samchain/econo-pairs-v1 huggingface dataset:
It means these assets are often not valued fully by investors and lenders. This raises the cost of capital for these firms to sub-optimally high levels – a market failure. Remedying that market failure, by ensuring intangible assets are consistently and coherently valued, is important if these companies are to grow to reach their full potential. 61  57  For example, Song et al (2015) find that virtually all the rise in earnings dispersion between workers is accounted for by increasing dispersion across the average wages paid by different firms. 58 Andrews et al (2015) and Dabla-Norris et al (2015). 59 HM Government (2013). 60 Aghion et al (2017). 61 Big Innovation Centre (2017b). 18  All speeches are available online at www.bankofengland.co.uk/speeches  18  More broadly, it is possible that current UK corporate governance practices may act as a brake on innovative companies. A recent report by the Big Innovation Centre makes important proposals for re-purposing UK companies to support long-term investment and productivity. 62  The government recently initiated a Patient  Capital Review to explore how best to support the financing of innovative companies as they scale-up. 63  A third category of policy measure focusses on the fortunes, not of innovative frontier companies, but the long tail of low-productivity non-frontier firms. These companies have tended to be focussed on somewhat less historically. Indeed, their large numbers and disparate characteristics may be one reason why this is the case.

Recent Bank of England research has suggested this may have been a potent crisis propagation channel for smaller businesses during the crisis. 14  As asset  prices have recovered, however, this channel cannot explain the persisting productivity puzzle. A third channel through which the crisis might have slowed productivity is by hindering resource reallocation between firms and across sectors. 15  Flows of capital and labour between companies are one of the key  channels through which technology and ideas are diffused. 16  Since the crisis, rates of labour market churn  between companies have been low and the dispersion in rates of return across sectors has been high. 17  Both are consistent with lower rates of factor reallocation having contributed to low productivity. (c) Forbearance and monetary policy  Some have contended that productivity may have been held back by the actions of the authorities, in particular regulatory forbearance and accommodative monetary policies. By supporting low-productivity companies who would otherwise have failed, policy actions may have prevented the “creative destruction” of 18  firms. Certainly, the level of company liquidations and firm exits has remained low in many countries since  the financial crisis, probably lower than would have been expected given the path of GDP. A number of studies have considered the evidence on the impact of regulatory and monetary policies on firm death and productivity.
Foreign denominated loans represent now only one third of the total stock of loans, compared to two thirds prior to the crisis, therefore reducing the exposure of debtors to foreign exchange risk (Figure 8). Financing from the parent banks are now 9 billion euro (as of July 2018), compared to 26.1 billion euro in December 2008 (Figure 9). Currently (as of July 2018), domestic deposits count for 70.9% of total banks’ liabilities, whilst the foreign liabilities represent only 9% of total banks’ liabilities. Loan to deposit ratio decreased from 122% in December 2008 to 75.2% in June 2018, showing that the local deposits are now the main source of financing for banks. Of course, the higher solvability ratio (Figure 10) and the much lower NPLs (Figure 11) also indicate that the banking sector is more resilient now than ever to external shocks. 4  Even the high concentration of sovereign debt in the hands of local banks has a positive side effect, which is the relatively low reliance on non-residents (they account for about 18% of the market). These are all indicators of reducing the contagion effect by alleviating the risk of a sudden reversal in the investors’ sentiment – which was described as a high systemic risk in the latest Financial Stability Report of the National Bank of Romania.

