samchain/econo-pairs-v1 huggingface dataset:
As Arthur Cecil Pigou (18771959) put it: “The social enthusiasm which revolts from the sordidness of mean streets and the joylessness of withered lives … is the beginning of economic science.” One may have chosen economics to find out how to become wealthy. Woody Allen said: “Economics is the study of money and why it is good.” Or one may have chosen economics to find out how society functions. Economics certainly offers a good starting point for this endeavour. Let me quote Alfred Marshall (1842-1924): “Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing.” Or one may have chosen economics because it is so hopelessly difficult and therefore enormously attractive to, and here I quote Robert Solow, “the overeducated in pursuit of the unknowable”. In the process of studying economics, every student sooner or later will have to decide whether do drop out or to continue. Most of the students opt for the practical application of what they have learned and quit university after their final exams. Some, however, will opt to stay on. In practice, this means to teach, to do research and increasingly to administrate since the universities have become large and slow-moving institutions. Let’s forget the latter and talk about the former. In teaching and in research lies most of the professional fulfilment of a university economist.

Let me tell you the story of a young economist who joined a large multinational business corporation many years ago. The post he held was that of a junior economist in the “central staff of economics”. Coming straight from university, he was clearly impressed by the sheer size of the headquarters and the complexity of the organisational structure of the company. There was a plethora of administrative units and of important production units. The organisation was of the matrix type, i.e. there were product divisions, there were so-called “regions” responsible for large segments of the globe like Europe, North America, Latin America and Asia, there were central functions like human resources, legal services, research and development and there were central staff units like corporate planning, politics and economics. Numerous important persons assuming significant responsibilities rushed from meeting to meeting and from business lunch to business lunch, mostly with clients and corporate visitors from abroad and sometimes just with local colleagues. The food and the wines served at the visitors’ restaurant easily matched what was on offer in the best restaurants in town. Clearly the junior economist felt great from the very first day. He sensed that he was expected to contribute to the development of this grand corporation, that he was finally in a position to apply what he had learnt at university and that his superiors, the more senior or even very senior economists in his unit, were waiting for him to deliver.
And if these shifts turned out to be more persistent they’d in time be matched by corresponding reallocations of supply. For tradable goods, I still think this is a reasonable central case. The shift towards goods demand is unlikely to endure forever and there may already be some early signs that consumer spending – here and in other countries – is rotating back to services. And in many of these markets supply looks to be reasonably “elastic”, at least over the medium and longer term: it responds positively to higher prices, ensuring a degree of self-correction (you can think of this as a flattening out of the cost curves in Charts 3 and 5). For most non-oil commodity prices, for example, periods of rapid growth tend to be followed not just by lower inflation but by rates of inflation that are actually below average. There’s evidence of the same mean-reverting tendency in manufacturers’ input prices in aggregate. It may also be a reasonable central case in the domestic economy but here things are more uncertain. Some shifts in spending may stick. If significant numbers of people continue to work from home, for example, the resulting changes in the pattern of spending – away from city centres, and on transport, and towards other areas and other goods and services – could endure. And it would take time to shift resources – people, capital, know-how – accordingly.

We know that rapid growth in demand tends to put upward pressure on prices. So with numbers like these perhaps it’s not surprising to see inflation going up, here and in other countries. In the UK, annual CPI inflation has risen from ½% to 2½% in the past four months. That’s more than half a percentage point higher than in late 2019, immediately before the pandemic. The MPC expects inflation to rise significantly further, to well over 3%, over the next six months. But in some ways the extent of the rise is a bit surprising. The economy may have grown very strongly over the past year but that’s only because it contracted so spectacularly in the first half of 2020, during the first phase of the pandemic. Even now, it’s still a long way from where it was before all this began. Growth of 5% in Q2 would still leave UK GDP 4% lower than at the end of 2019. And economic contractions don’t normally lead to higher inflation. We can identify a number of contributory factors, things that help to account for this contrast, right off the top. One is base effects. Arguably, comparing economic growth over the past eighteen months with the change in prices over the past twelve isn’t quite fair. One of the reasons annual inflation has risen so steeply through this spring is that prices of goods (energy in particular) fell significantly a year earlier, during the first phase of the pandemic.
Still other tasks have been added on, such as capital controls surveillance and the recovery of claims that reverted to the Bank after the crash. The Central Bank has gained strength as an institution in recent years, as it has grappled with older projects and newer challenges. In order to deal with them successfully, it has been necessary to expand our staff, but nowhere near as much as one might expect or as much as might have been done in other countries. We have been able to contain our staff levels because we have an exceptional team of highly qualified employees. If the Central Bank is to succeed in its role of safeguarding monetary and financial stability, it is of key importance in the changes that may lie ahead for the Bank that it remain professionally strong and productive. A competent and dedicated staff is vital in this regard. I wish to thank the Bank’s employees for their excellent work in recent years. Honoured guests: In closing, I would like to thank the Central Bank’s many collaborators for a successful cooperative relationship over the past year. First among them are the Financial Supervisory Authority and the ministries with which the Bank works most closely – in particular, the Ministry of Finance and Economic Affairs, which now administers the affairs of the Central Bank on behalf of the Government. I would also like to thank the financial institutions with which the Bank interacts for their cooperation.

