samchain/econo-pairs-v1 huggingface dataset:
The government’s five largest stakes in Norwegian companies can be roughly estimated at NOK 300 billion. In general, concentrated ownership requires a more strategic ownership approach and gives rise to higher risk than diversified ownership. 10  BIS Review14?/2001  Risk associated with state ownership NOK bn 300  The five largest state enterprises Petroleum Fund's bonds Petroleum Fund's equities  200  100  National Insurance Fund's private bonds  National Insurance Fund's equities  0 0  10  20  Return risk  This is illustrated further in the chart. The composition of government assets is broken down into equities and bonds in the Petroleum Fund and the National Insurance Fund and government ownership interests in the five largest companies. The horizontal axis provides a normal measure of risk, in other words the standard deviation of the return. The risk is estimated on the basis of the historical performance of the companies’ share prices. For unlisted companies, we have used share price performance for comparable international companies. Higher risk means that the assets are more exposed to fluctuations in return. As a whole, the return on the Petroleum Fund and the return on private bond holdings in the National Insurance Fund feature a moderate risk profile. The risk is higher for both the National Insurance Fund’s equities and the state’s ownership interests in the five largest companies. For a given expected return, the owner should aim at reducing risk because future income will then be more secure.

They depend on the hundreds of examiners who are dedicated professionals working in the public interest. Our examiners fulfill their obligations with considerable care, mindful of the stakes to Main Street when something goes wrong on Wall Street. I am grateful for their efforts. IV. Reasonable expectations  Before concluding, let me offer a broader view of what we at the Federal Reserve expect from prudential supervision. Very briefly, I submit that supervision should be fair, conscientious, and effective. Fair supervision means that the rules are applied consistently across the firms we supervise. We all need to know the rules and follow the same rule book. It also entails a commitment to independence from business or political influence, as envisioned by the Federal Reserve Act one hundred years ago. Conscientious supervision means we must be committed to sustained and, if necessary, radical self-improvement. The Beim report is an example of our willingness to commission and accept self-critical analysis and our commitment to improve. But we cannot stop there. To this end, we will be working with the Board of Governors on its upcoming review of whether the LISCC Operating Committee receives information that is sufficient to reach sound supervisory decisions. One subset of this system-wide inquiry will analyze regulatory capture – specifically, how divergent views are presented to decision makers at the Board. The review is expected to take several months. Effective supervision means tough supervision and demands a focus on large banks that pose systemic risk.
But it is a challenge, too, for the financial authorities who need to balance the need for market competition with the maintenance of minimum prudential and business behavioural standards by individual financial institutions, and the need to preserve overall macro-level financial stability. How far we are succeeding in meeting this challenge is, to my mind, the essential criterion against which we should seek to assess the development of our financial systems. Against that background let me now try to identify some of the main drivers of change that have been, and are, affecting all our financial systems to varying degrees. The first is financial deregulation, that is to say the relaxation of controls designed to override market forces in either an overall macro-economic or a directional sense. In the case of the UK this extends back very importantly to the abolition of exchange controls and direct controls over bank lending over twenty years ago, to enabling building societies (our principal mortgage providers) to extend their range of financial services activities, to the opening up of membership of the Stock Exchange and broader capital market intermediation and so on. Deregulation in this sense was both encouraged by, and in turn contributed to, increasingly intense competition within the financial services industry, including a blurring of traditional distinctions between different types of financial institution.

