samchain/econo-pairs-v1 huggingface dataset:
As for cooperation among authorities, the new resolution regime will take the form of a coordination framework. Accordingly, national authorities will ultimately maintain their discretion in the most important decisions, although they will be strongly encouraged to try to reach joint decisions on the ways to handle bank crises in resolution colleges. This is a realistic approach, already representing a major step forward. However, I think there may be a need for even more integration in the longer term. As an example, insolvency laws are addressed by neither the FSB standard nor the EU proposal – at least not its first phase of implementation – although they may well be important in practice. One also wonders whether there are other areas in which we could make progress. There were, and in fact continue to be, numerous proposals for the optimal European arrangement in the academic and policy sphere. Let me just mention three of them, which I find particularly inspiring. Most of you will be familiar with the influential arguments of Charles Goodhart and Dirk Schoenmaker, who have said that, as a form of coordination among national governments to handle cross-border bank crises, legally binding burden-sharing rules should be drawn up ex ante. Others, including David G. Mayes, have recommended adopting the prompt corrective action approach of the United States by designing a framework that would be based on stringent rules.

For the euro area I will say clearly: we need for cross-border banking institutions a European Resolution Authority, including or combined with a Resolution Fund, as well as a European Supervisor. This requirement is not only a necessity stemming from the high degree of interconnectedness among euro area banks, but  BIS central bankers’ speeches  5  constitutes also a major lesson of the present crisis. Indeed, some of the major imbalances that are besetting the euro area stemmed from uncontrolled behaviour of some banking sectors that eventually contaminated the sovereign. However, in the longer term, one can only envisage an integral EU resolution framework on a full EU basis, reflecting the highly integrated financial system in the EU. In parallel with the establishment of an EU resolution fund, we could gradually also start preparing to set up an EU-level resolution authority. Following a pragmatic approach, we could focus on the recently established Cross-Border Stability Groups. Common practical guidelines and blueprints could be prepared for them to foster a more harmonised approach for resolution across jurisdictions. With a more forwardlooking approach, on the basis of frequent peer reviews, qualitative assessments and stocktaking of best practices, we could gradually explore the possibilities of entering into more binding multilateral agreements within these groups, which in turn would pave the way for an EU-level authority. We should not forget that the supervisory reform process based on the De Larosière proposals is not yet finished. The review of the new EU supervisory authorities is scheduled for 2014.
Steering interest rates were cut all around the world, including in Sweden. Nevertheless, inflation continued to rise. A cold winter in Europe, problems with the Swedish apple harvest and poor fishing catches led to rising prices on fruit, vegetables and fish during the autumn. It is obviously easy to get caught up with details and fail to see the underlying changes. However, we could see even more clearly that the rise in inflation was not merely due to transitory factors, but entailed a broad rise primarily in domestic prices. This could be connected with the fact that secondary effects from the higher energy and food prices had made a greater impact in the consumer channel. Another important factor was that wage growth, despite the weaker development in demand, became even more problematic. Within many industries, for instance, construction, retail trade, banking and insurance, as well as the public sector, wages rose considerably during 2001. At the end of 2001/beginning of 2002, there were signals from confidence indicators that economic activity might have reached its lowest level in the USA and also Sweden and some optimism regarding the future began to spread. The effects of the terrorist attacks appear to have been limited, although some sectors were hit very hard. To sum up, we can conclude with the aid of this slide (OH 1 The Riksbank’s forecasts for GDP 1999-2003) that the year 2001 entailed constant downward adjustments in the growth forecasts.

With these few words, Mr Chairman, I would like to urge you, the participants, to be interactive in your discussions as this is one of the ways the workshop would add value to your knowledge and skills. I wish you fruitful discussions as you share your valuable experiences in macroeconomic analysis and modelling in support of Millennium Development Goals. I thank you for your attention. BIS Review 123/2007  3
Lim Hng Kiang: Impact of current issues to Asia’s growth and the global environment ahead Ministerial statement by Mr Lim Hng Kiang, Deputy Chairman of the Monetary Authority of Singapore and Minister for Trade and Industry, on Government Guarantee on Deposits, Singapore, 21 October 2008. *  *  *  Singapore remains stable and sound The global economy is slowing and the international financial system is still under significant stress. Amidst the current turmoil, the financial system in Singapore remains stable and robust. Financial institutions in Singapore continue to be sound and to operate normally. Our local banks and finance companies are financially strong and well-capitalised. They meet capital adequacy ratios in excess of MAS’ requirements, which are in turn higher than international standards. Foreign banks in Singapore are subject to strict licensing and admission criteria, and are required to maintain assets against their liabilities by an appropriate margin. Our financial markets remain stable and calm, and financial institutions in Singapore do not face funding difficulties in the interbank market. Public confidence remains high, and we have not had to take extraordinary measures. Why the need for Government guarantee Nevertheless, the Government has carefully assessed the international situation and its implications for Singapore. The actions taken by governments and central banks over the last few weeks in Europe and the US to recapitalise banks, purchase bad assets and guarantee bank borrowings in the wholesale markets have improved confidence in the international financial system, even though there remain significant problems and stresses.

