samchain/econo-pairs-v1 huggingface dataset:
Also, the series of corporate failures in 2001-02 revealed weaknesses in corporate governance practices, including accounting and audit rules, which are currently being addressed by the US authorities. Latin America Over the last two years, growth in most Latin American countries has been weak. This year, however, there are signs of a modest upturn, with confidence slowly returning. This has been due, in part, to the direction of the structural reform agendas of many countries in the region. To strengthen the foundations for growth, policy-makers must remain committed to implementing structural reforms. Countries that have made the greatest strides in reform are already reaping the benefits. Both Mexico and Chile, which are at the most advanced stage of reform in the region, have proven remarkably resilient to turmoil in regional economies and have weathered the period of weak global growth well, considering their exposure to sluggish mature economies. Other countries in the region have embarked on reform agendas and should be encouraged by the international community to see them through as swiftly as conditions allow. East Asia As for the crisis-hit countries in Asia, economic performance has been positively correlated with progress in reforms. Stronger average growth potential in countries such as Korea and Malaysia reflects partly the authorities' determination in pushing through corporate reforms, reforming the financial sector and strengthening insolvency laws. In China, the authorities have repeatedly emphasised that banking reform, if coupled with the restructuring and privatisation of state-owned enterprises, is key to strong growth and financial stability in the medium term.

Given that the target of imminent euro adoption is gone, and the large euro zone nations do not provide real leadership on fiscal soundness, there is less incentive for some of the new member states to stick to the consolidation of their public finances from today’s deficits above 5 per cent of GDP. The consolidation plans are already too dependent on a continued upturn. Whether in the old or new member states, there is an additional problem, as we are entering a period of intensifying structural changes. Old industrial patterns in Europe are being changed when confronted with both the boost to productivity from IT, as partly realised since the late 1990s in the US, and globalisation and enlargement, all of which supports this process. These trends will eventually help productivity and growth in Europe to start to catch up with the US again. But in the short term the structural changes will lead to higher frictional unemployment as old industries are more rapidly replaced by new ones. In addition, the recent downturn never led to a dramatic increase in unemployment or decrease in employment in the euro area; hence, the upturn is probably also less likely to lead to rapid job creation. Both factors create new incentives for fiscal policy to focus more on short-term job creation schemes and less on long-term fiscal soundness. So from this perspective, too, the hope that the recovery alone will “fix” the European deficit problem might be too optimistic.
Fund lending The areas of activity that I have just mentioned involve in the first place the long-term prevention of crises and the promotion of trade and growth. They account for the major part of the IMF’s work. However, the IMF also has the role of fire brigade in the international financial system. Roughly, financial problems occur in four or five countries each year. This often includes difficulties for these countries to handle their foreign payments - their foreign exchange reserve runs low since imports are greater than exports, and there is insufficient foreign capital inflow to bridge the gap. In such a situation, the country can apply to the IMF for a loan. A team of economists is then quickly put together and sent to the country to assess how severe the crisis is and what has to be done to regain control over the situation. Together with the country’s government, the IMF staff rapidly creates an economic reform programme that runs over a couple of years. The purpose of this programme is to establish confidence in the country’s economy and in this way turn the outflow of capital to an inflow, so that the country can regain balance in its payments. During the period that the country is undergoing the programme, it can also borrow limited amounts from the IMF to assist in covering parts of its deficit. The IMF’s lending is thus relatively short-term.

