samchain/econo-pairs-v1 huggingface dataset:
The bursting of a large property price bubble can have serious effects on financial intermediation. This could motivate an early monetary policy response. The cost of this pre-emptive strike strategy would have to be weighed against the fact that inflation and real activity will be lower than desired in the short term. Is this a price worth paying to maintain stability in the financial system? In order to answer that question, we need to know how sensitive the financial system is to a severe fall in property prices? Another problem with trying to act pre-emptively is, how do we spot the price bubble in time? So even though in a conflict between short-un price stability and financial stability, the latter were to be viewed as the more important, implementing such a policy could be fraught with substantial practical problems. The grounds for a pre-emptive strike against an equity price bubble are perhaps less compelling than for a property price bubble. The US experience from the 1987 stock market crash seems to be that, with an appropriately conducted monetary policy, the effects on real activity can be relatively small. With New York Stock Exchange order flows grossly out of balance on 19 October 1987, with the solvency of brokerages and clearing houses in doubt, banks were growing nervous and reluctant to lend. This was a clear case of systemic risk and before the market opened on 20 October the Fed affirmed its responsibilities to serve as a lender of last resort and also substantially eased monetary policy.

Second, if the effects of QE are more powerful in crisis states of the world, we may need to ensure that we have enough headroom in the future to repeat it. The determinants of QE unwind may therefore be more subtle than previously thought, and the Covid crisis offers a new lens through which to assess its role. This leads to what may be regarded as the most speculative of the conclusions, but it strikes me as important as we look to the decade ahead. It follows from the state contingent nature of the effects of QE, and the argument for going “big and fast” in such situations, that the central bank balance sheet may have 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  more of a counter-cyclical role and function than the evidence of the last decade alone would suggest, at least in certain circumstances. We need to work through what lessons this may have for the appropriate future path of central bank balance sheets, including the pace and timing of any future unwind of asset purchases. But one conclusion is that it could be preferable, and consistent with setting monetary conditions consistent with the inflation target, to seek to ensure there is sufficient headroom for more potent expansion in central bank balance sheets when needed in the future – to “go big” and “go fast” decisively. That begs questions about when does the need for headroom become an issue? What are the limits?
This obviously poses challenges for competing high value-added producers in Asia. •  But China is also offshoring lower value-added, labour-intensive production. This creates opportunities for the less-developed regional economies to catalyse their own industrialisation. Second, China’s import composition is shifting in favour of consumer goods and services. •  The more developed economies in the region are well-positioned to tap into China’s demand for financial services, healthcare, education, and tourism. Third, China is emerging as a significant source of capital for the region. •  In the middle of last year, while the world’s attention was focused on the volatility in China’s financial markets, an important development took place that went largely unnoticed. •  China became, for the first time, a net exporter of direct investment. •  Chinese FDI in ASEAN has been increasing by an average of 25% every year, in the five years to 2014. Vietnam and Cambodia are examples of countries that have become more plugged into the global markets as a result of becoming part of this new regional value chain. BIS central bankers’ speeches  1  •  Vietnam has emerged as a key assembly hub for electronic and electrical products. •  Cambodia has become a manufacturing base for Chinese garment and footwear companies, with three-quarters of its garment and footwear exports in 2014 headed for Europe and the United States.

•  Such risks include defaults and insolvencies of trading partners, regulatory changes, expropriation, labour unrest, and acts of terrorism. •  As the largest centre for structured trade credit and political risk insurance in Asia, Singapore can provide Chinese banks and corporates comprehensive and tailored risk management solutions. Infrastructure financing China is playing an increasingly important role in helping regional economies with infrastructure development through its “One Belt One Road” initiative. Chinese corporates and financial institutions can tap into Singapore’s well-developed infrastructure financing ecosystem in the following ways. •  Leverage on the strong network of multilateral agencies, banks and institutional investors to access regional infrastructure deals. •  Deepen their expertise in project structuring, risk allocation, and loan documentation. •  Gain access to the network of local project sponsors who are traditionally more accustomed to dealing with local and global banks. 4  BIS central bankers’ speeches  Asset management China is one of the key markets for Singapore-based fund managers, both as an investment destination as well as a source of capital. •  There is strong interest from financial institutions here to tap Singapore’s RQFII quota and offer investments with China exposures. •  Last week, Blackrock secured RMB 20 billion of approved RQFII quota in Singapore, which is the second largest quota granted to-date. At the same time, the Singapore market offers globally diversified investment portfolios for Chinese pension funds, insurance companies, and individuals.
12  All speeches are available online at www.bankofengland.co.uk/speeches  12  present because households face double jeopardy – risks to their lives and their livelihoods. Elsewhere, I have called this dread risk.14 At present, dread is double-barrelled. Yet this is not the only path possible for the economy. The willingness of companies to take back furloughed workers will depend importantly on their expectations about future demand for their goods and services. The stronger those expectations, the lower the likelihood of job losses. Firms will not make workers redundant if they need to rehire them, at a cost, soon afterwards. This lowers unemployment risk, raises household incomes, confidence and spending and thereby boosts firm revenues and employment, in a virtuous cycle. Back in the 1950s John Hicks called this dynamic a “super-multiplier” – “super” because the cumulative effects are amplified when emerging from recession.15 There is survey evidence to support this dynamic. The British Chambers of Commerce’s (BCC) weekly survey suggests firms’ demand and employment intentions have moved upwards in lockstep since April (Chart 11). Indeed, employment was close to balance by mid-May. Surveys of employment intentions and vacancies have also recently recovered from low levels. Chart 11: BCC survey Balance 60 Composite output 40 20 0 Reported employment  -20 -40 -60 -80 -100  2007  2009  2011  2013  2015  2017  2019  Sources: BCC and Bank calculations. Notes: Chart shows BCC Quarterly Survey and dashed lines show more recent weekly survey after Covid-19 crisis began.

