samchain/econo-pairs-v1 huggingface dataset:
Second, globalisation has contributed to higher imbalances of income and wealth in many countries.24 Amongst economists, a belief in free trade is totemic, but while trade makes countries better off, it does not raise all boats within them. 23  For example, two-thirds of official foreign currency reserves are in US dollars, over 60% of countries use the US dollar as their anchor currency, and around half of international trade is invoiced in US dollars - far greater than the US’s 10% share of world trade. 24 The IMF finds that technological progress during the 3rd Industrial Revolution has been the biggest contributor to these increasing imbalances. See IMF (2017), Understanding the Downward Trend in Labour Income Shares, April World Economic Outlook, Chapter 3. 15  All speeches are available online at www.bankofengland.co.uk/speeches  15  Rather, the benefits from trade are unequally spread across individuals and time. Consumers get lower prices and new products, and further benefits from higher productivity over time. Some workers, however, lose their jobs and the dignity of work, or see their “factor prices equalised.” In plain English, their wages fall. Such dynamics are being felt by those at either end of the great convergence. Survey evidence shows that 70% of Chinese workers believe that trade creates jobs and increases wages, US households think the opposite, and UK public opinion is equivocal.25 The nascent fourth industrial revolution may (for a time) harden such concerns.

2  All speeches are available online at www.bankofengland.co.uk/speeches  2  In part, the deceleration of the global economy reflects the shift from accommodative to tighter financial conditions that occurred initially in emerging economies, then in most advanced economies, and finally and sharply in the United States (Chart 2). Last year, the returns on all major asset classes from equities to credit to sovereign debt were negative. Cash once again was king. Chart 2: Global financial conditions indices tightened over 2018 United Kingdom  Standard deviations from historical average  8  United States  7  Emerging Market Economies  6  Global  5 4 3 2 1 0 -1  -2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Sources: Bloomberg Finance L.P., Eikon by Refinitiv and Bank calculations. The tightening of financial conditions globally partly reflected the usual – if somewhat delayed – reaction to the tightening of monetary policy.1 Over the past year, the withdrawal of monetary policy accommodation gathered pace. The Fed raised interest rates four times, and the Bank of England and ten other G20 central banks also tightened policy. In addition, after five years in which there was no new net issuance of G7 government debt, new government borrowing outweighed central bank purchases by more than $ trillion for the first time since 2012. Potentially more seriously, the slowing in global momentum may also be the product of rising trade tensions and growing policy uncertainty.
It is, therefore, imperative for developers to adjust their product offerings and consider bringing their costs down. One of the ways would be to seriously explore leveraging on more advanced and cost-efficient construction technology, such as Industrialised Building System (IBS). As cost of construction remains one of the major determinants of house prices, increasing efficiency and lowering costs can lead to a more inclusive housing market. Beyond considerations for price points that reflect greater affordability for the buyer, developers also have the responsibility to build houses that cater to the modern needs of the public. Aspects of quality, sufficient amenities and safety must be considered as critical elements of modern living. Financial institutions also play an important role in the housing market through the provision of financing. The effective intermediation role of financial institutions is equally critical for a wellfunctioning housing market. In the provision of financing, financial institutions need to ensure that they lend responsibly to those who are deserving, capable and able to repay. Financial institutions need to protect the public interest by ensuring that buyers do not borrow beyond their means and fall into financial hardship. To this end, the financial institutions should also continue to provide effective and transformative financial services to ensure that society at large would benefit and thus, improve their quality of life. I take note that there are a few interesting sessions during this conference related to innovations in finance, including one on fintech.

