samchain/econo-pairs-v1 huggingface dataset:
Before I respond to these claims, let me make three points very clear. The first is that I have no objection to an open and informed public debate on the merits and disadvantages of the Link - and on possible alternative exchange rate systems. It is absolutely right that a policy that forms the keystone of our financial system should be open to scrutiny. The strong public and market confidence in our currency can only be sustained if the reasons for adopting the monetary policy we choose are properly understood, and if the limitations, and the merits and demerits of possible alternatives, are examined through informed and reasoned debate. We encourage this process in the various publications we put out, in our educational programmes, and through the presentations and discussions that my colleagues and I take part in with people from all walks of life. Secondly, the benefits and disadvantages of the Link - its effects on the economy, the experience of similar systems elsewhere, the possible alternatives - are, and always have been, subject to continuous and critical review. This process has been considerably strengthened in recent years with the creation of a dedicated research department within the HKMA, the establishment of the Currency Board Sub-Committee, and the opening of the Hong Kong Institute of Monetary Research. A very large part of the output of these institutions is made public, so that the range and depth of the research they carry out is available to anyone who is interested.

Others present considerable uncertainty: for example, the extent and duration of the collapse in business and consumer confidence, and the question of how far monetary and fiscal stimulus will contain the collapse; and the scope and economic effects of the war against terrorism, which, we have been told, will be long and unlike any other war. The effects on our regional economy are likely to be severe. We are heavily dependent on exports to the USA, at a time when these are declining and likely to continue to decline for some time to come. Capital inflows into the region are falling because of increased risk aversion. Within the region, many countries face persistent internal problems, in some cases - such as Indonesia - both economic and political. The big engine of the region - Japan - continues to falter, with declining exports, rising unemployment, a weak banking sector, and an economy officially teetering on the brink of yet another recession. The latest news from Singapore - in many senses our sister-city in the region - is not good at all. The bright spot in the region continues to be China, which has sustained real GDP growth of 7.6% and export growth of 7% for the first three quarters. It seems inevitable that exports, and in turn GDP, will be affected by the decline in consumer spending in the US, which accounts for around 20% of China's export market: the latest figures already suggest this.
In conclusion, I would like to bring another matter of concern to your attention. While preparing for this meeting, we faced difficulties in finding useful statistical information on the demographic and economic activity of Fier district. Taking into account the opportunities it has to offer, the reported statistics do not make this district distinguishable or comparable to the other regions inside or outside Albania. It would be of interest, for instance, to have detailed information on the free capacities in agriculture and industry; average profitability; non-utilized labour market resources, the level of education and human capital; unit labour costs, and capital and final product cost per unit;  4  BIS central bankers’ speeches  prices of other factors of production, and so on. The lack of these indicators makes it hard, and even impossible, to evaluate and compare the business plans that may potentially be introduced to the financial institutions or other national or international partners. It should not be forgotten that in the global era, the real competition for Fier region does not stand in the other regions of Albania, but in those similar in the European economies and emerging countries. At present, we do not compete with these economies as we are not and won’t be able to be part of the global market as long as we are not “quoted” in real time, using the same methodology and figures that allow the comparison of costs and opportunities.

Due to the rising costs, advanced economies have generally lost their historical advantages in producing goods and services, replacing the absent income with debt, which now they have to pay off. Why are these developments important to the Albanian economy?   First, it is necessary to understand that these advanced economies are our major trading partners. They are the main users of our exports and, at the same time, the source of imported consumer goods and fuels.   Second, these economies are the major investors in the Albanian economy and the financial system.   Third, these countries are hosting the Albanian migrants.   Fourth, we believe that another effect relates to the psychological factor, which emerges in the form of consumers’ and firms’ hesitation to consume and invest. Subsequently, the difficulties facing our neighbouring partners are converted into difficulties for the Albanian economy. Any cuts in consumer and investment spending, be it private or public, will later yield cuts in these countries’ investments in Albania, lower demand for exports, lower remittances; in short, the fall in all aggregate demand components in Albania. This would generate the fall in output, the creation of spare capacities, the deterioration of firms’ and consumers’ balance sheets, and a number of other adverse phenomena. At present, the Albanian economy generates nearly as much as half of its potential growth. This gap, which in our terminology is known as “output gap”, is partly explained by the difficulties facing our trading partners.
In this respect, the Chilean financial system shows better performance than other Latin American and Emerging economies, in dimensions like market capitalization, number of branches per inhabitant, use of derivatives, and participation in domestic credit to the private sector, to name a few. Nonetheless, increased development and complexity of financial markets also means that risks may be higher, and that a stronger and more sophisticated regulatory framework is required. The New General Banking Law and future challenges The New General Banking Law, takes important steps in this direction, by embracing the recommendations of Basel III on banking capital and reserve requirements, as well as on corporate governance. Supervision is also improved under the new law, by merging SBIF into the new Financial Markets Commission (CMF) in order to have a system-wide oversight of risks and vulnerabilities in financial markets. Through the day, the different panels will discuss the role of macro prudential policies and the implementation challenges in adopting Basel III standards. The main goal of these standards is to increase the resilience of the banking sector, by increasing quantity and quality of capital requirements. This framework combines bank-specific measures with macro prudential actions to contain potential systemic risk. In this respect, one of the new tools is the countercyclical capital buffer: an additional capital requirement that could be activated and deactivated by the Central Bank depending on the state of the financial cycle, and whose main goal is to preclude the incubation of systemic risks and increase the resilience of the system as a whole.

