samchain/econo-pairs-v1 huggingface dataset:
The significant share of Hong Kong in Mainland0’s FDI and ODI underscores the unique role of Hong Kong as a gateway for foreign enterprises to access the Mainland market, while at the same time being a springboard for Mainland institutions to gain exposure to international markets. 7. With respect to portfolio investment flows, Mainland China has made important progress after joining the WTO in 2001. Portfolio inflows were allowed through the introduction of the Qualified Foreign Institutional Investor (QFII) scheme in 2002. A few years  BIS Review 153/2010  1  later, portfolio outflows were liberalised by introducing the Qualified Domestic Institutional Investor (QDII) scheme in 2006: this allows certain qualified banks, insurers and fund management companies to invest overseas. 8. At present, market attention has been focusing on portfolio flows from advanced economies towards Mainland China. In my view, portfolio flows in the opposite direction – i.e. portfolio outflows from Mainland China – will also present huge opportunities to the asset management industry, especially given the fact that the Mainland economy is the single largest provider of savings in the world. 9. Currently, outward portfolio investment (OPI) from the Mainland is only around 5% of its GDP, still far below 57% for East Asia, 42% for the US and over 100% for the UK. Our in-house research findings show that an economy’s portfolio investment outflows as a percentage of GDP tend to grow along with the level of economic development measured by per capita GDP.

Philipp Hildebrand: Switzerland and global competition - an all-purpose strategy Summary of a speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the University of St Gallen, St Gallen, 29 August 2005. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch)  *  *  *  Openness was one of the major factors that made Switzerland one of the richest countries in the world. A significant portion of our industry, and one upon which our current prosperity is based, is the direct or indirect outcome of foreign expertise and the efforts of foreign entrepreneurs. These people were attracted to Switzerland – particularly in the 19th century – by its openness and its stable, liberal environment. Openness promotes competition, innovation and progress, thereby securing sustained prosperity. But Switzerland strayed from the straight and narrow when it began erecting barriers to competition – barriers that provided ever greater protection to its domestic market. The ensuing insulation of the domestic market is probably one of the main reasons for Switzerland's growth slump today. External trade policies are always domestic market policies as well. Consequently, external trade policies have instruments that can be effective in opening up the domestic market from outside. This openness to external trade is of utmost importance, therefore, not only for exporters, but also for the domestic market. Being open towards Europe and towards other trading blocks is not mutually exclusive.
Chart 10  Chart 11  Whole economy real investment substantially weaker than pre-crisis forecasts  Advanced economy investment has fallen relative to GDP, remains lower than past episodes  Residual Non-residential Total  Equipment Residential  Per cent 10  1980  1989  0  2001  2007  pp fall in investment share of GDP 1.0  -10  0.5  -20  0.0 -0.5  -30  -1.0  -40  -1.5  -50  -2.0 -2.5 -3.0  Sweden  Switzerland  Germany  UK  Canada  US  France  Denmark  Italy  Spain  -60  -3.5 -4.0 -4.5 T  T+1 T+2 T+3 T+4 T+5 T+6 T+7 T+8  Years  Source: IMF World Economic Outlook and Bank calculations. 8  Source: IMF World Economic Outlook and Bank calculations. BIS central bankers’ speeches  Chart 12  Chart 13  UK business investment still short of pre-crisis share of GDP…  … and tracking below past cycle average Business investment, peak GDP = 100  12  Average of past cycles  11  2008  Nominal 10.5 10 9.5  Per cent of GDP  Real  130  11.5  90 80 70  8.5 2016Q1  2014Q4  2013Q3  2012Q2  2011Q1  2009Q4  2008Q3  2007Q2  2006Q1  2004Q4  2003Q3  2002Q2  2001Q1  Source: ONS and Bank calculations.

