samchain/econo-pairs-v1 huggingface dataset:
In closing those gaps, a useful intermediate objective would be to create in the UK a leading-edge diffusion infrastructure, to rival and complement its leading-edge innovation infrastructure. This boost our world (and, with luck, our World Cup) rankings. Inclusive innovation could serve as a conduit to inclusive growth. The UK’s innovation hub would get the spokes it needs to reach every sector, every region, every worker. It would be an industrial strategy for everyone. 58  Haldane (2017). 23  All speeches are available online at www.bankofengland.co.uk/speeches  23  References Acemoglu, D (2002), ‘Directed Technical Change’, The Review of Economic Studies, Vol. 69, No. 4, pp. 781-809. Acemoglu, D, Gancia, G and Zilibotti, F (2015), ‘Offshoring and Directed Technical Change’, American Economic Journal: Macroeconomics, Vol. 7, No. 3, pp. 84-122. Acemoglu, D and Robinson, J (2012), Why Nations Fail: The Origins of Power, Prosperity and Poverty, Penguin Random House. Aghion, P, T, Besley, J, Browne, D, Caselli, R, Lambert, R, Lomax, C, Pissarides, N, Stern, J, van Reenen (2017), ‘Investing for Prosperity: skills, infrastructure and innovation’, LSE Growth Commission Report. Andrews, D, Criscuolo, C and Gal, P (2015), ‘Frontier firms, technology diffusion and public policy: micro evidence from OECD’, OECD Productivity Working Paper Series, No 2. Andrews, D, Criscuolo, C and Gal, P (2016), ‘The Global Productivity Slowdown, Technology Divergence and Public Policy: A Firm Level Perspective, Hutchins Center Working Papers. Baddeley, M (2006), ‘Convergence or Divergence? The Impacts of Globalisation on Growth and Inequality in Less Developed Countries’, International Review of Applied Economics, Vol.

7 The gap in manufacturing is around 50%. 8 UK estimates of firm-level productivity dispersion are based on Bank of England analysis of ONS data, whereas non-UK estimates of productivity dispersion are provided by the OECD. Differences in underlying data used may therefore play a role in Charts 5 and 6. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  low road. Capitalism always of course throws up winners and losers, hares and tortoises, gazelles and snails, upper and lower tails. In the UK, however, these differences are far-larger, and have increased by more, than elsewhere. And therein, I would argue, lie the roots of the UK’s productivity gaps. Let me start with the good news, focussing on companies on the high road. The first and most important point to make is that the UK does not lack for innovative, high-productivity companies. If you tour the UK, as I do, you find these “frontier” companies in every region and every sector. Their productivity is world-leading, their technology world-beating, their managers and workers world-renowned. They are inspirational. Micro-analysis of UK companies confirms this anecdotal impression. Chart 7 plots the distribution of UK 9  relative to French and German companies. There are more UK companies in the upper tail than in Germany, with its much-vaunted industrial reputation, and France. The top 10% of UK companies have levels of productivity at least 100% above the median.
The war in Ukraine has not affected trade directly  Although the war in Ukraine has affected Iceland’s terms of trade, the net effect is ambiguous, with the prices of both imports and exports rising. Iceland is an exporter of both metals (mainly aluminium) and food products and thus has both gained and suffered from rising raw material and food prices. Terms of trade have remained favourable, although they have declined from their recent peak. Despite access to abundant domestic renewable energy, imported fossil fuels impact the Icelandic value chain both through the price of imported fuels, various imported goods and generally the cost of transportation, which is high given Iceland’s remoteness from major markets. Fuel is also an important cost item in fisheries. Rising import prices, however, result not only from the war in Ukraine, but can be partly explained by supply-chain disruptions and the container cost crisis triggered by a reallocation of resources in the global economy as it recovered from the pandemic. The cost increases seep into the global value chain and affect inflation globally. Eventually those mismatches are being resolved from the supply side, as firms respond to price signals, and from the demand side, with global tightening of monetary conditions and the withdrawal of fiscal stimulus. Mismatches are being resolved by increased supply and global tightening  The post-pandemic recovery in Iceland has two distinguishing features that set it apart from the recovery in most other OECD economies.

