samchain/econo-pairs-v1 huggingface dataset:
57  (c) Supporting Human Capital Ideas percolate through people. The UK’s labour market currently operates in a way which does not support the trickledown of knowledge as much as it might. If talent only circulates around existing productivity pools, an important diffusion channel is being blocked. Rather than smoothing out differences, worker movements appear to strengthen the magnetic pull of the productivity poles, the upper tail North and the lower tail South. The question is whether that magnetic pull could be reversed, or at least reduced, by supporting skills and staff transfers between the two poles. One way of doing so is through company mentoring or twinning. In effect, this is doing for companies what is often already being done for their staff, matching companies with very different levels of skills and experience. Be the Business is already engaged in a sequence of pilot mentoring schemes between companies, enabling the sharing of skills and knowledge. This is about to become a nationwide mentoring programme. They are also developing programmes to develop management and technical skills within companies – “mini-MBAs” – to help close some of the skills gaps with other countries. Beyond that, it may be worth considering whether a formal network for knowledge-exchange, along the lines of the German Steinbeis system, is worth considering. This would provide a more formal, systematic, institutional means of enabling skills transfer between companies, sectors and regions. This, too, would support diffusion and productivity growth in the long tail. Conclusion  57  Haldane (2018).

Chart 18 plots the distribution of management skills from the survey in the UK, Germany and the United States. The UK distribution has a notably larger lower tail. The UK has around twice as many companies with a  36 37  For example, Davis and Haltiwanger (2014) and Bjelland et al (2011). Bloom and van Reenen (2007), Haldane (2017). 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  management score below 2 than in Germany and the US, consistent with the UK’s longer tail being sourced, at least in part, in weaker management skills. Recent research by Bank colleagues, Saleem Bahaj, Angus Foulis, and Gabor Pinter, suggests this tail may also be explained by skills in corporate board rooms. Using company account data, they are able to assess the degree of “connectivity” of board members to other companies. This connectivity proxies a company’s ability, through its board, to draw on the experience of other companies when learning about and adopting new practices, products and processes. Chart 19 and Table 2 plots this measure of board connectivity across UK companies. It exhibits the same “power-law” distribution as other measures of connectivity, with a small set of companies whose directors are hyper-connected and a large set of firms whose directors are loosely or unconnected. 38  As with Facebook  friends and Twitter followers, there is a very small “in-crowd” of well-connected companies and a large disconnected “out-crowd”.
23  Tore Jørgen Hanisch, Espen Søilen and Gunhild Ecklund (1999): Norsk økonomisk politikk i det 20. århundre. Verdivalg i en åpen økonomi [Norwegian economic history in the 20th century. Ethical choices in an open economy] Høyskoleforlaget, Kristiansand. 24  The 1965 Credit Act and the 1950 Act relating to currency control were not repealed in their entirety until 2003. 6  BIS Review 154/2010  authority on the government, Norges Bank gradually drifted into an advisory role. Corporatist collaboration receded somewhat into the background and credit policy was integrated into the national budget. 25 This was probably an all-time low for Norges Bank. The Bank was not allowed to act, while inflation gained momentum. When Hermod Skånland began working in Norges Bank as deputy governor in 1971, he was warned by his colleagues at the Ministry of Finance. Later, he said: “... they did not know how right they were to ask their questions. They [had no idea] how little there was to do of any interest in Norges Bank at that time. It had no instruments, no policy tasks and was wholly and exclusively a supervisory body – apart from the few occasions when it served as a consultative body.

In this latter context banks have traditionally played a key role in financing the corporate and household sectors, earning their return by gathering information about, and assessing and monitoring, the creditworthiness of private sector borrowers, especially those who do not or cannot cost-effectively provide the comprehensive, public, information that would allow them to access the capital markets. Much of the banks’ lending, while nominally at short-term, for example in the form of callable overdrafts, is in practice illiquid and non-marketable. So a further  BIS Review 13/1997  -2-  distinctive characteristic of banks is that they typically function with a mismatch between their highly liquid liabilities and their less liquid, non-marketable, assets. There is no need, I think, to labour the importance to the economy as a whole of these distinctive banking functions, or the damage that would be caused if the banks’ role - as the repository of liquidity, as the core payments mechanism, and as the principal source of finance to at least a large part of the economy - were seriously interrupted. That in itself helps to explain the public interest in the effective functioning of the banking system, or why banks collectively have been regarded as special. But beyond that, the distinctive banking characteristics that I have described, of liquid liabilities and less liquid assets, give rise to special needs. Given the banks’ role in the payments system they may need late access to liquidity to square their positions vis-à-vis each other after executing payments instructions on behalf of their customers.
For instance, in the mining sector, the supply of goods and services has been taken up by private companies including those that can be classified as SMEs. Similarly, the transport sector, which was dominated by Government through the United Bus Company of Zambia (UBZ), Zambia Railways and Zambia Airways, etc, is now largely run by the private sector, consisting mostly of small and medium entrepreneurs. One can go on to mention the tourism, manufacturing, real estate, construction and others. This development is of great benefit to the economy in general and individual entrepreneurs in particular. Therefore, small- and medium-scale enterprises have the potential to make a significant contribution to the growth of the economy, thereby improving the economic welfare of the population. As you may know, SMEs in Zambia often have a direct impact on community development. Since they are usually based in places where the owners live, they draw upon the community for their workforce and rely on it to do business. They provide employment, particularly for low-skilled workers, as well as women and the youth, who usually make up the greatest proportion of the unemployed. However, this sector has faced difficulties in accessing credit for working capital and expansion of their investments. Mr Chairman, even if more SMEs wished to modernise their plant and equipment, they would find it hard to do so because of the difficulty of obtaining financing. Many banks choose not to provide credit to SMEs as they are perceived to be more risky and yet less profitable.

