samchain/econo-pairs-v1 huggingface dataset:
A 2½% increase in public consumption is expected for both years. Gross fixed capital formation, however, is expected to grow by 10¾%, mainly as a result of investments connected with the aluminium industry. Forecast investment in residential housing is 3%. Exports will increase by 2% this year and 4% next year, according to the forecast, due to the increased fishing quotas that I mentioned earlier. Growth of imports is expected to be 4½% this year and 7% in 2004. Despite higher forecast output growth this year, unemployment is expected to be a quarter of a percentage point higher than was forecast in May, at 3¼%. Estimated slack in the labour market this year has been revised upwards. However, unemployment is expected to head down to a figure of 2½% next year. Although higher output growth is expected this year and next year, the output gap is forecast to become slightly negative. A revised estimate now shows a slightly negative output gap last year, which will widen even further in 2003 since output growth is below estimated growth of potential output. The output gap is expected to turn marginally positive next year, when output growth will exceed potential. However, it is important to bear in mind that the evaluation of the output gap is highly uncertain, due to the non-observable nature of potential output. These data do show, however, that good balance is expected in both 2003 and 2004. The Central Bank forecasts inflation up to two years ahead.

Over the past 12 months, Core Index I has risen by 2.7% and Core Index II by 2.4%. Underlying inflation is therefore somewhat closer than the CPI to the Central Bank’s target. It is interesting to examine the development of individual components of the CPI. The housing component, for example, has risen by 13.6% over the past 12 months and the upward trend shows no sign of coming to an end. Public service prices have also had a considerable impact on the CPI over the past 12 months, but the rate of increase has slowed down. Measures taken to forestall an inflation-  BIS Review 45/2003  1  triggered national wage review in 2002 included a freeze on public service prices, which was relaxed when the risk connected with exceeding negotiated inflation ceilings had abated. There has also been a slowdown in the twelve-month rise in private services, which are highly sensitive to domestic wage increases. On the whole, goods are more sensitive than many other index components to changes in the exchange rate. Last year’s strengthening of the króna is clearly reflected in goods prices, with a significant drop in import prices. In 2003 prices of both imported and domestic goods have fluctuated somewhat. For decades, a far too high rate of inflation was one of Iceland’s main economic problems. This had an adverse effect on businesses, making effective planning difficult. It also had an adverse effect on households, partly because a large proportion of household debt is indexed to inflation.
We’ve done this by passing the rise in both export and import prices through the UK’s input:output tables and used the same definition of tradables and non-tradables as before. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  higher output in the tradable sector. There is less room to raise output but more of an incentive to add to that capacity.   Third, and despite these incentives, growth of overall business investment in the UK was relatively weak last year. Early official estimates say it shrank slightly in the year to Q4, by around 1%. (This compares with positive growth of 2% or so in the Euro area.) And although those estimates are particularly prone to revision, the various survey indicators also subsided in 2016 (Chart 12). This last point is the critical one. The world economy is looking better than it has done for some time. Against this backdrop, and given the existing capacity constraints, the fall in sterling provides a powerful incentive to invest in the UK’s tradable sector. All else equal, it would make sense for existing exporters to expand; for domestic-facing firms to think about entering new markets; and for multinationals to shift production to the UK. Yet some caution would also be understandable. All else is not equal. While much is at stake, no-one can be sure about the eventual outcome of the Brexit negotiations.

