samchain/econo-pairs-v1 huggingface dataset:
This growth rate, in turn, would still not be sufficient to ensure convergence with the average per capita GDP of the EU twenty years from now. For this latter objective to be achieved, a real growth rate of some 4 per cent would be required. The way forward: a concerted push for faster growth These scenarios underline the urgency of achieving more rapid, sustainable growth. The longer it takes to expand the productive base of the economy, the more onerous the challenge will be. The prospects for a significant recovery in the short term, moreover, are doubtful since oil prices are expected to remain at their current high level, and the dynamic benefits of fiscal consolidation and EU membership are unlikely to exercise a marked impact on growth in the coming months. Growth forecasts for 2006 vary between 1% and 2%. The current economic situation, therefore, requires decisive action designed to produce early results. I, therefore, feel obliged once again to make a strong appeal to all the social partners not to underestimate the threat which today’s realities represent for the wellbeing of their own members, and to cooperate in the search for real, long-term solutions in the national interest. The alternative is a slow, but depressing process of stagnation.

First, it is generally acknowledged that Malta’s pegged exchange rate regime has in the past served the economy well, in that it kept inflation and inflationary expectations at bay. As for the level of the central parity rate of the lira in ERM II, studies conducted by the Central Bank of Malta found no evidence of a significant exchange rate misalignment, a conclusion which was not contested by the competent EU institutions. There being no compelling reasons for change, therefore, the exchange rate level prevailing prior to entering the Mechanism was retained in the interests of continuity and stability. As for the unilateral commitment to maintain the currency at its central parity rate during the ERM II phase, I would remind the proponents of a flexible exchange rate regime of Malta’s high dependence on foreign trade. For such an open economy, the resultant volatility and consequent uncertainty would entail additional costs associated with insuring against exchange risk, thereby inflating both retail and export prices. Changes in the nominal exchange rate, moreover, are not likely to have a significant impact on competitiveness via adjustments in the real exchange rate. This is because a weakening of the currency is typically followed by a rapid pass-through in the shape of higher prices of imports and wages, as the 1992 experience proved. On the other hand, due to downward rigidities, a strengthening of the Maltese lira cannot be expected to be followed by commensurate reductions in price and wage levels.
History has shown that the countries that devalued in 1931 weathered the depression better than those which did not. 12 Following the British lead was a decision that produced a good outcome. In 1949 there was a new sterling devaluation, this time 30 per cent against the US dollar. As in 1931, the Norwegian government announced that the value of the krone would be lowered correspondingly 13 . But unlike at that time, the level of activity in Norway was now high, and  9  The letter from the British Academy to the Queen is available at: http://media.ft.com/cms/3e3b6ca8-7a08-11de-b86f-00144feabdc0.pdf. 10  See Frank H. Knight (1921): Risk, uncertainty, and profit, Hart, Schaffner & Marx; Houghton Mifflin Co, Boston. 11  See the article “Fotspor med historie” [Footsteps with history], Aftenposten, 8 July 1989 and Rod Pyle (2007): Destination Moon: The Apollo Missions in the Astronauts’ Own Words, Harper Paperbacks. For further discussion and additional examples, see Thomas Gilovich, Dale Griffin and Daniel Kahneman (2002): Heuristics and biases. The psychology of intuitive judgment, Cambridge University Press. 12  See the discussion in Tore Jørgen Hanisch, Espen Søilen and Gunhild Ecklund (1999): Norsk økonomisk politikk i det 20. århundre. Verdivalg i en åpen økonomi, [Norwegian economic history in the 20th century. Ethical choices in an open economy] Høyskoleforlaget, Kristiansand. 13  The government had discussed how Norway should respond to a British devaluation. However, they had not reached a final conclusion and the government was split.