When margin levels are set more conservatively, firms are likely to have more flexibility in responding to stress and are less likely to take action that might amplify the market shock and exacerbate the reduction in liquidity. When competitive pressure drives margins down, markets may be less resilient. Third, we believe the major financial institutions need to continue to improve their capacity to measure their exposure to risk in a less benign market and economic environment. The discipline of stress testing and scenario analysis that is designed to measure tail risk is at the frontier of this challenge. Senior management and boards of directors need to understand the limitations and uncertainty that pervade the tools we use to assess these risks, to try to better understand the potential scale of losses the firm may face, and to carefully examine how well risk exposures reflect the overall risk appetite of the firm, and the size of the capital and liquidity cushion maintained in relation to those exposures. Let me conclude by reiterating the fundamental view that the wave of innovation underway in credit derivatives offers substantial benefits to both the efficiency and stability of our financial system. The extent of these benefits will depend, in part, on the degree to which market participants can keep up with the pace of change in the market through continued investment in both risk management and in the processing infrastructure.
Two trends are noteworthy for Asian banks: the rise of the Asian middle class and the regionalisation of Asian corporates. 2  BIS central bankers’ speeches  Rising incomes and the agglomeration effects of urbanisation will significantly expand the ranks of the Asian middle class. •  In ASEAN, the middle class is projected to make up two-thirds of the population by 2030, compared to less than a quarter in 2010. This rapid expansion of the middle class will spur demand for a wide range of goods and services. Modern services, such as telecommunication, banking and finance, have higher income elasticities of demand compared to traditional services. This means that as income rises and wealth accumulates, the demand for financial services – be it consumer credit, wealth management, or insurance – will rise more than proportionately. As Asian economies develop and integrate further, Asian corporates will expand and internationalise. They will need more funding – not just traditional bank credit but debt and equity financing. They will need more cash management and transaction services. Asian banks who have been serving these corporates in their home markets will follow them as they regionalise their businesses. Financial regulation The second driving force that will shape banking in Asia is financial regulation. The Global Financial Crisis has spurred far-reaching financial regulatory reforms. The ones impacting banks most will be the new Basel III rules.

The broad adoption of financial technology or fintech could dramatically lower the cost of banking services. Not only will this enhance financial inclusion, it could potentially also help mobilise untapped savings, enable more efficient financial transactions, and make credit more readily available and affordable to small businesses. Emerging Asia fares poorly in financial inclusion even among emerging markets. •  Less than 15% of Asian SMEs have bank credit lines, compared to 24% in Latin America and 28% in Eastern Europe. •  In Indonesia, for example, only about one out of every three persons aged 15 and above has an account with a financial institution. Ironically, Emerging Asia’s relative under-development could turn out to be an advantage. The innovative adoption of digital technology by the financial industry is enabling these economies to leapfrog into more advanced channels for providing banking services. •  A growing number of Asian customers, especially in countries like China and India with rapidly developing technology infrastructure, are using mobile banking apps for payments and funds transfers, even before customers in more advanced economies. •  In India, bank accounts can be linked to biometric identity cards issued under the national Aadhaar initiative, enabling millions who otherwise lack the formal documents required to open a bank account to have access to basic banking services. Of course, technological innovations pose threats as well as opportunities to Asian banks. As in the US, a number of fintech entities in Asia are making inroads as lower-cost alternatives to banks.
The second element is for supervisors to conduct independent reviews of a bank’s capital adequacy relative to its risk profile, while the third is to help improve the ability of market forces to exert discipline on management behavior. These last two elements, which I will address in more detail in a moment, have been adopted by the Basel Committee as key parts of our proposal to revise the international standards on capital regulation. Risk-focused supervision In terms of the "risk-focused" approach to supervision, many of my colleagues would agree that what makes bank supervision so challenging is the need to keep pace with such a dynamic, fast-moving, and diverse industry. Consequently, supervision must be adaptive. The banking industry is intensely competitive and firms must constantly identify new markets, new products, and new ways to do business. Innovative products and technologies can quickly alter a bank’s exposure to risk. Continuous innovation in the industry and increasingly rapid changes in risk profiles demand that supervisors, too, keep up with the latest developments and work to anticipate them to ensure that our regulatory framework remains relevant and timely. Likewise, supervision needs to be flexible. We all know that the banking sector encompasses organizations that vary greatly in scope, size, and risk appetite, so it’s obvious that regulations that are useful for small, community mortgage banks will not apply equally well to massive, multinational trading banks, and vice versa.

