samchain/econo-pairs-v1 huggingface dataset:
oil and gas M anufacturing Retail trade, hotels and restaurants F inancial ente rprises, real estate and business activities Other  7% 1%  13% 12%  67%  Source: Norges Bank SG 240802  US companies have been pioneers in developing the Norwegian petroleum sector, which is crucial for us. Last year, Norway was the world’s third largest exporter of oil. Even today, two thirds of US direct investments in Norway are linked to our petroleum sector. The Government Petroleum Fund Market value in billions of USD1). End of June 2002 50 45 40 35 30 25 20 15 10 5 0  Stocks Bonds  Europe  US  Asia and Oceania  America ex US  1)Bond figure for US incl. USD 3 bn dollar-denominated issued by non-US entities  Source: National Central Banks, IMF SG 240802  Total capital in the Government Petroleum Fund. End of year. Per cent of GDP 100  100  80  80  60  60  40  40  20  20  0  0 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10  Source: Ministry of Finance. National Budget 2003 SG 240802  BIS Review 70/2002  5  Revenues from the petroleum sector have generated an annual fiscal surplus of some 10-15 per cent over the last few years. Since 1995, the fiscal surplus has been invested in the Government Petroleum Fund. The Fund invests only in foreign markets.

This global resolve is in congruence with the role and relevance of Islamic finance on the global economic environment in this post-crisis era. While the amount of funds managed in the Islamic financial system is still only a fraction of the total assets of the international financial system, it represents that portion of financial activities that is truly supported by underlying productive capacity that connects with the real economy. Despite the unprecedented disruptions in the international financial system, studies show that the Islamic financial industry has weathered the global financial crisis relatively well. The financial crisis has thus brought about a greater appreciation amongst the international financial community on the distinct nature and in-built strengths of Islamic finance. Based on the Shariah requirement that Islamic financial transactions needs to be supported by an underlying economic activity, its expansion contributes to income and wealth creation. In addition, the profit sharing and risk sharing characteristics in Islamic finance strengthen the incentives for the financial institutions to ensure the profits are commensurate with the risks being assumed. It is this form of finance that we would want to encourage. With this underlying foundations, efforts are being directed to build the domestic financial infrastructure. A challenge that is being specifically addressed is the development of an active secondary global sukuk market. In this regard, there has been a lack of trading in the secondary market especially in the USD sukuk market as the investors tend to buy-and-hold the instruments until maturity.
Notwithstanding the above, the French lessons programme is a very challenging one to our staff in that students are not only required to attend, at least, 90 per cent of class work conducted twice a week for two hours, but are also required to take examinations every ten (10) weeks; implying that only those employees who succeed in the examinations are allowed to proceed to the next advanced level. Your Excellency Following the commencement of the French lessons, I am pleased to inform you that this programme has already started showing encouraging results, as evidenced by the fact that at the end of the first segment of the beginners’ course, all those who took the examinations passed and are progressing to the next stage. The results could have been even better had all the 78 enrolled students attended tuition and taken the examination as scheduled. Let me also clarify here that some employees missed the examinations due to the call of duty and not out of lack of commitment. In this regard, I wish to assure Your Excellency that as a sign of commitment on the part of individual employees and the bank, a crush programme has been put in place to enable those who missed the first examination to sit for it and catch up with the rest of the class by April this year.

Although these numbers might ring some bells, the performance of the Chilean index does not differ significantly from other regional stock markets and its recent behavior might just be a catch up from very low levels. Measured in real terms, its current value does not seem to be an outlier either (figure 7). Figure 7 120  MSCI: Latin America  Real IPSA  (fixed-base index: January 2013=100)  (fixed-base index: January 2001=100)  120 Mexico  Latin Chile America  Colombia  Peru  30 13  14  15  350  Brazil  90  60  350  16  17  90  250  250  60  150  150  30  50  50 01 03 05 07 09 11 13 15 17  Sources: Central Bank of Chile and Bloomberg. 12. The prolonged strike at the Escondida, the open-pit copper mine with the world’s largest production, will have a very important effect on our first quarter GDP figures. It already did in the Imacec of February, which showed a yoy contraction of 1.3%, with a fall of 17.1% of its mining component. Since the strike ended in late March and resuming normal production levels is not instantaneously, the figures of that month will also be affected. If you add the continued weakness in construction, the economy could experience an expansion close to 0% in the first quarter of the year.
I was struck by a trivial example of where a bad equilibrium path can lead on a recent visit to the US. I opened the mini bar in my hotel room to find it empty save for a small slip of paper. Here is what it said: “A personal note to you.... We have made a renewing change to our heavenly guest rooms. Our refreshment centers will no longer be pre-stocked. Please be aware the refreshment center cooler is not intended as a refrigeration device” The empty-mini-bar equilibrium is not a good one. How do you get there? I think the story is this: mini-bar prices are high; they are high because some people conveniently tend to forget how much they may have used their mini-bar when they come to pay the bill and that forgetfulness gets worse the higher are prices; but then the mini bar prices need to be even higher as the forgetfulness seems to get worse. This vicious cycle ends up with mini bars that are empty save for a “personal note to you”. Good economic policies can help prevent bad equilibria and reduce the chances of vicious circles. For banks, I believe the most direct way to do this is to prevent an initial (limited) fall in the value of assets triggering sharply higher concerns about their solvency.