Another important issue to be discussed is how the effects of commodity prices on inflation, economic activity and exchange rates differ with respect to different monetary policy regimes. Another important issue is the interaction among different economic policies vis-a-vis the commodity price fluctuations. Distinguished guests, Studies included in the program will substantially contribute to the understanding of the commodity price dynamics and the policy responses against the macroeconomic effects of these dynamics. In this context, I would like to thank the organization committee for their efforts for this conference program which gathers very interesting and enlightening studies. I also believe that the conference will provide a platform which will be highly beneficial for the exchange of views among participants. Thank you very much in advance to all participants for their contribution. Now, I would like to give the floor to Pierre-Olivier Gourinchas, professor of economics at California University-Berkeley and the chief editor of the IMF Economic Review journal to open the first session. 2  BIS central bankers’ speeches
Despite the weakened krona, the decrease in exports was extremely severe. It is natural to ask why. One explanation is that a large part of the decline in world trade affected investment goods and durable consumer goods such as cars. The purchase of these goods could easily be postponed when the crisis broke out. Such product groups represent an important part of Sweden’s exports. In could thus be said that Sweden was impacted particularly severely due to the composition of its exports. As I mentioned in my introduction, Sweden is a small, open economy that is highly dependent on exports. During 2009, GDP fell by over 5 per cent, the sharpest decline since the Second World War. Even if the krona was heavily weakened, this was not enough to prevent a major fall in exports. On the other hand, there are many indications that the weakening of the krona contributed strongly towards preventing inflation from becoming excessively low. Unlike abroad, where inflation became negative, inflation in Sweden remained around the target even during the most acute phase of the crisis (see Slide 6). Note that inflation in Sweden here disregards changes in mortgage interest expenditure – it is measured using the CPIF. This approach corresponds better with the way that inflation is measured abroad. 2 Developments in Sweden during the financial crisis differ in several regards from the crisis we experienced during the 1990s, when major problems were present in the Swedish economy before the crisis erupted.

However, the discussion in recent years has mainly focused on another reason why the central bank might want to keep an eye on asset price trends, and this is that the collapse of inflated asset markets can have a serious impact on the real economy and in some cases eventually threaten the stability of the financial system. Apart from protecting monetary value, which is perhaps their best-known function, it is also the task of central banks to promote financial stability, whether directly or indirectly. This is even suggested by the Swedish legislation, which lays down that the Riksbank shall seek to “promote a secure and effective payment system”. Dramatic events following the collapse of asset markets are usually assumed to be triggered by the consequences in the credit market and company balance sheets. When asset prices rise more than economic fundamentals justify, a fall in prices is inevitable sooner or later. Such an adjustment can be very costly if financial institutions have widely accepted assets as collateral for loans during the period of rising asset prices. When there is a sudden sharp fall in prices, the value of the collateral diminishes. In such a process falling asset prices can cause losses to banks and other financial intermediaries and, if the worst comes to the worst, a full-scale financial crisis. These problems can, moreover, be exacerbated by exchange rate fluctuations.
The ratio of current account deficit to GDP is 11.8 percent in Bulgaria, 8.7 percent in Romania, 7.9 percent in Hungary and 7.2 percent in the Slovak Republic 1 . Another point that I would like to highlight about the current account deficit is that sustainability of high current account deficit depends on the financing quality of the deficit. Within this framework, I would like to present some figures on the maturity structure of capital inflows to Turkey. In April 2006, net capital inflow excluding IMF credits was USD 53.6 billion. The share of direct foreign investments and long-term capital in financing of current account deficit increases rapidly. In April 2006, long-term capital inflow became USD 23.2 billion and credit utilization of the non-banking private sector became USD 21.1 billion. The primary source of the capital inflow was long-term capital and credit utilization of the non-banking sector; 85 percent of which was long-term. Making a projection, we expect this financing structure to continue. According to the “Foreign Direct Investment Confidence Index”, which questions the countries’ capacity to attract investments over a 13 year period and which is an indicator of foreign direct investments that will come to the country, Turkey was the 13th most attractive foreign direct investment destination among 25 countries in  1  IMF, World Economic Forum, April 2006. BIS Review 68/2006  7  2005 2 .

