samchain/econo-pairs-v1 huggingface dataset:
We must look at the institutions active in the financial markets; monitor how borrowers and other operators who could affect the banks behave and how the infrastructure supporting the financial system functions. It is difficult to determine which problems could constitute a threat to the system. Let me take the IT bubble in 1999 and 2000 as an example. If the banks had financed the many newly-started IT companies, they would have been hard hit when the air went out of this market. This would in turn have had repercussions for the real economy. However, it was not the banks who acted as venture capitalists here. This meant that the risk of shocks in the economy as a whole was less. Another example is what happened at Barings Bank a few years ago, when one of their foreign exchange traders speculated and lost around SEK 10 billion. The Bank of England refrained from intervention and did not provide the bank with any support, although a major bank was suffering serious problems that eventually caused its failure. This is because Barings’ problems were not expected to have any serious repercussions for the system as a whole and thus were not a stability issue. As in other sectors, bankruptcies do occur. This is normal and also important for market discipline.

Making this translation in the loss function, we see that the conservative central banker attempts to minimize the equally weighted sum of squared inflation and unemployment deviations: L = (π – π*)2 + 1 * (u – u*)2 where u and u* are the actual and natural rates of unemployment6 The bottom line is that a conservative and tough-minded central banker can still value deviations in unemployment from the natural rate equally with deviations in inflation from its target. Accordingly, an inflation rate of 5% against an inflation goal of 2% presents this  3  Taylor, John B. 1979. “Estimation and Control of a Macroeconomic Model with Rational Expectations,” Econometrica 47 (5) September, pp. 1267–1286. 4  For example, Woodford, Michael, 2005. “Central-Bank Communication and Policy Effectiveness,” Paper presented at Federal Reserve Bank of Kansas City Symposium on “The Greenspan Era: Lessons for the Future,” Jackson Hole, Wyoming, August 25–27, 2005. Available at: http://www.columbia.edu/~mw2230/JHole05.pdf  5  Rogoff, Kenneth S. 1985. “The Optimal Degree of Commitment to an Intermediate Monetary Target,” Quarterly Journal of Economics 100 November, pp. 1169–1189. 6  That is, Okuns’ Law says (y – y*) = 2*(u – u*), where u and u* are the actual and natural rates of unemployment. Making this translation in the loss function (so squaring and multiplying by ? = ¼ yields L = (? – ? *)2 + 1 * (u – u*)2.
First of all, although the unemployment rate in the Turkish economy is quite high compared to the EU members, we observe that the total increase in employment throughout the year 2004 was much higher than that of the EU members and acceding countries. Another notable issue about the structure of our labour market is that Turkey s economy is moving from a labour intensive structure toward a capital intensive one. And it is a natural consequence that during this period some sectors are expanding while others are contracting. What this implies is that the structure of employment has also been changing. In fact, even though it is still  15  Under-Secretariat of State Planning Organization. 16  http://www.europa.eu.int/comm/eurostat. 17  International Labour Organization. 18  Böttcher, B. (2004). "Turkish Accession to the EU- The Way is the Goal". Deutche Bank Research. 19  International Labour Organization. 20  www.un.org. 6/8  high compared to the EU members, the share of the agricultural sector in total employment has been falling while that of services sector has been on the rise. And I believe that Turkey s young and dynamic demographic structure supports easier transfers between sectors and facilitates improvement in the sectoral dispersion of employment. Having mentioned all these demographic and labour market conditions of the EU and Turkey, I need to emphasize the importance of making further progress on educational reforms in Turkey.