The charge that central banks are out of monetary ammunition is wrong, but the widespread absence of global price pressures demands that our firepower be well aimed. Indices of policy uncertainty are about 1¼ times their pre-crisis averages in the US and Japan, and as high as three times in China. In the UK, progress since the financial crisis has been more than totally unwound this year with the measure having risen to five times its precrisis average by the start of the official referendum campaign (Chart 3). 5  A closely watched measure of economic uncertainty – the VIX – spiked when the global financial crisis hit. Measures that combine this with other sources of economic uncertainty, such as dispersion among forecasters’ growth projections, households’ unemployment expectations, and currency volatility, show clear variation over time, and rise at times of economic stress. See Haddow, A, Hare, C, Hooley, J and Shakir, T (2013) “Macroeconomic uncertainty: what is it, how can we measure it and why does it matter?”, Bank of England Quarterly Bulletin, Q2. 6  One way some of this has been measured is again to count occurrences in media articles of references to economics, uncertainty, and policy terms like “deficit”, “regulation” or terms relating to monetary policy. See: Baker, S, Bloom, N and Davis, S (2015), “Measuring economic policy uncertainty”, NBER Working Paper No. 21633, October. BIS central bankers’ speeches  3  While clearly these three uncertainty measures are related, distinct movements are visible.
BIS central bankers’ speeches  5  Given the importance of addressing the risks stemming from systemically important financial institutions, it is necessary for regulators to reduce and if possible eliminate the prospect that a systemically important financial institution would find itself in difficulties in the first place. This consideration also brings up the need of supervising better shadow banking,5 which consists of those parts of the financial system that are not visible to regulators and hence not under their direct control and supervision.6 Basle III goes a significant way in narrowing the gaps in regulation that result from recourse to shadow banking.7 It does so by incorporating off-balance sheet exposures in the leverage ratio and by including in the liquidity, regulatory and supervisory standards a range of risks stemming from shadow banking. Thus, stronger banking regulation and supervision will go a long way towards containing the risks of the shadow banking sector. The situation in Malta I will now take a closer look at some key issues relating to the domestic economy and financial system, particularly the fiscal situation, international competitiveness and financial stability. The outlook for the fiscal situation calls for continued vigilance and caution. Official projections of the deficit ratio for 2012 and 2013 have been revised downward, remaining below the Maastricht threshold of 3%. However debt forecasts have been generally revised moderately upward, to levels projected above the 70% level in 2012 and 2013.

Government finances were quite healthy, with low public debt and a low deficit to GDP ratio. The turning point came with the collapse of the housing market starting in 2007. A drop in banks’ share prices led to a deposit run on the banks. The scale of the problem snowballed after the Irish government guaranteed all the obligations of the largest banks. This transformed the house price crash into a sovereign debt crisis, with the evaporation of the markets’ confidence in Ireland’s ability to honour its obligations. Irish borrowing costs rose abruptly, requiring an EU/IMF bailout. 4  4  Ioannis Sarmas, ibid. BIS central bankers’ speeches  Strengthening governance As I have already mentioned, the ECB played an important role in the policy response to the crisis. In addition to the conventional interest rate tool, the ECB introduced a number of nonstandard measures (such as the three-year LTROs that I mentioned earlier, and a reduction in the required reserve ratio) to facilitate the transmission of monetary policy to the economy. The events of the last few years have provided important lessons for the construction of a whole new approach to European economic governance. The aim is to go beyond the shortterm responses, such as the Greek bailouts, and tackle the problem before the situation has become critical. To provide better support where necessary, the European Financial Stability Fund will be replaced by the European Stability Mechanism, which will be a permanent rescue fund with added firepower and a stronger mandate.
Medium-term forecasts Current stance, short-term outlook and the assumptions Current stance relating to real sector variables that constitute the basis for the forecasts presented in the previous Inflation Report have been preserved in this Report to a great extent. Despite rapid growth in domestic demand in the last quarter of 2005, the ongoing increase in the ratio of investment expenditures to GDP eased the pressures on inflation imposed by the increase in demand by pushing the production capacity upwards. Moreover, continuing productivity proceeds limited the increase in costs, thus limiting the pressure on inflation. While producing forecasts, the short-term outlook relating to domestic supply and demand conditions was developed in the light of these findings. Real interest and real exchange rate variables, which determine the relationship of supply-demand conditions to inflation and constitute the starting point of the monetary transmission mechanism, are also significant components of the assumption set that constitute the basis for medium-term forecasts. It is assumed that in the current situation, real interest rates are not at a level that can exert pressure on credit increases and demand conditions. Nevertheless, under a main scenario in which the current program will continue to be implemented, macro and political stability will not deteriorate, structural reforms and, accordingly, long-term capital inflows as well as productivity increases will continue, it is assumed that the New Turkish lira will retain its strong position and will continue to support the decline in inflation.