10  In economics the impact on the exchange rate of variations in tradable versus non-tradable productivity is known as the “Balassa-Samuelson” effect (Samuelson (1964); for a survey of the evidence see Egert et al (2006)). 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  I want to ask why this is. Why do forecasters think the more negative effects of sterling’s fall will predominate – what impediment might there be to its more positive effects? To do so it’s worth taking a closer look at how depreciations actually work. The view one often hears is that they make UK output cheaper in foreign currency terms, encouraging extra demand from overseas. I’m not sure that’s quite right. I said earlier that economists often make the approximation that prices of tradable goods and services are the same in all countries (measured in some common currency). This makes intuitive sense when you think of an area like commodities. For example, you would not expect sterling’s fall to reduce the dollar price of North Sea oil or the euro price of UK-produced wheat. Those are determined largely in global markets. What happens instead is that their prices go up in sterling terms. And if there is a response of net export volumes it comes about largely because the rise in prices directly boosts the profitability of UK-based production. Whether we’re talking about firms that export or those that compete with imports, it encourages such businesses to expand.
If the MPC does not take any action, there is then a danger of moving from a low inflation regime to a high inflation regime. Given that core inflation tends to be more persistent, we need to be watchful of any further sustained pickup in momentum. 3. Financial stability remains sound overall but there remain pockets of vulnerability. a. Financial institutions remain sound with robust capital positions and high liquidity, while NPL ratios remain low. b. Debt serviceability of households and businesses has improved in line with the economic recovery and with support from financial measures implemented since the crisis. However, there are vulnerable segments given the uneven nature of recovery especially SMEs in sectors that are lagging and low-income households. Therefore, targeted measures will still be in place to support vulnerable groups. Although raising interest rates may increase financial burdens for indebted households to some degree, the potential costs of sustained high inflation is much greater. Therefore, the MPC judged that policy rate hike will not harm financial stability and will in turn help prevent inflationary pressures that will hurt consumption in the future. [3.2 What should we really be worried about?] Given the reasons and trade-offs outlined above, we are taking a gradual and measured policy normalization approach. However, there remain certain issues that raise concerns to some. Let me take this opportunity to clarify several issues: (1) Thailand is not behind the curve The context of Thailand is different from other countries that have begun their rate hikes a while back. 1.

After a thorough assessment of all the trade-offs, the MPC judged that policy normalization was warranted as the balance of risk has changed: the recovery is intact and resilient, financial stability remains sound overall, but inflation risk has increased. 1. The recovery is intact and resilient a. Economic recovery gaining traction supported by a strong recovery of tourism and domestic demand given improved labor market, household income and economic activities. Although Q2 GDP headline is lower than expected, we reaffirm the growth trajectory and economic recovery underpinned by strong domestic demand growth. Consumption has recovered well with not just pent-up demand but supported by real improvements in income. Recovery of the tourism sector is key to ensuring a smooth and sustained income recovery as the sector accounts for 12% of GDP and employs over 20% of total employment. • GDP growth = 1.5% in 21, ~3% in 22, ~4% in 23; 2.3%/2.5% for Q1/Q2 this year • Consumption growth = 3.5%/6.9% for Q1/Q2 this year vs. 3.3% pre-covid • Non-farm income grew 10.4%/13.5% in Q1/Q2. Farm income grew 10.7%/16.4% in Q1/Q2  2  • Unemployment/underemployment = 0.5 mill/2.4 mill (Q2/22) vs. 0.4 mill/2.5 mill pre-covid (Q4/19) • Tourist numbers = 3.2 mill YTD, 8.5/21 mill for 22/23 vs. 40 mill pre-covid b.
2  BIS central bankers’ speeches  markets) might prevail in shifting a culture from a client focus to one that is overly defined by financial performance. 12. It is interesting, when comparing and contrasting cultures within banking, to consider for a moment Glass-Steagall and its separation of commercial and investment banking to prevent commercial banks from trading securities with their customers’ deposits. 13. Passed during the Great Depression, following a number of bank runs which destabilized the US economy, Glass-Steagall’s motivation rested on: real or perceived conflicts of interest, in the form of collusion between banks and their affiliates with the affiliates borrowing from the banks to buy securities and then selling securities to repay the banks’ debts and worries that banks would engage in risk-taking speculation, trading with customers’ deposits rather than lending to promote economic growth. The “firewall” created by Glass-Steagall was gradually weakened over the years and, as you all know, was eventually repealed in 1999. Some argue that this repeal contributed to the Global Financial Crisis. Joseph Stiglitz, the Nobel prize winner, summed it up thus: “Commercial banks are not supposed to be high-risk ventures; they are supposed to manage other people’s money very conservatively….. Investment banks, on the other hand, have traditionally managed rich people’s money – people who can take bigger risks in order to get bigger returns.”3 14.