This is not meant to be a realistic model – in fact it isn’t even a model, it is simply a set of stark assumptions. But it illustrates why using interest rates to try to control leverage – at least for companies – may not be at all effective. And I believe that high leverage has been at the centre of the financial problems of recent years. Bean et al (2010) provide some evidence on the impact of monetary policy – that is interest rates – on credit and asset prices. They find that monetary policy has some effect on asset price inflation, but little on bank lending. For example, in a counter-factual experiment using vector auto-regressions, they estimate that for the US if policy rates had started rising in 2003 and peaked at around 7.5% in late 2006, then the peak of the real house prices would have been around 7.5% lower; real credit growth would have been just 3% lower by the end of 2006. For the United Kingdom, if Bank Rate would have been around 7% from the end of 2004 to mid-2007, real house prices would have been around a fifth lower at the end of 2006, while the stock of real credit would have been only 4% lower, trivial compared to the almost 50% increase in the stock of credit seen over the period.
Some years ago we published estimates of the exchange rate in this equilibrium; we also indicated an interval for the real TCW exchange rate index that has subsequently been cited by many journalists and market players. Estimates of that type are not, however, a direct guide to the krona exchange rate that would be appropriate for ERM2 membership. Other factors that have to be considered include the economic situation in Sweden and the rest of the world. Moreover, the estimates are expressed in terms of the TCW index, which covers all the rates for Sweden’s foreign trade, not just the euro area. The assessment must also allow for the fact that, at least in the coming years, the Swedish economy will not be in long-term equilibrium, which implies both internal and external balance. It should also be borne in mind that however sophisticated, calculations of this type do not yield precise results. In recent months the TCW index has fluctuated between 124 and 125. This is some way from the estimated long-term equilibrium range. The main conclusion from our earlier studies—that in the longer run it is reasonable to expect the krona to strengthen—still holds. But it does seem reasonable to count on this being a gradual process that emerges as the economy approaches a situation with both internal and external balance. On various occasions in recent years it has turned out that we were over-optimistic about the adjustment’s future rate.

The depreciation of the euro has also contributed to easing financing conditions. At its meeting on 3 September 2015, the Governing Council of the ECB expressed its readiness and ability, if required, to allow for more accommodation in its monetary policy stance. To this end, it could – if considered necessary – use the flexibility already embedded in the purchase programme to increase its size and extend its duration or modify its composition. The Spanish economy To conclude, I would like to briefly discuss the Spanish economy and its outlook. During 2015 the Spanish economy has been in what we could call a “virtuous triangle”, by simultaneously meeting three conditions: robust inflation-free growth, job creation and an external surplus. In 2015 we are going to achieve GDP growth of more than 3%, a negative average annual inflation rate, a current account surplus of more than 1 pp of GDP, and growth in employment and social security registrations, prompting expectations of an unemployment rate of less than 20% of the labour force by end-2016. However, the degree of uncertainty in economic projections has widened notably in recent months and the risks of slippage have risen owing to the downturn in the outlook for global growth. However, the Spanish economy is in a position to meet these challenges. The reforms implemented to date promote economic recovery and contribute to increasing Spain’s resilience in the face of exogenous shocks.
To promote economic research of the highest quality, it is essential that the research activities of the HKIMR are, and are seen to be, carried out freely, without interference from interested parties, including the HKMA. It is therefore not desirable for the HKMA to exercise control of the  BIS Review 38/2003  1  HKIMR's day-to-day activities. But, of course, the professional quality and academic integrity of its activities need to be monitored and ensured. For this reason, a Council of Advisors, whose members are all distinguished economists working in and outside of Hong Kong, has been established. Many of them are in fact here today. The role of the Council is to ensure the quality of the HKIMR's activities and to alert the Board of Directors if shortcomings become apparent. While the relationship between the HKIMR and the HKMA remains close, the HKIMR does enjoy independence in research matters. One consequence of this is that the views expressed in its different publications do not necessarily reflect those of the HKMA. One of the distinguished members of the HKIMR's Council of Advisors is our first speaker today, Charles Goodhart, and it is my great pleasure to introduce him. It was very much his visit to Hong Kong that gave the HKIMR the idea of organising this workshop. As you all know, Charles is one of the world's foremost monetary economists and an expert on central banking issues.