This initiative has seen two six-month extensions and, more importantly, it has been complemented by the introduction of a “common framework” for restructuring the sovereign debt of countries with deep-seated debt problems. Despite the limited quantitative results of the DSSI and the uncertainty surrounding the level of success of the “common framework” for debt restructuring, both initiatives represent an unquestionable improvement on the part of multilateral coordination in sovereign debt resolution. Third, the main multilateral development banks (such as the World Bank, the European 2/4  BIS central bankers' speeches  Investment Bank and the African Development Bank, among others) are also playing an important role in this crisis. Throughout the pandemic, these institutions have deployed a series of emergency measures in line with their mandates and spheres of influence. For instance, their fresh financial support to the Middle East and North Africa (MENA) region since the outset of the pandemic amounts to over USD 8 billion, adding to the USD 4.3 billion of IMF emergency financing and USD 7.2 billion of IMF financing provided through regular programmes. Finally, the recent G7 agreement to back a new global minimum tax rate for multinational companies is a step in the right direction to address the tax challenges arising from globalisation and the increasing digitalisation of economies. Undoubtedly, major steps have been taken in this crisis to strengthen international cooperation, but much ground has still to be covered.
Different countries have chosen different solutions – although most countries define their inflation target in terms of the CPI or a modified version of the CPI. We Executive Board members have said that of course the Riksbank should not exclude the possibility of changing to another measure of inflation than the CPI if there are good reasons for doing so. But when discussing such a change I believe that it is important to remember the most important reason for introducing the inflation target, namely the need for a nominal anchor. This implied at that time, and in my opinion it still indicates, that the inflation target should be defined in terms of a price index that reflects normal purchases and which Swedish households are familiar with. In any case, one important criterion for an alternative measures must be that it can really function as an anchor for inflation expectations. Are we Executive Board members "inflation nutters”? Many proposals for changes in the inflation-targeting policy that have been put forward recently relate to the balance between stabilising inflation and stabilising the real economy. Sometimes they seem to assume that the Riksbank is not allowed to, is unable to, or quite simply does not want to give consideration to production and employment when making decisions on the repo rate. Let me say this as clearly as I can: they are wrong. When we make decisions on changing the repo rate and make forecasts for it we always consider how production and employment will develop.

At the same time, we of course cannot allow inflation to drift too far from the 2 per cent target, or to wait too long before bringing inflation back on target, as there would then be a risk that the inflation target would lose credibility. So, from the Riksbank’s point of view we have said that monetary policy is normally aimed at attaining the inflation target a couple of years ahead. This is our aim when forecasting the repo rate path. So an appropriate repo rate forecast is normally that inflation is close to the target a couple of years ahead, according to our forecast, without any major fluctuations in the real economy. Monetary policy depends on the type of shock This means that it is not possible to describe our strategy by any mechanical policy rule. To determine whether, and if so, how the repo rate needs to be changed now and in the coming period, it is necessary to analyse the causes behind the deviation of inflation from the target and also how the interest rate, inflation and the real economy interact. What is the driving force in the economy? What type of shock has led to inflation deviating from the target? How has it affected production, employment and so on? And how are they likely to develop in the future? As there is a time lag before the effects of monetary policy become apparent, the forecasts are of central importance.
In conclusion, allow me to reiterate the Bank of Zambia’s concerns with regard to high lending rates being charged by financial institutions, especially Microfinance Institutions, which are inhibiting the expansion of credit. I acknowledge that some financial institutions have begun to lower their interest rates but I am certain that there is room to do more. The continued lowering of lending rates by Microfinance Institutions will not only stimulate our economy but also reduce non-performing loans in the industry as low lending rates reduce the risk of default. I am informed that CETZAM’s interest rates range from 48% to 72% per annum. I have also been informed that CETZAM introduced an agricultural loan product for rural areas and last year lowered the interest rate from 60% to 48% per annum. It is my sincere hope that CETZAM will further reduce lending interest rates to these clients that they are targeting for savings deposits. The Bank of Zambia undertakes to continue pursuing policies that will drive financial innovation, build strong financial institutions and partnerships to ensure a stable financial sector in the country. It goes without saying that strong financial institutions can weather shocks more easily and thus contribute to Zambia’s economic growth. 2  BIS central bankers’ speeches  Finally, Ladies and Gentlemen, I wish to take this opportunity to once again congratulate and commend the Management of CETZAM for introducing this new savings product, which is expected to improve the savings culture of the ordinary Zambians in the community.

