samchain/econo-pairs-v1 huggingface dataset:
Our challenge, therefore, is to evolve successfully in the face of this shift and it is a philosophy that the HKMA has been actively pursuing in the past few years – exploring new policy headroom, improving our financial infrastructure, promoting Hong Kong’s offshore renminbi business in overseas markets in collaboration with the financial industry, and co-operating with other places, such as London, Paris, Australia, Malaysia and Thailand in developing renminbi business. A competition of soft power among international financial centres 11. As I have emphasised on many occasions, the competition among international financial centres is essentially a battle of soft power. That is not to say hard power is not important. Quite the opposite, the building of hard infrastructure such as airports, transportation system, telecommunications, and efficient offices, is a prerequisite for entering the race. Yet it can only go so far. Funds, especially at the wholesale level, tend to flow to and aggregate in the more efficient and safe financial centres. Therefore, the race ultimately depends on soft power, which is made up of a wide range of qualities and strengths that are difficult to quantify. They include, the most important of all, the rule of law, protection of property rights and intellectual property, the taxation regime, the soundness of financial institutions, the robustness of supervisory frameworks, the competency and integrity of professionals, such as financial practitioners, accountants and lawyers, the free flow of information, the free and convenient movement of people, and a favourable business environment.

These figures demonstrate that we should be able to seize the abundant business opportunities arising from the Mainland’s expansion in external trade if we continue to fortify our trade relations with the Mainland and the rest of the world, just like our trade intermediation activities growing from 15% of GDP in 1979 to 20% in the early 1990s, and then to 25% now. 6. Let me illustrate with another example why Hong Kong will not be marginalised as the Mainland continues to open up to the world. Let’s look at the opening of the cross-strait “Three Direct Links”. Prior to 2008, there were no direct flights between the Mainland and Taiwan. Passengers had to make a mid-way stopover at a third place. As a result, Hong Kong became the busiest transit point between the Mainland and Taiwan by virtue of its favourable location. Some pundits predicted that the opening of the “Three Direct Links” would deal a devastating blow to the aviation industry between Hong Kong and Taiwan. On the contrary, air traffic between Hong Kong and Taiwan increased by 15% from an average of 118 flights per day in 2007, before the implementation of the “Three Direct Links” in 2008, to 136 daily flights in 2013. This clearly illustrates that as long as Hong Kong is able to maintain its attractiveness and competitiveness, we can continue to effectively perform our role as an intermediary between the Mainland and Taiwan. Are Hong Kong and Shanghai deadly rivals? 7.
But we do realise that there remain important pieces on which banks need to put in extra efforts. And I think it is fair to say that “Incentive System” is perhaps one of the most important outstanding pieces. 5. Talking about incentive system, let’s reiterate upfront that there is no single best incentive system in the world. Incentive systems have to be fit for purpose. But the reality is that it is very difficult for banks to even form a view on how effective their respective incentive systems is. Given the sensitive and proprietary nature of incentive frameworks, banks generally are unable to share and benchmark incentive practices, let alone assessing what practices are more effective in driving the right staff behaviour. Recognising this, the HKMA decided to step in and provide some benchmarking assistance to the industry. Last year, we launched a focused review on the incentive systems for front-office employees among 20 retail banks. The review was completed last month, and there are some interesting observations that I would like to share with the audience. 6. During the review, the consultant engaged by us conducted the first ever industry-wide employee survey in Hong Kong, and did a number of focus group discussions and individual interviews. The best way to describe the effort is that: it is an attempt to gauge the inner true voice of front-office staff who interact with bank customers on a daily basis.