Last but not least, there is a need to build a healthy rental market. Policymakers need to be clear that the drive for affordable housing is not necessarily equivalent to the drive for “home ownership” alone. Adequate housing is about access, which can be achieved not only through outright ownership, but also through the ability to rent a decent home at affordable prices. The overriding policy priority should not be ownership at all costs. We need to learn from the Global Financial Crisis on the importance of a sustainable housing market. 2/3  BIS central bankers' speeches  Policymakers need to protect the interests of the public and the stability of the economic and financial system. It is also in the interest of the public that they do not buy homes that they cannot afford and fall into financial hardship, which will have detrimental consequences to socioeconomic stability. More broadly, we need to remember that one of the best ways to achieve the affordable homes objective is to promote employment opportunities and income growth for the people. This will strengthen their economic capability and financial position for home ownership. To some extent, we have observed some encouraging trends, including the fact that house prices are now growing more in line with income growth. Another important avenue for policymakers is the exchange of information and ideas. Through the sharing of experiences, especially with policymakers from other countries, we are able to learn and explore new frontiers.
While consumption certainly provides a large contribution to the strong growth in GDP in coming years, strong increases in real income also make a contribution. Strong increases in the property and share prices area are also assessed, however, to contribute to the high growth figures for consumption. An important issue is whether the current monetary policy regime per se prevents the major imbalances that we saw during the 1980s being built up? During the years monetary policy could not counteract an altogether too high loan-financed increase in demand as the overheating did not seem to threaten the exchange rate target despite the large deficit in the current account and a continued deterioration in competitiveness. In retrospect, it can be noted that too much confidence was placed in the fixed exchange rate policy. It is difficult to conceive that such a high increase in demand and such a high use of resources today would not be considered to threaten the inflation target and thus be counteracted by a more stringent monetary policy. Accordingly, the debt ratio of businesses and households would not either increase in such an unrestricted way as at the end of the 1980s. The banks have also become considerably better at handling risks in their balance sheets at the same time as supervision and monitoring has been improved and adapted to the deregulated financial markets that we now have. Conclusion I have discussed the effects that rising asset prices can have on the real economy.

 The demographic problem: the equivalent of approximately 30 percent of the labour force in Romania and of 13 percent of the total population work abroad (from 3 percent in 2005). This is Romania’s lost GDP. 2   Moreover, even now, when Romania’s economy reports above potential growth rates, the country continues to record negative birth rates. The ageing of the population affects potential GDP; and it is not only about ageing – ageing is doubled by a high rate of people at risk of poverty (around 40 percent in 2016).  According to in-house studies that refer to a panel of 6 Central and Eastern European countries and cover the period from 2005 to 2016, a 1 percent increase in the share of population aged 65 and above triggers a 1.3 percent decline in potential GDP.  Real convergence is measured not only in quantitative terms, in cold figures, but also in qualitative terms. For instance, over 90 percent of the population owns a house, but housing quality is the lowest in Europe (about 30 percent of the individuals have no access to basic sanitary facilities and around 70 percent live in overcrowded dwellings).  The living standards and the wage differential further account for emigration waves even amid the high economic growth. This is a deeply uneven growth at both interregional and intergenerational levels, which is unbalanced in terms of structure and which reinforces inequalities within the society (the Gini coefficient stood at 38 percent in 2015).
But we must also admit that there is not just scope, but also a need, to apply judgement when producing good data and statistics. And trust plays a key role here. People can trust the ECB and the national central banks to apply expert judgement when it is needed. In my speech today, I will focus on key ingredients that have been crucial in building up the ECB’s good reputation over the past 20 years. The first is to have good data and to use them well when taking decisions. The second is to ensure good cooperation. The third is to keep pace with changing times. Good data for good decisions 1/4  BIS central bankers' speeches  I am aware that the need for good data may seem self-explanatory, especially for an audience of statisticians. But that doesn’t make it less important, particularly in the case of the ECB. The stakes are extremely high: whether for monetary policy or banking supervision, our decisions impact the lives of over 340 million people. This gives the data we use, and the analysis we carry out, enormous importance. Our data need to be reliable and our statistics sound. Only then will they be able to form the basis for good decisions. But not all data are created equal. Even well-collected data may fall short of answering the burning questions of our experts. With the 2008 crisis, for example, we learned the hard way why better and more granular data are necessary.