You will immediately discern upon descending to the bedrock of Manhattan, marveling at the massive vault door, appreciating the multi-faceted control environment, that payments security is a timeless preoccupation. Hardly any of the gold in the vaults of the Federal Reserve Bank of New York is the property of the United States, whose reserves you know from 007 lore reside in Ft. Knox. Instead, it is gold held on behalf of foreign and international monetary authorities. Indulge me, if you will, in a fascinating historical anecdote in the annals of official reserve custody, which I will endeavor, perhaps feebly, to tie to today’s theme. The Spanish Civil War was a brutal conflict that pitted Nationalist rebel forces, allied with Fascist Italy and Nazi Germany, against the Republican government supported by the Soviet Union. In 1938, with their government on the cusp of implosion and before fleeing into exile, the Republicans hastily sent their gold stock to their trusted ally, the Soviet Union, for safekeeping. This episode is recounted in a history of the Spanish Civil War by Hugh Thomas, who writes the following: According to Orlov (now I confess to not reading the whole book, so I do not actually know who Orlov is; nevertheless, according to no less an authority than Orlov!
Assets under management in Singapore grew by 17% year-on-year, to $ trillion as at end-2020, driven by strong inflows into traditional and alternative investment strategies 10 as well as valuation gains 11 across major asset markets. The FinTech sector has also continued to do well. Investments in FinTech firms based in Singapore reached a record $ billion in 2020, an increase of more than 30% from 2019. In the first quarter of this year, FinTech companies here already raised more than $ million. The financial services and FinTech sectors created 2,500 net jobs last year. We expect the financial sector to continue to create good jobs this year. Financial institutions expect to create about 6,500 new hiring opportunities 12 this year, with strong demand in areas such as technology, wealth management, corporate banking, and insurance. 13 The financial services sector has exceeded both the value-added and employment targets set by the Industry Transformation Map (ITM) for 2016–2020. Growth in value-added during this 5-year period averaged 5.4% per annum, above the ITM target of 4.3%. The sector, together with FinTech, added an average of 4,700 net jobs per annum, above 7/9  BIS central bankers' speeches  the target of 4,000. MAS has started reviewing the ITM strategies and targets for the next 5 years. MAS has been studying in depth how the financial services landscape will transform and what Singapore must do to remain competitive in the coming decade.

The broader economy should see a recovery in the second half of this year alongside strengthening global demand and further progress in our vaccination programme. Trade-related activities such as manufacturing and wholesale trade will be supported by resilient global trade flows and robust upswing in the global tech cycle. Modern services, particularly the financial and ICT sectors, are set to expand at a firm pace this year, amid a pickup in credit intermediation activities and the ongoing digitalisation of business processes which has been accelerated by the pandemic. Moreover, compared to a year ago, Singapore is much better equipped to handle the pandemic, with more effective testing and tracing, swift isolation of infected cases, and vaccination. Singapore’s GDP growth could exceed the upper end of the 4 to 6% forecast range, barring a setback to the global economy. Last month, the official forecast range was maintained at 4 to 6% in light of the deterioration of the domestic COVID-19 situation and consequent Phase Two (Heightened Alert). MTI, together with MAS, will review the forecast range in August when preliminary estimates for Q2 GDP are available. The resident unemployment rate should continue to gradually decline. Total employment expanded by 14,000 in Q1 this year, the first expansion after four consecutive quarters of contraction. The Phase Two (Heightened Alert) measures and continued restrictions under Phase Three (Heightened Alert) however will have a transitory impact on employment in the domesticoriented services sector.
This was compounded by unforeseen changes in the credit market when banks began offering mortgage loans in competition with the state-owned Housing Financing Fund [HFF], after the latter announced a substantial increase in its loan-to-value ratio and mortgage amounts. Another unexpected event was the issue of króna denominated Eurobonds [glacier bonds], one sideeffect of which was to delay the transmission of the Central Bank’s policy rate hikes across the domestic yield curve. The background to these transactions is a global glut of savings which has led to exceptionally low international interest rates, coinciding with unusually high interest rates in Iceland. One consequence was to divert much of the monetary policy impact into the exchange rate channel. 1  The press release is posted on the Central Bank’s website, www.sedlabank.is  BIS Review 16/2007  1  Another more positive consequence was a surge in turnover in the domestic financial markets, which deepened them by bolstering price formation and enabled them to handle much larger trading volume smoothly, without significant price volatility. Policy rate changes are only passed through in full to domestic demand with a sizeable lag. In a small, open economy like Iceland, the impact is initially reflected in the exchange rate. Other things being equal, a rise in the policy rate causes a temporary appreciation of the króna, which squeezes the export and traded goods sectors and also channels demand out of the economy. The banks’ surprise entrance into the domestic mortgage market made it difficult for the Central Bank to respond effectively.