More importantly, deepening the offshore RMB liquidity pool will enhance market efficiency and underpin the growth of offshore RMB activities, strengthening Hong Kong’s development as a leading offshore RMB hub and its unique role in the internationalisation of the RMB. 7. There have also been significant developments in the internationalisation of the RMB as well: The establishment of an RMB Liquidity Arrangement by the People’s Bank of China and the Bank for International Settlements, announced in June, will provide support to participating central banks in times of market fluctuation. The HKMA is pleased to join the initial group of participating central banks in the Asia-Pacific region. The inclusion of Chinese Government Bonds in FTSE Russell’s World Government Bond Index is testimony to the acceleration in the international use of the RMB. The increased prominence of the RMB in international trade and foreign currency reserves was underlined in May when the International Monetary Fund increased the RMB’s weighting in its Special Drawing Rights basket from 10.92% to 12.28%, the first time the weighting has been reviewed since the RMB was added to the basket in 2016. Opportunities ahead – development strategy 8. The liberalisation of the Mainland capital markets in recent years has resulted in rapid growth in cross-boundary capital flows. Hong Kong’s mutual market access schemes with the Mainland, like Stock Connect, Bond Connect and now ETF Connect, have further catalysed this process by encouraging greater portfolio investment into the Mainland. 9.
10 8  6 4 2 0 -2  Source: NBR  Debt instruments (intercompany lending)  2017p  2016  2015  2014  2013  2012  2011  Reinvested profit  2018H1p  Equity investments  2010  2009  2008  2007  2006  2005  -4  Figure 17. Inflation will stay in the target band in 2018 and 2019 CPI inflation  Source: NIS, NBR  CORE 2 adjusted inflation  Figure 18. Exchange rate evolution 107  250  1 January 2018 =100  106 200  105 104  150 103 102 100 101 100  50  99 98 1-Jan-18  0 1-Feb-18  1-Mar-18  EURRON Source: Reuters  1-Apr-18  EURPLN  1-May-18  EURCZK  1-Jun-18  EURHUF  1-Jul-18  EURTRY (rhs)  1-Aug-18  EURARS (rhs)  Figure 19. 5 year yield of FX government bond 11  9  7  5  3  1  -1 29-Dec-17  29-Jan-18  PL_5Y(eur) Source: Bloomberg  28-Feb-18  31-Mar-18  CZ_4Y(eur)  30-Apr-18  RO_5Y(eur)  31-May-18  30-Jun-18  TR_5Y(usd, rhs)  31-Jul-18  AG_8y(usd. rhs)  31-Aug-18  Figure 20. 10 year yield of FX government bond  10  8  6  4  2  0 2-Jan-18  2-Feb-18  PL_10Y Source: Bloomberg  2-Mar-18  CZ_18Y  2-Apr-18  RO_10Y  2-May-18  2-Jun-18  TR_10Y(usd, rhs)  2-Jul-18  2-Aug-18  AG_10Y(usd, rhs)  Figure 21.