BIS Review 161/2010  7  References Bean, C. (2009), “The Great Moderation, the Great Panic and the Great Contraction” Schumpeter Lecture at the Annual Congress of the European Economic Association in Barcelona on 25 August 2009, available at: http://www.bankofengland.co.uk/publications/speeches/2009/speech399.pdf Borio, C. (2010), “Implementing a macroprudential framework: blending boldness and realism” http://www.bis.org/repofficepubl/hkimr201007.12c.htm Dale, S. (2009), “Inflation Targeting: Learning the Lessons from the Financial Crisis”, Speech at the Society of Business Economists’ Annual Conference, London on 23 June 2009, available at: http://www.bankofengland.co.uk/publications/speeches/2009/speech395.pdf Haldane, A. (2009), “Rethinking the Financial Network”, Speech delivered at the Financial Student Association in Amsterdam on 28 April 2009, available at: http://www.bankofengland.co.uk/publications/speeches/2009/speech386.pdf IMF (2010), “G-20 Mutual Assessment Process – IMF Staff Assessment of G-20 Policies” http://www.imf.org/external/np/g20/pdf/111210.pdf King, M. (2010), “Banking: From Bagehot to Basel, and back again”, Speech given at the Second Bagehot Lecture Buttonwood Gathering, New York City on 25 October 2010, available at: http://www.bankofengland.co.uk/publications/speeches/2010/speech455.pdf Mishkin, F. (2008), “How Should We Respond to Asset Price Bubbles?” http://www.federalreserve.gov/newsevents/speech/mishkin20080515a.htm Tucker, P. (2009), “The Debate on Financial System Resilience: Macroprudential Instruments” At Barclays Annual Lecture in London on 22 October 2009, available at: http://www.bankofengland.co.uk/publications/speeches/2009/speech407.pdf  8  BIS Review 161/2010
If there is a “lump of labour” to be allocated across a fixed pool of jobs, technology will raise unemployment, other things equal. This being the real world, other things are of course never equal. As cheaper capital displaces labour, goods and services become cheaper, raising real incomes across the economy. That boosts the demand for new goods and services and new industries to supply them. To complete the loop, displaced labour then switches to meet this new demand, lowering unemployment. These are the income or compensation effects of technological progress. They are what make the “lump of labour” a fallacy. Which of these two effects – displacement or compensation – wins out? Ultimately, this is an empirical question and we have several hundreds of years of empirical evidence as a testbed. Perhaps unusually, these historical data tell a remarkably consistent story. •  Since 1750, there has been a steady and continuous stream of labour-saving technologies which have boosted economy-wide productivity, as measured by output per unit of labour inputs (Chart 9). On average since 1750, growth in UK labour productivity has been around 1.1% per year. That means the productivity of our economies has improved by around a third each generation, a massive leap forward. •  This improvement in labour productivity has not, over the medium term, caused any reduction in employment. In the UK, the employment rate today as a proportion of the total population is around 50%, very similar to levels in the early 19th century (Chart 10).

That is its lowest rate in a decade (Chart 3). 2  BIS central bankers’ speeches  •  These improvements in the labour market have also been reasonably well dispersed across the UK. Unemployment has fallen in every UK region since 2012, by at least 2 percentage points. •  Last, but by no means least, aggregate pay across the economy has begun to rise. A year ago, Mark Carney told the TUC that “Britain deserved a pay rise”. Today, I am delighted to say it has had one. Aggregate pay across the whole economy is growing at around 3% year-on-year, compared to less than 1% a year ago. •  In inflation-adjusted terms, the picture is even more heartening. Real pay is rising at over 3% year-on-year. A year ago, it was falling by around 0.4% (Chart 4). Real wages are rising at their highest rate for 8 years and, encouragingly, some of the fastest rates of real wage growth have been among the lowest paid. These developments have in large measure been driven by the recovery in the UK economy over the past few years. But let me now add some cross-currents to this fast-flowing employment stream. Many of these cross-currents will be familiar to the TUC’s membership. They pose some real challenges, economically and societally. •  Rates of unemployment still remain high among some cohorts and in some regions. Unemployment rates among those aged 18–24 is still over 13%, 8 percentage points above the national average.