One reason for greater circumspection today in monetary policy is that the trade-off between growth and inflation may have changed. During the 1990s the paths of inflation and real economic activity in many countries, Sweden included, have not followed the pattern that their earlier relationship suggests. This has started a discussion, in the United States and elsewhere, of whether macroeconomic structures have changed so that higher growth is now feasible without inflationary tendencies. It is BIS Review 106/1999  2  sometimes argued, for example, that one of the forces behind today’s improved economic performance in the United States is the rapid advances in computer technology and telecommunications; this has led to more efficient processes for production and distribution and thereby paved the way for higher productivity growth. Productivity in the United States does appear to have been rising more strongly. Some observers consider that the potential annual growth rate may have moved up from 2% to up to 3%, perhaps even more. In Sweden, too, there are many indications that the growth of labour productivity in the 1990s has been higher than in the 1980s. The upward shift may perhaps amount to half of a percentage point. It is this that has prompted the common, but not entirely certain, estimate that the Swedish economy can now sustain an annual growth rate between 2 and 2.5%. But Swedish statistics do not yet confirm that productivity and thereby potential growth have increased fairly appreciably, as has been the case in the United States.
The state of our economy shows that the fiscal framework is sound. BIS Review 16/2009  13  From 2008 to 2009 – during the downturn – the government budget will stimulate the mainland economy by the equivalent of 5 per cent of GDP, or NOK 90 billion. Half will automatically be channelled through unemployment benefit, which will cushion the impact on purchasing power for those who lose their jobs, and through lower taxes for households and firms, without an attendant reduction in government expenditure. The remainder comprises active measures and the gradual increase in petroleum revenue spending. Credibility is enhanced when fiscal policy adheres to the same strategy over several years and when the automatic stabilisers are also allowed to operate when tax revenues are high. As a result, the Norwegian government can spend money during a downturn without prompting a rise in consumer saving in order to meet future tax expenses and without pushing up yields on government securities as a result. The government still has freedom of manoeuvre. The operational objective of monetary policy is low and stable inflation with annual consumer price inflation of close to 2.5 per cent over time. Over the past ten years, inflation has  14  BIS Review 16/2009  averaged 2 per cent, which is close to but somewhat lower than the target, and it fluctuates to a lesser extent than previously.

The fact that Stanbic Bank Zambia is opening its branch in a part of the city where most of the business players are unbanked is victory for the financial inclusion process which seeks to get more Zambians banked and more SMEs access financial products. Distinguished Guests, the role that SMEs play in an economy cannot be over-emphasised. SMEs provide sustainable economic growth through job creation, development of entrepreneurial skills and the potential to contribute significantly to export earnings. However, provision of finance to the SME sector in Zambia still remains a challenge. A survey conducted by the World Bank on Enterprise Development in Zambia (2007) identified poor access to finance as a major impediment to investment and growth in Zambia. Only 16% of firms surveyed reported having a loan or line of credit from a financial institution, compared with 23% for the region and 35% for all countries surveyed. Therefore, while Zambia’s cost of doing business index has progressively improved in recent years, access to finance continues to feature among the three key constraints to investment and growth. It is, nevertheless, gratifying to note that commercial banks in Zambia are slowly realising the importance of the SME sector. You may wish to note that at the end of December 2011, commercial banks’ lending to SMEs was at 21.0% of total loans, an improvement from 17.0% in December, 2010. This also represented an increase in lending to SMEs by 68.9% to K2,322.5 billion from K1,375.0 billion in 2010.
Additionally, controls should be embedded in the system to ensure integrity of input, processing and output. Adequate physical and logical access controls are important since they can protect data, system and resources from unauthorized persons. Finally, a financial institution should provide alternative resources for backup and recovery, and ensure that they can be available during an event of a disruption. All of these matters are about security and confidentiality, integrity and availability which will be elaborated more in the next slide. Security and confidentiality Supervisory objective An objective of IT supervision in security and confidentiality areas is to ensure of IT activities being conducted in a secure and control environment and of data confidentiality and integrity by laws, rules and regulations. Supervisory areas To achieve such objectives, the following points should be addressed by supervisors. Physical security: It is about control for environmental exposures due primarily to mother-nature events such as lightning, storms, flood and etc. Others may be caused by human acts such as  BIS Review 35/2005  5  terrorist, fire, electronic shock and equipment failure. The result of such conditions can damage computer system, equipment and facilities which in turn cause an interruption. Another type of physical security is physical access controls which aim to prevent unauthorized access to computer system, equipment and facilities as well as data. Examples of this type of controls are electronic door locks, biometric door lock, video camera, etc. Logical security: It is data, system and network access control.

