samchain/econo-pairs-v1 huggingface dataset:
Of course, today, the selection process for entry to the Bank of England is wholly merit based. And, I hope if we had such a talent in the Bank, we would strive harder to keep them. But I mention the Bank’s Birmingham branch and the contribution of Charles Geach because it illustrates the role that finance played in the launch of the British economy. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  And because I want to talk today about investment and the finance that supports it in the modern British economy. In doing so, I will draw heavily on new work by the Bank of England on businesses investment and financing decisions. Investment and productivity An economy’s productive power – productivity – depends ultimately on the skills of its workforce, its stock of physical and intangible capital, the bulk of which we can think of as investment by businesses, and the efficiency with which these inputs into production are combined. Productivity has been disappointing since the financial crisis. There has been almost no growth in output per hour since the crisis. Productivity having fallen in the crisis, then again in 2011/12 after a recovery, has resumed fairly sustained growth in the last three years. But the growth has been weak especially when compared to the rate of productivity growth before the crisis. The amount of output produced per hour worked in the UK would be around 18% higher if the pre-crisis rate of productivity growth had been maintained.

There are probably several reasons why they have not. As noted earlier, inertia has probably played a role – the survey results suggest that firms adjust their investment targets infrequently and change them slowly. So it is possible that the sharp decline in real interest rates since the global financial crisis may not yet be reflected in company hurdle rates. Uncertainty and risk aversion may also have played a role. In the survey, these were the predominant nonfinancial obstacles to investment (Chart 5). Of the third of firms who said they had invested too little over the 7  past five years, over 80% cited uncertainty as an obstacle. Other studies have also found that increased uncertainty can lead to weak investment. 8  Chart 5: Obstacles to investment over the past five years  (a)  % of businesses 90  Moderate Obstacle Major Obstacle  80 70 60 50 40 30 20 10 0 Internal funds  External funds  Uncertainty  Risk aversion  Cost of finance  Shorttermism  Skill Shortage  Low/slow returns Source: Bank of  England Finance and Investment Decisions survey. (a) Question 8: ‘If your business invested ‘too little’ over the past five years, what were the main obstacles to investing?’. (b) ‘Short-termism’ arises when companies value short-term returns above investment that typically yields returns once a long-term horizon.
First, I will outline BNM’s role in fostering an enabling environment for network expansion as well as in promoting competition, innovation and choice in the payment landscape;  ii. Second, I will highlight the key priority areas for stakeholders that could accelerate the displacement of cheques and cash with cost-effective e-payments;  iii. Third, I will outline the importance of a synergistic collaboration between MyClear and the financial institutions to deliver innovative payment solutions and meet user needs; and  iv. Fourth, I will highlight the need for the financial institutions to provide end-to-end and value-adding financial solutions to their customers. 1. Fostering an enabling environment for network expansion whilst promoting competition, innovation and choice  An efficient and well-functioning payment system must not only have the economies of scale to enable lowering of costs, but also the quality of services to serve the needs of an increasingly demanding and sophisticated users. We designed our developmental efforts into two-fold: i. Foster an enabling environment for infrastructure building and network expansion to achieve the economies of scale; and  ii. Promote effective competition among the industry players to spur the development of innovative solutions, provide greater choices and value proposition to the public and in the process, lower costs. BIS central bankers’ speeches  1  Over the past few years, BNM has played the role of a catalyst by instituting reform measures and introducing market incentive mechanisms to enhance the accessibility and the quality, affordability and security of the e-payment services to the general public.

Given the inflation target, we will be mindful of the effects of higher interest rates on the krone exchange rate when inflation is low. Nonetheless, the interest rate path published in Monetary Policy Report 1/07 was higher than in Inflation Report 3/06. The reason for this is that the prospect of stronger-than-expected growth in both Norway and among our trading partners pointed to a higher interest rate path. On balance, this had a greater impact on the interest rate path than a stronger krone. Over time, however, the nominal exchange rate is not the main force. The most important influence on competitiveness in Norwegian business and industry and the purchasing power of the Norwegian krone is changes in the real exchange rate. The real exchange rate can be measured in a number of ways, for example by consumer prices or labour costs in Norway relative to our trading partners measured in a common currency. The real exchange rate has fluctuated widely over time and has deviated over longer periods considerably from the average level since 1970. The real exchange rate has nonetheless shown a tendency to revert to this level. Over time, the exchange rate acts as a buffer in the global economy. When economic activity is high in one country, an appreciation of the country’s exchange rate will have a dampening effect. Conversely, when there is a need to stimulate the economy, a weaker exchange rate will boost growth.
It has given developing countries increased borrowing facilities to mitigate acute effects of other economic shocks, be they crop failures or lower prices for major export products. The process has also led to increased investment in developing countries. At the same time, investors in industrialised countries have had new opportunities of diversifying risk and obtaining the higher return that may come from projects in developing countries. This should have tended to improve the utilisation of capital in individual countries as well as in the world as a whole. Some observers argue, for example, that the efficient capital markets in the United States were a major factor behind the favourable economic trend there in the 1990s, a trend that also benefited developing countries. But this has not been a straight-forward matter. When the process was initiated, the effects that capital liberalisation in recent decades has had on the stability of both national and global capital markets  BIS Review 2/2002  3  were clearly underestimated. There has now been a change in the international discussion. Much has been written about the ways in which deregulations were implemented, both in countries like Sweden and in developing countries. The process was sometimes too rapid, sometimes wrongly designed and often lacked a thorough assessment of the consequences. These lessons are now being taken into account in advice to countries that have not yet opened their markets.

