samchain/econo-pairs-v1 huggingface dataset:
“Papa Bear” - Inflation Let me start with “papa bear” inflation. On conventional wisdom, he should be making an appearance by now. Historically, inflation comes from high wage growth in a tight labour market during the late stages of the business cycle – a relationship economists describe as the Phillips Curve. Cyclical conditions are now tight in major economies, especially in the US. US unemployment rate has fallen to 4.1%, well below the Fed’s estimated Non2/7  BIS central bankers' speeches  Accelerating Inflation Rate of Unemployment (NAIRU) of 4.6%. Yet, wage growth has remained at around 2.5%, below the pre-crisis average of 3.5%. Whenever central bankers gather these days, this phenomenon of “missing inflation” is often the main topic of discussion. Many wonder whether the Philips Curve has permanently flattened – meaning whether the negative relationship between the unemployment rate and wage growth has fundamentally weakened. Some even ask if the Philips Curve is dead – if the relationship no longer exists. Why has “papa bear” inflation been missing to-date? The first and simplest explanation is that the headline measure of unemployment may be understating the level of slack in the economy. In the US, the IMF estimates that the output gap between actual and potential GDP has only just closed. The output gaps in the EU and Japan are still some way off from closing. There may also be quite some slack in the labour market that may not be fully apparent.

A financial crisis is a sure way of thwarting economic growth, as we saw nine years ago. What is the risk now? From one perspective, the wide-ranging post-crisis regulatory reforms have made the global financial system more robust and resilient. Large banks are stronger, more liquid, less leveraged. Derivative markets are safer, with central clearing covering more than 90% of OTC derivatives trades in the major jurisdictions. Yet, from another perspective, the risk of financial instability is not small. This is mainly due to the build-up of leverage in recent years. In the G7 economies, the ratio of government debt to GDP has increased by 45 percentage points since the crisis and is now at its highest since World War II. 5/7  BIS central bankers' speeches  In emerging Asia, corporate debt issuance has ramped up to about $ billion p.a. since 2014, three times the average volume in the preceding five years. Household debt has built up sharply in many advanced as well as emerging market economies, with escalating house prices a key driver. High leverage is a risk factor for financial instability. I spoke earlier about how an increase in interest rates in a high leverage environment can create debt servicing pressures. If these pressures lead to widespread credit defaults, financial instability is usually not far off. Another channel of causation from high leverage to financial instability is through sharp corrections in asset prices, particularly real estate prices.
Nor can it be ruled out that the temporary tax increases approved this year may have to remain in place for longer or be replaced in time by other permanent measures. BIS central bankers’ speeches  3  I believe that in a country as decentralised as Spain, and in light of the deviations that arose in 2011, what was needed was to accompany budgetary consolidation with a significant strengthening of the institutional framework, so that all tiers of government might be called on to meet their commitments. Fortunately, the recently approved Organic Law on Budgetary Stability is a substantial improvement here. Moreover, it is fully attuned to the recent EU reforms on governance. Also, the agreement reached a few days back between the central and regional governments under the aegis of the Fiscal and Financial Policy Council on the deficit targets for 2012 and on the consolidation plans to attain these targets is excellent news. This lays the foundations for avoiding overruns such as those witnessed last year. What is crucial now is the swift and effective implementation of the instruments envisaged in this Organic Law, in particular the monitoring and control mechanisms for public finances at all levels of government, and those intended to enforce compliance with the targets set by all of them. The law proposes substantially improving general government transparency at the different stages of the budgetary process. In particular, timely detection of budgetary deviations is considered essential so as to adopt measures.

