samchain/econo-pairs-v1 huggingface dataset:
Japan, together with the US and China, form the strategic triangle that undergirds regional stability. With India's rise, a new strategic triangle of US-China-India will, in time, be superimposed upon it. Stable relations amongst the key players will be critical for regional peace and development. 33. Recent tensions in Sino-Japanese relations are of concern. Such strains are part of the deep ambivalence with which Beijing and Tokyo view each other. Both China and Japan have their respective positions on the history issue. China's attitude towards Japan is coloured by Japan's reluctance to come to terms with its World War II history, while Japan's attitude towards China is shaped by its anxiety over how China's rise will alter the regional balance and affect Japan's interests. Domestic politics and rising nationalism in both countries are complicating factors. 34. Fortunately, both countries want to avoid a collision. There are strong incentives for China and Japan to deepen ties. China needs investments, technology and know-how from Japan, while Japan needs the markets and production base in China. 35. The tensions in Sino-Japanese relations are understandable because there has never been a period in history when China and Japan are simultaneously strong powers. Today, both countries find that they must treat each other as equals. Naturally, the search for a new modus vivendi will be fraught with anxiety. While not forgetting the past, both sides must find a way to close the history issue and write a new chapter of cooperative relations.

Japanese companies can also take advantage of Singapore as a hub for knowledge and market intelligence. Over the years, we have developed a network of institutions that have a deep reservoir of knowledge on China, India and Southeast Asia. Our businessmen are also familiar with these countries. We are now building up links with the Middle East. 46. Japanese companies based in Singapore can enjoy not only benefits from the JSEPA, but also 10 other FTAs that Singapore has concluded with major economies like the US, South Korea and Australia. I would like to highlight the Comprehensive Economic Cooperation Agreement (CECA) between Singapore and India as it is the first comprehensive FTA that India has signed with any country. Conclusion 47. The rise of China and India will shift the global economic centre of gravity from West to East. Remaking our economies cannot be an occasional exercise. Governments must respond boldly and continuously to the imperatives of our changing times. Likewise for companies. This is the only way to ride the rising Asian tide. 48. Thank you. I will be happy to take your questions. BIS Review 83/2005  5
Flexible inflation targeting  The Riksbank and all the other inflation-targeting central banks conduct flexible inflation targeting rather than strict inflation targeting. Flexible inflation targeting means that monetary policy aims at stabilizing both inflation around the inflation target and the real economy, whereas strict inflation targeting aims at stabilizing inflation only, without regard to the stability of the real economy, what Mervyn King (1997) has described as being an “inflation nutter”. By stabilizing the real economy I mean stabilizing resource utilization around a normal level, keeping in mind that monetary policy cannot affect the long-term level of resource utilization. Because of the time lags between monetary-policy actions and their effect on inflation and the real economy, effective flexible inflation targeting has to rely on forecasts of inflation and the real economy. Flexible inflation targeting can be described as “forecast targeting”: The central bank chooses a policy-rate path so that the forecast of inflation and resource utilization “looks good.” By a forecast that looks good I mean a forecast either in which inflation is already on target and resource utilization is already normal, or in which inflation is approaching the target and resource utilization is approaching a normal level at an appropriate pace. More precisely, it means a forecast for inflation and resource utilization that as effectively as possible stabilizes inflation around the inflation target and resource utilization around its normal level.