This will facilitate faster time-to-market for VC managers, and promote financing for enterprise development. We are also working with government agencies, universities and industry players to explore industry-wide talent development programmes for VC and PE managers. There is a growing suite of opportunities in bankable infrastructure projects. Investors with strong in-house infrastructure expertise can engage in direct investments in green-field projects. This can be done alongside multilaterals and commercial banks. Others can tap on established fund managers focused on Asian infrastructure. Yet another opportunity lies in project bonds. But these remain relatively nascent in Asia. 5/6  BIS central bankers' speeches  Regardless of the investment approach, project structuring is critical in bringing to fruition infrastructure projects. For investors looking towards Asian infrastructure, Singapore offers a dynamic ecosystem – with quality solutions in project advisory, project financing, and legal services, and dispute resolution. Conclusion Let me conclude. The global economy is in a better shape than it has been in a long while. Financial markets reflect this but have probably under-estimated tail risks. Reduced volatility in the markets should not beguile us into thinking there is less uncertainty out there. Some caution will not be entirely misplaced. Asia remains the biggest growth story in the world. There is still much work ahead in regional economic integration and domestic structural reform. But Asia is moving forward. And the region’s economic fundamentals remain sound. Investing in Asia is about participating in this growth story.
Do you think your depositors are going to have the same confidence in you, even if it is somebody else that has failed? Do you think they are going to say, “it’s okay. Only one finance company has failed. The company that we have deposited our money in is okay. Therefore, we can go on without any problem”. Do you remember the finance company crisis in the late 1980s and early 1990s? When one finance company failed, what happened? Why is it that Northern Rock had to be supported so strongly by the Bank of England, even though it is not a clearing bank? Isn’t it simply because the Bank of England realized that if one major bank fails, the domino effect, or the contagion effect will take place? So, my dear friends, it must be now clear to you, that as directors, you are not only responsible to your shareholders; you are not only responsible to your own depositors; you are also indirectly responsible to all depositors. Don't forget that if one fails, the resulting effect on the industry and the markets is going to be very very serious. Nobody is going to be spared. That's why we want you all to understand your responsibilities. That's why we take the necessary steps to regulate the industry so diligently. We have a responsibility, to preserve the financial system stability of this country. We take that responsibility seriously.

But, at the same time, in the interest of the entire system, there may be occasions that we have to do that. So, please understand the rationale for our regulation. We are responsible for financial system stability and you, in an indirect way, are also responsible for that. 4  BIS Review 55/2008
The U.S. Treasury and the Federal Deposit Insurance Corporation extended guarantees for money market mutual fund shares, issuance of certain types of debt by bank holding companies and unlimited amounts of deposits in transactions accounts of commercial banks. Later, with the passage of the TARP legislation, the federal government addressed the excessive leverage and shortages of lossbearing capacity through the injections of capital in October 2008 and in April 2009 in conjunction with the Supervisory Capital Assessment Program, or stress test of the major U.S. bank holding companies. Ultimately, the 2007–09 crisis was about both leverage and liquidity in the financial system as a whole, and not only in the tightly supervised sector of banking firms. This suggests that official sector efforts should aim at forward-looking monitoring of financial vulnerability that take both leverage and maturity transformation into account, and to broaden supervision to include broader coverage of the financial sector. In addition to many other efforts, the Federal Reserve is conducting tests of exactly that sort through its capital and liquidity assessments, the Comprehensive Capital Analysis and Review, or CCAR, and the Comprehensive Liquidity Analysis and Review, or CLAR. CCAR is the Federal Reserve’s annual process for evaluating capital adequacy of large and complex financial firms under normal and stressed conditions. CLAR is the Federal Reserve’s annual, horizontal exam to evaluate the liquidity position and liquidity risk management practices of those firms.

The use of unconventional measures has also changed the nature of part of the liquidity created. Liquidity resulting from repos and currency swaps is temporary: it flows back automatically when the transactions are not renewed. Liquidity created by acquiring foreign exchange and Swiss franc bonds, conversely, is permanent. We expect to keep the foreign exchange and bonds we have purchased on the SNB’s balance sheet for an extended period. As part of the impending normalisation of monetary policy, SNB Bills – introduced a year ago – will therefore play a central role. Liquidity absorption will mainly be conducted through the issuance of SNB Bills. Consequently, part of the balance sheet will in future be funded with interest-bearing debt capital. Moreover, the expansion of the balance sheet will substantially increase the SNB’s credit and currency risks. Strengthening the SNB’s provisions The financial crisis has highlighted how important it is for the SNB to have a solid equity capital buffer. Without it, the SNB would be unable to carry the risks on its currency reserves internally – nor would it be in a position to take the measures to stabilise the financial system that proved essential in the financial crisis. Equity capital, furthermore, is central to the independence and credibility of the SNB. In spite of the extensive crisis measures we have taken, the SNB’s balance sheet is as robust as ever – though its financial stress resistance is heavily dependent on the distribution reserve, which is high at present.
The task set ahead for central banks in emerging markets, therefore, are many. First and foremost is to manage the challenge posed by the new globalization in the pursuit of price stability. Important in this context is the monetary policy framework that addresses the challenge to price stability while at the same time allows central banks to pay closer attention to financial stability. Next is the question on the role that central bank policies can play to support the economy’s transition from export-led growth to a more balanced growth. Such transition will require a redirection of economic incentives from exports to domestic consumption and investment. At a minimum, the transition will require a further strengthening of the economy’s financial system so as to ensure an efficient intermediation of resources into productive investments. Against this backdrop, I want to leave you with a few thoughts on the challenges to macroeconomic policy that will be important for emerging market central banks going forward. The first is monetary policy and the challenge is to have in place a monetary policy framework that can deal effectively with the threat to price stability and the need to oversee the risk of financial imbalance in this era of globalization. In the current crisis, it is clear that no particular monetary policy framework is superior in dealing with such a challenge. Nonetheless, experience of many inflation-targeting emerging economies in this crisis does demonstrate that price stability and financial stability can be preserved even in extreme financial circumstances under a flexible inflation-targeting regime.