I am not sure if this is a dimension covered in Professor Genberg's paper on Endogenous Dollarisation, but it is of particular relevance to Hong Kong. The third paper, to be presented by Professor Kumhof, deals with issues regarding price dynamics. Professor Kumhof's paper focuses on pricing policies and inflation inertia, at a time when we are experiencing deflation in Hong Kong: I am sure, however, that there are insights that we can derive from the paper and the discussion. Research on price formation is high on the agenda of the HKIMR and the HKMA, and possibly in academic and other organisations active in economic research in Hong Kong. We have had deflation for some five years now and we are still debating the relative importance of cyclical and structural factors behind that deflation. There is also debate on whether measures could and should be taken to limit the damaging effects of deflation, notwithstanding the fact that Hong Kong is a highly externally oriented economy. Views on price dynamics will contribute to these debates. As you know, the HKIMR was established by the HKMA. This reflects the importance we attach to thorough analysis of monetary and financial issues that Hong Kong is facing. Developments in the local, regional and global economies provide many opportunities for Hong Kong, but also serve as potential sources of risks. It is therefore critical that we actively seek to understand these developments.
For centuries, this question has been the “bridge of donkeys” (pons asinorum) for philosophers’ apprentices. Supporters of the synonym theory highlight a common etymology between the two words – morality is the Latin translation of Greek ethos. Despite their initially identical meanings, the two words nevertheless have followed different paths over time: “morality” can be described as a “hard concept”, similar to the fundamental rules engraved on Moses’ stone tablets or in the code of Hammurabi. In contrast, “ethics” refer to a softer and less binding concept, a kind of existential version of morality with a more personal dimension. I will use the word ethics in that way in this speech. The question of interest rates is a noteworthy example of the way a moral prohibition can evolve into a more flexible and ethical approach. From a moral overall ban, ethically “fair” interest rates have been progressively distinguished from usury rate, with the latter still being forbidden. Page 2 sur 10 “Homo economicus” invented currency very early in human history, and it is striking that almost as soon as currency was born, countless abuses were seen as well: manipulation of gold or silver weight in coins, skewing of scales, and so forth. Men therefore quickly summoned ethics to define how to govern its use. However, human kind has also shown a tendency to exempt itself from the rules it had previously established, before setting new rules again in order to respond to the problems caused by deregulation.

Therefore, a scenario of recovery in net exports such as that described requires Spanish firms to push ahead with the improvement in competitiveness made by them in response to the sharp ongoing adjustment in the structure of world trade due to the entry of new competitors. At the same time, the slower momentum of final demand should manifest itself in a certain slowdown in imports, curbing the leakage of spending out of Spain. However, as I indicated in September, it is precisely in the external economic environment where the main factors of risk to the macroeconomic scenario outlined above are to be found. If the recent bout of financial instability and of heightened international uncertainty were to significantly affect the buoyancy of Spain’s export markets, the capacity of external demand to contain the adverse impact of a slowdown in domestic spending would be diminished and, accordingly, the efforts required to improve competitiveness would be even greater. Domestically, the continued dynamism of employment and the gradual normalisation of the property market are fundamental for keeping income expectations and, consequently, agents’ spending plans on a mildly slowing course. In any event, the Spanish economy is witnessing a process in which construction investment is diminishing in importance as the engine of growth. Therefore, it is essential to have a sufficiently flexible mechanism of resource allocation to enable industrial activity and services to take over from construction, furthering the change in output composition that has been taking place in the last few quarters.
•  MAS is working with several other banks and insurers on their plans to establish and expand their analytics and innovation teams in Singapore. At the heart of a Smart Financial Centre must be a progressive information technology architecture. Two key characteristics of such an architecture are: •  common standards; and  •  seamless data sharing. Common standards Let me begin with common standards. They are key to making systems interoperable and harnessing fully the benefits of new payments technologies. Lack of standardisation leads to fragmentation, inefficiency, and inconvenience. •  Take for example electronic funds transfer. •  Without a common standard, an application written to effect funds transfer for one group of financial service providers may need to be rewritten to work with another group of financial service providers that operate on different interface standards. Common standards allow systems and applications to operate efficiently and seamlessly when different financial service operators and solution providers come together. •  The EMV chip is one of the most impactful examples of a common standard. It is all the more impressive as it was an industry initiative without any government involvement. •  NFC, or near-field communications, represents the next big thing in common standards. It is enabling contactless payments on mobile devices like smart phones. Yet another good example of a common standard is ISO 20022. This is the international standard for electronic data exchange among financial institutions. •  Its growing adoption has helped to make payments platforms interoperable and reduce inefficiency.