Also, the global financial system currently provides ample liquidity, and since global markets have increasing access to more information on the productive and financial structure and the functioning of the economies of the region, they are more willing to provide tailored financing at good rates of return. Against this backdrop, we believe that the economies of the region have a good opportunity for building a new relationship with the Fund, which should be based rather on a collaborative dialogue about how global financial development could contribute to the final objective of achieving high and sustainable growth rates in the medium-term, than on meeting a certain set of stringent conditions associated to the lending programs as has been so far. Should the weight of emerging economies in the decision-making process of the Fund be increased, all these necessary efforts to which I have referred to above would produce better outcomes. Chile, as the rest of South America, did not support the proposed resolution on the quota reform in September, although it did fully support the search for an integral solution. The reasons for our vote are well known and it is not is my intention to reiterate our arguments in this occasion. We still believe that an increase in emerging country quotas would lead to more active and committed involvement of emerging economies in the Fund’s decisions that definitely would increase the Fund’s legitimacy in the region.
A concern for reputation incentivises banks to seek risky ventures (to keep dancing), the more so the better is the market’s prior on the macro state (the louder the music). We also posit as a larger proportion of banks set risky credit policies, the larger the incentive to pursue similarly risky policies. When others are posting positive earnings, the reputational loss from foreclosing and taking losses is that much greater. This is the “Keynes constraint”. It is better for your reputation to fail conventionally than to succeed unconventionally. These conditions generate the potential for credit booms and busts. The better is the macro state, the greater banks’ incentive to pursue risky projects to preserve reputation, as the market attributes low earnings to low ability. But one bank’s announcement of positive earnings encourages others to announce positive earnings by setting risky policies too. In Rajan’s model this strategic complementarity between banks generates multiple equilibria: in sufficiently good states, banks coordinate on risky policies (“credit booms”), while in bad states they coordinate on tight policies (“credit crunches”). In between, either equilibrium is possible. Define the payoff function  . Substituting gives:  This captures the marginal return to adopting a risky policy. It allows us to define the regions of fundamentals over which risky policies and tight policies dominate respectively.

On the face of it, these summary statistics are consistent with credit dynamics being distinct from GDP dynamics. It is possible to formalise this intuition by using filtering techniques to  11  The countries covered are: Australia, Canada, Germany, Denmark, Spain, France, United Kingdom, Italy, Netherlands, Norway, Sweden and the United States. 12  They argue that medium term cycles in GDP reflect persistent responses of real activity to the high-frequency fluctuations normally associated with the “business cycle” (Comin and Gertler, op. cit.). In this sense, there is a direct analogy with our model, in which strategic complementarities in risk taking can generate persistent credit cycles in response to high-frequency fluctuations in fundamentals. 13  The bank loans series consists of total domestic currency loans of banks and banking institutions to companies and households, while the assets series consists of total domestic currency assets of banks and banking institutions. For a full description of the data and its sources, see Schularick and Taylor (2009), Appendix B.  BIS Review 168/2010  9  extract the cycle in credit. To do so, we apply a band-pass filter to the data. 14 This isolates the cyclical component of a series operating in a frequency range specified by the user. 15 Charts 6–7 show cyclical fluctuations in real loan growth in the UK and US. The specified frequency domain is 8–20 years. Shorter-term, business cycle fluctuations, say between 2–8 years, were typically not found to account for much of the overall cyclical variation in credit.
Those are absolute prerequisites for stability in banking. Active, and sometimes intrusive, supervision of banks, and particularly of global banks, has to be at the foundation for stable banking and finance. I don’t think any reconfiguration of the structure of banking and finance is going to get us to an intrinsically safer system, taken as a whole. And we have to remember that this last global crisis, which is still with us in many ways, started not with large universal banks or large global banks, but with narrow or specialised players. Countrywide (the mortgage provider) in the US, Northern Rock in the UK, investment banks like Bear Stearns and Lehman Brothers. It was accentuated through AIG’s Financial Products division, which played a prominent role on the derivative markets. But it was not global banks that sparked off the crisis, although they helped propagate it globally. It bears reminding ourselves of that. BIS central bankers’ speeches  1  No matter how we restructure the system, no matter how we cut down or dice the pieces, banking will involve risk. And without the right culture – whether it’s about an investment bank or commercial bank or a mono-line player – and without the active and intelligent supervision, we’d have the same problems over and over again. The problems that underpinned this global crisis were old-fashioned problems – property booms that were misjudged by banks, regulators and borrowers; and the problem of banks relying too heavily on borrowing short term to invest long-term.