In the past, banking was regarded as a reputable profession and bankers were highly trusted and respected both by their customers and by members of the public more generally. This was not surprising as basically customers entrusted their life savings to their bankers and the preservation and safety of their hard-earned money was in the hands of those bankers. Although nowadays customers still place their life savings with banks, bankers no longer enjoy the same high degree of trust and respect from society, especially after the Global Financial Crisis. What has changed so dramatically to bring the reputation of bankers so low? 1  FT.com – March 12, 2009 “Welch condemns share price focus”. BIS central bankers’ speeches  1  Change in modality and governance structure of banking 6. Well, the modality and governance structure of banking have changed a great deal over the last century. More importantly, these changes have created an incentive system that leads to a misalignment and disconnect between the interests of the owners of banks (i.e. the shareholders), bank management and customers. 7. Not so very long ago, banking was a business conducted by individuals, families and (more latterly) private partnerships, where the owners and managers of banks had ample “skin in the game”. They stood to lose not only their investments in the banks but also their entire family wealth or, in some more extreme cases, even their liberty, should their actions, or the actions of their partners, result in the failure of their bank.
Output is still some 4% below its previous peak and more than 10% below where it would have been if the economy had simply continued growing at its pre-crisis historical trend. There have been few winners over the past few years. In a deep sense, the low level of real interest rates here and in the other advanced economies is a reflection of the impact on the financial crisis. Heightened uncertainty and, for some households, a desire to reduce their indebtedness have resulted in an increased propensity to save. And the same heightened uncertainty has reduced the appetite of businesses to invest and encouraged them to build up cash buffers. Substantial dissaving by the public sector could offset that initially, but there are limits to how long the markets will allow high deficits to be sustained. Fiscal consolidation was unavoidable at some juncture. Given that, the stance of monetary policy needs to be loose in order to sustain demand. If we had chosen to run a substantially tighter monetary policy, then that would only have served to depress activity and raise unemployment even further. By slowing growth, it would also make the task of fiscal consolidation and de-leveraging even more challenging. And by providing a gloomier climate for business, it would also inhibit investment and slow the necessary re-balancing of our economy towards manufacturing and internationally tradable services. Treating serious medical conditions often has unwanted side effects. But, unpleasant as those side effects sometimes are, treatment is invariably better than the alternative.

Indeed, in the absence of the extra £ billion of gilt purchases announced two weeks ago, we judged that inflation would be rather more likely than not to undershoot our 2% target in the medium term. That was why we decided that it was necessary to do more. Moreover, the longer capacity lies idle, the more likely it is to be scrapped completely. And the longer people are out of work, the more likely they are to become disconnected from the labour market altogether. So there is an added incentive to getting the recovery back on track quickly. The euro area represents the biggest single downside risk to this picture. Greece is the country in the headlines right now, but several countries of the euro-area periphery face, in varying degrees, a challenging mixture of unsustainably high public and/or private indebtedness and weak competitiveness. Correcting those problems requires: fiscal consolidation; bank recapitalisation; and a rebalancing of demand towards net exports. The first two are under way, but the third is harder to achieve in a monetary union where no exchange rate movement is possible to bring about the necessary improvement in international competitiveness. At best, these countries face an extended period of very low growth while the necessary adjustments take place. And while this morning’s agreement between the Greek government and the euro-area authorities is certainly welcome, there still remains a possibility that events could unfold in a disorderly and damaging fashion at some stage in the future.
Thailand has advantages to be a hub for regional headquarters of multinational companies; a hub for logistics and distribution activities; a sourcing hub for regional markets; and a financial hub for regional markets. However, to remain competitive as a regional hub is a challenging task. 2  BIS central bankers’ speeches  14. To remain as the preferred hub and entry point of the region, we perceive an opportunity for investment from China which has the advantage in capital, construction capacity and technology. As the advantage of low cost factor of productions is rapidly declining, China is facing an urgent need to re-orient supply chains through Thailand to enter ASEAN and the Greater Mekong Subregion (GMS) in particular. China and Thailand should therefore make every effort to grasp this opportunity and construct win-win solutions for both sides. Ladies and gentlemen, 15. Let me conclude that China economic prosperity and advancement provides wide range of untapped opportunities for Thailand. They are right here where we are now, in our region. We should seize it and not miss it. And I am confident that so long as we work hand in hand with China, unite together, and embrace the merit of economic integration, the synergy of the two will surely give its fruit on the growing tree. Thank you. BIS central bankers’ speeches  3