At the same time, an independent status for the Riksbank calls for more in the way of accountability. It will be even more important that monetary policy decisions are anchored - at the political level as well as among a broader public - by means of clear motivation and an open dialogue. Decisions to adjust the interest rate tend to affect both households and firms very directly and specifically. It is therefore vital to gain an understanding for our execution of monetary policy. In recent years the Riksbank has done a great deal to promote an increased understanding of what we do. This work must continue. One instance of transparency is the clear focus on the 2 per cent inflation target. In that this target and our tolerance interval of 1 percentage point are clearly specified, the Riksbank’s operations are open to assessment. Our policy involves adjusting the instrumental interest rate - the repo rate - to a level that we judge to be in accordance with the inflation target. Experience tells us that a change in the short interest rate has its full impact on inflation after a time lag of one to two years. Consequently, the Riksbank has to operate in a relatively long time perspective - the interest rate has to be set in the light of forecasts of what the rate of inflation will be one to two years ahead. Our assessments of future inflation are presented continuously in speeches and various publications, above all the quarterly inflation reports.
I would argue that this can lead to synergies by facilitating the rehabilitation of viable companies in a manner benefiting all the creditors – including the public authorities – in the longer term. Having said all that, there is no doubt that financial restructurings and insolvencies do contain several distinguishing features compared with corporate reorganisations, besides the importance of confidence with which I started. Indeed, that probably explains why much of the debate on the Model Law is on whether its principles can be applied to the insolvencies of banks and other financial institutions. Different views on this meant that the Law had to contain an effective opt-out for banks and insurance companies. I would certainly agree that depositors or policyholders are in a different position from ordinary creditors. They are likely to have less information, be greater in number, and be less well organised to recover their assets than professional creditors. So any application of corporate  4  BIS Review 67/2001  workout and insolvency principles to international financial insolvencies would have to allow for depositor and policyholder protection schemes. The role of supervisors would also, of course, need to be recognised explicitly. In particular, the principles underlying corporate workouts and insolvencies would have to be consistent with internationally recognised principles of banking and insurance regulation. In the EU framework, that requires consistency between cross-border corporate sector initiatives such as the Model Law and ILG Principles and the EU passport system and principle of home state responsibility for banking and insurance supervision.

Norman T L Chan: HKMA Fintech Day Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at HKMA Fintech Day, Hong Kong, 11 November 2016. * * * MY, George, Julia, Frank, Herman, Albert, distinguished guests, ladies and gentlemen, 1. It gives me great pleasure to welcome you all to this HKMA Fintech Day, which is part of the Fintech week. Today we have a great gathering with speakers and participants from diverse background of the financial and technology sectors, including banks, stored value facility (SVF) operators, fintech firms, fintech investors, regulators and many others. I am sure the discussions today both on and off the stage will be extremely interesting. 2. The event today is organized by the Fintech Facilitation Office (FFO) of the HKMA together with our three strategic partners: the Applied Science and Technology Research Institute (ASTRI), Cyberport and the Hong Kong Science and Technology Parks (the Science Park). As you are aware, we set up the FFO in March this year with the mission to facilitate the development of fintech in Hong Kong. 3. In the last few months, the FFO has organized many activities to bring together users and solution providers of fintech, so as to build an ecosystem to promote the adoption of new technologies in the banking sector. The FFO will continue to develop this collaborative platform together with ASTRI, Cyberport and the Science Park.
2  BIS Review 109/2010  “There is hardly a trace of the multitude of unnatural industrial plants that it wanted to promote. That is how powerless we are when we seek to determine the law of nature rather than follow its prescriptions.” 4 The ideals of free competition and a passive state predominated up to World War I, even though not everyone shared this view. The radical German economist and philosopher Karl Marx believed that competition and big industry led to falling profit rates and predicted that it would lead to the collapse of capitalism. 5 In pace with stock market crashes and deep depressions in the 1920s and 1930s, confidence in free market forces waned. The British economist John Maynard Keynes’ theories of economic management set a new standard for post-war economic thinking. Keynes argued that a decentralised market economy alone would not be stable. He advocated in particular that government should stimulate the economy in adverse periods by increasing government spending. Such a countercyclical policy was necessary in order to ensure that the market economy could again function effectively. Keynes’ theories gave support to an era of more state planning and control. Some countries went farther than others. In Norway, the first Nobel laureate in economics Ragnar Frisch was an important agenda-setter. Frisch, who worked here in this department, wanted to make the subject more scientific by using mathematics and statistics. According to Frisch, economic theory should be expressed by mathematical models and supported by quantified relationships.