Therefore, information content provided in key banking data such as loan demand, rate of loans approval, lending standards adopted by banks, delinquency ratio, and NPL could be useful in helping to assess how risk and activities are evolving in the macroeconomy, and whether the information point to the need for monetary policy to react over and above what the usual price and output data imply, either by an interest rate action or by a macroprudential action. My final observation is on the relevance of inflation-targeting as a monetary policy framework in the post-crisis era. Recently, inflation-targeting has come under a close scrutiny whether the framework is useful given its narrow focus on inflation whereas risk to economic and financial stability can come from many sources other than inflation. In this crisis, the performance of the inflation-targeting economies does differ widely, but the majority are those that have been more successful in weathering the crisis. Examples here include Australia, New Zealand, Canada and a large number of emerging market economies as opposed to a more difficult experience elsewhere. My view is that inflation-targeting remains useful as a framework for monetary policy, and experience of many inflation-targeting emerging markets in this crisis demonstrates clearly that price stability and financial stability can be preserved even under extreme financial circumstances. But the framework could be further strengthened so that the need to pay attention to financial stability concerns can be more formally addressed through a flexible inflation-targeting regime.

As you know, I never comment on what my colleagues have said. On the basis of our decision, which was taken by the Governing Council with an overwhelming majority, I would like to emphasise the following points. First, we are totally independent of governments and pressure groups of any kind. It is not by chance that we have guaranteed price stability, but by taking decisions which have pleased neither governments nor lobby groups. Second, our mandate is price stability. From 1999 to the present we have delivered average annual inflation of 1.98% for 330 million European citizens. We are unswervingly committed to price stability. Third, we re-absorb all of the liquidity that is injected through our interventions. We are not printing money and there is no change to monetary policy. Fourth, the aim of our interventions is to enable certain markets to function more normally, in order to ensure the correct transmission of our monetary policy, which is unchanged. Fifth, we have taken note of the decision by governments not only to strictly comply with their undertakings to reduce deficits, but also, on the part of a number of them, to step up their budgetary consolidation efforts. For us, this is absolutely of the essence. BIS Review 76/2010  3  Does the situation of the Spanish banks concern you? I have no particular comments at this stage. On the international level, prudential supervision by the Banco de España has always been regarded as rigorous, particularly with its concept of dynamic provisioning.
But we feel that the costs of delayed action may sometimes outweigh its benefits, as postponing the inevitable and failing to accept the changed reality will lead to additional unnecessary costs. One should not want to keep alive old structures that clearly cannot be sustainable in the changed world for longer than necessary. This is a waste of limited resources and reduces long-term productivity. There is a saying that “a crisis should not be wasted” – negative shocks to an economy should lead to productivity gains. Our experience shows that quick decision-making and decisive policy actions can shorten the period of uncertainty that also weighs on economic activity. People and entrepreneurs in countries with delayed reforms overreact, leading to a higher level of risk aversion than necessary. Overshooting in risk aversion results in lost jobs and postponed investments. BIS central bankers’ speeches  1  Estonia, for example, lost almost 20% of its GDP during the crisis. By now we have regained the pre-crisis level, contrary to many countries that preferred to delay the necessary reforms. Some of them still face years of decreasing economic output. In summary, I would like to stress that prolonged fiscal consolidation and structural reforms can lead to unnecessary costs to the society. Some countries have chosen to delay the pain and take only gradual steps with their structural reforms, but this has in fact resulted in a reduction of the overall economic activity to the extent that might be no less than the shortterm cost of a quicker adjustment.

Madis Müller: New models in Northern Europe? Speech by Mr Madis Müller, Deputy Governor of the Bank of Estonia (Eesti Pank), at a symposium organised by the Konrad-Adenauer-Stiftung, Berlin, 28 November 2012. *  *  *  Ladies and gentlemen, Thank you for this excellent opportunity to discuss together with colleagues from Latvia and Lithuania the experience of the three Baltic countries during the financial crisis. While the situation of each country is undoubtedly different, we can still consider if there are any lessons one could learn from the Baltic cases. In my opening comments, I would like to address specifically the question of what is the best pace for economic adjustments once a country has been hit by a crisis. We hear today many suggestions that austerity requirements have gone too far and that we should allow more time for implementing difficult reforms. First, let me start by saying that in more open economies, the crisis was felt almost instantly. In small and open countries such as the Baltic countries, there was no domestic demand to substitute for the lost export income. The economic reality had changed very suddenly. The EU countries could be divided into two groups. The countries that had a higher export dependence had to react fast to the changed economic environment. This applies especially to smaller countries, including the Baltic States, although Germany’s economy is also heavily reliant on exports.