According to this principle, monetary policy decisions taken in a centralised fashion by the Governing Council of the ECB are implemented in a decentralised way by the national central banks. Contrary to the US, the use of modern technology and communications has made it possible for market operations not to be concentrated at a single geographical location, but to be carried out simultaneously at all of the National Central Banks. The same type of arrangement applies in other monetary areas (cash management, payment systems, etc.). The efficiency of such a decentralised scheme has been demonstrated in August and September when the inter-bank money market has gone through marked turbulences. The close relationship of national central banks with their banking system has allowed better understanding and addressing their refinancing needs. The Eurosystem benefits from an efficient operational framework The operational framework is based on two main guidelines: -  a range of monetary policy instruments selected in accordance with the principles of an open market economy, a level playing field, simplicity and transparency: these instruments enable the smooth adjustment of banking liquidity and effective steering of short-term interest rates. I should add that the Eurosystem accepts a wide range of collateral, including private securities, to carry out its open market operations.
The Storting realised that the objectives of monetary policy could be best achieved if the monetary system was shielded from the arbitrary intervention of the monarchy. The distance between the seat of government in Oslo and the central bank in Trondheim was a perhaps deliberate twelve day journey.28  26  A central bank requires mechanisms that ensure confidence. Kydland and Prescott demonstrated that policymakers who tried to pursue an optimal plan for economic policy may have a strong incentive to deviate from the same plan at a later point in time. This will be the case, even in the absence of news that would warrant a change in the plan (see Kydland F.E. and E.C. Prescott (1977), “Rules Rather Than Discretion: The Inconsistency of Optimal Plans”, Journal of Political Economy, Vol. 85, No. 3, pp. 473–491). The expression “tying oneself to the mast” encapsulates in a simple way how the central bank can avoid the dilemma that Kydland and Prescott describe. The traditional task of the central bank was to issue notes and coins and ensure a well-functioning payment system. But the payment system is only well-functioning when the public has confidence in the value of money. Thus, the primary duty of central banks is to ensure that the value of money is stable. The value of money relies on the confidence of the public that a responsible policy is being pursued. If a central bank is to keep its promise and deliver stable money, it is important that the political authorities stand behind it.

Let me elaborate on these two themes: why liberalise the financial sector, and why liberalise at a measured pace. In doing so, I will draw partly from Singapore’s experience. Singapore and Myanmar are two very different economies and it would be unwise to apply Singapore’s experience directly to Myanmar. But I think the overall lesson is relevant: It is critical to open up, but open up at a measured pace. Why financial liberalisation is important A well-developed financial sector can be a catalyst to spur and sustain economic growth. It will lead to more effective mobilisation of domestic savings, help to harness foreign savings, and improve the efficiency of investment allocation. And opening up the financial sector to foreign participation can play a critical role in catalysing the sector’s growth and development. A basic purpose of banking is the provision of credit for economic and social development. Large segments of the Myanmese economy and population do not have access to affordable funding. Foreign financial institutions can complement the local banks in effective credit intermediation. It will deepen the financial sector, thereby helping to raise household savings and divert funds away from the shadow financial system. Foreign financial institutions can provide a channel for Myanmar to tap into foreign savings to drive its growth, even as the country ramps up the mobilisation of domestic savings. This is  BIS central bankers’ speeches  1  particularly relevant for financing infrastructure development, which is critical to drive Myanmar’s economic growth.
Globalisation raises the demands on flexibility Globalisation means ”the growing mutual dependence between countries around the world through the increasing volumes and amounts of cross-border transactions in goods, services and capital flows”.1 This process has intensified in recent years, partly reflected in a sharp pick-up in world trade, an even faster increase in direct investment and a very steep rise in global equity and currency trade. Globalisation has given rise to rapid structural change, resulting in jobs being shed in certain sectors or being relocated to countries with lower production costs. Sweden has, for a long time, experienced fast structural change, which contributed to the strong economic performance in the 1990s. Less than 100 years ago, around half of Sweden’s employed worked in agriculture and forestry; today, that figure is only 2 per cent. Over the same period, the proportion of the employed in the services sector has risen from roughly 20 per cent to 75 per cent, at the same time as the proportion in manufacturing increased at first from about 30 per cent to just over 40 per cent and then fell to 20 per cent. Among other things, we saw during the 1960s and 1970s that large parts of Swedish manufacturing, in the shape of the textile and shipbuilding industries, were outsourced from Sweden.