Within the Islamic finance realm, prospective cases studies can include amongst others the application of Shariah Standards by Islamic banks and its effects on product structuring and pricing strategy, legal aspects, risk management, oversight function and governance process of the banks. For the takaful sector, case studies on microtakaful for example can lead to the development of protection schemes that can be offered at affordable prices. I trust the academia has enough resources to produce such case studies and generate new research findings and breakthroughs, given the knowledge and expertise of their academic faculties. In essence, we need to be more exploratory and brave to rigorously investigate or examine real life situations and complex scenarios and benefit from hindsight and learnt lessons that can give new solutions for future growth. The initiative to develop the Educator's Manual is in itself a good starting point to encourage universities to move towards experiential learning. Students will be exposed to Shariah and operational requirements covering areas such as product structuring, legal, accounting as well  BIS central bankers’ speeches  3  as risk management. The transparent nature of the standards would enable students to critique and form their own views and conclusions. It is a leap forward to change the paradigm on the theoretical and operational aspects of Shariah applications. This initiative is certainly a gamechanger for our Islamic finance education programme.
Mr Erçel reviews the monetary side of Turkey’s ambitious three-year disinflation program  Speech given by Mr Gazi Erçel, Governor of the Central Bank of Turkey, at the Merchant Taylor’s Hall, in London on 25 January 2000. *  *  *  Turkey’s disinflation program: what we are doing and why Starting this year, Turkey has embarked on an ambitious three-year program to disinflate its economy. I call it ambitious because Turkey has suffered from a high and persistent inflation for the past quarter of a century, and any program that hopes to correct such a long-standing problem needs to be ambitious. I will begin by reviewing this new program, especially the monetary side of it. But first I will give you some snapshots, from the past, of the Turkish economy, which I think will give a clear idea why this was the right time to take action. The history of Turkish inflation shows that for the last quarter century inflation has been gradually increasing, never falling below two digits. The average inflation rate for the whole period was 55%. During the last decade inflation has averaged 72%. Reflecting the uncertainties inflicted on the economy by this chronic inflation, growth has been volatile and at the low end of the range of comparable emerging market economies. Turkey’s average growth rate over the last two decades was 4.2%. Average growth for the emerging markets of Asia, where inflation is not a problem, has been much higher.

The Banking Law that was enacted by Parliament in the summer of 1999, and the amendments made during the last month, were aimed at giving the banking system the necessary efficiency and soundness. In conclusion, let me summarise recent history. We have been working on this program for the past two years. Its technical excellence accurately reflects well the effort that has gone into it. I do not hesitate to say that the program is “comprehensive”, “strong”, “ambitious”, “bold” and “imaginative”, and most of all “achievable”. The willingness of the political authorities to execute this program is clear from the way they have taken the necessary but politically difficult economic decisions: quickly, without hesitation or second thoughts. The IMF and the World Bank have strongly endorsed the program, the former by approving for Turkey a three-year standby arrangement, and the latter by extending project credit. The prospect of membership negotiations with the European Union pursuant to the Helsinki decision provides an additional strong incentive to implement the program forcefully. There is a strong autonomous ownership of the program. The Government, the Parliament, policymakers, and the social partners all understand the great rewards, particularly in terms of reduced interest costs and stable growth, that will follow the program’s successful implementation. The markets’ reactions to the program have also been very positive. Interest rate declined from 100% last October to the 30s recently.
Against that background, how is this dialogue proceeding in the UK at present? For we too are addressing the questions which preoccupy you in the United States, in our quaint, olde worlde British fashion. But before I review the current debate on regulatory structure in the UK, I should say a little about the way we define the objectives of financial regulation. We think of five: to BIS Review 21/1997  -2-  protect the economy against systemic risk; to protect individual depositors, investors and insurance policy holders against loss from the failure of their intermediary; to protect customers against business misconduct; to assist society at large in the fight against crime (for instance by making sure firms have in place systems to detect and report laundered drug money and other proceeds of organised crime); and, last but not least, to create and sustain fair markets. Described bluntly, these objectives make the job of regulators look impossibly daunting. But of course they are not absolute aims. Regulators cannot, and should not, offer blanket assurances to investors and depositors. They cannot, because the tools and resources to do so are simply not available. And they should not, because it would be quite wrong to remove from investors and firms the responsibility for assessing, taking and monitoring financial risks. This is a very important point, which Alan Greenspan has helpfully underlined on a number of occasions recently.

In the aftermath of the crisis, the configuration of the world economy will be transformed as changes in the pattern of global demand take place, as demands for greater efficiency and lower costs occur, as actions are taken for a reduced role of government in the economy, as new regulatory regimes are being introduced, and as efforts are being undertaken to enhance our capacity to manage systemic financial crisis. Many of these changes will involve cross border arrangements and collaboration. We are all stakeholders with interest in what the post-recovery world will look like. Indeed, the issue of new economic models in the context of these developments is relevant not just to Asia but also for other parts of the world. We have seen how within the short period of less than a decade, the rapid escalation of debt-driven consumption in North America led to chronic financial and economic imbalances that has resulted in a significant economic dislocation on a global scale. Several lessons can be drawn from these developments. The Asian economic model for the future needs to be redefined if the economic progress is to be sustained, taking into account the global changes that are taking place. Asia's success which has been described as a “miracle” has been well documented. It has been acknowledged that “the miracle” is not the result of any one single factor but rather, a confluence of factors. Structural change and pro-growth policies were coalesced synergistically with hard work ethics.
So tonight I want to stand back and review how I saw the big picture two years ago and how what has happened since has changed my view. And what evidence I am looking for to confirm my view of the likely future. Slow healing story Since the Great Recession of 2008/9 we have had the slowest recovery in our modern history – slower than the recovery from the Great Depression. For those of you familiar with children’s literature, one title for the story of the last eight years is “a series of unfortunate events”.1 In this big picture story, the UK economy was hit by a very unfortunate event, a massive financial crisis, leading to the deepest recession for 80 years. Three years later, as it is just beginning to recover, the economy is hit again by the effects – via confidence and financial market and trade – of the euro-area crisis. Three years on the economy finally picks itself up with a burst of strong growth. Unemployment falls at the fastest rate for 40 years, confidence recovers and business investment starts to grow strongly. But pay growth and hence incomes respond much less, reflecting in part the fact that productivity growth does not recover. And, in the latest chapter, just as we see signs of income growth and productivity growth coming back into life, a deflationary shock from a collapse of oil prices, which should boost the economy, allied to a slump in emerging markets, pulls us back and the economy begins to slow.