Conclusion Let me reiterate that Singapore’s financial system remains sound and we are well-placed to meet the challenges facing us. This global crisis is unprecedented, and requires Singapore to respond effectively, decisively but also prudently. The provision of a Government guarantee on deposits is a necessary temporary measure to protect the interests of Singaporeans and the economy, which are in turn dependent on a strong and competitive financial sector. The risk of drawing on the guarantee and potential impact on Singapore’s reserves are low. This is a measured, precautionary action that will help us to weather the global economic slowdown and the ongoing financial crisis in international financial markets. BIS Review 127/2008  3
A reference to the letter appeared in Skidelsky, R. John Maynard Keynes Volume 1: Hopes Betrayed, 1883-1920, Macmillan, London, 1983, page 280. The official attendance on 13 September was 38,575; the Villa scorer was the incomparable Clem Stephenson, who may have lacked pace but whose passes were, according to contemporary observers, “as sweet as stolen kisses”; and the ‘most expensive’ right winger for Blackburn Rovers was John “Jocky” Simpson who cost Blackburn a record fee of £ when he was transferred from Falkirk in 1911. BIS Review 5/2004  1  do those prices come from? Each month - on “Index Day” (either the second or third Tuesday of the month) - around 300 “price collectors” visit a wide range of retail outlets and record the prices charged for 130,000 different items, ranging from small loaves of brown bread to large lawnmowers. Each of these different items will have changed in price by a different amount. A key difference between the CPI and RPIX is how these 130,000 price changes are averaged to give a measure of overall inflation. RPIX inflation is, for most goods, an arithmetic average of the inflation rates for each item. In contrast, CPI inflation is measured as the increase in the geometric average (the average of the logarithms) of the different prices.

But just as changing from Fahrenheit to Centigrade has not proved easy for those who had become used to the old measure, so it will take time for us all to adjust to the new inflation measure. Unfortunately, there is an additional complication. Unlike the translation between Fahrenheit and Centigrade, the difference between RPIX and CPI inflation does vary with the economic temperature. That is because the “formula” effect is not the only difference between the two measures. RPIX includes both house prices and Council Tax. Those items are omitted from the basket of goods and services used to construct the CPI. So when house prices are rising faster than prices in general, as has been the case in recent years, RPIX exceeds CPI inflation by more than the half a percentage point represented by the “formula” effect. Over the past 15 years, when data have been collected on both measures, RPIX has exceeded CPI inflation by about three quarters of a percentage point. It is possible to argue, therefore, that moving from a target of 2.5% for RPIX inflation to one of 2% for CPI inflation represents a small increase in the long-run effective target. But no reasonable person could describe a symmetric target of 2% as inconsistent with price stability, defined as a state of affairs in which inflation does not materially affect economic decisions by families and businesses.
In particular, the current broad-brush treatment of credit risk means that the capital requirement in respect of credits of widely varying quality is the same. And though the existing Accord was modified a number of years ago to incorporate capital requirements in respect of market risk, it doesn’t require banks to hold capital against many other risks they run - for example, operational risk, interest rate risk in the banking book, and business cycle risk. So there are many good reasons why there should be a Basel II to address these weaknesses in the current Capital Accord. But while this objective of better matching capital requirements to the risk taken is certainly very worthwhile, it’s really only part of the story. For the aims of Basel II are somewhat broader than this. Basel II is not about creating some wonderful all-singing all-dancing system of capital requirements to keep the banking supervisors happy. It’s not a case of supervisors trying to dictate how banks should manage their business. On the contrary, it’s quite the opposite. For Basel II is an attempt to mould supervisory capital requirements to the ways in which banks actually manage their business. Moreover - and this is the crucial point - it aims to relate the capital requirement not only to the amount of risk they undertake, but also to how well they manage that risk.

