samchain/econo-pairs-v1 huggingface dataset:
Recognizing this inherent risk, the HKMA, in seeking to nurture the universal banking model in Hong Kong, must continue with its long standing conservative supervisory approach with even greater emphasis on prudence under-pinned by proactive and forward looking supervision. 20. Ladies and gentlemen, this is a rather long speech and I thank you for your kind attention. Thank you! 4  BIS central bankers’ speeches

Over the medium term, the key driver of returns and risks in the financial markets will be geoeconomic fragmentation. Rising tensions between US and China have led to higher trade barriers, tighter crossborder investment restrictions, and greater domestic production of critical goods deemed to be of strategic importance. On the trade front, slightly more than 60% of the trade between the two countries is subject to tariffs from one side or the other. Investment flows between the US and China have slowed amid tighter regulations by the US to safeguard national security and supply chains. Both countries have stepped up domestic industrial policies. China has committed $ trillion over five years to augment domestic technology and digital infrastructure. The US has passed the $ billion CHIPS Act to boost semiconductor research and production capabilities over the next ten years. These measures have led to not just reduced trade and investment between the two countries but is also shaping broader shifts in global trade patterns and supply chains. These shifts are most evident in the electronics industry. America’s share in China’s electronic exports fell by 4% points between 2017 and 2021, while regional economies such as Taiwan, Vietnam, and Thailand gained market shares. At the same time, these three economies exported more to the US market in 2021, compared to 2017. Vietnam has seen the largest increase in its exposure to the US market, at 14% points.
5  The economic literature is a long way from providing a clear-cut answer as to how monetary policy should react in a highly uncertain environment. A classic reference is the “Brainard principle”, which states that policy should exhibit prudence in the face of uncertainty about the impact on inflation of underlying shocks or of any policy mis-calibration.11 It is typically summarised as “in a dark room you move with small steps”. Indeed, the higher the uncertainty, the greater the likelihood that a more aggressive monetary policy response to shocks may push inflation away from the target.12 However, this view has been qualified by subsequent research. For instance, when there is uncertainty about the persistence of inflation –as is clearly the case in the current context–, it may be optimal for the central bank to respond to rising inflation more aggressively in order to reduce uncertainty about the future inflation developments.13 The reason is that when the dynamics of inflation are uncertain, the amount of uncertainty facing the central bank is greater the further away the inflation rate is from its target. Consequently, to reduce the amount of uncertainty about the future path of inflation, optimal policy becomes more aggressive, pushing inflation closer to target.

Models including more realistic characterisations of oil or gas markets offer conceptually similar responses, as in for instance, Nakov, A., and A. Pescatori “Monetary Policy Trade-Offs with a Dominant Oil Producer”, Journal of Money, Credit and Banking, 42: 1-32, 2010. 3  persistent inflation such expectations can become highly sensitive to deviations of realised inflation from their own forecast.8 Thus, an adequate monetary policy conduct should take into account the risk of de-anchoring by moving the interest rate more aggressively than in the absence of such a risk.9 The optimal monetary policy then involves a strong response to movements in agents’ long-run inflation expectation. This strong response ensures that whenever the public is surprised by inflation in the wake of recent events, and expectations start to de-anchor, the central bank does not allow them to drift above the medium-term anchor persistently. In sum, the medium-term orientation of our inflation target recognises both the imperfect control of inflation by monetary policy in the short run, owing to the variable transmission lags to the economy and inflation, and the fact that certain kinds of shocks may create a temporary trade-off between inflation and economic activity, as in the case of cost-push shocks. The medium-term orientation provides the policy flexibility to assess the origin of shocks and look through temporary shocks that may dissipate of their own accord. By following this medium-term orientation, the ECB avoids unnecessary volatility in activity and employment. Importantly, the medium-term orientation does not imply that central banks should ignore short-run inflation developments.
A surveillance procedure was also put in place to verify that all the parties involved complied with the agreed fiscal targets. And in the case of non-compliance, a “corrective arm” was envisaged, starting with warnings and ultimately culminating in sanctions, in order to ensure that governments would quickly reduce any excessive deficit through progressive corrective steps. The fiscal rules were complemented by additional elements, such as the Broad Economic Policy Guidelines, which were introduced as a tool to ensure a convergence of economic policies and performance across Member States and to foster economic growth and employment, as well as to attain the ambitious goals set in the “Lisbon Agenda”. How has the European framework for economic governance been applied and how well has it served Europe? It is true that the euro area has fared reasonably well in macroeconomic terms. For instance, real GDP growth per capita in the euro area has not lagged behind that in the United States. Over the same period under review, more jobs were created in the euro area than in the United States. However, the European governance framework was unable to ensure fiscal soundness and macroeconomic stability in all euro area Member States. Some Member States had already accumulated large fiscal imbalances in good times. The fiscal policy framework suffered from weak implementation, in particular after the reform of the Stability and Growth Pact (SGP) in 2005. Other macroeconomic imbalances, particularly divergences in competitiveness, were also allowed to develop over a number of years prior to the crisis.