12  BIS central bankers’ speeches  Figure 8 Total loans (real annual change, percentage) 30  30  20  20  10  10  0  0  -10  -10 07  System  08  09  Large multibanks  10  11 12 Medium-sized multibanks Retail banks  Source: Central Bank of Chile based on SBIF data. BIS central bankers’ speeches  13
Somewhat simplified, the income comes from two main sources: remuneration to the labour force in the form of wages and other benefits and remuneration to capital in the form of yield and profits. Both of these types of remuneration have increased over the past three years, and GDP has increased by a good three per cent on average in  4 See, for instance, OECD (2015) and Furceri et al. (2016). 6 [14]  real terms. 5 But the question is how the growing incomes have been distributed among households. Households differ with regard to the size of the income they receive from different sources. In general, labour income is in relative terms the most important source of income for households in the lower and middle parts of the income distribution, while capital income has the most significance for those at the top – particularly the very top – of the distribution. As monetary policy affects wages and capital income in different ways, the overall effect may differ from one household to the next. It is this channel from monetary policy via the composition of household income on which the debate has focused the most – rising asset prices should have benefitted households at the top of the income distribution to a relatively large degree and thus contributed to a greater income dispersion. Higher asset prices, lower yield and cheaper loans However, households do not only differ with regard to the composition of labour and capital income.

We expect largely unchanged unit labour costs over the next three years due to low wage increases and rising productivity. We also expect the Swedish krona to continue to strengthen (Figure 22). This will mean that inflationary pressure will be low during the forecast period. Repo rate at all-time low At the monetary policy meeting in December, the Riksbank decided to maintain the repo rate at the all-time low of 0.25 per cent, standing fast by its previous assessment that it will not be necessary to raise the repo rate until the autumn of 2010 (Figure 23). The background to this decision is that a low level of resource utilisation, together with a slow development of prices and wages, is expected over the next three years. In order to meet the inflation target and to support economic recovery, the repo rate must remain low for a long time. This is the same repo rate path that we adopted as long ago as July. Since then, the forecasts for GDP growth and employment have certainly been revised upwards. The forecast for resource utilisation has accordingly been revised upwards. However, at the same time, the forecasts for inflation have been revised downwards. These two changes largely cancel each other out as regards their effect on monetary policy. Wage formation has functioned well for more than a decade Wage formation has functioned well over the last ten to fifteen years. The development of wages has been compatible with low and stable inflation.
In this context it is important to remember that relatively little development will take place in east Iceland this year and for most of next year. The effect will not begin to be felt to any extent until well into next year and the bulk of construction work will take place in 2005 and 2006. The main conclusion of the Bank’s analysis is that even though this will be the largest construction programme in the history of Iceland, it should be able to go through without disrupting the economy. However, this calls for cautious economic policy implementation. The Central Bank’s analysis shows that with a somewhat stronger exchange rate and higher interest rates than would otherwise have prevailed, and a tighter fiscal stance than would have been needed, inflation will remain inside the tolerance limits of the target, i.e. below 4%, and that this will prevent the economic instability that the construction programme in east Iceland would otherwise have caused. Exchange rate developments and the fiscal input will be major factors in determining how much interest rates will need to rise. However, neither an exchange rate adjustment nor fiscal measures can entirely replace monetary measures, since the change in exchange rate partly reflects expectations of a rise in Central Bank interest rates, beside which the scope of the east Iceland construction programme will simply be too great to be countered solely by cutting back public sector activity.

The policy rate is currently 5.3%. The exchange rate of the króna was fairly stable from last spring and until the winter, then strengthened again towards the end of the year and in the beginning of this year, to reach its highest point for two years. Undoubtedly the expected power-intensive industrial project in east Iceland is a contributing factor. The new monetary policy framework was introduced in a fairly tough climate of a sliding exchange rate and mounting inflation. It is fair to say that the tight monetary stance is the main reason that inflation went back down so quickly. Experience has shown that the monetary policy passed its initial test with flying colours and no one should have any doubts now about the value of monetary policy in the Icelandic economy. It works in Iceland, just as it does everywhere else. On February 10 the Central Bank published its quarterly Monetary Bulletin. As usual, this contains a new inflation forecast along with the Bank’s latest national economic forecast and a new assessment  of economic and monetary developments and prospects. The bulletin also contains an evaluation of the impact of the proposed power-intensive industry and hydropower development projects in east Iceland, which were incorporated into the inflation forecast and national economic forecast. The forecast assumes that inflation will be below the Bank’s target over the next two years. On the basis of this and the new economic forecast, the Governors announced a cut of 0.5 percentage points in the Bank’s policy rate last Monday.