In the preceding 15–20 years, the global economy was characterised by solid growth, greater economic stability than earlier and by low and stable inflation. The period is often referred to as “the great moderation”. A consensus was forming that wide fluctuations in the economy, as had been the norm, were a thing of the past. The US economist and Nobel Prize winner in economics Robert E. Lucas expressed a commonly held view in a speech he gave in 2003: “[...] macroeconomics in this original sense has succeeded: Its central problem of depression prevention has been solved, for all practical purposes, and has in fact been solved for many decades.” 11 Autumn 2008 was to become a reminder that we should be on our guard against established truths and consensus. If history has taught us anything, it is how little we actually know. So, if I were to offer some advice to those of you about to embark on your economics studies, I would first and foremost say this: be inquisitive and ask questions. Learn enough to be able to doubt. And since I have the chance for a word with you “in private” I would like to seize the opportunity to put in a good word for mathematics. A wealth of information and complex problems often make it difficult to see the essence of an issue and to distinguish what is important from what is not. And this is where mathematics can be helpful. Mathematical models and formulas simplify complex relationships into manageable quantities.
Our foreign population now represents more than 20% of the total population and 25% of the labour force. Despite strong immigration, our unemployment rate – 3.1% – is relatively low. In recent years, our economy has been doing better than its neighbouring countries in terms of growth and employment. At probably close to 3% this year, our economic expansion is above our potential. Obviously, the fact that we are not a member of the European Union is no obstacle to our development. This is good news. However, Switzerland remains a slow-growing country – not only when compared to Singapore and other "East Asian Tigers". Our weak growth performance in the long run is due in part to full employment, the relatively high level of personal income and the limited scope for domestic investment. Like many other highly developed industrial nations, Switzerland is increasingly a producer of services. The flagship of our service industry is the financial sector, which expanded markedly in the 1990s and now accounts for 15% of our GDP – more than the machine tool industry and the chemical industry together. During the same period, however, the number of banks was reduced by half and the number  1  Switzerland ranks fifth in terms of European visitor arrivals to Singapore, just behind France and the Netherlands. BIS Review 85/2006  1  of bank employees has remained stable despite expanding financial activities. These figures show that our financial industry has been eager to react swiftly to the challenges posed by globalisation.

For both historical and geographical reasons, our country is exposed to a considerable commercial risk in Europe, with 60% of our exports going to European countries. These European markets are no longer the most dynamic, nor will they become so in the future. Clearly, in recent years, the emerging economies in Asia have become one of the vibrant regions of the global economy. This is precisely why globalisation makes sense for an economy open to international markets, such as ours. Therefore, it is essential that we step up the diversification process so as to ensure the expansion of our export sector. It is in our own best interests to further strengthen economic relations with Asia. With our liberal philosophy and sound financial standing we have the necessary tools to pursue a policy of openness and enhance our strong presence abroad. Our monetary framework Switzerland is well-known for its stable monetary framework. Average inflation over the last 20 years has been 1.8%, and for the last 13 years, we have had price stability. We have never gone through monetary reforms as many European countries have done over the past few decades. Our monetary regime has been unchanged since 1973, when the peg to the US dollar was removed. Today, the Swiss franc is freely determined by market forces. As a representative of a country that has had floating exchange rates for over thirty years now, I can only underscore the importance of an exchange rate regime that reflects the realities of the market.
That is a formidable task, and it is striking that, in the US, the FDIC has introduced a requirement that troubled banks must be able to demonstrate that, if necessary, they could report each day the details of so-called Qualifying Financial Contracts, which are essentially derivatives. We may need to contemplate something along those lines in the UK. All of that is needed after buyers for the business have been found. Potential bidders for all or part of an ailing bank will themselves need the kinds of information typically offered to bidders in a “friendly” M&A transaction. So there is a case for banks routinely maintaining such a Data Room as part of their crisis contingency plans. In delivering its resolution responsibilities under the 2009 Banking Act, the Bank is ready to work with banks and the FSA in helping to specify in more detail what is needed in practice. If the information can be ready almost routinely the execution of resolutions would be aided. In summary, as a consequence of its new statutory role, the Bank can have a need for a lot of information about banks getting into distress. That might usefully be seen alongside the information needed before a bank reaches the point of being unviable, when it might apply to draw on the Bank’s public liquidity insurance facilities, notably the Discount Window. And beyond that, a bank might seek Emergency Liquidity Assistance, where the Bank acts under the Tripartite MoU.