1) The changing nature of systemic liquidity risk Stripped of its superficial idiosyncrasies, the LDI episode provides an almost canonical example of the structural trends we identified in our BIS work: First, the growing use of LDI[6] increased the exposure of real people, in this case current and prospective UK pensioners, to developments in gilt markets. Second, key features of LDI funds left them, and their Defined Benefit (DB) pension scheme investors, exposed to very substantial liquidity risks in the event of a sharp change in interest rates. Those features were: large leveraged holdings of longer-duration gilts or interest rate derivatives; liquidity buffers for meeting margin or collateral calls that had not been rigorously stress tested for more severe shocks; and an overly cumbersome recapitalisation process that left DB schemes unable to inject resources quickly enough into their LDI funds, even where they had the means to do so. Third, in such circumstances, the LDIs’ business model was reliant on being able to liquidate their gilt holdings in size, and at stable well-defined prices. In markets where there was limited intermediation capacity and few if any other marginal buyers, that proved impossible. Expressed like this, and abstracting from the very different initial trigger, these features bear a striking resemblance to the 2020 dash for cash. A wide range of non-bank players with leveraged positions and thin liquidity buffers all rushed simultaneously to get out of positions in normallyliquid financial instruments in order to raise funds for margin calls and other liquidity needs.
The intensification of trade tensions has increased the downside risks to global and UK growth. In this regard, the news at the weekend that the US and China agreed to restart trade talks is welcome – though as we have learnt, progress today is no guarantee of progress tomorrow. To recap, the direct effect of the measures announced thus far would have only a marginal impact on the UK, of -0.1% of GDP. That would rise to -0.4% if all measures, including auto tariffs, were implemented. If there were a Brexit-style business confidence shock in the US and China, the total impact on the UK would start to be material, rising above -1% of GDP (Table 3). Since the middle of last year, expectations of UK rates three years ahead have fallen by around half a percentage point and 10-year gilt yields are similarly lower. That would roughly offset the hit to UK GDP in the downside scenario of a significant, Brexit-like hit to US and Chinese business investment. But global trade tensions are not the only factors influencing UK financial conditions. They also remain highly sensitive to the perceived probabilities of different Brexit outcomes. That’s because asset prices are mean expectations, reflecting the weights that market participants place on every possible outcome. 12  As the MPC noted in the minutes to its June meeting, several major car manufacturers had brought forward their regular annual shutdowns from the summer to April, as part of their Brexit contingency plans.

Global integration is not the solution to all our problems, but acting to restrict it or to insulate us from its consequences would damage our capacity to grow and to adapt to change, and these costs would make it harder, not easier, to deal with our longer-term challenges. To the extent we are reluctant to remove restrictions or subsidies in the United States, we make it easier for the forces in other countries to block reforms from which we would benefit. The world has a lot of experience with the costs and benefits of protection, and the balance of judgment on those questions has not significantly changed even with all the changes that technology and policy have brought to global trade. Economies that are more open have generally seen more rapid growth, both in incomes and in employment. Economies that are less open have generally grown less rapidly. Openness itself, of course, is not enough. Our capacity to adapt to change depends in part on the effectiveness of government policy in a range of important areas. Education seems the most obvious of these, but policy in health care, in public infrastructure, and many other areas will also play an increasingly important role in determining the relative strength of the U.S. economy in this more integrated world.
4 [25]  Steering the interest rates worked well during this period, despite the Riksbank using a very small toolbox when conducting its monetary policy. We went from doing to mostly talking about monetary policy. But the fact that this works is based on the Riksbank having built up credibility on the market and that it is ready to use its balance sheet if market rates were to deviate from the desired levels. On Wall Street there is an expression “Don’t fight the Fed” – which means it is not a good idea to take positions based on the assumption that the central bank will fail to attain the interest rates aimed for. Steering interest rates is also based on the fundamental transmission mechanism functioning – that other interest rates in the economy actually change when the shortest money market rates the Riksbank affects are changed. How well this functions depends on different conditions in the financial sector that can be state-dependent. A similar development took place in many countries during this period – the central bank's job conducting monetary policy was relatively simple. But below the calm surface, two interlinked problems were bubbling up – a trend fall in real interest rates and rising debts. I have talked about these problems on several occasions. 5  Falling interest rates Over the past 30 years, interest rates around the world have fallen heavily.