Bank Negara Malaysia has undertaken a number of initiatives in promoting transparency and good banking practices in Islamic banking  2  BIS Review 35/2002  institutions. To achieve these objectives, Bank Negara Malaysia has adopted an all-encompassing approach which is focussed on strengthening the institutional capacity of the Islamic banking institutions, broadening the range of financial products and services and deepening the Islamic financial markets by intensifying research and development efforts as well as creating awareness in addition to strengthening the regulatory framework for Islamic banking. One aspect that has been carried out by Bank Negara is the introduction of a structured framework in the determination of the rate of return for Islamic banking operations. Previously, there were various modes of framework in the disclosure of the rate of return used by the Islamic banking institutions and it has, to a certain extent, made it difficult to assess the performance of the Islamic banking industry. It also created distortions in the rate of return as the spreads can vary significantly among Islamic banking institutions. The new framework addresses the issue of uniformity as banks are required to observe a single framework, thereby reducing the potential for distortions in the rate of return, and generating a more equitable distribution of income, as well as increasing the level of transparency. On the part of the regulator, it has provided us with better means of assessing the efficiency of Islamic banking institutions as well as their profitability, prudent management and fairness.
As a market facilitator, the HKMA is joining hands with various stakeholders to keep enhancing our platform. We are assisting the HKSAR Government in implementing a multi-year green bond issuance programme totalling $ billion. Meanwhile, we have set up a cross-agency steering group that brings together financial regulators and Government agencies in order to create a concrete roadmap to promote green finance in Hong Kong, through addressing crosssectoral regulatory issues and coordinating market development efforts. We will also explore with our Mainland counterparts collaboration opportunities in the green finance space to support 1/2  BIS central bankers' speeches  China’s commitment to achieving carbon neutrality in 2060. 9. Talent and capacity is key to our green strategy. In a recent survey jointly conducted by the HKMA and the banking industry, climate-related risk management was identified as an area with skill gap among practitioners. This challenge is not unique to Hong Kong. The launch of the Alliance is therefore most timely to fill that gap by – - providing a learning and sharing platform for banks to acquire the knowledge and tools to transform into “greener” banks; - helping banks seize climate-related investment opportunities; and - providing thought leadership to advance the green agency globally. 10. Equally important, by helping banks build their capacity, the Alliance will complement the efforts of banking regulators across jurisdictions to enhance the banking sector’s management of climate-related risks and promote sustainable banking. Participating banks will benefit greatly from the IFC’s wealth of knowledge and expertise in the field of green finance.

Very soon we will reach out to stakeholders to join us in this most meaningful project. 13. Thank you. 2/2  BIS central bankers' speeches
The investments necessary are long-term and the fixes, in many cases, will take multiple years to execute. A number of firms have sound programs in place to address these longstanding issues, but continued strong project management and tenacity are crucial. I see commitment to this basic “blocking and tackling” as essential to financial institutions continuing to be competitive – and relevant – in the digital world. And that’s the third dimension that concerns me: the competitive landscape for financial institutions in the digital world. As more and more non-financial entities are entering the financial arena, I worry that financial firms may lack the agility and ability to compete at the level that they need to – particularly with the added complexities (and likely constraints) of regulation. At the end of the day, will financial firms be able to compete in the same way – or will these largely unregulated players be the future of our financial system? 2. Culture  My final topic today is culture – a complex topic that we all know it is an important one. Before I get into this in detail, I want to stress that “culture” is very different from “risk culture.” You can have a strong risk culture within your firm, but still have cultural issues. The culture I am talking about today is broader and deeper. There seems to be a general acceptance that there needs to be changes to the overall culture in the financial services industry, as well as improvements to cultures within individual firms.