Governance may be seen as the manner in which power is exercised in the management of a country’s social and economic resources for development. We all know that good governance involves setting adequate policies, programs and regulations, which then have to be translated into legislation. As I often say, sustainable development hinges on the consistency of economic policies – there is no substitute for consistent, sound and stability-oriented economic policies. In this context, institutions are central to the way a country is governed and these are the formal and informal rules in a society. As the Nobel Prize winner Douglas North pointed out “the formal rules are set by the state through laws and regulations, while the informal rules come from the culture, history and experience of each society”. Only in the last 10–15 years most economists have discovered good governance – with its four pillars: transparency, accountability, predictability and participation – as a major determinant of economic growth. Thus, economic governance implies the need to ensure stable, transparent and predictable rules that encourage competition and fair access to public services. It is achieved through a country’s public and private sector institutions and the civil society. Moreover, the recent international crisis has underscored the need for an in-depth reform of economic governance at both European and global levels.
Jean-Claude Trichet: Structural reforms for the European economy Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the Forum ABC, Madrid, 15 February 2008. *  *  *  Ladies and gentlemen, I would first like to thank very warmly the organisers for inviting me to speak here today in the context of the series of conferences organised by the “Forum ABC”. In my intervention I would like to share with you my views on “Structural reforms for the European economy” and on the importance such reforms have for job creation and productivity growth. This is indeed a major policy issue and, I believe, a topic of great interest to everyone here too. After all, high employment and high productivity levels are the key preconditions for a high level of real income and living standards in our societies. If we look back over the last decade, employment growth has been strong in the euro area and even more so in Spain. However, over the same period, labour productivity growth decelerated significantly in the euro area and in Spain in particular. A key challenge therefore is how to simultaneously achieve solid employment and productivity growth. It is well-established in the economic literature that structural reforms and institutions are among the main factors that explain the different performance of per capita income growth across countries over the medium to long term.

The financial system was only saved from total seizure through the prompt and internationally co-ordinated action of the authorities to inject extra capital into the banks, guarantee their funding and boost the provision of liquidity. Around the same time, the confidence of businesses and households, already weak, collapsed. Many businesses told us the same story – that orders “fell off a cliff” in September and October. That story was repeated around the world, and is evident in the surveys of business activity (see Chart 1) and more recently in the first estimates for growth in the final quarter of last year. The global economy is now in the throes of a sharp and synchronised downturn. Banks have responded to the loss of confidence in the financial markets, and the deterioration in economic prospects more generally, by tightening the terms and availability of credit so as to bolster their weakened balance sheets. That threatens to generate an adverse feedback loop: the worse the outlook becomes, the lower the chance of a loan being repaid and the more cautious the banks become about extending new loans, making the outlook yet bleaker. We hear many stories of businesses finding credit harder to get, though I understand that a recent NFU survey found that farmers’ relationships with their bankers remained fairly good. The only bright spot – at least for most of us, if not for you – has been the collapse in commodity prices as the slowdown spread to the emerging market economies.
Thus, price stability is the main objective of monetary policy in all of these countries and has in fact become the recognized single target for monetary policy in numerous countries. The reason for this emphasis on price stability is that it creates the best conditions for balanced growth and increased welfare. The Icelandic financial market has developed very rapidly over the last ten to fifteen years. It is a small market by definition, but has nevertheless the same institutional set-up as larger industrial countries. Aside from the Central Bank, these include commercial banks, savings banks, securities companies, various investment funds, insurance companies, large and important pension funds and last but not least a stock exchange - linked with the other Nordic exchanges - where the shares of 60 to 70 Icelandic companies are listed and traded on regular basis. Supervision of the activities of all of these institutions is in the hands of a unified financial supervisory authority that has broadly the same legal powers and follows the same methods and standards as supervisory agencies in other European countries. Important rationalisation has taken place in the Icelandic financial system. Until a few years ago, two of the main commercial banks were fully government owned and so were a host of so-called investment credit funds. The funds were unified in a single institution, which was subsequently privatised.