To this end, the Blueprint seeks to align the financial sector with the national aspiration to not only become a high value-added and high-income economy, but also lay a solid foundation for a more dynamic, inclusive and sustainable development path. Fourth, we continue to be firmly anchored on the Bank’s monetary and financial stability mandates. As we have always emphasised, sustainable economic growth can only happen within a context where monetary and financial stability is preserved, and where the integrity of the financial system is safeguarded. This Blueprint is the fruit of the labour of many, both from within and outside Bank Negara Malaysia. For this, our heartfelt thanks goes out to all who have generously given ideas, insights and time to make this Blueprint possible. I would also like to thank Yang Berhormat Senator Tengku Datuk Seri Utama Zafrul Aziz, Minister of Finance for gracing this event and launching the Blueprint. While producing the Blueprint has been a lot of hard work, the greater task for us is to turn its 2/3  BIS central bankers' speeches  vision into reality. This requires us to work and think outside the box as the nation enters a new stage of development. It is our desire and belief that the financial sector will continue to serve Malaysia well in the years ahead, doing its part to improve the well-being of people now and for the generations to come. 3/3  BIS central bankers' speeches
Chart 3: Compositional effects currently  Chart 4: Low skilled employment more  weak, generally counter-cyclical  cyclical in the US  Source: ONS, Labour Force Survey and own calculations  Source: U.S. Bureau of Labour Statistics  BIS central bankers’ speeches  9  Chart 5: Productivity growth very weak  Chart 6: Pay surveys better match for AWE  in recent years  ex compositional effects  Source: ONS, CBI and BCC  Source: ONS  Table 1: Detailed questions in the Labour Force Survey Characteristics  LFS Question  Age  How old are you? Occupation  What was your (main) job in the week ending Sunday the [date]? Tenure  In which year did you start working continuously for your current employer? And which month was that? Education  This next section is about qualifications gained in the UK. Please think about ALL qualifications you have ever gained [in the UK], even if it was a long time ago or you are not using them now (please exclude expired qualifications). Sector/ Industry  What did the firm/organisation you worked for mainly make or do (at the place where you worked)?

In addition, the SNB recruits and employs many economists itself. Maintaining close ties with the universities is a necessary prerequisite for SNB economists to remain on top of the latest economic knowledge and for the SNB to be an attractive employer. However, the SNB also considers itself a provider of research and teaching services. To the extent possible, it publishes its own research results and also makes available other economic expertise, e.g. in the area of statistics. An academic education is a privilege for which society justifiably expects something in return. For graduates, this presupposes an especially large commitment to making a contribution to Switzerland’s prosperity and success. The SNB also would like universities to make concrete and useful suggestions for Swiss economic policy, e.g. with regard to the pension system and healthcare. This is because convincing solutions in these areas make it possible for monetary policy to continue to take full effect. In addition to the economic function, the strong education system also has an eminent civic one, namely by providing the glue that holds the whole society together. First, a good allround education enables voters to form their own opinions about complex substantive issues. This is essential in order for the advantages of direct democracy to be fully realised. Second, an education system structured in a way to maximise labour market access for as many people as possible is a significant factor for integration. And third, owing to its high quality and flexibility, it prevents class mentality and elitism.
However, in the euro area, all the available evidence so far points to the existence of a stable relationship between M3 and price developments over the medium term. M3 and other monetary and credit aggregates also demonstrate leading indicator properties for future price developments. In the end, it is this evidence which makes us confident that monetary and credit aggregates are an important indicator for assessing risks to price stability. The second pillar of the strategy is associated with a complementary, but more eclectic, approach, which implies that a wide range of indicators is of relevance for monetary policy. While inflation is a 3  BIS Review 44/2000  monetary phenomenon over the medium term, at shorter horizons it will be influenced by many other variables. Changes in international commodity prices, such as the price of oil, will influence developments in consumer price inflation. Demand and cost pressures can also influence price developments in the shorter term. Moreover, policymakers will generally need to tailor their actions to the prevailing economic circumstances, since the impact of monetary policy on the future evolution of the price level at any specific time will depend on a host of factors which are not captured by monetary data. Analysis under the second pillar is intended to reveal this information, giving policymakers greater insight into shorter-run price dynamics and their implications for monetary policy. Monetary policymaking in the euro area has to reflect the complexities and uncertainties which surround the transmission mechanism of monetary policy in a wholly new economic entity.