With a view to the future, I should note that the current reform will further increase the complexity of the capital adequacy requirements. Although the potential of capital adequacy regulation has not yet been exhausted, other possibilities should also be investigated in the future. Complementing the capital adequacy approach with improved liquidity management of the banks seems to be a particularly promising measure. Shortcomings in liquidity management may give rise to problems that cannot be resolved by adequate capitalisation. It is not surprising that such considerations are made primarily by central banks. After all, liquidity concerns are typical for central banks. On the macro level, maintaining the supply of liquidity is a monetary policy task. On the micro level, however, it is the task of each bank to bring its solvency into line with the risks. This requires that the liquidity risks be correctly assessed and managed, and that assets, which can if necessary be used as collateral, be made available. The central banks and supervisory authorities of the G-10 countries should, therefore, increasingly focus their attention on minimising liquidity risks. This is of particular relevance to banks that are systemically important and internationally active. Integrated financial market oversight: what now? In the meantime, the Federal Council decided on the further procedure regarding the Federal Act on Financial Market Oversight (FINMA Act). The Federal Department of Finance will prepare a statement by the end of next year and submit it to the Federal Council.
Bank Negara Malaysia, working together with the JC3, is committed to supporting these efforts within our mandates for financial and monetary stability. On that note, I wish you productive discussions in the sessions ahead. We look forward to concrete outcomes from these discussions given the heavy and urgent responsibility we all bear to mitigate the devastating effects of climate change.

The first one is poverty, which has long been one of the most important issues policy makers in developing countries strive to overcome. When there is insufficient wealth to nourish basic needs, indebtedness could become inevitable and it is difficult to get out of the vicious cycle of debt. The second factor is the growing trend in consumerism which largely overshadows consumers’ self-restraint and eventually entices them to spend recklessly. In this wellconnected era, consumerism has rapidly intensified and spread widely through various perceptive channels especially the mass media. Let me give you one example of this consumerism we have experienced. Not long ago, the Bank of Thailand invited the bank’s  BIS central bankers’ speeches  1  CEOs to a meeting and we showed them their own television advertisement. The campaigns were trying to induce people to apply for loans with streamlined process. This could lead people to believe that applying for a loan was as simple as daily shopping at a supermarket. An average ordinary individual could easily get the cash and spend on vacations, buying some fashionable outfits, or paying for a wedding ceremony. Worse, one advertisement related the number of loan application to the chance of success in a lucky draw, the more you borrow, the higher chance of success to win gold necklaces. After watching those commercials, the CEOs were surprised to learn how far their marketing campaigns had gone and agreed to promptly revise the concepts of their marketing messages to minimize further imprudent behavior.
15  Table 1 Domestic scenario  2021  GDP Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Private consumption Goods and services exports Goods and services imports Current account (% of GDP) Gross national savings (% of GDP) Nominal gross fixed capital formation (% of GDP)  11.7 21.6 18.0 17.6 18.2 20.3 -1.5 31.3 -6.6 18.8 24.0  2022 (f) 2023 (f) Jun.22 MP Sep.22 MP Jun.22 MP Sep.22 MP Report Report Report Report  2024 (f) Jun.22 MP Sep.22 MP Report Report  (annual change, percent) 1.5-2.25 1.75-2.25 -1.0/0.0 -1.5 / -0.5 2.25-3.25 2.25-3.25 1.4 1.2 -3.4 -4.7 2.5 2.2 1.0 0.9 -3.4 -4.6 2.5 2.6 -4.8 -3.3 -2.2 -4.7 3.0 2.9 2.8 2.2 -3.7 -4.6 2.4 2.4 2.1 1.4 -4.1 -5.7 2.5 2.5 1.3 1.3 5.7 5.5 3.0 3.0 0.0 -1.4 -3.0 -5.5 2.3 1.2 -6.6 -6.3 -4.5 -3.6 -4.0 -3.3 18.4 18.9 20.0 20.0 20.1 19.9 23.3 23.5 22.8 22.2 22.4 22.2  (f) Forecast. Source: Central Bank of Chile.