If given enough authority, rules can induce symmetric behaviour. It remains to be seen how the discretionary fiscal measures adopted in response to the crisis can be wound down and reversed to support fiscal sustainability in the longer run. Since the ECB has started to gradually phase out its extraordinary liquidity support measures, fiscal authorities should also start to withdraw stimulus to safeguard public solvency over the medium term. To support this, we have the right mechanisms in place in Europe. Governments will have to comply with and, as experience shows, even re-enforce the fiscal rules enshrined in the Stability and Growth Pact. Concluding remarks: some lessons From this quick overview, I draw two lessons for monetary policy. The first lesson to be learned is that central banks need to broaden – not restrict – their overview of the economy. Monetary data are critical in warning against risks that are slow to appear in inflation forecasts. Monetary analysis at the ECB consistently sent early signals that risk was broadly under-priced, when inflation was quiescent and measures of slack were moderate. BIS Review 22/2010  3  The second lesson is that price stability is the only anchor which can pin down the economy in turbulent times. It is not sufficient to guarantee financial stability, but it is certainly necessary to prevent financial instability. Increasing the level of inflation that central banks should aim at would be a step in the wrong direction.
The Bank of Estonia has been at or close to the frontier of this revolution. Today it provides a rich daily diet of reports, forecasts, working papers, speeches and tweets. th  The 20 century may yet be seen by historians as a Golden Age for central banks. Central bank numbers rose from under 20 at the start of the century to over 175 by its close. Those with operational independence for monetary policy rose from fewer than 40 in 1971 to over 150 today. And the numbers of central banks 7  with responsibilities for regulatory policy has risen sharply too, especially since the crisis. 5 6 7  Barro and Gordon (1983). For example, Nelson (2005). Haldane (2017a). 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  th  The rise in central bank numbers in part reflects the greater numbers of nation states in the 20 century. But this, too, is revealing. Establishing a central bank has increasingly been seen as an essential building block of nation state-building, a crucial element in the fabric of democratic statecraft. Indeed, that was precisely the Estonian experience, as events in this very room a century ago testify. The Age of Innocence  This Golden Age of central banking has persisted for a century. As best we can tell, it has served economies and societies well. Prior to the crisis, the global economy entered a golden period of its own with steady 8  growth and stable inflation, known as the “Great Moderation”.

Currently, it crops up 10 times more often than the word “customer” and almost 7 times more often than the word “staff” in proximity to uncertainty. 24  Chart 2 plots a time-series of the incidence of the words “uncertainty” and “Brexit/referendum” in Agents’ company write-ups. The two, unsurprisingly, are positively correlated after the referendum. Indeed, mentions of Brexit have outnumbered mentions of uncertainty by a factor of around 3 since the referendum. While mentions of Brexit have fallen from their referendum peak, it is notable that they have picked up sharply over the past few months, with measures of uncertainty following suit. This new research strengthens the case for improving public understanding of the economy. An improved understanding could result in better-informed popular narratives, and more stable expectations, among the general. And that, ultimately, would make for a more stable economy and financial system. In practice, there may be structural factors which could be acting in the opposite direction. The great trust shift may mean people are less willing than in the past to trust expert opinion (such as through mainstream media) and more willing to trust non-expert opinion (such as some parts of social media). Around half of those in the EU use social media as a news source and, among those aged 18-24 in the UK, around a quarter use it as their main news source. 25  Yet we know that information from social media sources is typically filtered and personalised. 26  That fits  people’s (personalised, localised) preferences.
More precisely, the Eurosystem’s operational framework is characterised, first, by a large number of counterparties eligible for refinancing operations and marginal lending facility. This facilitates the direct provision of liquidity to a large number of banks in need of it, at a time when the money market is working imperfectly. Second, the Eurosystem accepts a wide range of collateral eligible for its refinancing operations. This has facilitated the raising of liquidity via the Eurosystem for banks with reduced access to the interbank market, at the same time economising through their operations with the Eurosystem on those few types of assets that have continued to be tradable throughout the turbulence, such as government bonds. In this respect, the framework may have also supported the continued functioning of capital markets. Third, the large size of its refinancing operations (around one third of total assets in the Eurosystem balance sheet – or € billion) has allowed the Eurosystem to provide longer term refinancing to banks at a large scale, and at the same time to continue to adequately steer liquidity in the course of the maintenance period. BIS Review 123/2008  3  2. Implications for central banks, financial regulators and supervisors  At the level of the international community, we have adopted a methodology for responding to the present turmoil and working out what lessons can be drawn from the crisis: the FSF, created after the Asian crisis, coordinates global efforts towards creating a more resilient financial system.

Indeed, all financial sectors are impacted by market developments as the boundaries between financial activities are becoming increasingly blurred. More broadly, all competent financial authorities, central banks, supervisors and ministries of finance should strengthen their coordination mechanisms for managing a crisis impacting cross-border financial institutions. In Europe, an important step has been taken in this direction with the Memorandum of Understanding signed by the financial authorities of all EU Member States in June 2008, which established common principles, procedures and terminology to be used by all parties involved in a cross-border crisis. BIS Review 123/2008  5  Conclusion We are experiencing a very challenging and demanding episode of the market correction which started more than a year ago and was due to a significant underassessment and underpricing of risks in global finance. This fostered extremely high risk–taking behaviour, excessive leverage and a widespread use of toxic, obscure and abnormally sophisticated financial instruments. In this regard, global finance was potentially unstable before the start of the turbulence and this was mentioned publicly, particularly in 2006 and the first part of 2007, by a number of speakers, including myself. The sub-prime mortgage crisis has therefore played the role of a trigger but there was a good deal of explosive around. My experience of previous crises is that it is extremely important to analyse situations very carefully and lucidly and never to underestimate its gravity.