MAS has therefore re-centred its exchange rate policy band at the current level of the nominal effective exchange rate of the $ while maintaining a zero percent appreciation path and no change in the width of the policy band. Promoting key growth areas in the financial sector The weaker domestic and regional economic environment in the last two years has dampened growth in Singapore’s financial sector. Financial sector value-added contracted by 4.8 per cent in 2002 compared with a rise of 2.2 per cent in 2001. The banking industry was affected by weak loan demand. The insurance industry experienced a sharp decline in activity following three years of rapid growth. The securities industry was dragged down by falling equity market volumes and bearish market sentiment. But the weakness in overall financial activity masks strong performance in key growth areas such as asset management and treasury business. Total assets managed by Singapore-based financial institutions grew a healthy 12 per cent in 2002, bucking the global trend of a decline in assets under management. In the debt market, 2002 saw continued healthy growth in structured debt and a record number of issues by foreign entities. Singapore has also benefited to some extent from the consolidation of financial sector companies worldwide. Various institutions have chosen to centralise their regional operations in Singapore. For instance, in treasury, several global players consolidated in Singapore their regional foreign exchange and derivatives business.
Although the repo rate was cut to 0.25 per cent in 2009, it has been higher than this since summer 2010. The problem is rather that it may be desirable in the future to stimulate the economy further, for instance, if the economic recovery comes to a halt. The scope for further cuts in the repo rate may then be limited. The credibility of the inflation target could be impaired Finally, it is a problem if monetary policy and the Riksbank start to lose credibility. The value of money in modern economies is entirely based on expectations. Firmly-anchored inflation expectations and confidence in the central bank’s actions therefore comprise the basis for monetary policy. The inflation-targeting policy has successfully built up this credibility by communicating a clear overall target – a particular inflation rate. It has also become possible to gradually give greater consideration to the stability of economic activity as credibility has accumulated, although the primary target has become somewhat less clear as a result of this flexible inflation-targeting policy. However, monetary policy can hardly maintain its credibility if the inflation rate deviates from the target for too long. One question that has been discussed frequently in the wake of the recent financial crisis is whether central banks should use their policy rates to try to mitigate the credit cycle.14 Monetary policy could possibly contribute to this type of stabilisation for a  would have been if inflation had averaged two per cent during this period.

Low demand abroad contributes to low demand in Sweden, too. And low price increases abroad contribute to low import prices at a given exchange rate. However, this does not mean that monetary policy lacks the ability to counteract these developments. I usually think of this as a rowing boat in a strong current. If we do not row, the current (global developments) will determine what direction the boat moves in. But if we row, we have a better ability to get where we want to go, particularly if we try to keep away from the parts of the water where the current is strongest. The monetary transmission mechanism is usually divided up into different channels (see Figure 6).20 The channel most often mentioned is probably the interest rate channel. A lower interest rate makes it more attractive to consume and invest. This increases demand in the economy. And in the long run, the higher demand means that prices and wages rise, that is, inflation increases. In an economy like Sweden’s, which is so dependent on international developments, the exchange rate channel probably has greater importance, at least for the development of inflation. An (unexpected) repo rate cut means that the krona weakens. The weaker krona leads to an increase in demand for Swedish goods at the cost of foreign goods. In addition, there is a direct inflation effect that arises when imports become more expensive as a result of the weaker exchange rate.
In its role as the regulator, the Bank of Albania’s vision is to contribute to the future, aiming to establish a highly adequate environment for boosting financial innovations and modernising the financial structure. Our regulatory regime aims at fostering innovation, being a positive catalyser and not a barrier. We aim at being avant-garde for a modern financial infrastructure. But experience shows that technology always is a step ahead and rapidly spreading. Technology has no limits and we, as regulators, should adopt rules and laws that these technologies be used by the consumers, individuals or businesses. At the same time, we should be aware of the risks that accompany these new technologies. Finding a perfect balance between the promotion of new ideas and the regulatory prudence constitutes one of the major challenges in this regard. BIS central bankers’ speeches  1  Bank of Albania has designed a payments regulatory framework, which paved the way for the development and modernisation. This framework provides all banks or other suppliers of financial services with the possibility to access the payment system in an equal and transparent way, thus contributing to the development of a competitive payment industry, without any asymmetry. Bank of Albania welcomes the contribution of innovation and technology in financial services as a support for achieving its strategic objectives for financial inclusion and reduction of cash use in the economy. These objectives serve crucially to both the transmission of the monetary policy and the safeguarding of financial stability.

One significant characteristic of the current expansionary period is the fact that the sustained growth of activity has given rise to a high rate of increase in employment. Here, however, much remains to be done, since the current level of occupation is still some distance off the pre-2008 level. Another notable feature of the current recovery is the progress made in restoring macroeconomic and financial equilibria. This is playing a key role when it comes to explaining the intensity and duration of the current upturn. In this respect, it is worth mentioning the continuing and notable positive external balance and the subsequent reduction in the economy’s – and in particular the private sector’s – over-indebtedness; such progress has proven vital for restoring the confidence of foreign investors and of Spanish households and firms. The current account balance stood at close to 2% of GDP in 2017, a similar figure to that observed the previous year and up on the figures recorded in the early years of the recovery. True, some factors that have contributed to this improvement in the economy’s external balance have effects that tail off over time. This is the case of oil prices which, despite their recent rise, remain lower than those in force until mid-2014. Also, the improvement in financing conditions in recent years has provided for significantly lower interest payments abroad. Other explanatory factors behind the improvement in the balance vis-à-vis the rest of the world are structural in nature.
The difference would be that we open up for the possibility that it could take longer than we previously assumed, without making monetary policy more expansionary. ... but the aim of the policy would not change If we were to find ourselves in such a situation it would not mean that we were suddenly to start conducting a completely different policy and begin raising the repo rate, for instance. There would still be reasons to conduct a policy that is as expansionary as possible, to avoid taking longer than necessary to attain the target. However, one consequence would be that the Riksbank's communication became very important. The damage in a situation where monetary policy can no longer be made more expansionary, despite inflation being expected to undershoot the target for quite a long time, will be much less if the general public can be convinced that the target has not been abandoned, that it is merely a question of taking longer than normal to attain it. Clarifying this would be a difficult but hopefully not impossible task. Here it is important to realise that inflation can be controlled by the central bank in the long run. Inflation is ultimately, as is often put, a monetary phenomenon and determined by how expansionary monetary policy is on average (see Figure 12). Digitalisation, globalisation and other structural changes can push down inflation during certain periods of time, and these periods can very well be quite long. However, the effects of structural changes on inflation do not last for ever.