This will be more in the nature of a gradual evolution than a “big bang”. There are really two main strands. The first will be a more systematic identification of risk, and covering a wider range of risks. The second will be the increased use of quantitative techniques, including modelling and stress-testing. Let me talk a little bit about each of these in turn. First is the more systematic identification of risk, covering a wider range of risks. This is something on which I would say that Hong Kong is already in many respects quite well advanced. For several years now the HKMA has adopted what we term a “risk-based supervisory approach”. This involves a number of steps. First, the inherent risks being run by an institution in each of its business lines are identified. Eight inherent risks are focused on - credit risk, market risk, interest rate risk, liquidity risk, operational risk, legal risk, reputation risk and strategic risk. These risks are then classified as either “high”, “moderate” or “low”, taking into account the current position and likely future developments. The risk control practices to manage these inherent risks are then evaluated, and classified as “strong”, “acceptable” or “weak”. This evaluation takes account of such factors as management oversight, policies and procedures, risk measurement and internal controls. The final step is to combine the assessments so as to determine whether, for each business line, the risk controls are adequate given the level and direction of risk.
It is an indispensable part of our efforts to make Singapore a premier financial hub in Asia, and we have every confidence in getting there. 6  BIS Review 14/2001

They will again be put to the test when the terms-of-trade change is reversed and the gains either fully or partly dissipate. Monetary policy in Norway is oriented towards low and stable inflation. Low and stable inflation provides enterprises and households with an anchor for inflation expectations. Given that there is confidence in the nominal anchor, monetary policy shall also contribute to stable developments in the real economy. Norges Bank therefore operates a flexible inflation targeting regime. This means that weight is given both to variability in inflation and variability in output and employment in interest-rate setting. Monetary policy is facing particular challenges. Inflation has been considerably lower than the inflation target during the past three years. During the same three-year period, economic growth has been high, and higher than our estimate for long-term growth potential. The output gap has shifted from negative to positive. Unemployment is low and falling, and the increase in house prices, equity prices and credit has been high. Monetary policy has been and continues to be expansionary. Real interest rates have been low, and considerably lower than what is regarded as a neutral level. The expansionary monetary stance must be seen in the light of the fact that inflation has been very low and that there was idle capacity for a longer period. BIS Review 49/2006  1  The economy is periodically exposed to unexpected supply- and demand-side disturbances that affect both inflation and output.
And this year, we will consult on giving greater access to our balance sheet as well as our infrastructure to non-bank payment providers. There is also still considerable opportunity to improve the domestic retail payment systems. FPS is not available, unlike in some other countries, at the till. And while the card schemes offer instant transaction it can take a number of days for merchants to receive the value of the transaction. These add to costs which are eventually borne by consumers. Two years ago, the 3 main scheme companies in the UK were consolidated into one entity that now is developing a new single ‘instant payment’ interbank system - the ‘New Payments Architecture’. The aim is to provide a faster, more resilient, and more efficient interbank system that is open to bank and non-bank payment service providers, and one that will enable and encourage innovation and competition including instant payment at the point of sale. Innovation and competition can lead to better, cheaper, payments services in the economy. But, the payment systems on which we depend have to be reliable and robust, prudentially and operationally. Regulation, therefore needs to keep pace with the changes in the payments landscape and the proliferation of new actors. The same risks have to be subject to the same regulation. The current regulatory regime focusses on the banks and core payment systems that have traditionally performed most of the functions, the ‘chain of actions’, involved in making transactions.