Nonetheless, much more can still be achieved in the context of financial market development, enhancing competition, and putting in place the needed financial infrastructure to help facilitate better risk management by banks and the private sector. In the Thai case, we are moving in this direction with the launch of our Second Financial Sector Master Plan last year that focuses on improving efficiency, access, and the comprehensiveness of the Thai financial sector. In general, apart from lowering the risk to financial stability through better risk management, a robust and efficient financial sector will also raise the capacity of emerging economies to generate investment from their local savings. This, in my view, is where the real issue lies in solving the problem of global imbalance. So, this very much concludes what I plan to say to you this morning in my address. I hope it has been useful. Again I want to thank SEACEN, the CCBS of the Bank of England, and Ministry of Finance, Brunei Darussalam, for the invitation, and wish you all a successful seminar as well as a full and rewarding career at your respective central bank. Thank you. 4  BIS Review 36/2010
This was not the case only 20 years ago. Following strong economic growth in the post-war period, the Nordic countries lost ground in the 1970s and 1980s. Growth in the Nordic region, particularly in Denmark and Sweden, was lower than in other European countries and the US during this period. Finland recorded strong growth for a long period, but a poorly diversified industry structure made the country vulnerable. Oil brought growth to the Norwegian economy, but the first decades of the oil age were still marked by instability in the mainland economy. Solid growth in the Nordic countries in recent years has been underpinned by strong productivity gains in most of these countries. Finland and Sweden have a highly developed ICT industry. A feature shared by the Nordic countries is the growing efficiency of service production. BIS Review 15/2007  13  14  BIS Review 15/2007  Economic developments in the 1970s and 1980s were unstable both in the Nordic region and in Europe. Inflation was very high and variable, but was tamed in the 1990s. Falling demand and production resulted in high unemployment. For a long period, there was a tendency in both the Nordic region and elsewhere in Europe for unemployment to climb to higher levels in each cycle. This tendency has been reversed in the Nordic countries, while unemployment still remains high in several European countries. During the 1980s and 1990s, economic policy was revised in all the Nordic countries. Denmark tightened government budgets as early as the 1980s.