Before all else, the point that I would like to emphasize is that our inflation targets are point targets. These targets have been set as consumer price index inflation. Our policies are established solely with the aim of achieving these targets. In our monetary policy implementations, we have announced our inflation targets for a three-year period in order to increase the emphasis placed on medium-term. In this context, the inflation target is 5 percent for 2006 and 4 percent for 2007 and 2008. To apply a rule to the Central Bank’s accountability in the event of any deviation or the possibility of deviation from the inflation target, a + 2 point-uncertainty band has been established around the point target. Once again, I would like to underline the significance of this issue. This band, which has been formed around the inflation target, aims at setting the accountability criteria. Looking at the practices around the world, we see that a 40 percent-uncertainty band has been formed around the point target in most countries. Our implementation is based on this approach. In the event that inflation is realized outside this band or, in case of such a possibility, the mechanisms specified with respect to accountability will start. With the introduction of the formal inflation targeting regime, interest rate decisions are made by voting at the Monetary Policy Committee meeting. Monetary Policy Committee meetings are held once a month on pre-announced dates. Nevertheless, when deemed necessary, extraordinary meetings may be held, such as yesterday’s meeting.
Pricing in different forward markets currently gives a slightly divided picture of what direction prices will take. The oil price has risen more than expected and forward rates imply that it may remain at a higher level. At the same time, the world market price for certain foods and metals has fallen in recent weeks, for instance, the price of wheat, meat and aluminium. However, the price of some other foods, such as rice, has risen recently. …but we must nevertheless take a stance But regardless of whether the international price impulses are temporary or more lasting, they must not be allowed to push up inflation permanently! In my opinion, the risk of this has increased in that inflation expectations have risen during the autumn. According to Prospera’s survey in April, however, expectations have fallen slightly. The National Institute of Economic Research’s Consumer Tendency Survey also indicates that households’ inflation expectations have been adjusted downwards since the February report. But expectations are still a little too high, particularly in the longer term. And this was one reason why I voted to hold the repo rate unchanged at 4.25 per cent at our most recent meeting. Other important factors behind my stance were that, according to our forecast, inflation will overshoot the target for a good while to come, at the same time as growth remains fairly robust. Weighing together these factors also indicated that the interest rate may need to remain at its current level for some time to come.

Irma Rosenberg: Rising commodity prices Speech by Ms Irma Rosenberg, First Deputy Governor of the Sveriges Riksbank, at SEB, Stockholm, 9 May 2008. *  *  *  A challenge for the central banks What have we been able to read in the news in recent months? Let me give some examples. Mining companies have begun prospecting for ore in many parts of Sweden, particularly in the Norrland region. Municipalities which have long experienced problems with emigration, such as Pajala, are now facing a more positive situation. Optimism has increased. Increased trade barriers are being reported in some parts of the world. But this is not a question of what has been the usual case, where countries protect domestic industries by limiting certain exports. Instead they have introduced high charges to prevent exports of foods such as grain and rice. We have also been able to read about demonstrations and food riots in poor countries such as Haiti, Cameroon and Burkina Faso. The UN food organisation FAO has also warned of social and political unrest in several countries. Why am I taking up these examples? What have they got in common? Well, they are the result of one and the same phenomenon – that world market commodity prices have almost exploded in recent years. The high metal prices have made it profitable to search for ore and extract metals that earlier would have been left in the ground.
The intention is to achieve implementation as closely as possible to the G10 schedule. Examples of tricky issues to be considered with care are: how to (or whether to) apply operational risk requirements for smaller institutions; how to carry out the validation of internal models for both market risk (we still do not allow banks to use them for capital purposes) and IRB; how to encourage more complex banks to adopt IRB. There are, however, more pressing priorities for Brazilian supervision at present, such as the improvement of recently implemented processes of risk focused supervision, the consolidation of the New Credit Information System, the studies underway for the introduction of a supervisory rating system geared towards the determination of the adequate frequency and intensity of supervision for each particular financial institution/conglomerate and the definition of strategies for consolidated supervision and international co-operation. The New Accord will be most likely implemented in Brazil in a gradual manner, the new rules co-existing for a while with the old ones. This will be the case, for example, of the smaller banks, to which will be applied either the simplified standardised approach, which does not depend on external credit assessment institutions, or the current approach. One possibility is the application of the current approach with slight modifications, such as a review of the present weights and the incorporation of some innovations from the standardised approach. For these less complex institutions, the capital requirement for operational risk might not be explicit, but only covered under Pillar II.