The vast number of bank branches around this part of the city also confirms the stiff competition in the banking sector and we hope that the public will be the ultimate winner though affordable products and services. Ladies and Gentlemen, it is a well known fact that bank branch expansion programs play an important role in increasing access to the unbanked. However, there is need to complement physical branch expansion with other product innovation programmes that will capture a lot more people in the remote areas of our country. The real challenge for all of us is how to enhance savings mobilisation, and effectively channel the public’s savings to its most productive use. I therefore encourage banks to offer an expanded range of innovative banking products in order to mobilise savings to support financing of economic activities in all parts of the country. Distinguished Guests, the banking sector in this country has, over the last few years, witnessed significant growth in consumer lending. As a matter of fact, on a sectoral basis the “personal loan” category has been the largest recipient of total credit and accounted for 24% of at end-October 2009. The resultant credit expansion has no doubt brought significant benefits to the economy. However, the secondary effects of the recent global economic crisis pose a real challenge to the banking sector through increased non-performing loans. For instance, non-performing loans were recorded at 7.2% as at December 2008 but has almost doubled as at September 2009 to 13.1%.
The Bank of Albania expects the situation to improve in the next few months, following the macro prudential measures we have taken to facilitate lending, and banks’ cleaning up of balance sheets and credit restructuring. I did not intend to make a random overview of the situation, but to show the Albanian economic reality at this moment and present the future challenges. It is easily understandable that the weak economic growth calls for innovative solutions from other new sectors. There is room for banks to lend to profitable projects as they continue to collect deposits and maintain sound levels of financial ratios. It is now the responsibility of all policy-makers to help entrepreneurship, in order to get a clear view of the right investments for the future. We have stated in our reports that the new sources of growth should originate from competitive sectors in the domestic and, even further, in the external market, so that the trade balance keeps on showing the improvements of 2013. Export growth is important in the long run to offset the moments of weakness in domestic demand, by diversifying the sources of income. Although the economy benefits from the increase in the exports of mineral products, the latter are often exported without any sort of processing in the domestic market and, consequently, make little contribution to improving productivity and competitiveness of the Albanian economy. Bank of Albania’s research and analyses show that traded goods’ sector has shown increasing productivity compared to the non-traded one.

21  All speeches are available online at www.bankofengland.co.uk/speeches  21  Chart 8: Financial markets’ inflation expectations (5 year – 5 year breakevens)  Per cent  9 8 7 6 5 4 3 2 1 0  1985  1988  1991  1994  1997  2000  2003  2006  2009  2012  2015  2018  Sources: Bloomberg and Bank calculations  Chart 9: Involuntary part-time share of employment and average net desired hours, alongside unemployment  Per cent  Hours per person  10  0.7 0.6 0.5  8  0.4 0.3  6  0.2 0.1 4  0 -0.1  2  -0.2 -0.3  0 2001  -0.4 2003 2005 2007 2009 Involuntary part-time share (LHS) Net additional desired hours (RHS)  2011  2013 2015 2017 Unemployment rate (LHS)  Sources: ONS and Bank calculations. Notes: Involuntary part-time workers are those that would like a full-time job but haven’t been able to find one. Average net desired hours is the average number of additional hours that employed individuals would like to work at their current hourly rate.
Observations for each region are weighted by the population of each region. Chart 5 compares the regional distribution of income per head in the UK, France and Germany in 2016, again centred on mean income levels in the UK in 2016. It suggests a materially wider regional dispersion in incomes in the UK than in France and Germany. The gap between richest and poorest regions in the UK is almost twice as large as in France and three-quarters larger than in Germany.13  12 13  Comparing NUTS 3 regions. Figures refer to income differences at the NUTS1 regional level, using Purchasing Power Standard (PPS). 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Chart 5: Distribution of UK, France and Germany income per head in 2016  Île de France  Oberbayern  Inner London West  Sources: Eurostat and Bank calculations. Notes: Purchasing power standard (PPS) per household in NUTS2 regions for 2016 centred around the UK mean. Excludes NUTS region ‘FRY’ (‘Départements d'outre mer'). These regional differences in GDP are found in alternative metrics of economic health, such as pay (Chart 6).14 They are also mirrored in medical health. Chart 7 plots one measure of medical health by region – average life expectancy. This mirrors regional income differences. Richer people tend to live longer. The gap between highest and lowest life expectancies regionally is around 3.4 years, or 4.2% of the UK average. 14  Haldane (2019).