Multipurpose: Consumer can use money paid in advance to purchase goods and services from different retailers determined by the e-money issuers  E-money can be categorized into network-based and card-based depending on how the value is stored. -  Storing value in a network basis requires no physical item to store value but is kept in the service providers' system. -  Storing value in a card-basis is the use of a plastic card with embedded chip to store value. E-money is regarded as non-traditional financial services which lead to new ways of security and control implementation. Furthermore, it may facilitate money laundering activities. That is why in Thailand, we prohibited the transfer money among customers without going through service providers' data system. In addition, the system must be able to trace all activities. A bank should set a maximum limit of e-money that can be used . And, it can only be issued in Thai Baht currency and used in Thailand. IT outsourcing means allowing other service providers to perform on behave of a financial institution IT functions which are normally done by the institution itself. By the advent of rapid changes in technology and competition, financial institutions tend to reduce costs and to improve their services by outsourcing some technology-related functions to third parties both within and across borders. In Thailand, we see a few distinctive characteristics of IT outsourcing services. -  Full scope of IT operations.
There are certain similarities between projecting developments in the Norwegian economy in the coming months and forecasting the weather. Meteorologists have observed that averaging a large number of forecasting models generally produces more accurate forecasts. 1  Ysander, Bengt-Christer, “Award Ceremony Speech”, Royal Swedish Academy of Sciences, 10 December 1989. BIS central bankers’ speeches  1  To project consumer price inflation in the coming quarters the Bank has developed a system for averaging forecasts from about 170 different statistical models, all of which are intended to project inflation in the Norwegian economy in the very near term. The models are grouped into three classes, and the models within each class may contain different variables or be variants of one another2. The weights are continually adjusted on the basis of historical accuracy, so that models with better predictive power are given greater weight in the subsequent round. The Bank has a similar system including almost 250 models for forecasting mainland GDP. The projections from these systems of models extend four quarters ahead in time and are published at regular intervals on the Bank’s website. We call this apparatus SAM (System for Averaging Models). For projections with slightly longer horizons, the Bank parts company with weather forecasters. While meteorologists are unlikely to influence the weather with their predictions, Norges Bank’s interest rate setting can actually influence economic developments in the medium term. This places particular demands on the system of analysis and involves other demands than if the sole purpose were to make forecasts.

Chart: Isolated effect on GDP of an interest rate increase in two different VAR models In order to further explore the extent to which the estimation period has a bearing on the results, we have estimated VAR models with successive starting points from 1986 to 19968. Each model is quantified on quarterly data up to 2009. In the analysis, the interest rate increases by 1 percentage point and then gradually falls back. The increase in the interest rate will result in a temporary decline in GDP growth. The chart shows the effect in two of the models, one that is estimated from the mid-1980s and the other where the estimation period starts ten years later. The impact on GDP occurs somewhat earlier, but is a little smaller when we start the estimation period later. This may reflect the change in monetary policy regime during the period or structural changes in the Norwegian economy. Chart: Maximum impact of a 1 percentage point interest rate increase, different estimation periods If we only look at the maximum impact of an interest rate increase in each of the models, we obtain a picture of how this has changed over time. Each point in the chart represents the impact on the level of GDP and inflation when the effect of an interest rate increase is strongest in each model (estimation period).
•  Secondly, I noted that many accession countries have already expressed their intention to join ERM II as soon as possible after EU entry. This intention is to be welcomed, although it should be clear that ERM II membership needs neither to happen immediately after EU accession in all cases, nor to be limited to only two years. It would be misleading to consider ERM II as a mere “waiting room” before the euro. On the very contrary, ERM II would allow countries to retain some limited exchange rate flexibility during the catching-up process. ERM II membership offers a meaningful, flexible but credible framework for increasing convergence with the euro area, for tackling the challenges faced by accession countries on the road towards the adoption of the euro, for contributing to macroeconomic and exchange rate stability and for helping determine the appropriate level for the eventual irrevocable fixation of parities; and this, again, in the best interest of candidate countries themselves. •  Thirdly, a sound and efficient banking and financial system is key. Significant progress has been made over the past few years in rehabilitating the banking sector and encouraging foreign ownership. The latter has also contributed to greater integration into the EU financial system. Nevertheless, the improvement of financial technicity and banking practices is a process entirely in the hands of the accession countries. The intermediation role of the banking sector remains fundamental for the efficient use of capital and sustained growth.