We must use regulatory power to guide innovations - the example of the General Regulation on Data Protection (GDPR) , have the courage to develop an industrial policy with public-private partnerships, as in the case of artificial intelligence and batteries, and make progress, for example, on Franco-German business law. Climate change and carbon tax Lastly, the ecological transition is clearly one of our common structural priorities and carbon tax is generally considered to be the most effective instrument to fight global warming. The European agreement of 21 July provides for the Commission proposing in the first half of 2021 a "carbon border adjustment mechanism", accompanied by a "revised emissions trading system, possibly extending it to the aviation and maritime sectors." The advantage of this solution is that it provides the European Union with a resource of its own and restores fair competition between European products and imported products that have a higher carbon footprint. The success of this instrument will depend on our negotiations at the WTO, and on its more extensive integration into European policies (transport, industrial policy, etc.). ** Earlier I mentioned the difference in terminology between French and German: the French use "couple", while the Germans speak of "engine".
A capital conservation buffer of 2.5 per cent, added to a contra cyclical buffer, will create a stronger shock absorber than previously was the case. This contracyclical buffer is built up when times are good to then provide a safety margin during downturns. The capital adequacy requirement is also complemented with a pure leverage ratio measure, meaning that equity may not fall below 3 per cent of total assets. Under earlier frameworks, other capital, of lower quality, could have accounted for a large part of capital adequacy. This applies to both Additional Tier 1, i.e. other instruments that cover losses while the bank is active (going concern), and Tier 2, which is to say financing instruments that can cover losses if the bank should fail (gone concern) – for example, unsecured debts with long maturities that cannot be redeemed. The crisis has shown that, above all, it is Common Equity Tier 1 that can be counted on when the tide turns for the worse. All in all, the banks’ capital position will be strengthened considerably compared with previous regulations, contributing to the boosting of confidence in the individual banks and in the system as a whole. …clear measures for liquidity… In the autumn of 2008, we saw how a lack of confidence in the financial markets rapidly led to liquidity problems. So one priority for increasing financial stability has been to ensure the banks are able to manage liquidity problems in the short and long terms.

In the fiscal area, the post-crisis recovery has not been accompanied in a significant number of countries, advanced and emerging alike, by a sufficient reduction of structural deficits in public accounts and the halting of the process of rising public debt. More generally, in many cases it may be necessary to move forward with fiscal reforms that seek to reduce the distortions to growth while allowing the most vulnerable sectors of society to be supported more decisively. The limited fiscal space available is exacerbated in the longer run in many economies, principally but not exclusively the advanced countries, owing to the adverse demographic prospects. Ageing populations pose significant challenges for public finances, as they bear on both the revenue and the expenditure sides. On the expenditure side, ageing will considerably affect pension and healthcare spending which, in many cases, will require rethinking pension systems to guarantee their sustainability. On the revenue side ageing leads to changes in the composition of tax bases as it does to lower labour income shares, to capital deepening and to changes in the composition of consumption. In the area of monetary policy, many advanced economies are still in a situation of zero lower bound. More generally, in most countries the room currently available to face a hypothetical recession is less than that existing at previous similar cyclical junctures. Monetary policy also needs re-thinking, on the basis of more long-term challenges for the economy. The natural interest rate has been falling since at least the 1980s.
7 The first one is commonly called contagion and is closely studied in the research literature. For example, a supposedly idiosyncratic failure of a financial intermediary leads to the failure of other intermediaries. The second one emerges from imbalances that build up over time, such as credit booms or concentrations of lending in certain regions or sectors. These “bubbles” can go on profitably for most participants who “ride” them for quite a while. Then relatively small events or changes in expectations can lead to their breakdown, simultaneously bringing down a wide range of intermediaries and markets. 8 The third way in which systemic risk can materialise relates to economic downturns or other aggregate shocks that cause the collapse of a wide range of intermediaries and markets simultaneously. 9 Other important elements in systemic risk include the strong information intensity of financial contracts and transactions, and a high degree of connectedness between financial intermediaries and markets as well as a strong reliance on debt financing (leverage) and on maturity mismatches between assets and liabilities. These factors imply feedback mechanisms that amplify shocks and can lead to non-linearities in the financial system that then are easily transmitted to the real economy. Systemic stability, or the absence of systemic risk, can be seen as a public good, thereby legitimising the role of governments and other authorities in addressing it.

The development of the venture capital industry, a better framework for SME financing and the provision of micro financing continue to be important priorities to ensure that credit is made available to all segments of the economy, as well as to support the growth of new areas and industries. Increased focus on developing these financing modes has been supported with higher public sector budget allocations for the venture capital industry and for specific development financial institutions to channel micro-credit to small micro-enterprises. Priority has also been accorded to investment in information and communications technology by the banking sector. With the completion of the consolidation exercise, domestic banking institutions have actively embarked on upgrading their systems, including in product delivery, risk management and information systems. The adoption of technology in the Malaysian banking system has predominantly been to automate business processes. However, more recently technology has been used as a tool to assess and drive business performance. With competition in the market becoming increasingly intense, the ability to understand the drivers of performance and the ability to make prompt response is vital to remain competitive. Business delivery channels and business processes have also been reviewed to enhance efficiency levels and service quality to the customers. Many have formed strategic alliances with partners to enrich their value proposition to their customers through cross-selling of products and services. Indeed, the Malaysian banking industry has now become more consumer-centric.
There is also a very high degree of complementarity between the financing of investment projects, such as those envisaged in the NGEU programme, and the implementation of structural reforms. In particular, according to Banco de España estimates, if a careful 18  selection of NGEU projects were accompanied by various structural reforms to ease the rigidities in the product and labour markets, the potential growth rate of the Spanish economy could reach around 2% by the end of that decade, nearly 1 pp higher than at present. (vi) The fiscal consolidation challenge Maintaining high levels of government debt over time is a source of vulnerability and leaves less fiscal space in the event of adverse macro-financial shocks. In the coming years, public indebtedness will remain very close to or even exceed current levels, unless an ambitious fiscal adjustment plan is implemented. Specifically, various simulations indicate that if no fiscal adjustment is made in Spain in the coming years, the pressure exerted by population ageing on public expenditure will drive up the government debt-to-GDP ratio. Conversely, under an alternative scenario in which a consolidation effort is made – one consistent with maintaining the structural primary balance envisaged in the Banco de España’s latest macroeconomic projections for 2024 –, the government debt ratio will stand at levels close to 120% of GDP in the coming decades.