The explanatory power of fundamental factors in explaining the developments in residential real estate prices is decreasing steadily, while the volume of mortgage loans in comparison to GDP has never been so high. Should these imbalances increase further, considerable risks to financial stability could emerge. Given this situation, the SNB has strongly advocated the introduction of a countercyclical capital buffer in Switzerland. This buffer would not be a permanent increase in equity requirements for banks. It is only to be activated temporarily in the event of excessive growth in domestic mortgage lending. As soon as lending growth weakens again, the buffer can be deactivated. An instrument of this kind was examined in detail last year by a working group headed by the Federal Department of Finance, to which both FINMA and the SNB also belonged. The group proposed that the buffer be introduced rapidly so that a suitable instrument would be in place, in case the imbalances in the Swiss mortgage and real estate market increased further. Concluding remarks Ladies and Gentlemen, as you will have gathered from my remarks today, the challenges facing the SNB have not diminished. Consequently, it is all the more important that we are able to devote our complete attention to our tasks, now and in the future. The SNB’s monetary policy decisions are directed purely and solely at fulfilling its statutory mandate. It is our responsibility to ensure price stability.
It was rather their economic applications and how they spread - thereby altering patterns of production and consumption - that determined the magnitude of their impact on long-term growth. Bringing about such a development involves ensuring that it is supported by the ways in which various parts of our society function. Economists talk of society’s institutions or a market economy’s infrastructure. This refers to everything from the structure of government and the degree of economic stability to how the judicial system functions, with 2 ownership playing a major role, the quality of education and the structure of taxation. As I said, a major cause of Sweden’s earlier difficulties in utilising steam-engines was that various social systems were not able to latch onto the new technology and use it productively. Sweden simply lacked the conditions for this initially. A historical view of transformation and development One of several possible approaches to an analysis of economic developments connected with various industrial revolutions was put forward by the Austrian economist Joseph Schumpeter in his theory of development clusters and long cycles. This approach has been developed in Sweden by economists and economic historians such as Erik Dahmén, Johan Åkerman, Lars Magnusson and Lennart 3 Schön. Changes in technology are often cited as a basic cause of the long cycles. Technical innovations tend to be developed in clusters that play a central part in the transformation of manufacturing.

Urban Bäckström: Sweden’s economy and new information technology Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, arranged by the Ministry of Industry, Employment and Communications, held in Stockholm, on 7 February 2001. *  *  *  First I want to express my thanks for the invitation to discuss Sweden’s economic development with you in a wider perspective. I am delighted to do so. Today I shall be leaving monetary policy a little to one side and looking beyond the economic fluctuations of a short-term nature that are usually the centre of attention. Thus, I do not intend to talk about current monetary policy. Instead, I want to discuss economic developments in a longer perspective. I shall also be taking a look at economic policy through the driving mirror to see what lessons we can draw from the past. First, however, there is the matter of the new economy, which only six months ago was such a ubiquitous topic. What happened to the discussion about the new economy? There has been much talk of the new economy in recent years, in Sweden as well as elsewhere. It is not entirely clear what the term stands for and its meaning tends to vary with the speaker. But it often refers to new information technology in general and the internet in particular.
The contribution of small enterprises to the growth of service, construction, trade and agriculture sectors, where micro-enterprises compose the largest part of this group, has been obviously significant for the short-term and stable revival of the Albanian economy. These enterprises have provided a substantial input to the decrease of unemployment and to the rise of productivity in the aforementioned economic activities, with a considerable impact for the quick growth of the Albanian economy. The domestic economy is noticeably improved over the last decade and the progress made over an expanded period of these last years reflects a positive and relatively stable macroeconomic environment. The growth rhythms of real GDP, are assessed as plausible, and in general higher compared to the other countries of the region. The consumer price level as well, has resulted in compliance with the target of the central bank for the price stability. “The calmness” of the external factors that struck the supply reaction and the domestic macroeconomic stability, provided the inflation rate be normalised within the targeted limits. The developments occurring in the exchange rate already are perceived as stable compared to its high fluctuations characterising the ’90s. In the view of domestic currency against the main foreign currencies basket, LEK has appeared with appreciation tendencies on continual basis during an extensive period, thus acting as a softer against the imported inflation.