Less than a decade ago, we did not even have the statistical requirements for the Monetary Union, let alone the statistics themselves for the euro area. Today, euro area statistics compare favourably with those of other major countries in many respects. A concrete example is the monthly balance of payments for the euro area and the availability of a timely, flash estimate of the euro area Harmonised  2  BIS Review 67/2004  Index of Consumer Prices (HICP). Moreover, the ECB compiles an elaborate and timely set of monthly statistics on monetary developments in the euro area and interest rates. Statistical preparations had to start early, due to the long lead times involved. On average, it takes around 18 months from inception to delivery of a new set of statistics that involves the collection of additional information from economic agents. While there is still room for improvement, which I will explain later on, I feel confident that the ECB has now at its disposal a solid set of statistics of sufficient quality for the conduct of monetary policy. Let me share with you some of the success factors and ‘lessons to learn’ from this development process. First and foremost, the achievements have been possible thanks to the intensive and fruitful cooperation and coordination with other statistical agencies.
And activity and inflation in the housing market is subdued, despite very low mortgage rates. The MPC’s projections assume that households will increase their spending broadly in line with their real incomes, as the squeeze following the Brexit vote comes to an end. The bar is relatively low as it implies household spending growth at half its pre-referendum pace and one third of its pre-crisis clip despite record employment and rising real wages. But there is a risk that households could opt to save rather than spend as their real incomes recover. The more the expectations of households for Brexit resemble those of financial markets and businesses, the more growth is likely to slow below its trend. Excess supply would therefore widen, dampening the expected 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  increases in domestic inflationary pressures so that inflation falls well below the target (Chart 11). 18  Monetary policy would be expected to respond.

But to assist firms and policymakers in this challenge, we are working with climate scientists and our partners through the central banks and supervisors Network for Greening the Financial System (NGFS), and last week we published a number of reference scenarios.22  These reference scenarios provide for the first time a harmonised set of high-level climate scenarios, available in a publicly accessible database, in which both transition and physical climate change impacts are included in a consistent way. They provide a foundation for decision-useful financial and economic analysis, including stress testing, that will be as relevant for you and your customers, as to the authorities. And we will continue to build on these scenarios, taking on board your feedback and putting in place plans to publish a second iteration around the turn of the year. International coordination  This is only one example of our work with international partners. We are one of eight founding members of the NGFS, which was set up for central banks and supervisors to share expertise on climate-related risks. In the two and a half years since it launched, the NGFS has grown to 66 members and 13 observers spanning 5 continents and from jurisdictions that account for over half of global emissions. This reflects the broad recognition now that climate change matters to central banks and supervisors. Climate change is of course a global problem that requires global solutions. So the work we do through the NGFS and other international fora is essential.
The first is the need to further redress public finances, so as to afford budgetary policy room for manoeuvre ahead of any future negative shocks. Moreover, the fiscal consolidation process should be compatible with an improvement to the quality of public finances that helps contribute more to the potential growth of the economy. The second is the resumption of the structural reforms in the factor and product markets with a view to contributing to better resource allocation and to improving our economy’s competitive capacity. Thank you. 6/6

Today’s allocation of zakat contribution to INCEIF by the three Islamic banks is another commendable act of industry in support of learning. INCEIF has received monetary contributions from several other Islamic financial institutions since 2007. This has enabled INCEIF to continuously enhance its internal capacity as the leading provider of Islamic finance education and knowledge. The contributions are being utilized to create the provision of scholarships, research and facilities development. In this regard, INCEIF has recently been accorded the “Project of National Interest” (Projek Berkepentingan Nasional) status. This status, which accords contributors with tax benefits in the forms of tax rebates for zakat contributions and tax deductions for non-zakat contributions, will incentivize more individuals and institutions in providing monetary support to INCEIF. The contributions will indeed go a long way towards the growth and development of Islamic finance in Malaysia and beyond. Thank you. 2  BIS Review 87/2010