Copper prices at the London Metal Exchange (LME) fell from highs of $ per tonne in July 2008 to as low as US $ per tonne in December 2008. The dramatic decline in the price of copper led to reduced earnings from copper exports by mining companies and subsequently reduced earnings for the Government from mineral royalties and corporate taxes from this source as well as falling income taxes from employees in the mining and related sectors. The reduced export earnings for the mining sector also translated into lower investments and production. Further, some mining companies, which were carrying out exploration works, discontinued these activities. Ultimately, all this led to job losses in the country’s extractive industry, leading to lower income tax revenue. In addition, the downturn caused a reduction in the Government’s capacity to develop the much needed infrastructure as it had to scaledown its capital expenditure in line with lower revenue. Loss of employment In the real sector of the economy, the impact of the crisis was reflected in the scaling down of production or the closing down of some mining operations due to low copper prices. This had the inevitable consequence of loss of jobs. However, the reopening of some closed mines which has followed the recovery in metal prices has since led to a slight improvement in the situation. External position weakened The declining earnings from copper exports adversely affected Zambia’s balance of payments position.
Digital currencies may alter the size and composition of central bank assets Most of my remarks today have focused on the potential implications of digital currencies for central bank liabilities. But of course, for every liability, there also has to be an asset. Whether those assets are, in total, any larger than today depends, in part, on whether new digital currencies cause a net increase in demand for central bank liabilities, or simply substitute for reserves or banknotes. A narrow digital currency that largely cannibalised banknote demand, for example, might have little or no impact. By contrast, a broad digital currency with many attractive payments features could materially increase the demand for central bank liabilities. The impact of any increase in demand on the size and composition of central bank assets depends on whether, and how, central banks choose to accommodate that demand. I’ve already noted that, in systems like the UK’s, digital currencies may cause some banks whose deposit bases have been partially disintermediated to increase their borrowing from market-wide facilities. A more interesting case could arise if the central bank chooses instead to back persistently higher demand with more long-lasting assets, for example to reduce rollover risk. At modest size, that may look little different to today’s banknote programmes.

The extension also expands the FLS to cover lending to financial leasing and factoring corporations (which are a source of credit for SMEs). We have been clear that the design of the extended FLS particularly encourages lending to SME’s in determining access to the FLS. Incentives to lend to SME’s are therefore in place,  BIS central bankers’ speeches  3  no doubt about that. But we cannot promise that the results will follow almost as night follows day, because there is more to it than that. Let me end, by advertising a piece of work done by your chairman-elect, chairing a group that recently produced a report on SME lending in Northern Ireland. In that report, Kate and her colleagues point to structural market failures affecting the supply of finance to SMEs, which mainly relate to imperfect or asymmetric information, and which tend to be exacerbated in times of heighted economic uncertainty and risk aversion. Likewise, the report points to information failures on the demand side for businesses seeking finance. The report goes on to note that over the last five years there has been a market correction as banks have moved away from a lending approach based on property as security to one that is more based on evidence of a business plan that indicates returns to the firm that will repay borrowing.
Credible, “low-for-long” guidance as a means of easing policy at the lower bound So let’s start with the value of commitment when the policy rate is close to the lower bound. As you know, the last thirty years have seen a marked decline, around the world, in the underlying, “equilibrium” real rate of interest (sometimes called “R*”). This a real phenomenon, not a monetary one, caused by some combination of a greater desire to save – across the world as a whole – and weaker investment demand. But central banks have still had to accommodate the decline and the appropriate nominal rate of interest has therefore fallen alongside this “R*” [7]. However, there’s a limit to how far the nominal rate can fall. As long as people also have access to physical cash, bearing zero interest, it’s not possible to lower the official rate much below that level. And when the “normal” policy rate is already close to that lower bound there’s very little room for conventional policy to respond to negative, disinflationary shocks. This in turn creates the potential for deflationary traps. Because the policy rate can’t fall in response, a decline in inflation expectations pushes up real interest rates, depresses demand and inflation, and this justifies the original (and self-perpetuating) weakness of expectations. These traps are potentially very costly as they can lead to protracted periods of unnecessarily weak economic activity.