Although we have little control over the strength of the economic winds buffeting our economy, our framework of inflation targeting does, as I said in my first speech as Governor almost five years ago, provide a seaworthy vessel. We cannot avoid some volatility in the short run and it is important that everyone understands the limits to the ability of central banks to smooth the economy. But, by keeping our eye firmly on the need to keep inflation close to target in the medium term, we can reach the calmer waters of low inflation, steady growth and a better balanced economy. And our policy framework will, I hope, allow you not to be overwhelmed by the headlines and to focus on what really matters for our future prosperity – the successful running of your own businesses. 4  BIS Review 8/2008
I would not deny that this is a convenient short-term solution. But since Fintech and Green Finance are longer term trends, I firmly believe that the most effective solution is to nurture more home-grown talent. That’s why the HKMA is currently working on two fronts. On the one hand, we are working hard to upskill existing practitioners to ensure that they keep pace with developments of the industry. On the other hand, we are actively reaching out to universities and secondary schools, seeking to attract more new blood for the industry and better prepare those interested young talent for a long-term banking career. 18. So let’s talk about existing practitioners. Our Enhanced Competency Framework (in short, ECF) comes in handy here. The ECF has been playing a key role in enhancing the competency level of our banking practitioners, through providing systematic training as well as industry-recognised qualifications. To date, more than 16,000 practitioners have obtained certifications in various professional areas under the ECF. At the end of last year, we added a new “Fintech” module into the ECF family. And we are now working hard on other new modules covering “Compliance” and “Green and Sustainable Finance”. I’m sure the speakers in the last panel today will share more insights about the changing roles and skills required of compliance officers in the face of the fast changing operating environment. 19. Now, making available systematic training programmes for practitioners is one thing. But getting them to actually take those training will depend on many factors.

Speeches 29 Jun 2022  Opening Keynote Speech at ASIFMA Compliance Asia Conference 2022 : Building the right talent pool for Hong Kong Arthur Yuen, Deputy Chief Executive, Hong Kong Monetary Authority Ladies and gentlemen, Good Morning to all of you, 1. Let me start off by thanking ASIFMA for inviting me to this Compliance Asia Conference. With the COVID situation finally settling down, it’s the right time to re-direct some of our fire-fighting energy back to more forward looking topics. And I think revisiting some of the issues about talent pool for the financial industry is indeed a good starting point. 2. For many of us, the Global Financial Crisis of 2008 is already a distant memory. Most of us may have forgotten the main factors leading to such a painful experience. Just to name a few issues contributing to the crisis: risk takers were not facing the consequences of taking undue and excessive risks; and no proper mechanisms were in place for shaping or influencing the behaviour of financial practitioners. As a banking supervisor, the HKMA cannot afford to forget those lessons. Instead, we have been working hard, even throughout the pandemic in the past two and a half years, to close those gaps. More recently, the HKMA has made good progress in cultivating sound bank culture and preventing “bad apples” from rolling among financial institutions. I would like to take this opportunity today to share with the audience our latest developments on those fronts.
movements along the Phillips Curve) and global integration along all dimensions – labour, final goods and services, and intermediates – acts as a series of positive supply shocks that impart sustained disinflationary pressures (i.e. shifting the Phillips Curve downwards and flattening it). And just as global factors affect the relationship between domestic slack and inflation, they have made it more difficult for central banks to set policy in order to achieve their objectives. Major secular forces have lowered the equilibrium rate of interest, meaning that central banks have had to use unconventional tools in order to provide stimulus. At the same time, open and integrated markets have reduced central banks’ control over their domestic financial conditions. In the wake of such disinflationary challenges some have argued that monetary policy frameworks should be overhauled. For example, Claudio Borio recently suggested that the secular disinflationary effects from continued global integration could dominate increased cyclical inflationary pressures from a smaller global 38  Bonis, B, Ihrig, J and Wei, M (2017). ‘The Effect of the Federal Reserve's Securities Holdings on Longer-term Interest Rates’ FEDS Notes. Washington: Board of Governors of the Federal Reserve System, 20 April 2017. 39 This analysis uses the IMF’s Flexible System of Global Models, a semi-structural model of the global economy that captures international trade and financial linkages. 15  All speeches are available online at www.bankofengland.co.uk/speeches  15  output gap as the recovery progresses.

However, the corporate sector faces major challenges down the road. Against a backdrop of lower expected cash flows and higher debt, the solvency position of some firms has worsened, especially in the case of those operating in sectors more adversely affected by the pandemic that are still facing some restrictions. Thus, with the crisis stretching out, concern has now shifted from liquidity risk to the deterioration of the solvency position of firms. Therefore, economic policies should now focus on supporting viable businesses whose solvency has worsened as a result of the COVID-19 shock, given that the potential liquidation of these firms would be a drag on economic recovery via different channels. First, due to the loss of employment and capital that follows the closure of any company. Second, firms’ solvency problems may end up affecting the health of lenders if these problems are significant and widespread within the corporate sector. And third, in extreme scenarios, the ability of of some banks to provide new lending could be affected, generating negative financial loops. We should take into account as well that a high level of corporate debt, even if not leading to defaults, can still be a drag on investment in the following years, lowering productivity and economic growth, as the experience from the global financial crisis indeed shows.