But the same course might, if widely copied by other banks, have unfortunate effects on the banking system as a whole. It is part of the supervisors’ job to take that wider, systemic view and sometimes to curb practices which even prudent banks might, if left to themselves, regard as safe.” 1 All four points are old verities. On the second plank of the banking Social Contract, I set out the Bank’s current thinking on liquidity insurance in Tokyo a few weeks ago. 2 The Bank has introduced new permanent liquidity facilities for banks, whereby we stand ready to lend to viable banks against a very wide range of collateral, on terms designed to avoid encouraging imprudent liquidity management. And this year we have effectively been acting as a Market Maker of Last Resort in certain corporate-credit markets. Given the significance of capital markets in today’s financial system, central banks need to think about whether or not such operations should be a permanent part of their armoury. Today, I want to outline our thinking on the third element of the Social Contract. Taking it to be about only deposit insurance turns out to be too narrow. It is really about what society should demand of banks to make their failures marginally more tolerable. It is not often a central banker can speak openly about bank failures.
The existence of public money generates a second type of externality to do with intertemporal choices. The willingness to hold money as either a store of value or a means of payment, or use money as a unit in which contracts are denominated, depends upon expectations of the stability of the value of that money. If money takes the form of competing private currencies then there is no inherent problem for private issuers to maintain the value of their liabilities by backing them appropriately, a commitment that can be enforced by the legal system. Alternatively, where a private commodity standard is the solution to the exchange problem, then there is no ability -and therefore no temptation - to devalue. But a public monopoly means that the demand for money today depends upon expectations of our collective decisions about the supply of money tomorrow. The key question for a public currency is how do we prevent the government - ourselves - abusing its issuing power in the future? Collective decisions today cannot bind future collective decisions. And when monetary policy is set period by period inefficient outcomes result. The key insight of Finn Kydland and Edward Prescott (1977) was that the inability to make commitments leads to a failure to internalise the impact of public policies on the expectations of the private sector. Dynamic inconsistency was used by Kydland and Prescott (1977) and Robert Barro and David Gordon (1983a) to demonstrate that rational expectations could lead to an equilibrium in which inflation was higher than desired.

Massive speculation on that day led to the announcement in the morning of a 2 percentage points rise in interest rates and, when that failed to dampen the pressure on sterling, of a further 3 percentage points rise in rates. That second announcement, far from bolstering the exchange rate, merely convinced financial markets that Britain’s membership of the ERM could no longer be sustained politically. The strong political commitment to joining European monetary union, which was the effective support for other currencies in the ERM, was absent in the United Kingdom. Following its departure from the ERM, the UK introduced an inflation target regime for monetary policy. It succeeded in bringing inflation down to around 2½ percent (see chart 2). 6  BIS Review 5/2004  Chart 2: UK inflation and inflation expectations, Oct 1991-Oct 2003 Per cent 7  Implied inflation (a ) from IGs RPIX inflation rate  6 5 4 3 2 1 0 Oct-91  Inflation target announced  Bank independence  Oct-93  Oct-95  Oct-97  Oct-99  Oct-01  Oct-03  (a )  Implied average inflation expectations from 5 to 10 years ahead, derived from index-linked gilts. Source: Bank of England, ONS  But long-term inflation expectations did not fall as quickly. Only after the announcement in May 1997 by the new Labour government that the Bank of England would be made independent did inflation expectations fall quickly to the target level, as can be seen from chart 2.
Due to the present economic environment, fiscal policies and structural reforms can and should be more and more part of the policy mix. But it also follows from the guiding principle that I have highlighted today: the more tools available, the easier it is to combine them to minimise the trade-offs between price and financial stabilities. Fiscal policy can help monetary policy in fostering financial stability in several ways. First, it can of course help by taking away some of the burden of policy accommodation. But fiscal policy can also directly assist monetary policy in fostering financial stability. It can help monetary policy to provide the safe assets necessary to a resilient financial system, if possible including in the form of a euro area-wide safe asset. On the tax side, it should reduce all excessive incentives towards real-estate investment, and foster a more neutral allocation of savings according to a sound reward of risk. Let me end with one question: what will monetary policy be like in ten years? We clearly can’t be certain of anything, but we can at least share a conviction: the more progress we have made together on these issues I mentioned, the better our monetary policy will be. Thank you for your attention and your cooperation.

To start with, as of today, our toolkit is very much bank-centric. We are making some progress to extend macroprudential  policy  beyond  the  banking  sector. But  we  should  acknowledge that we are not there yet and that this is becoming a pressing issue as the non-banking sector is developing in reaction to the macrofinancial environment and changes in the regulation framework. In addition, as our macroprudential arsenal is still rather new and untested, uncertainty remains on the quantitative magnitude of the effects of our interventions viii. Experience will teach us how to adapt and adjust our policies over time, but uncertainty will remain a feature of real-world policy-making. Finally, we should refrain from hubris: over time, we will design a more comprehensive macroprudential toolkit and learn to make the best use of it. But while macroprudential policies can certainly contribute a lot, some root causes of financial crises will remain out of their reach and macroprudential policies alone would fall short of achieving financial stability. Page 6 sur 11 If prudential policies have limitations, it is legitimate to ask whether monetary policy should take into account financial stability concerns or even assist prudential policies. To be sure, monetary policy has drawbacks as an instrument to foster financial stability. In particular, it cannot target specific risks. But as Jeremy Stein noted, the bluntness of the tool is also its strength: it affects all financial players. ix Let me take a step back.