In Switzerland and the UK, where this trend has been going on the longest, 30-40 per cent of the shops’ products are private labels.4 Sweden has long been one of the countries with the lowest share of private labels, around 10 per cent. According to a limited survey by the Swedish Competition Authority of typical low-price goods, the prices of supplier brands have developed in line with the CPI while the prices of private labels have fallen sharply. Increased competition and lower prices Food prices in the CPI have dropped more or less since the start of last year. Tougher competition increases the pressure on food retailers to cut prices in order to keep customers, even though other factors, such as service and quality, are important to consumers in their choice of shop. Lower prices are made possible by reduced profit margins, lower taxes or lower costs resulting from, for instance, lower wages, higher productivity or a more limited product range. VAT rates in the Swedish non-durables sector have not changed during the current decade. However, wage costs have increased at a slower rate, which has led to lower unit labour costs in the wholesale and retail markets, despite a decline in productivity growth in recent years. Moreover, companies' profit margins have continued to narrow. So it seems that the stiffer competition has contributed to lower food prices primarily through smaller profit margins and low wage increases. How much lower can Swedish food prices go?
At the end of 2000, it probably will be in at least four euro area member countries and in a total of at least seven European Union Member States. Turning to the third condition, it is important to remember that the considerable improvement in the cost competitiveness of the French economy in the 1980s and 1990s played a very large part in the recent success of our economy, a fact that we perhaps tend to neglect a little today. If the French economy has grown more quickly than the other main European economies between 1997 and 2000, whilst recording the largest external surplus in Europe and the second largest in the world over the last three years, it is to a large extent because, thanks to our low inflation, average unit wage costs in the manufacturing sector have, since the start of 1987, increased significantly less in France than in the euro area as a whole (some 16% less), as can be seen from the following graph: Competitiveness of the French economy Unit production costs in the manufacturing sector (unit wage costs) Relative to Monetary Union Member States 120 115 110 105 100 95 90 85 80 75 Jan. 1986  Jan. 1988  Jan. 1990  Jan. 1992  Jan. 1994  120 115 110 105 100 95 Gains in competitiveness 90 85 80 75 Jan. 1996 Jan. 1998 Jan. 2000  Nominal exchange rate: from the franc to the euro (base 100 in 1987).