The function of state banks has become more concentrated and their share of the credit market has been reduced from more than 30 per cent in the1980s to 8 per cent today. The first wave of banking deregulation in the mid-1980s was not particularly successful. It was only after the banking crisis and the tax reform that Norwegian credit and capital markets started to function efficiently. It became more profitable to channel capital to investment projects that yield the highest social return and locked-in capital was freed up for new industries and businesses. It became easier for entrepreneurs to start up and build up businesses and capital. Illustrative of the enterprise spirit in the period 1998-2003 – which was not a period of particularly strong growth – was the start-up of 12 new businesses for every 100 existing businesses, which was quite high compared with other countries. Norwegian credit and capital markets are relatively well developed today. Sound projects will always find funding. The main weakness is still to be found in housing, property and wealth taxation, which favours considerable overinvestment in dwellings and holiday homes. In addition to the changes I have highlighted, the framework conditions for the electricity market, telecom market, aviation and audiovisual industry have changed. Retail trade has been liberalised. State-owned companies were listed on the stock exchange and new forms of managing public entities were developed. 16  BIS Review 15/2007  Economic growth has also been bolstered by higher female labour force participation.
Simple measures of margins, such as the profit share, have been relatively resilient. And a recent survey by the Bank’s Agents suggested that margins on average were only a little below normal, despite the marked contraction in demand. 8 Why so? In part, aggregate margins may have been boosted by the sharp rise in sterling export prices following the depreciation of sterling. The increase in exporters’ margins may well have masked a decline in margins earned by domestic producers. 5  That is consistent with some surveys of companies’ capacity utilisation, which do not seem to have fallen by as much as the fall in output might suggest. 6  An important issue determining the evolution of supply in the medium-term is how quickly this mothballed capacity is either brought back on stream or eroded. This is likely to depend on the pace of the recovery. 7  Strictly, the model I am discussing talks about the mark-up over marginal cost, whereas margins are calculated with reference to average costs. Margins have the advantage that they can be calculated from companies’ published accounts, wheras mark-ups are not directly observable. But different estimates of the mark-up in the United Kingdom have appeared to move in a similar direction to margins across economic cycles. See Haskel et al (1995) and Macallan and Parker (2008).

As the Swiss economy is on the upswing, income is rising, as are the prices of assets. Demographic changes could also add to the pressure. For instance, immigration of well-qualified persons with high purchasing power has increased quite steeply since the agreement on the free movement of persons entered into force almost five years ago. These factors all tend to drive up demand for residential space. So far, supply has been able to keep pace with the increasing demand. Nevertheless, with supply adjusting only slowly, a higher level of demand could well accelerate price increases in the real estate market. It would then be the SNB’s responsibility to ensure – under these more difficult circumstances – that price movements in the real estate market did not threaten price stability as a whole. BIS Review 11/2007  1
At last week’s 4th ASEAN Informal Summit in Singapore, ASEAN leaders launched an Initiative for ASEAN Integration or “IAI”. It is intended to narrow the divide between the older and newer members of ASEAN and enhance ASEAN’s competitiveness as a region. It is a framework for the more developed ASEAN members to help those members that most need help, and in so doing make ASEAN prosper. To kick it off, Singapore is offering a package of IT training and assistance in human resource development to Myanmar, Laos, Cambodia and Vietnam, while China, Japan and South Korea have also offered assistance that falls within IAI’s broad framework. Of course, ASEAN’s future depends as much on external factors as it does on these direct initiatives to promote intra-ASEAN trade and investment, and build up the economic strength of individual members. Our economies are highly dependent on international trade, and it is in our interest to work together actively for a freer, more stable and secure global trading environment. ASEAN therefore needs to support an open, stable multilateral trading system under the WTO, and the early launch of a new round of trade negotiations. Strong multilateral rules are the foundation for world trade, and protection against anarchic bilateral and unilateral trade policies. Small countries could not survive without them; even large economies would be much poorer off in a tit-for-tat environment. Hence ASEAN strongly supported the candidacy of Dr Supachai Panitchpakdi for the Director Generalship of the WTO.

Banks play a critical role in every economy. For ASEAN economies to continue to grow, they will need new investments. These investments will require financing, by sound banks able and willing to lend to sound borrowers. The immediate priority is to speed up the resolution of the non-performing loans (NPL) within the banking system. The process is underway, but is far from complete. Even today, NPLs in some ASEAN countries remain well above 20%. As in the case of corporate restructuring, effective bankruptcy laws are essential. Asset Management Companies (AMCs) need sufficient power to deal expeditiously with debts which are unrecoverable. Otherwise the banking problems will infect the whole economy, and drag countries into the same deep-seated malaise as Japan. Finding new money and writing off bad loans is the relatively easy part. It is more difficult, but equally important, for banks to put in place proper systems, structures, and prudential standards, to prevent the same problem from happening again. They need to establish rigorous credit cultures. They  BIS Review 111/2000  6  must lend based not on personal relationships, but on objective assessments of the borrowers’ creditworthiness. Many countries are encouraging bank mergers and consolidation as part of their plans to strengthen the financial sector. Mergers can help to strengthen the commercial banks, and give them the scale to compete in the globalised financial industry. However, mergers by themselves are insufficient.