In the crisis, estimates of this rate were deeply into negative territory, which is why the MPC cut Bank Rate to 0.5% and launched quantitative easing (QE). The MPC’s asset purchases can be thought of as equivalent to reducing the level of Bank Rate, since both policies provide stimulus to activity and boost inflation. If you adjust real Bank Rate to factor in the effects of QE, the resulting, “adjusted”, rate is probably below zero at present.7 Our latest forecast is consistent with the natural rate and adjusted Bank Rate recovering slowly. But it is very much part of our thinking that the  5  See Nickell, S, and Saleheen, J. (2015) “The impact of immigration on occupational wages: evidence from Britain”, Bank of England Staff Working Paper No.574. 6  The GDP projections in the February 2016 forecast include a downside skew, reflecting the possibility that global activity and, in particular, growth in emerging economies may disappoint. 7  The adjusted measure of Bank Rate is calculated by comparing the estimated effects of QE with those for a cut in Bank Rate, and using that to convert the MPC’s asset purchases into an equivalent change in Bank Rate. Expected inflation is also subtracted from the adjusted rate to convert it from a nominal to a real rate and so make it comparable to the estimates of the natural rate of interest discussed in the text.
Firstly, the euro exchange rate and long-term interest rate will play an important role in shaping monetary conditions within the euro area, together with the level of short-term interest rates that will be steered by the ESCB. Secondly, although the degree of openness of the euro area will be much lower than is currently the case for any EU Member State, with “foreign” trade representing roughly 9% of GDP for the EU as a whole, the area will remain totally open to foreign capital flows. In that regard, I would like to stress that current holdings of French and German securities by non-residents, including cross-holdings, amount to 1,200 billion dollars. This highlights the importance of keeping a high level of confidence in the euro. Thirdly, in spite of the fact that the ESCB will inherit credibility from the participating national central banks, the ECB will have no track record of its own in targeting money or inflation. It will thus have to build up its reputation and pay due attention to those indicators that reflect most directly the level of confidence placed by investors in the euro. Of course, as underlined above, the external value of the euro will not have the status of an intermediate objective and the ECB’s strategy will not be based on exchange rate targeting.6 However, any depreciating trend of the euro would feed domestic inflation through a rise in import prices and, by undermining investors’ confidence, would contribute to the building of risk premia into the euro yield curve.

It will also publish the results of its tender operations. It could equally wish to release daily aggregate data on the reserve holdings, if averaged reserve requirements are in place, and on the use of the two standing facilities, as measured in both cases at the end of the previous day. 2.2. Intraday operations: the spillover from intraday credit into overnight credit as a borderline case To ensure the smooth functioning of the TARGET system, the national central banks will provide intraday liquidity to participants in the real-time gross settlement systems. This will be done in the form of fully collateralised intraday credit operations, in the sense that a credit extended during the day falls due before the end of the day. From a monetary policy point of view, such operations create the risk of a spillover of intraday credit into overnight credit that would undermine the control of the ESCB over the euro monetary base. In other words, the spillover of intraday credit into overnight credit in the books of the central bank can be viewed as a borderline case between payment systems and monetary policy issues. Within the euro area, this risk will be limited as end-of-day debit positions will be automatically considered to be a request for recourse to the marginal lending facility, i.e. an ESCB monetary policy instrument that bears a penalty interest rate.
It is the latter which is the correct measure of output and it differs from the former by an appropriate allowance for depreciation of capital  2  BIS Review 58/2001  goods. The proper measure of output is net domestic product, NDP. In normal circumstances, the growth rates of GDP and NDP are identical. But the two can differ when the average depreciation rate of the capital stock is changing, and that is exactly what has been happening recently. There has been a shift toward greater investment in short-lived assets, such as IT and computer software, and as a result the average depreciation rate has risen. Part of the additional gross output is simply replacing the higher proportion of capital that wears out each year. It makes no sense to include the higher depreciation as part of increased output and hence higher productivity. A change in technology that raises output today at the expense of output tomorrow is not an improvement in productivity. Using estimates of growth rates of GDP will lead to an overestimate of the rise in productivity growth during the transition to higher depreciation rates. The rise in average depreciation rates in recent years suggests that the magnitude of this overestimation could be non-negligible, although more research is needed. Moreover, as John Kay has pointed out, the measurement problem, and the overestimation of output growth, is even more acute when the price of capital goods is falling relative to that of final consumption goods.