It has not been about the reliability and security of commercial bank money as it has become more dominant in the economy. It is interesting to observe that in the eighteenth and nineteenth century there was a similar shift from state money, in the form of coins, to private money, in the form of banknotes, which in those days were bearer claims issued by private banks. That eventually generated a very different reaction, with the result that private banks in most countries were banned from issuing bank notes. 4  And I think that the lack a similar reaction to the increasing use of private money at the end of the last century was in principle the right one. Unlike in the nineteenth century, commercial banks operate under public regulation and with a guarantee of retail bank deposits.5 While banks create the bulk of money in the economy, the overall supply is controlled by the Bank of England through monetary policy. In such a framework, there is the necessary assurance, albeit indirect, about the robustness and reliability of commercial bank money: that is, of the claims we all hold on the banks that are licenced to take deposits and that provide our transactional bank accounts. I have said that this was the right reaction ‘in principle’. In practice, we discovered in the great financial crisis that the prudential controls on banks that took deposits and the deposit guarantee scheme were not strong enough.
Closer to home in this country, the Euro area economy is a good deal better placed to withstand the US slowdown, although we are all bound to be affected to some degree. For most of last year the Euro area economy performed relatively strongly, with overall output growth well above trend, and unemployment in the area as a whole continuing to fall from its earlier chronically high level. A problem, of course, was the persistent weakness of the Euro in foreign exchange markets, despite strong "fundamentals" in terms of conventional analysis. This was largely the result of an outflow of capital, much of it drawn into the US by the magnetic attraction of prospective corporate earnings growth – and apparently continuing despite the US slowdown. The euro's weakness gave rise to widespread – but in my view unjustified – criticism of the ECB. The task of a central bank operating an independent monetary policy is necessarily a limited task, not least because it effectively has only one instrument – its control over short-term interest rates. Its role – as I said earlier – is essentially, to use that instrument to influence aggregate demand in the economy, with the aim of keeping demand broadly in line with the supply-side capacity of the economy. The measure of its success is consistently low inflation. Against that criterion the ECB has been relatively successful.

The outcome is obviously the major uncertainty surrounding the global economic prospect, and policymakers elsewhere can only monitor, continuously and very closely, the emerging evidence and react to that in the light of its likely impact on their own situation. The US slowdown comes at a particularly bad time for Japan which is already suffering from a combination of weak domestic demand – particularly consumer demand – and supply-side constraints reflecting pressures on the banking system, heavily burdened with non-performing loans, and an acknowledged need for restructuring parts of the non-financial sector. Japan has pretty well exhausted the scope for macro-economic stimulus. Successive fiscal packages focussed on public works, and a sustained period of attempted monetary expansion, at near-zero interest rates in the face of deflation, have failed to overcome a high rate of precautionary saving by an ageing population facing an uncertain economic future. The policy emphasis of the new Japanese administration appears to be shifting towards firmer action to bring about supply-side reform in the belief that this will help to engender greater confidence. The danger is that, to the extent that more aggressive restructuring  2  BIS Review 47/2001  results in bank ruptcies and higher unemployment in the short term, that in itself might tend to weaken consumer demand for a time before the benefits of the restructuring come through. I make no judgement about the prospects in Japan. You certainly are better placed to do that than I am!
This has raised questions on whether in fact regional financial integration is important, given that the lack of it has not been an inhibiting factor to economic integration. ASEAN economies, however, have now reached that stage of development in this decade whereby greater regional financial integration will raise further our growth potential. An important key to unlocking our full potential is to accelerate this integration and cooperation within the ASEAN region. Main benefits of financial integration An intensification of financial integration in ASEAN will not only serve to enhance growth at the national level, but also act as a catalyst to achieve a growth that is mutually reinforcing  BIS central bankers’ speeches  1  for the economies in the region. Regional financial integration will bring about the more effective intermediation of funds and thus the efficient allocation of resources in the region. Excess savings in one country can be channeled into productive investments in another country within the region, thereby promoting growth. The ASEAN region has one of the highest savings rate in the world, at approximately 30%, as well as international reserves amounting to USD800 billion. The bulk of ASEAN’s surplus funds, however, are intermediated mainly through the international financial markets before being reinvested back into the region. In particular, more than 90% of cross-border portfolio investment flows are channeled to the advanced economies.

At the start there were 11 member states; today we are 16. Nine other countries have no “opting out” clause and are supposed to enter the euro area when they meet the criteria. We will see what happens. Needless to say that any country that seeks to join EMU will have to fulfil all the Maastricht criteria not only for one year but also on a sustainable basis. Il Sole 24 Ore: How do you judge the mood in the countries that are queuing to enter the euro area? Do you see a broad acceptance of the idea that EMU commits the destiny of a country? Trichet: In some cases there is a clear and broad political consensus to join EMU. In others there is not. In any case I consider that you have to judge the process through the lenses of history. This said, I do believe that all EU institutions and governments should point out the euro area’s meaning in terms of sharing a common destiny. More specifically, we all must understand that we have to fully accept peer surveillance to preserve the good functioning of our monetary union. Il Sole 24 Ore: What about Germany: Convincing the Federal Republic to help Greece was a long and difficult process. Do you think that Germany believes in the common destiny created by the euro? Trichet: I trust that all EMU countries are aware of this fact.