Kremer, M. and A. Popov, (2018), “Financial Development, Financial Structure, and Growth: Evidence from Europe”, Special Feature A, ECB Report on Financial Integration in Europe. Leandro A. and J. Zettelmeyer (2018), “The search for a Euro area safe asset”, Peterson Institute for International Economics Working Paper 18–3. Mokyr, J. (2014), “Secular Stagnation? Not in Your Life”, Geneva Report on the World Economy, pp. 83–89. Monti, M. (2010), “A New Strategy for the Single Market”, report to the President of the European Commission, José Manuel Barroso, May 2010. Tumpel-Gugerell, G. (2009), “The road less travelled – exploring the nexus of macro-prudential and monetary policy”, speech at the conference Learning from the financial crisis: financial stability, macroeconomic policy and international institutions, Rome, 12 November 2009. van Ark, B., M. O’Mahoney and M. Timmer, (2008), “The Productivity Gap between Europe and the United States: Trends and Causes”, Journal of Economic Perspectives 22:25–44. 1 Tumpel-Gugerell, G. (2009), “The road less travelled – exploring the nexus of macro-prudential and monetary  policy”, speech at the conference “Learning from the financial crisis: financial stability, macroeconomic policy and international institutions”, Rome, 12 November 2009. 2 Beck, R., L. Dedola, A. Giovannini and A. Popov (2016), “Financial integration and risk sharing in a monetary  union”, ECB Report Financial Integration in Europe, Special Feature A; see also Asdrubali, P., B. Sorensen and O. Yosha (1996), “Channels of Interstate Risk Sharing: United States 1963–1990”, The Quarterly Journal of Economics 111(4): 1081–1110.
In the same spirit, the Government should be prepared for the possibility that, should the course of the pandemic worsen, it may be necessary to introduce additional measures or to extend or recalibrate those already in place. In addition, there needs to be a transition from the current income support policies for households and liquidity and funding support policies for businesses towards measures geared to fostering medium and long-term growth. In particular, this requires that budgetary policy favour, rather than hinder, the necessary reallocation of resources. This is how the new incentives for furloughed workers to return to work, envisaged in the latest extension of these measures, should be understood. Moreover, although the structural changes that may be triggered by this crisis have become a recurrent subject of debate, the specific nature of these changes is as yet uncertain. On the one hand, it is noticeable that as a consequence of the pandemic, certain transformations that were already under way, such as teleworking or digitalisation, are accelerating. Yet on the other hand, and by contrast to the experience of the previous crisis, which saw structural correction of certain industries in Spain, such as construction and financial services, that were oversized, it is not at all clear that the sectors currently most affected by the social distancing rules resulting from the pandemic will see a permanent fall in their demand once we have overcome the health crisis.