And by the time the CCFF and the MPC’s second round of asset purchases got under way in earnest, the UK-wide lockdown was underway – and nearly all of us were working from home. Table 1: The Bank’s operations since 1.3.20  Funding Schemes  Asset Purchases  Liquidity Facilities  GBP bn (as at 27 May)  Change Stock since 1 outstanding March  Chart 15: The Bank’s balance sheet (%GDP)  Peak stock level since 1 March  ILTR  28  +21  28  1 & 3 Month CTRF  6  +6  11  USD swaplines  23  +23  37  APF Gilts  556  +121  556  APF CBPS  14  +5  14  CCFF  19  +19  20  TFSME  12  +12  12  TFS (closed)  107 -  107  FLS (closed)  2-  2  Total  769  Per cent 40 Banknote Covid-19 convertibility to gold crisis 35 reinstated Amalgamation of Treasury and Bank note issues Failure of Lehman Brothers  Banknote convertibility South to gold Sea suspended bubble  WW1  30 25 20  WW2  15 10 5  +207 0  Source: Bank of England  1700  1750  1800  1850  1900  1950  2000  Source: Bank of England, available here. Dotted line extends series to mid-2020, assuming completion of current asset purchase programme.
The ACPR’s pilot exercise and CCFD’s report Despite the Covid-19 crisis, the pilot exercise on stress tests which I announced here one year ago was launched in July and its results will be published next April. Top French institutions (both banks and insurers) are currently running it. This exercise is the first of its kind worldwide. Its goals are twofold: 1/ better assess the exposure of banks and insurers to climate risks (both physical and transition risks) in a forward-looking/dynamic manner. 2/ Assist the industry to better factor in climate change risks, improve models and assessment methodologies, and identify data gaps. Beyond that, we hope we are designing a methodology for climate stress tests that can be fine tuned over time and which other central banks and supervisors will be able to follow. The Authority also published a guide last May referencing the best practises regarding the governance of climate change risks for banks. On another note, the ACPR’s CCFD (our new Commission Consultative Climat et Finance Durable [Climate and Sustainable Finance Committee]) has been monitoring the public commitments of financial institutions to exit carbon-intensive industries. The ACPR-AMF preliminary joint report published this morning stresses the progress made by the French financial sector, but also the need for harmonisation. 1.2.

The NGFS is keeping its momentum On the international front, it is a source of great pride to see the NGFS, which we initiated almost three years ago in Paris – along with seven other founding members – and for which we provide the Secretariat, blossoming with more than 70 Members, covering the five continents. The NGFS is striving with more than six deliverables produced to date, following-up on the six recommendations we issued in our First Comprehensive report (April 2019). Let me highlight three of its latest publications in particular, which bring some building blocks to a climate-risk assessment framework:  1/3  BIS central bankers' speeches  - The “Guide for Supervisors”, published last May, sets out recommendations for banking and insurance supervisors (for example: identifying exposures of supervised entities that are vulnerable to climate-related and environmental risks and assessing the related potential losses); - The “Guide on climate scenario analysis for central banks and supervisors”, published last June, which aims to provide a common starting point for analysing climate risks to the economy and the financial system. Indeed, the ACPR pilot exercise builds on these NGFS climate scenarios; - The NGFS has also started to tackle the link between climate change and monetary policy by publishing “Initial takeaways” in June 2020. Based on a comprehensive review of existing literature and expert analyses, it provides early answers to the following questions: (i) How does climate change affect key macroeconomic variables?