And I find it encouraging that Citi has been at the fore of this refocus on the basics of banking and finance. You’ve gone through a process of introspection in the last few years, because of the crisis and through the crisis, and you’ve come out stronger. Not just because of better capital and liquidity – although that’s obviously a pre-requisite for strength in the post-crisis era. But more fundamentally because you’re asking yourselves important questions about culture – questions about responsibility, and about the source of your profitability as an enterprise that intends to be around for a long time to come. So the story of Citi, and like the story of several other global institutions, is also about the recurring importance of certain basics. And the most important basics in banking have to be about serving your clients and growing with your clients, and about managing risks well. There’s a risk that we’re placing a too much importance in recent policy debates on the structure of banking. You read the headlines, you’ll find a continuing debate about how large banks should be, whether we should have narrow banks or universal banks, about the role of national banks and global banks, about the role of commercial banks versus investment banks and the rest of the shadow banking system. These are important questions of structure, but I think we risk an overemphasis on structure and an inadequate focus on the culture of banking and finance, and an inadequate emphasis on the need for active supervision.
By contrast, in firms with low levels of cultural capital, formal policies and procedures do not reflect “the way things are really done.” Misconduct results from the norms and pressures that drive individuals to make decisions that are not aligned with the values, business strategies, and risk appetite set by the board and senior leaders. Employees do not speak freely when they have concerns, and directors and senior managers do not find out about improper conduct until it is uncovered by the authorities. Rules may be followed to the letter, but not in spirit. All of this increases misconduct risk and potentially damages the firm and the industry over time. To be clear, I am not saying this is easy. Culture is difficult to assess because it is not a single, point-in-time metric, but a multi-dimensional concept with different implications for different parts of an organization. This complexity suggests that no single metric, solution, approach, or template will work for every firm in every circumstance.5 Consider the different roles of key players in mitigating misconduct risk and building and sustaining a healthy culture. The board of directors, senior management, staff, investors, industry groups, and the official sector might all see and assess aspects of a firm’s culture differently. Today, I will focus on a few of these stakeholders. Boards of Directors In 2017, the New York Fed hosted a culture measurement workshop that included a panel of board members from various financial firms.

Since the beginning of the crisis, its communication includes more the so-called “Forward guidance", i.e. pointing to the future monetary policy setup. Mario Draghi’s statement from 2012, when the future of the euro was in jeopardy, is well known, a statement that has stabilized financial markets and confidence – “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough”. Moreover, the scope and the volume of our functions significantly enlarged. Macro-prudential function, banking solution, consumer protection in the financial services sector – all of these are new dimensions for us, which also mean change in the context and improvement of the way we communicate. The changes in the last decade have been particularly pronounced in terms of 1/3  BIS central bankers' speeches  information and statistics requests from central banks. As the uncertainty grows, so does the “impatience” for faster access to data and information on the economy and financial sector condition. At today’s workshop, the accent was put particularly on this part of our communication – statistics, which is pivotal for our decision-making, and equally important when properly communicating and explaining them to the public. For the first time, we decided that this event should be fully devoted to this topic, taking into consideration your interests expressed in the survey conducted last year, as well as the interests you most often addressed this year.
About 5,000 to 6,000 of polytechnic graduates enter fulltime permanent employment each year. But only 3% of them join the financial sector. MAS and financial institutions can do more to harness this talent pool. The quality of our polytechnic graduates is high – as good as college graduates from many countries. The practical training and technical skills of our polytechnic graduates are relevant across a wide variety of financial sector roles from relationship management, product marketing, data and technology, to operations. There is scope to develop meaningful career pathways for polytechnic graduates to do well in the financial sector. Some financial firms have already begun doing this. JP Morgan runs a one-year apprenticeship programme for polytechnic graduates to experience working in corporate, operations, finance and technology roles within the firm. The programme started in 2015 and has seen strong outcomes. One example is Hazel Lim from Singapore Polytechnic. Hazel joined as a business management apprentice in 2020. The apprenticeship developed her understanding of sales initiatives and the use of data analytics to identify sales opportunities. The experience has helped her transition to a full-time role as a Business Manager in JP Morgan. With the support of JP Morgan’s tuition assistance programme, Hazel is currently pursuing a part-time business degree. The work-study arrangement allows her to apply theoretical knowledge to the real world and further hone her skillsets. OCBC Bank has co-designed with Ngee Ann Polytechnic a curated internship programme.

Rather, it is to enable the entry of high-quality global talent in a more transparent and flexible way to complement the local workforce in Singapore. The enhanced framework has three key features that facilitate bringing in of talent that businesses need. First, the framework is based on a transparent points-based system. It clearly lists out the criteria that will be assessed for each application. Second, the system is more flexible. If an application for an employment pass falls short in certain criteria, the shortfall can be offset by scoring well in other criteria. Third, the framework facilitates applications where there is a skills shortage locally for specific job roles. A list of job roles where there is local shortage, will be developed for each sector. We want this list to reflect the needs of our financial institutions. MAS will be seeking the industry’s inputs in the next 1 to 2 months, to identify job roles where there is a shortage. The framework has been designed such that most existing employment pass holders will have no problem meeting its requirements. Of course, some financial institutions may need to adjust their workforce profiles, as they transition to the new framework. But they will have ample time to make these adjustments – at least 15 months for new employment pass applications and 27 months for renewals. MAS will work closely with financial firms to ensure they have access to the talent they need to grow and that is in short supply locally.