Már Guðmundsson: The financial crisis in Iceland and the fault lines in cross-border banking Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at FIBE, Bergen, 7 January 2010. *  *  *  It gives me great pleasure to be here in Bergen this morning to give an address on the financial crisis in Iceland, and I would like to take this opportunity to thank the organisers for inviting me to do so. You call this session Icelandic mysteries. At this juncture, this is a more apt phrase than you might think. We are currently waiting for the findings of a parliamentappointed committee that has been working hard for over a year, collecting evidence and analysing the causes of the financial crisis in Iceland. The committee is due to release its report in early February, and we hear the report and supporting material will be well in excess of a thousand pages. We know how the Icelandic banks failed in the autumn of 2008 and can identify some of the key vulnerabilities that led to their demise. However, some important pieces of the puzzle are still missing, in particular regarding the governance and risk management of the banks, on the one hand, and the Icelandic authorities’ crisis management and interaction with their counterparts in other countries, on the other. So what I will present here today is unavoidably a partial picture. 1 You could say that it is just as well, for this is a complex saga with many twists.
To meet the  4  When interpreting the figure, it may be useful to know that Prospera’s wage expectations systematically underestimate wage trends by around 0.5 percentage points. BIS central bankers’ speeches  7  inflation target in such a situation, the Riksbank would have to raise the repo rate more rapidly. This would further dampen employment. However, the result also depends on the reason for the higher wage increases. If these are due to the stronger development of productivity, costs will not increase and the intensifying effects on inflation and unemployment will not be experienced. My assessment is still that if wage increases were to be slightly lower than the approximately 3.5 per cent per year in 2012 and 2013 that the Riksbank estimated in its April forecast, not only inflation and unemployment, but also interest rates, could be lower. This would be preferable from the wider perspective of welfare. It would also reduce the risk that increasing energy and commodity prices or rising inflation and wage expectations will push up inflation beyond our expectations. Conclusion The Riksbank is not a party in the collective bargaining process. It is the social partners that conclude the agreements. But monetary policy aims to maintain a low and stable level of inflation. This job is made easier if wage formation works well. The effective functioning of wage formation since the mid-1990s is due to the improvement of both the conditions for wage formation and wage formation itself.

Today, the proportion of Thai exports to non-G3 countries growing significantly higher, particularly to China, and ASEAN. In parallel, the share of G3 in Thai exports has declined from more than 50 percent in 1995 to less than one-third. Ladies and Gentlemen, Turning to the final part of my talk. As a central banker, our challenge is to constantly weigh the balance between risks from global slowdown on our economic growth versus rising domestic inflation pressure. Despite more downside risk on growth at present, the central bank assesses that the Thai economy is growing at around its potential and demand pressure could transmit readily to higher inflation outcome as well as expectations. To this end, the Monetary Policy Committee has been raising the policy rate to normalize monetary policy and bring the real policy rate closer to the positive range, yet remaining sufficiently accommodative to cushion the downside risk on growth. With many uncertainties ahead, it is wise to keep the inflation rate low to ensure that the economy remains competitive and to minimize pockets of instability, whether through excessive growth of bank credits, fiscal spending, or asset price bubbles. Low inflation helps keep the health of the economy in check and preserve the purchasing power or real income of all segments of the population. This is especially important for salary earners and the poor, whose real income could easily by eroded by higher inflation. Worse is to allow inflation expectation to run away because it will be costly to get expectation well anchored again.
This brings us to the second part of our event today – the launch of one of ICLIF’s research studies which has been written by Mr. Rajeev Peshwaria, the CEO of ICLIF, published globally as a book entitled “Too Many Bosses, Too Few Leaders” by Simon Schuster of New York. The book illuminates on what it really takes to be an effective leader. The book extends beyond the advice on the distinct behaviors and attributes required of leaders to providing “a clear path”, “a road map” to achieving leadership excellence at every level in the organisation. In my own experience, the core foundations to achieve superior performance set out in the book is essential. Defining with great clarity the purpose and values of the organisation and articulating it throughout the entire organisation is key towards achieving these desired results. Then, it is sustaining the high level of energy and talent at all levels of the organisation is what will ignite the motivation to achieve the breakthroughs – that will achieve the ground breaking results – that will bring the organisation to the frontier of the business. Energy is the one thing you need heaps of in order to lead. Such energy to stay on course despite the most formidable of obstacles needs to be sustained. Not only must you find your own sources of energy, but you also have to energise others around you. The book discusses how to find that personal energy and how to energise others in an intrinsic way.