This successful launch, to the benefit of 305 million Europeans, represents the crowning achievement of the euro changeover, after the launch of the euro on the financial markets, on 1 January 1999. Both operations were a technical success because they had been meticulously well-prepared by the full body of the Eurosystem, the European Central Bank, and all the euro area national central banks, including Banque de France in France. However, aside from the technical success in itself, the warmth and enthusiasm with which French citizens and other Europeans welcomed the euro, their new currency, was proof that European construction enjoys real popular support that has all too often been underestimated. Let me now turn to the core of my subject today: first, the process for economic reform, second, the perspective of enlargement. *  1. *  *  Economic reforms  Before reviewing the priority topics which require a new impulse, I would like to make a remark on the also often underestimated link between reform and the changeover to the euro : indeed, the introduction of banknotes and coins in euro is a major structural reform in itself, as it constitutes a powerful drive towards restructuring the European economy, and a strong lever to facilitate the comparison of prices, taxes and incomes between the Member states.
The Role of Trade Policies and Institutions,” Discussion Paper # 6225, Centre for Economic Policy Research. Boschini, A.D., J. Petterson, and J. Roine (2003) “Resource Curse or Not: A Question of Appropriability,” Working paper Series in Economics and Finance #534, Stockholm School of Economics. Braun, J., M. Braun, I. Briones, and J. Díaz (2000), “Economía Chilena: 1810 – 1995. Estadísticas Históricas,” Documento de Trabajo # 187, Instituto de Economía, Pontificia Universidad Católica de Chile. Bravo-Ortega, C. and J. De Gregorio (2006), “The Relative Richness of the Poor? Natural Resources, Human Capital and Economic Growth,” in D. Lederman and W. Maloney (eds. ), Neither Curse Nor Destiny: Natural Resources and Development, Stanford University Press. Cerný, A. and R.K. Filer (2006), “Natural Resources: Are They Really a Curse?” CERGE-EI Working Papers #321, Center for Economic Research and Graduate Education – Economic Institute, Prague. De Gregorio, J. (2006), “Bonanza del Cobre: Impacto Macroeconómico y Desafíos de Política,” Estudios Públicos N° 103: 17-42. Gavin, M. and R. Perotti (1997), “Fiscal Policy in Latin America,” in B.S. Bernanke and J. Rotemberg (eds.). NBER Macroeconomics Annual 1997. Cambridge, MA, US: MIT Press. Mehlum, H., K. Moene, and R. Torvik (2005), “Institutions and the Resource Curse,” The Economic Journal 116(508): 1-20. Sachs, J.D. and A.M. Warner (1995), “Natural Resource Abundance and Economic Growth,” NBER Working Paper #5398. Sachs, J.D. and A.M. Warner (1997), “Sources of Slow Growth in African Economies,” Journal of African Economies 6(3): 335-76. Sachs, J.D. and A.M. Warner (2001), “The Curse of Natural Resources,” European Economic Review 45(4-6): 827-38.

Continuing on this subject, I will next talk about the way macroeconomic policies have helped in the context of the large swings of the price of copper. Macroeconomic policies and copper in the current scenario To make economies less vulnerable to commodity price fluctuations, having an adequate macroeconomic policy framework is imperative. As will be argued in this section, this is the case in Chile today. 3 It is common knowledge that in Latin America, cycles have historically been very pronounced. Global economic downturns have triggered strong adjustments in the countries in the region. This is largely due to the destabilizing effects of terms of trade fluctuations on public finances (Gavin and Perotti, 1997). Due to the importance of copper for fiscal income, a positive shock on its price should be expected to prompt destabilizing policies. This does not occur, however, because Chile’s fiscal policy is countercyclical, and is based on a  3  This issue is also discussed in De Gregorio (2006). BIS Review 106/2009  3  structural fiscal balance rule. To determine the structural balance, a key element is the estimated long-term copper price. This rule began being applied in 2001 with a target of 1% of GDP; last year it was brought down to 0.5% because of a large accumulation of resources in sovereign funds, and this year, to provide an extra fiscal impulse, it was reduced to 0% (figure 8).