Today’s monetary policy is based on the experience gained by Norway and other countries, over the past 30 years in particular, and on the results of extensive macroeconomic research. Important lessons are: –  Inflation is a monetary phenomenon. A country with a national currency can choose the level of its own inflation. Inflation in a country is not something that drifts in with the wind from abroad. –  If monetary policy is to function effectively, an institutional framework is required to reinforce confidence that overriding weight is assigned to long-term objectives. The institutional framework and guidelines for monetary policy in Norway reflect developments in other countries. This is of particular importance for a small country because of the considerable influence international operators have on developments in our country. Rules can anchor expectations, but they must be credible and robust to disturbances to international and domestic economic developments. Inflation targeting is in practice a flexible rule that can stabilise expectations and at the same time provide room for adapting to the abrupt shifts our economy is exposed to. Thank you for your attention. 10  BIS Review 36/2004
(2) Figure above (below) 50 points indicates optimism (pessimism). Sources: Adimark, car association Asociación Nacional Automotriz de Chile, Central Bank of Chile, chamber of commerce Cámara Nacional de Comercio and ICARE/Universidad Adolfo Ibáñez. 8  BIS Review 61/2010  Figure 3  Lending interest rates (*)  Loans to firms and households  (moving four-week average, percent)  20  40  16  35  12  30  8  25  4  20  0  07  08 Commercial 30-89 days  (*) Weighted average rates. 09 10 Consumer over 3 years  (annualized change in the moving quarter of the nominal seasonally-adjusted series, percent)  30  30  20  20  10  10  0  0 -10 02 03 04 05 06 07 08 09 10  15  Consumer Housing  Commercial  Sources: Central Bank of Chile and Superintendence of Banks & Financial Institutions. Figure 4 Nominal exchange rate (indices, Jan/2/2006=100)  Real exchange rate (indices, 1986=100)  140  140  130  130  120  120  110  110  100  100  90  90  80  80  08 MER  09  10  MER-5  OER  120  120  110  110  100  100  90  90  80  80  70  70  88 91 94 97 00 03 06 09 1995-2009 average 1990-2009 average  RER  Source: Central Bank of Chile.

The good news is that with the rise of big data and new technologies, authorities have the capacity to achieve what was not possible before to keep a pulse on developments affecting the financial system. Second, authorities must continue to develop and deepen their understanding of risk transmission. Approaches to quantify the immediate, direct impact on institutional resilience are now reasonably well developed. However, further work remains in mapping out the second and higher order effects on the broader financial system and economy. Authorities need to continue pushing the envelope to advance the development of more holistic approaches to systemic risk assessments. This needs to be able to capture propagation channels and feedback loops not just among entities within the financial system, but also across the domestic and global economy. An understanding of structural changes driving such interlinkages will become increasingly critical. Third, authorities must have a broad policy toolkit for responding to financial stability risks. In recent years, central banks and other authorities responsible for financial stability have had their mandates clarified and powers strengthened for this purpose. This is however by no means assured in many other countries where financial stability authorities continue to face significant limitations in their ability to act, in particular, during a crisis. In Malaysia, the enactment of new central bank legislation in 2009 accorded Bank Negara Malaysia with strengthened surveillance powers, along with broad powers to implement measures to avert risks to financial stability.
We do not know how long this development will continue. The long-term requirements for improving the balance between wage growth and productivity growth may become apparent at an early stage. Developments for Norwegian enterprises do not, however, have to be negative. Some enterprises could be at the forefront of technological developments and increase efficiency more rapidly than the relatively high rate of growth in real wages in Norway. Many enterprises move large portions of their production abroad. Norwegian manufacturing companies could still be profitable even if the significance of the manufacturing sector in the Norwegian economy is reduced. However, scaling back manufacturing involves a risk. It makes the economy more vulnerable. The growth potential of the economy – the basis for learning, innovation and development – may be impaired when less of the business sector is exposed to intense foreign competition. 1  Akram, Q.F. (2000): PPP despite real shocks: An empirical analysis of the Norwegian real exchange rate. Working Paper 2000/7, Norges Bank, Oslo. BIS Review 20/2002  3

Well-crafted innovation can reduce market concentration, yield new risk-mitigating technologies, and increase the scope for electronic settlement in central bank money: all of which enhances, not reduces, financial stability. So we are open, not closed, to such advances. At the same time, we make no apologies for having a relentless focus on stability and resilience, and have 1  previously set out the criteria against which we assess change in the payments landscape . Indeed, households and companies expect nothing less. Surveys regularly show safety to be at the very top of people’s expectations from payments. No amount of real-time, API-enabled, mobile front ends can make up for the prospect – however remote – that one’s money might be lost or mislaid; or that a failure in one part of the payments network might bring down other parts of the banking system. Judged against those yardsticks, the UK’s payment systems have actually performed very well in recent years: combining the innovation of Faster Payments, Direct Debits and widespread use of online banking (to give just three examples) with a resilience record which – though by no means perfect – stands in contrast to some other parts of the financial system. So why the need for change? There is a one word answer to that, and that is: complexity. The UK has world-beating technologies. But too many sit in silos.