also owes to the depreciation of the euro exchange rate.

These include improvements in service delivery by the public sector, having a stable and sustainable tax system, maintaining stability in the exchange rate, preserving political stability, consistency in government policy, and continued investment in infrastructure development. Other areas highlighted include addressing high lending rates, increased efforts in the fight against corruption and reducing bureaucratic processes. Further, respondents were of the view that government needs to take appropriate measures to enhance private sector involvement in decision-making and streamlining licensing requirements. In closing, I wish to thank you all for attending this virtual meeting and hope that you will use the occasion to explore the survey findings and recommend appropriate measures to contribute to the enhancement of the business environment. It is now my singular honour and privilege to officially open the workshop and wish you all fruitful deliberations. I thank you for your kind attention. God bless you. 2/3  BIS central bankers' speeches  3/3  BIS central bankers' speeches
Their response in turn will affect how financial institutions interact with businesses going forward. Beginning from July this year, financial institutions have started reporting their climate related risk exposures based on the Climate Change and Principle-based Taxonomy developed for the financial sector to assess and classify economic activities within their portfolios. Aside from building a strong foundation for risk assessments and disclosures, the taxonomy is expected to encourage the flow of capital towards supporting transition activities. We recognise the need to minimise macroeconomic and social dislocations in the short term as we transition to a low carbon economy. The financial sector taxonomy therefore does not adopt a binary classification of green and brown activities, but also recognises credible efforts by businesses to actively reduce the harm that their operations might pose to the environment during transition. Based on an analysis of their material exposures to climate-related risks, financial institutions would be required to take actions to address high and unmitigated exposures. We have also strengthened the standards that we expect financial institutions to meet in managing climate related risks. This includes an expectation for financial institutions to work with and support their customers in managing their transition. More to the point, if businesses are committed and willing to undertake changes to reduce their GHG emissions and green their operations, the financial sector should help them make the transition. This may take the form of appropriate financing or protection solutions and advisory services.

The competent parties must endeavour to find solutions that combine the necessary market regulation and supervision with the advantages inherent in capital mobility. A completely regulated market reduces capital flows and generates large fluctuations in market prices, leading in turn to welfare losses. But neither is a market without any common rules and supervision an ideal remedy. Operations in financial markets need some degree of supervision but this must not paralyse the potential for developments that can contribute to higher prosperity in the global economy. BIS Review 23/1999  8
In particular, it is essential from Malta’s point of view that the presence of subsidiaries of cross-border banks that are systemically important to a host country be given due weight in determining participation in the college of supervisors. International experience has also shown that state intervention may be necessary to resolve problems in the financial sector. The state is often the only entity in a democracy that has the political legitimacy, financial strength and credibility to support ailing institutions and, hence, restore confidence in the financial system as a whole. In extreme situations, which require the injection of public funds, the cost to the public purse can be very high. This is an additional reason why maintaining fiscal discipline in the shape of balanced budgets over the economic cycle is important. This would allow a buffer to be built up that could be used in exceptional situations if required, without jeopardising the sustainability of public finances. Finally, safeguarding the health of the financial sector in these challenging times also calls for prudent behaviour on the part of the market players themselves. Though not under any identifiable threat, Maltese banks should build on their existing strengths by reinforcing their capital base through the retention of a greater proportion of earnings; and, as domestic economic conditions are expected to weaken, loan loss provisioning levels may also need to rise. BIS Review 155/2008  5  The current crisis will not be over until confidence and trust are restored, and the credit channel starts to function fluidly again.

And as the editorial of the November issue of the Institute’s journal Financial World goes on to explain, “It is the mood that has fundamentally changed and this change is why, though governments may pump money into banks, share prices are still weak. It is why central banks are cutting rates but Libor is staying put. It is also why, despite public money to provide liquidity to markets, to guarantee bond issues and even to take stakes in banks, stock markets continue to drop like so many stones.” Perhaps this is happening because, as former ECB Executive Board member and Italian Economy Minister, Tommaso Padoa Schioppa aptly put it, this is not a crisis in the system, it is a crisis of the system. As tales of woe beyond our shores multiply, it is appropriate to take stock of what this systemic shock could mean for Malta. First, some background. Our financial system has changed beyond recognition in recent years, driven by a combination of domestic market reforms and international integration. The liberalisation process of the 1990s saw the gradual removal of interest rate restrictions, the easing of capital controls and the privatisation of most of the financial sector. The legal framework was entirely overhauled, bringing it in line with EU standards and laying the foundations for the growth of new areas of financial activity, such as investment services and trusts. EU membership in 2004 opened up the Maltese financial market to service providers from other member states.
And no doubt the world economy will also have a share in these benefits. 3  BIS Review 109/2000

To avoid ending up in a such a dilemma in future, we can decide to take into account inflation developments after the target horizon. From what I have said until now, it is evident that our monetary policy decisions are normally based on the main rule that says that we should aim at keeping CPI inflation at two per cent 1-2 years in the future. However, on every occasion when decisions are made, we must consider how to relate to the guidance provided by this simple decision-making rule. This assessment is based on the extent to which the main rule leads to unacceptable macroeconomic costs in the form of fluctuations in employment and output. However, departures from the rule must not damage credibility in the inflation target or lead to inflation expectations being affected. As we have gained experience and increased our knowledge, we have clarified how we intend to apply our decision-making rule. We will in all probability, continue to obtain new insights and be confronted by unexpected events. This means that we must continuously evaluate and review our strategies. Independence requires openness A very important part of our strategy, which I have not taken up before, is openness and transparency as to how monetary policy is conducted. This part can hardly be reconsidered. The Riksbank’s independence creates good conditions for achieving and maintaining credibility for the price stability target.