They are also used as animal feed – which means higher prices for meat and poultry. As rice is substituted for wheat, rice prices have also begun to increase. The disruption of commodity supplies is adding to cost pressures across a range of industrial activities. The Russia-Ukraine conflict has affected the supply of palladium and neon – two elements that are crucial inputs used in semiconductor production. This has raised chip prices which is in turn feeding through into the prices of products ranging from smartphones to refrigerators to automobiles. In short, the Russia-Ukraine war has sharply worsened the outlook for global inflation. The conflict is likely to be prolonged and thereby continue to impart an upward impulse to global food, energy, and commodity prices. This will in turn feed into global consumer price inflation in the months ahead. The inflation story in Singapore is not too different from the global story. As in the major economies, inflation in Singapore started edging up towards the end of last year on the back of a strong recovery in demand. The Singapore economy grew by a robust 7.6% in 2021 and the labour market returned to full employment. Core inflation edged up progressively over the course of last year, from 0.2% in Q1 to 1.7% in Q4, as spare capacity was absorbed. The growth momentum has slowed this year but the economy remains on track to come in within the lower half of the 3-5% GDP growth forecast.
Despite its substantial international integration, the Swiss economy, at this point, is scarcely affected by the turmoil in the international financial markets. Growth remained strong in the third quarter. Real gross domestic product rose at an annual rate of 3.3%. Employment continued improving across the board, in line with our expectations. In both the industrial and service sectors, the process of new job creation carried on. In construction, employment stabilised at a high level. Unemployment continued falling. As a result of the favourable developments in the labour market, consumer sentiment remains buoyant. Consequently, household expenditure is still increasing at a robust pace. Furthermore, strong demand for labour is now leading to a faster increase in real wages. Given this situation, private consumption should continue to support growth in 2008. Due to impetus from Europe, Asia and the oil-producing countries, goods exports are advancing further. Looking at production, expectations remain optimistic both for the manufacturing sector and for non-financial services – businesses expect the growth phase to persist. Investment activity remains lively. The banking sector is faced with the uncertainties that have arisen out of the developments in the US real estate market together with the structured products that relate to this market. It is possible that the contribution of the Swiss financial sector to GDP growth will fall as early as the fourth quarter of this year, due to a drop in the volume of activity on financial markets.

Over the years, we have put in place various arrangements to enable smooth information flows between the financial sector and the law enforcement community, within a controlled environment. These “public-private partnerships” (PPP) are vital as they allow the financial intelligence unit, law enforcement agencies and reporting institutions to leverage on intelligence-led collaboration and information sharing to detect financial crime and terrorism financing. This will further support investigation and prosecution processes. For Malaysia, our goal is to formalise and further deepen what we have built over the years. As such, I am pleased to announce that the PPP will be officially launched shortly by our Prime Minister. I wish to also express my appreciation to other participating agencies in the PPP namely Polis Diraja Malaysia, the Suruhanjaya Pencegahan Rasuah Malaysia, Jabatan Kastam Diraja Malaysia and the Securities Commission Malaysia, and also the 18 reporting institutions. Second, reporting institutions must accelerate efforts to further expand and develop their AML/CFT toolkit to deal with new and emerging risks. At our end, Bank Negara is in the process of reviewing our AML/CFT policies. A key outcome of this review is the move of our regulatory framework towards being more “risk-based” and “principles-based”. We have come a long way since the AMLA was gazetted in 2001. Since then, reporting institutions have matured in understanding and have fully implemented the regulatory requirements. This is also supplemented by the issuance of various guidance, technical notes and updates on regulation.