J D Rogers: Debt reporting in Sierra Leone Keynote address by Dr J D Rogers, Governor of the Bank of Sierra Leone, at the opening ceremony of the WAIFEM Regional Course on Debt Reporting and the IMF/World Bank Debt Compilers Guide, at the Bank of Sierra Leone recreational complex, Kingtom, 7 August 2006. *  *  *  Director General, West African Institute for Financial and Economic Management (WAIFEM), Officials of the Commonwealth Secretariat & The International Monetary Fund (IMF), Distinguished Guests, Course Participants, Ladies and Gentlemen. 1.0  Introduction  On behalf of the President, His Excellency, Alhaji Dr. Ahmad Tejan Kabba, the Government and people of the Republic of Sierra Leone, I am pleased to bid you all a warm welcome to Freetown. Let me start by expressing our sincere thanks and appreciation to the West African Institute for Financial and Economic Management (WAIFEM), the Commonwealth Secretariat (COMSEC) and the International Monetary Fund (IMF) for choosing Sierra Leone as the venue for this Regional Course on Debt Reporting and the IMF/World Bank Debt Compilers Guide. The theme of the course is relevant and timely. Let me thank the organizers of the course for this initiative which would go a long way to strengthening overall debt management capacity in the sub-region. Ladies and Gentlemen, 2.0  Principles for compilation of gross external debt position  The need for comprehensive, comparable, and reliable data on external debt for informed decisions by policymakers, financial markets and other users of economic statistics cannot be over stressed.

With low unemployment, solid wage growth, and ample job openings, all indicators show that the strength of the labor market is at a level consistent with my view of maximum employment. Inflationary Pressures The other side of our mandate is price stability, and this is where our greatest challenge now lies. Inflation is far too high. In February, inflation-as measured by the personal consumption expenditures (PCE) price index-was nearly 6½ percent. And high inflation is a key concern in many countries around the world. Even before Russia's invasion of Ukraine, the rapid global economic rebound had driven up prices for oil and many other commodities. Higher inflation is especially detrimental for those who are least able to meet the growing cost of essentials like food, housing, and transportation. The war in Ukraine and the global response present even greater challenges and uncertainty. For example, Russia and Ukraine are large exporters of key materials, including neon, palladium, and platinum. Those materials are used in the production of a wide array of products, from auto parts to computer chips. Even before the war,  2/5  BIS - Central bankers' speeches  manufacturers were confronting shortages of important inputs. Further disruptions to these key products could create spillovers to economies across the globe. But there are differences in the ways in which countries are experiencing inflation. In the United States, we are now seeing elevated inflation across many categories of goods and services.
The report starts with the following bold statement: “CEMFI is a remarkable adventure, both on the research front and in terms of educational achievements. A relatively recent introduction in the landscape of European higher education in economics, CEMFI has succeeded in establishing itself as one of the premier research centers and postgraduate schools (in Europe).” A number of factors have contributed to this success. First, I tend to think CEMFI has 1/2  BIS central bankers' speeches  benefitted from the long-term stability that the institutional support of the Banco de España has given it. Second, it has a very good working relationship with the university system, through the agreement with Universidad Internacional Menéndez Pelayo, which provides the official recognition of the Master’s and PhD degrees. At the same time, it is not burdened by some of the constraints, that make it difficult in Continental Europe to organise graduate studies comparable to those of the best US universities. Third, CEMFI has developed over the years norms of behaviour and a collective culture in respect of the admission of students, the hiring and promotion of faculty, and the responsibility and commitment to the institution that are key ingredients for achieving excellence in training and research. Finally, CEMFI has been fortunate to count on an outstanding leadership that has steered its development over the years. Besides the Master’s and PhD programs, and the important contribution of faculty to frontier research, CEMFI provides other valuable services.