This will allow their tech-savvy customers’ systems to process payments without human intervention. •  BNY Mellon has built an internal online API catalogue for services such as pricing, calendars, market and reference data, etc. This has helped its developers to significantly reduce steps to build new innovative apps. More efficient data submission Another potential benefit from APIs will be a reduction in the cost of regulatory data submission. Currently, data submission to MAS is still partly manual. We will improve this process. Our vision is for data to flow seamlessly in both directions between systems in the financial institutions and MAS. This will reduce the ongoing cost of regulatory submissions. This is not a trivial exercise, given the volume and diversity of financial data. Well-crafted APIs are essential for this vision to work. MAS will closely engage the industry to ensure that these APIs are clear, simple to implement, and extensible. Conclusion I spoke earlier about the telegraph. Despite the breakthrough in world travel and communication enabled by the telegraph and other technologies, the globalisation of the late 19th century soon faltered and reversed. There is a lesson here. Technology alone does not make connections or create better understanding: it merely gives us the means to make those connections. •  What is more important is the spirit of openness and collaboration. •  Common standards and seamless data sharing are in this spirit.
The changing geopolitical landscape  In conducting monetary policy, in supervising financial institutions and in developing Singapore as a financial centre, MAS must be keenly aware of the larger geopolitical picture. International events and politics play a big part in the economic prospects of our region, including Singapore. Let me first sketch for you the geopolitical situation. Though there are many uncertainties and serious challenges, international relations are essentially stable. The US is unrivalled as the pre-eminent global power. As terrorism is a serious threat to the American homeland, the global fight against terror will remain President Bush’s overriding priority. He will have to find a way to stabilise the situation in Iraq, hold elections and hand over the task of rebuilding Iraq to the Iraqis. He will want to rebuild ties with Europe. On the economic front, President Bush will try to keep the US economy humming, while managing the growing trade and fiscal deficits and weakening dollar. In Asia, both China and India are on the rise. They will exert an increasing influence on global economic developments and trade and capital flows. China is now the location of choice for a wide range of manufacturing activities. It produces goods so cheaply that even Bangladesh complained about it. When I was in Bangladesh recently, they complained that Chinese textiles were edging out their own textiles in Bangladesh. But China is not a sweatshop for cheap, shoddy consumer goods. MNCs and Chinese companies produce high-quality goods there for the international market.

On the government level, borrowings would really be handy when it wants to keep up public expenditure and to enhance welfare payments, healthcare and the military. This would not only improve the standard of living and employment, but also help boost national power and speed up economic growth. The list of wonders that borrowed money can bring goes on, but we almost forget there is a catch, that is, debts must be repaid somehow some day; and the higher the interest rates, the more we will have to pay back over time. For individual borrowers, except for those with a handsome pay rise, they can only hope to pay off earlier debts by reducing consumption in the days ahead. Well-run enterprises should have no problem servicing their debt if their business expansion financed by loans does indeed enhance their productivity and competitiveness. Likewise, heavily indebted governments will be able to service their debts only when they have sustained economic growth and rising tax revenues. In other words, the ability to repay debt hinges on increased productivity and improved income, or otherwise, reduced future spending and increased savings. But despite the substantial GDP growth in major industrialised countries in the past 30 years, debts in these countries have piled up concurrently at an even more alarming rate. Advanced economies from across Europe and the US to Japan have all sought to boost economic prosperity, standard of living and employment with ever more borrowings and increased consumption and public spending.