Jean-Claude Trichet: Report on the operations of the Banque de France  Introductory letter for the Annual Report of the Banque de France, by Mr Jean-Claude Trichet, Governor of the Banque de France, submitted to the President of the French Republic, the President of the Senate and the President of the National Assembly. *  *  *  I am honoured to present you with the report on the operations of the Banque de France, monetary policy and the prospects for it, as required by law. As is the custom, I also submit herewith the Monetary Policy Council’s comments on the past year, which was marked by the introduction of the euro and the implementation of the single monetary policy. After a brief slowdown at the end of 1998 and the start of 1999, French economic growth became firmer from the second quarter of 1999 onwards. The expansion became more broad-based, which points to robust growth in 2000, as do forecasts and business surveys. Foreign trade, which had an adverse effect on activity in 1998, sustained GDP growth in 1999 thanks to the recovery in exports that started in the spring. Furthermore, domestic demand remained strong. The particularly high level of household confidence, the surge in job creation and the purchasing power generated by continuing subdued inflation fostered firm consumption growth, which rose by 2.2% on average in 1999, while corporate investment recorded sustained 7.6% growth. Overall, GDP increased by an average of 2.9%.
The level of outstanding debt as a percentage of the Island’s annual GNP, a ratio used by many fiscal analysts, rose from about 60 percent in 2000 to more than 100 percent in 2013. Debt ratios in this range can inhibit economic growth in that they generally lead to higher financing costs, which in turn, can lead to constraints on access to further financing. The recent downgrading of Puerto Rico’s public debt to non-investment grade was a clear signal that the current fiscal situation poses serious risks to the Island’s economic future. Steps toward fiscal sustainability Next, I will discuss the buildup of Puerto Rico’s public debt and then provide some thoughts on ways to improve the Island’s fiscal health. To open this discussion, it is worth noting some key features of Puerto Rico’s fiscal institutional environment. The Commonwealth has a close relationship with the U.S. government which, in many ways, is analogous to that of a mainland state. Puerto Rico shares a common market and a common currency with the U.S. mainland leading to strong economic interdependencies. Federal aid is a major source of revenue for the Commonwealth and Puerto Rican residents participate in large U.S. social insurance programs such as Social Security and Medicare. In addition, Puerto Rican debt trades as a municipal security in the U.S. capital markets, and much of the interest earned on this debt is exempt from local, state and federal income taxes, regardless of where in the U.S. the investor lives.

It seems likely that any country in a similar debt situation to Puerto Rico would have faced difficulty in continuing to raise money in the bond market and would have faced questions about the sustainability of its debt level. Debt sustainability is generally defined as a condition where government debt is at a reasonable level – one with acceptable risks to market confidence and long-term economic growth – and is not on a path to increase indefinitely relative to some measure of national income. Stabilizing Puerto Rico’s debt as a share of the Island’s income and then reducing its debt to more sustainable levels should be a key goal of the Island’s fiscal and economic policy. While the precise path toward lower debt burden is uncertain, the trend is largely determined by the interaction of three factors: the government’s fiscal policy, the growth rate of the economy and the interest rate on the public debt. Regarding the buildup of new public debt, the Commonwealth government has stated its intention that the general fund budget will be balanced in fiscal year 2015. This intention, together with the stance of not using deficit financing to support public corporations, should greatly limit the issuance of new debt. The measures put in place during this year have already had some success in cutting the projected budget gap for the current fiscal year. But what other steps can be taken to move the Island toward fiscal health?
Chart 4  Chart 5  Real interest rates have also declined at longer horizons  Longer term yields insensitive to policy surprises  Source: Bank of England  Source: Bank of England and Bank calculations  QE is a different matter. As has been well documented elsewhere, announcements of asset purchases did have statistically significant effects on longer-term interest rates. Work at the Bank suggests that the combined effects of the various stages of QE reduced 10-year gilt yields by as much as 100bp. But it’s not clear for how long that effect has persisted: there are reasons to believe that asset purchases have a greater impact when markets are more illiquid, and have less capacity to absorb the flows. Most of the decline in longer-term real interest rates occurred before the crisis. And, in any event, the first point above still applies: judging by the subsequent behaviour of inflation, QE looks simply to have brought forward a decline in real interest rates that would have occurred anyway, only more painfully so. As the Bank of England explained in a Quarterly Bulletin article a couple of years ago, without QE we’d have experienced higher unemployment, lower wages and lower inflation. It’s hard to see bond yields rising in such an environment.

Different jurisdictions will come up with different arrangements to address this issue, but I would say that every jurisdiction is going to need its own solution. And, perhaps for the first time, that has highlighted the need for some international co-ordination of policies on shadow banks. The FSB is just starting to explore this virgin territory.21 Asset managers and incentives The vast majority of the asset management world is not engaged in shadow banking and, more important, does not of itself jeopardise the stability of the system directly if it gets into trouble. The taking and absorption of risk by unlevered funds is a fundamentally healthy part of the system. But financial stability authorities cannot be indifferent to this industry. By investing in the debt and equity of banks, it is a vital part of market discipline. We do not want – and cannot have – a system where the first line of defence after the management of banks themselves is the cadre of official sector supervisors. For the system to be healthy, we need boards, auditors, equity investors and debt holders to play a big part, and for investment decisions to be subject to constructive incentives. Yet, there is relatively little debate about whether the incentives of asset managers made the system more prone to crisis. Although not a subject for today, an important part of this is the drive to develop resolution regimes that entail debt holders taking losses on their exposures to distressed banks and dealers.