Management of the Petroleum Fund The Petroleum Fund is currently one of the world’s largest institutional investors, on a par with the largest pension fund in the US and the largest European fund. With the rate of growth that can be expected, the Petroleum Fund will be larger than these two funds in the next year or two. Norges Bank manages the Petroleum Fund on behalf of the Ministry of Finance. This is a challenging task that has been given high priority within the Bank. We have established what we believe is a professional management organisation. Performance is measured against the benchmark portfolio defined by the Ministry of Finance and the results are published in a quarterly report. So far, Norges Bank has achieved an excess return every year. Management costs have been low. In terms of net earnings, Norges Bank has added close to NOK 15bn to the Fund. The total return for the Fund is largely determined by the benchmark portfolio. Since 1997, the real return has averaged 4.2 per cent. Of this, 0.4 percentage point can be attributed to active management, for which Norges Bank is responsible. The Fund has become a large investor in international equity markets. Norges Bank recently established a group dedicated to actively supporting best practice corporate governance in companies where the Fund has ownership interests. Norges Bank already makes extensive use of its voting rights and has voted in about 17 000 cases this year.
Of course, the principles and continued testing are part of prudent planning, and do not imply that normalization will necessarily begin soon. As always, the views I express are mine alone and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System. The Committee’s normalization principles and plans Let me start by briefly reviewing the statement on normalization principles and plans that the FOMC published following its September meeting. Importantly, this statement is intended to provide the public with information about the eventual normalization process and does not signal a change in the current or future stance of policy. As the Committee indicated in its September post-meeting policy statement, it continues to anticipate that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. Many elements of the normalization principles and plans are similar to the principles adopted by the Committee in June 2011, while others have been revised in light of the changes since then in the size and composition of the System Open Market Account (SOMA), the Fed’s securities portfolio, as well as enhancements in the tools the Committee will have available to implement policy during normalization.

Moreover, they should finance their house purchase with a sufficient proportion of equity. Equity acts as a cushion, absorbing movements in property prices. In addition, banks should use discipline in lending practices, even in an environment of low interest rates. The prime considerations when granting loans should be the observance of maximum loan-to-value ratios and a conservative valuation of property. BIS Review 78/2009  1
The tighter the labour market is, the higher wage growth will be. Demand for goods and services determines to a great extent how tight the labour market will be. High levels of private and public consumption, investment and exports will sustain the demand for labour. When the supply of labour is limited, the competition for labour pushes up wages. A tight monetary policy stance with a high real interest rate will curb domestic demand. In many countries, low and stable consumer price inflation is the goal of monetary policy. Consequently, we can assume that imported price inflation will remain subdued. However, price inflation will nonetheless vary in pace with global economic developments. The krone exchange rate also plays an important role in determining import prices. A strong krone exchange rate will curb prices for imported goods, while a weak krone exchange rate will result in higher prices. When there is a rise in the interest rate in Norway and a widening differential between domestic and foreign interest rates, investments in NOK will increase, and the krone exchange rate will rise. Price inflation may vary considerably from month to month. This variation may be due to random or temporary conditions, such as fluctuations in electricity prices or petrol prices, or the effects of changes in real taxes. When we assess the interest rate, we disregard these effects. Statistics Norway has constructed an indicator for adjusted price inflation - CPI-ATE - which is the measure we use to examine the results of monetary policy performance.

The guarantee is limited to a maximum of NOK 2m per depositor per bank. This represents a tightening for savings banks in relation to earlier statutory rules. For commercial banks this provides clarification in relation to the practice that was chosen during the banking crisis when all  BIS Review 124/1999  2  deposits were covered even if they were not covered by a formal guarantee. In relation to rules in other countries, the deposit guarantee in Norway is very generous. During the banking crisis, subordinated loan capital was not written down in the crisis banks, although the banks’ guarantee funds and later the state had to provide support to ensure continued operations. Subordinated loan capital did not function as a buffer as intended. Under the new Bank Guarantee Act, this capital can, subject to certain criteria, be drawn on while the bank is still operating. This increases the real buffer capital. It also means that banks with insufficient capital, and banks that take excessive risk, have to pay more for subordinated loan capital. This boosts market discipline. The risk of problems in one institution or a market segment spreading to other institutions or markets through the payment system is substantially reduced. A large share of interbank transactions is settled continuously during the day through Norges Bank’s settlement system. The largest interbank payments are settled individually and continuously on a gross basis. This reduces the risk of crediting an account without the payment due being transferred.