Anna Sweeney: Solvency II Review - protecting policyholders while improving the regime Speech by Ms Anna Sweeney, Executive Director for Insurance Supervision of the Bank of England, at the JP Morgan European Insurance Conference, 15 June 2021. * * *  Introduction In the Channel Four show Grand Designs, people set themselves the task of self-building a new house, starting with an empty field or sometimes an existing property, and finishing a number of years later with a beautiful new place to live. Along the way there are invariably dilemmas around which building materials to use, how best to deliver on the architect’s plans, and whether the end result will be as originally envisaged. Fortunately with the Solvency II Review we are not starting with an empty field. The task at hand is more like the considered modernisation of a listed building. We already have a well-embedded regime, where there is a shared understanding of the benefits as well as the limitations. Our house has ‘good bones’; we are committed to upholding the principles which underpin the current regime. There are many important features that we want to preserve. But like any good self-builder, we’ve been walking around with a notebook, making lists and early sketches for the areas that might most benefit from upgrading; extending; reinforcing; or streamlining. Some areas may only need thoughtful tweaks. Others may need structural work.
Motivation behind the Committee’s proposals Beyond the advanced methods proposed for the treatment of credit risk, the inclusion of a capital approach for operational risk represents one the New Accord’s most notable innovations, to which I’ll now turn. In recent years, banks and supervisors have begun to recognise the need to evaluate and seek ways to reduce losses arising from failures in processes, systems, people, or external events. Increasingly, supervisors, like many leading institutions, consider the management of operational risk to be a comprehensive practice comparable to that of credit or market risk. While operational risk is not as readily quantified as these other exposures, the Basel Committee has noted genuine progress among leading institutions in measuring and controlling it. “Unbundling” operational risk from other risks and then including an explicit capital charge for it was intended to support these private sector efforts and to reward firms that develop better measures. With that motivation, the Committee sought approaches to operational risk that mirror the New Accord’s three pillars of more risk-sensitive minimum requirements, coordinated supervisory review, and enhanced market discipline through greater transparency. Together, the three pillars support the development of sophisticated measures of operational risk and offer incentives for banks to enhance their relevant controls. The Committee recognises that the art of operational risk management is still in its nascence and that risk managers are experimenting with a wide range of methodologies.

In turn, the banks, being financial intermediaries, do not provide loans at rates lower than the cost of funds raised from households and businesses. And our survey of banks showed that when banks are asked about the key rate, in particular, whether they are ready to reduce their corporate lending rates in case the Bank of Russia reduces the key rate, banks respond in the negative, because there is a problem of excessive outstanding borrowings of enterprises in some industries and another problem of  BIS central bankers’ speeches  3  high risks. And, of course, interest rates on loans can only be reduced after the reduction of inflation. However, this is not enough, it is important to conduct changes in the real sector itself, it is necessary to reduce the risks of borrowing in order to bring down lending rates. I need three minutes more, please... There should be a selection of efficient projects, competition for efficient projects, and the rates reduction based on lowered inflation, which will allow the financing of investment projects. (Slide 6) It is quite obvious that under the influence of unforeseen external factors the inflation will be higher this year than we projected. Unfortunately, it will reach 8%, but we have all the grounds and prerequisites for the inflation reduction in the medium run. Besides, we believe it is important to fix our inflation target for the medium term at 4.0%.
Such investments can be found in the emerging markets of Asia, especially in China. Although the dynamics are somewhat different in China, its tale of economic growth is as legendary as that of the Middle East. China has experienced a huge inflow of funds in search of growth opportunities and at the same time the Mainland authorities have been gradually opening up the country’s outward investment. As a Special Administrative Region of China, Hong Kong plays a pivotal role as the IFC of China in the course of financial liberalisation. Not only has it acted as a conduit for Mainland companies accessing international markets through IPOs, but also one of the largest sources of foreign direct investments for Mainland China. With the continuing financial liberalisation on the Mainland, Hong Kong is positioned as the most attractive destination both for investing into China and tapping China's funds. What are the challenges for us? Opportunities aside, we are of course aware that Hong Kong also faces challenges in developing Islamic finance. It is a fact that Hong Kong’s Islamic community is not big, but we are confident that the development of Shariah-compliant financial markets can take off even in environments in which the domestic Islamic community is relatively small, simply for the fact that investors nowadays are looking beyond domestic boundaries and traditional finances as financial activities gravitate towards the Middle East and China. Indeed Hong Kong’s relatively small population does not seem to undermine in any way our performance in the conventional financial and capital markets.

There is, of course, also the ESRB’s role in the new regulatory framework connected to the CRD/CRR. In addition, I also think that the ESRB more or less by construction is well  |8  placed to help its members tackle mainly national problems, by using peer pressure and working against inaction bias in various ways. This may be very important, not least when vulnerabilities emerge due to problems that are mainly beyond an individual authority’s own control. One may wish that we would have come even a little bit further in this area at this point, but it is important to realize that it takes some time to set up the necessary internal framework and processes. But by now the ESRB has that kind of machinery in place. The next step is to start using it. Even if we have a much more complete supervisory framework in place today, both nationally and at the EU and euro area levels, I think the role for the ESRB as the EU’s macroprudential overseer is becoming more and more important. At a high level, there is in particular an increasing need to keep a truly systemic perspective, capturing all financial sectors, their interlinkages and dynamics. The EU banking sector is facing structural problems, non-bank financial institutions are becoming more important, CCPs have taken on a systemically important role and the low interest-rate environment is, among other things, challenging the insurance industry, and the EU financial sector does not seem to become less interconnected.