My remarks today will focus on the implications for the strategic direction of the Islamic financial industry taking into consideration the lessons learned from such financial turbulence including the current crisis. As Islamic finance becomes an integral part of the international financial system, it will be increasingly tested by such developments. History has shown that the world will continue to be plagued by such crises. The key for the Islamic financial industry is therefore to ensure that it would not be a source of such financial instability and is able to achieve a level of resilience that would ensure its sustainability. Lessons learned from systemic banking crisis The world has experienced more than 124 distinct banking crises in the recent 27 years. 1 While the triggering factors that precipitated financial crisis have been different, for most, it resulted in a general loss of confidence and a downward spiral in asset prices. Such a crisis was experienced in the Asian region just over ten years ago. Following the lessons that were learnt from this experience, Asia has emerged in a better position to manage the spill over effects of the current financial turmoil. The key elements in the efforts have been the strengthening of the foundations that accord the resilience to withstand shocks to the system and that will ensure sustainability through episodes of such turmoil. There are several similarities in the current financial crisis and the Asian financial crisis.
Exchange rates are typically hard to forecast, and all the more so in the scenario of a global trade war. For the Swiss franc, which is traditionally seen as a safe haven, the risk assessment of investors would be particularly important. Would our currency be sought as a safe haven in the event of a trade war? Or would it even come under downward pressure given that Switzerland, as a small open economy, would face particularly strong exposure to a severe contraction in world trade? Chart 5 shows that the marked increase in uncertainty relating to trade policy has so far not had any lasting influence on the Page 5/9  value of the Swiss franc. However, it could be a different picture if there were to be a trade war. The lessons learned from the Great Depression show that a trade war may be followed by a currency war. If many countries deliberately weaken their currency to support their own export sector, the consequences for the global economy are severe. Being aware of this, central banks have in recent years consistently refrained from engaging in competitive devaluations. However, it is difficult to predict how they would behave in the event of a fullyfledged trade war. I have mentioned only a few of the factors that are relevant for a central bank’s immediate monetary policy response to an upsurge in protectionism. They all demonstrate that an upsurge in protectionism first and foremost fuels uncertainty.

There is no escaping the reality of this ongoing structural change if a country wants to maintain its competitiveness over the long term. There have also been increasing calls of late for free trade to be curbed because it is not ‘fair’ for certain countries. In this context, the concept of ‘fairness’ is applied in entirely different ways. It is used in assessing bilateral trading relationships, for example, or in connection with alleged violations of existing trade rules. I would like to briefly address both these aspects. It seems rather odd to insist that trade between two countries can only be regarded as fair if the bilateral balance of trade is in equilibrium. Trade between the actors in these countries is voluntary, and therefore only takes place if all of the participants stand to benefit from the exchange. Such trade is not a zero-sum game in which one side’s gain is the other side’s loss. The view that the trade balance between two countries should be in equilibrium ignores both the reality of global value chains and also the very essence of specialisation. Today semifinished products and intermediate inputs can move back and forward across national borders 3 4  Cf. Autor et al. (2016), for example. Cf. World Trade Organization (2017), for example. Page 3/9  many times before the end product is complete. Simply netting bilateral trade flows is no basis for judging whether trade is fair or not.
A key moment, which some of you will recall first-hand, came in 2003 when our then Governor, the late Sir Edward George, delivered a speech in which he talked about being touched by the plight of Muslim neighbours who had had to use a conventional interest-bearing mortgage to purchase their home, reluctantly and against their principles. He reflected on how sad and unnecessary this seemed, given the UK financial system’s capacity for innovation in meeting the needs of different parts of society.7 To put that right, the Bank asked a senior working group drawn from the public and the private sectors to identify the changes needed to legal, tax and regulatory arrangements. Those changes formed the foundations of the system we have today. They were subsequently reinforced by a 2007 FSA paper articulating how Islamic finance could be fairly and consistently supervised within a secular regulatory framework.8 Thirteen years later, one of the co-authors of that paper – Arshadur (‘Ash’) Rahman, known to many attending Islamic Finance Week – is the driving force behind our new facility. The regulatory approach set out by Ash and his co-authors still applies today. A preference for principles over excessively rigid rules, able to respond to diverse and evolving markets, and reduce the scope for regulatory arbitrage. Avoiding unnecessary regulatory obstacles to Islamic finance, while giving no special favours.

Mervyn King: Through the looking glass – reform of the international institutions Text of the Inaugural International Distinguished Lecture by Mr Mervyn King, Governor of the Bank of England, to the Melbourne Centre for Financial Studies, Melbourne, 21 December 2006. * 1. *  *  What does globalisation mean? Humpty Dumpty said to Alice, “When I use a word, it means just what I choose it to mean – neither more nor less”. So let me explain first what I mean by “globalisation”. In his excellent book Why Globalization Works, Martin Wolf remarks, “Globalization is a hideous word of obscure meaning, coined in the 1960s, that came into ever-greater vogue in the 1990s”. I think of globalisation as a process of increasing international economic integration accompanied by political agreement on the rules of the game which govern that process. The rise of China and India as trading powers is an example of increasing integration. And the accession of China into the World Trade Organisation is an example of the application of the rules of the game. Globalisation is the driving force of many of the most significant changes in our economies. But it is far from a new phenomenon – it is as old as the human race itself. The European settlement of Australia represented the globalising forces of migration and capital flows over several centuries. To me one of the most poignant symbols of globalisation is the Australian War Memorial at Hyde Park Corner in London.