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On redistribution, if the past repeats itself Mark Twain-style, the gap between skilled and unskilled workers could further widen as hollowing-out intensifies. This could bring pressures to reallocate income from rich to poor, from owners to workers (Brynjolfsson and McAfee (2014)). It could also mean the gap between capital (those who own the robots) and labour (those who work for them) shares could widen further. If so, that may require a rethink of the relative roles of capital and labour, not least when it comes to running public companies. At present, owners of capital have the whip hand – no longer literally, but legally – when it comes to running public companies. That is why shareholders are often called, quite misleadingly, the “owners” of a company. This model of corporate governance has served the world well for over a century. But, today, it may not always make for the best outcomes, either for companies themselves or for wider society (Haldane (2015)). And a further tilt in the balance of power in favour of capital could make that situation worse. There are already corporate governance models which strike a somewhat different balance. Interestingly, many of today’s largest and most successful technology companies are in private hands. Even for those technology companies which have gone public, ownership and control has often been separated from financing through dual-class share listings which retain voting rights for the founders and workers.

As it emerges from its most severe set-back since the 1930s the economy remains, to quote Churchill from the 1930s, a riddle wrapped inside a mystery inside an enigma.2 Let me give examples of each. First, the riddle. Data on the economy is riddled with uncertainties and beset by revisions. A few weeks ago, we awoke to discover that we as a nation were £ billion better off than we had thought, courtesy of the Office for National Statistics. Alas, my excitement soon gave way to mixed emotions: this windfall was in part the fruits of charitable, drugs and prostitution-related activities, previously under-recorded. What a party that must have been. A further set of systematic revisions to existing estimates of the National Accounts data is planned later this year. It is well-known, and entirely understandable, that these data are subject to revisions which are to some extent predictable. That is why, before the Bank even starts forecasting the future of the economy, we begin by backcasting and nowcasting the past and the present. To give a current example, although the estimate of first quarter GDP growth is 0.8%, the Bank expects the final estimate to be 0.9% given the strength of business surveys. The 90% confidence interval around this estimate is 0.4% to 1.4%. Put differently, we can be 90% confident that annual growth in the UK economy lies somewhere between 5.4% (a raging boom) and 1.4% (an anaemic recovery). Hence the riddle.
The reforms aimed at the treatment of systemic institutions may be grouped under two major headings: supervisory measures and new legal frameworks. 2  BIS central bankers’ speeches  Addressing firstly supervisory measures, solvency requirements for these systemic institutions have been tightened. Such tightening, on top of the levels set under Basel III, has been implemented in two phases. An initial step involved the Basel Committee establishing a methodology, based on five indicators, to identify these institutions. These indicators reflect the size of banks, their interrelatedness, the lack of substitutes for the services they provide, the global scope of their activity and their complexity. The following step was to impose capital surcharges, on a staggered scale from 1% to 2.5%. The second group of reforms refers to resolution, which involves an authority restructuring a bank through the use of specific tools, with the aim of ensuring the continuity of the bank’s critical functions and thus preserving financial stability. The essential characteristics all resolution regimes must meet were listed in the FSB document entitled “Key Attributes for Effective Resolution Regimes”. This has been one of the most important agreements reached to date on the matter. Resolution In the European sphere, the Bank Recovery and Resolution Directive have recently been approved, incorporating the FSB guidelines into the acquis communautaire. In Spain, Law 9/2012 of 14 November 2012 on the restructuring and resolution of credit institutions had already foreseen several of the elements required in this area by the FSB and by the Directive.

It is a shame that such an understanding of the intricacies of development and human satisfaction are not more widely understood and appreciated. As for Thailand, we may begin to foster this philosophy through adopting a more diverse array of measures of development and success. Agencies such as the NESDB should publicly announce and raise awareness of the diverse aspects of development, success, and prosperity. For example, these indicators can include rates of water accumulation for use and amount available in reservoirs each year, the number of villages that face water shortages each year, increase (or decrease) in forested areas, ratios of industrial factories with substandard water treatment procedures, oil dependency ratios of the industrial sector, or teacher-to-student ratios, to name a few. Our country’s leaders need to commit to certain goals and targets that are clearly and publicly announced. The public’s perception that growth and development is reflected only in growth of GDP should be corrected. Listening to me today, I am sure many of you may think that my visions are only a dream that will be hard pressed to find their way into reality. I do admit that many of these proposals will be difficult to put in place in practice, but they are not impossible. They are actions which we need to push towards, and  4  BIS Review 43/2006  at the soonest. I have discussed these issues in other venues and fora and with many positive reactions.