Pablo Hernández de Cos: Graduation Ceremony - Centro de Estudios Monetarios y Financieros Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Class 2020/2021 graduation ceremony, Centro de Estudios Monetarios y Financieros (CEMFI), 1 July 2021. * * * Good afternoon class of 2021. Good afternoon dear colleagues and friends. It is a pleasure for me to participate in this graduation ceremony together with Juan José Fernández Muñoz, Coordinator of Studies and Programs of Universidad Internacional Menéndez Pelayo, Samuel Bentolila, Director of the Master’s Programme, and Rafael Repullo, Director of CEMFI. I would especially like to thank Juan José Fernández Muñoz for being here today. The partnership with Universidad Internacional Menéndez Pelayo, dating back to 2006, has been instrumental in improving our ability to attract excellent students and the quality of our graduate programme, and I am very grateful for this. The Master’s programme of the class graduating today was severely disrupted by the COVID19 pandemic. In early March 2020, just before the end of the second term of the programme, all teaching activities were moved online. During the summer of 2020 CEMFI made all the necessary investments and established a set of safety protocols to be able to go back to onsite teaching. These efforts paid off handsomely. Most courses this year were taught on-site, with a minimal incidence of COVID-19 and, fortunately, no serious cases at all.
Chart 25: Projection for wage growth and inflation, assuming inflation expectations put downward pressure on wages Wages - lower inflation expectations Wages - February IR projections Inflation - February IR projections Inflation - lower inflation expectations  14  6 4 2 0 -2 -4  Monetary policy If there is evidence that risks to inflation, globally and in the UK, may be skewed to the downside, the obvious next  Percentage change oya  Source: ONS and Bank calculations. BIS central bankers’ speeches  question is what, if any, monetary policy response might be appropriate as insurance against those downside risks. One insurance device comes from the specification of the inflation target itself. Even if the risks to inflation are asymmetric, central banks’ inflation targets typically are not. This reduces the risk of monetary policy imparting a “deflationary bias”. The MPC’s own mandate is crystal clear: deviations above and below the 2% inflation target are to be treated symmetrically. In its Open Letter to the Chancellor earlier this year, the MPC made clear it would act symmetrically to meet the inflation target.15 A second insurance policy against downside inflation risk comes from clearly specifying the horizon over which inflation is expected to return to target following a deviation. Provided that horizon is credible, this reduces the risk of inflationary expectations becoming dislodged from the target on a persistent basis.

Chart 30: Simulation of Bank rate and CPI inflation, if the starting level of slack is 2% Path for Bank rate  Per cent 1.5  Per cent 3  CPI inflation  2.5 1 2 1.5  0.5  1 0 0.5 2013  2014  2015  2016  2017  -0.5 2013 2018  February IR Simulation with a lower bound at 0% Simulation with a lower bound at 0.5%  2014  2015  2016  2017  0 2018  February IR Simulation with a lower bound at 0% Simulation with a lower bound at 0.5%  Source: ONS and Bank Calculations. Simulations show optimal policy under full commitment. Of course, there are good reasons why monetary policy is not set by algorithm. These simulations ignore a number of important practical uncertainties. For example, they assume that this policy path is fully credible and effective in stimulating demand and inflation expectations. In practice, the effects of a policy easing cannot be known with certainty and 18  BIS central bankers’ speeches  policy credibility cannot be guaranteed. Moreover, there are upside as well as downside risks to the inflation outlook. Nonetheless, these experiments are in my view the right baseline when assessing the appropriate policy stance today. Conclusion Inflation has dropped like a stone over the past year, to close to zero. This largely, but not wholly, reflects external forces.