Notwithstanding some recent signs of improvement in the economic outlook, it is premature to declare the financial crisis over. From today’s perspective, the need for enhanced credit support remains. Therefore, for the time being central bank liquidity is likely to remain abundant. This does not mean, however, that the broader concept of liquidity in terms of monetary aggregates grows strongly. And it is this broader concept, not central bank liquidity itself, which is related to inflationary pressures over the medium term. Of course, central bank credit and broader monetary aggregates are linked over time. In a modern banking system, and in normal circumstances, central bank credit is largely used by banks – in the form of required reserves – to create bank credit, and expand deposits and broad money aggregates. So, an increased provision of central bank credit can lead – more or less automatically – to an increase in broad money. In current conditions, that link has been weakened, however. Today, banks – in the aggregate – tend to hold part of the central bank credit that they obtain in our refinancing operations not as a reserve against an expansion of loans and deposits, but in the form of  8  BIS Review 103/2009  excess reserves deposited with the Eurosystem. This attenuates the automatic link between the provision of central bank liquidity and broad money. And, as a consequence, it attenuates the inflationary potential of the Eurosystem’s outstanding credit to banks.
Without stability in the financial system it becomes more difficult to conduct monetary policy, and price stability is part of an effective payment system. Practically and organisationally, however, these are two separate fields of work. You could say that we normally use two different toolboxes to perform these two tasks. First, we have a monetary policy toolbox, parts of which I have already described. The monetary policy measures, for example the setting of the repo rate, have a clear objective: to influence economic activity with the aim of maintaining price stability. This in turn is an important component of our efforts to achieve stable development in the real economy. Second, we have a box of tools for promoting stability in the financial system. Financial stability is a basic prerequisite for a safe and efficient payment system. The Riksbank normally uses tools other than the repo rate to promote financial stability. Our analyses of the risks in the financial system that we produce and publish every six months in our "Financial Stability Report" represent the primary tool in this toolbox. If nothing else, this and other feedback that we provide to the banks makes them more aware of potential vulnerabilities and, in the best case, gets them to take preventive measures. This is usually referred to as "moral suasion". But this toolbox also contains more concrete tools. These include the possibility to quickly add liquidity to the banking system.

Christian Noyer: Foreign reserve accumulation – some systemic implications Speech by Mr Christian Noyer, Governor of the Bank of France, at the Salzburg Global Seminar, Salzburg, 1 October 2007. *  *  *  The topic of foreign exchange reserves is a very old one, but it has gained new prominence for two obvious reasons: the level of such reserves has increased dramatically over the last decade; and the management of those reserves is increasingly diversified. Today, I would like to reflect on the implications of these changes for the international monetary and financial system. I will try and examine how they are linked to the persistence of global imbalances, their consequences on global capital allocation and asset prices, as well as their impact on structural change and economic governance in all countries, both emerging and developed. The level and nature of international reserves The facts World foreign exchange reserves have surged from USD 2 trillion in 2001 to an unprecedented USD 5 trillion in early 2007. Of this total, the share of emerging Asia has risen from USD 600 bn to more than 2 trillion, as a result of reserves having increased at a rate of USD 200 to 300 bn per year since 2003. In addition, reserve assets of oil-exporters boomed in 2005 and 2006 by more than USD 200 bn each year. The drivers In order to fully understand the nature of this protracted process of foreign asset accumulation, it is important to examine the various factors motivating it.
So we can be thankful that, when the crisis erupted, you were once more in a position of influence. You reminded us that the euro has always been more than just a currency, and your unyielding defence of Europe was a bulwark in those febrile times. This is best captured in your belief that “if a solution is good for Europe, it is good for Germany; and if something is bad for Europe, it cannot be good for Germany.”1 Of course, there have been different views about what constitutes a “good solution” for Europe, such as the appropriate balance between sharing risks and reducing risks. 1/3  BIS central bankers' speeches  But I was always struck by the fact that, once you had agreed a way ahead with your European partners, you defended it with conviction. I know that this was not easy: you had to tread a careful path between maintaining confidence in the euro at home and making the necessary reforms to safeguard the single currency. The fact that 81% of Germans back the euro today, and the euro is more popular than ever among the wider European public, is testament to your skill in navigating that course.2 What allowed you to achieve this was your second quality: your intellectual rigour. I have had many occasions to observe your forensic mind at work. You combine the subtlety and foresight of a statesman with the scrutiny and attention to detail of a tax lawyer.

I do not intend to use my remarks this evening to recall our many private conversations – they shall remain private – nor your many achievements: we all know what they are. I would like instead to focus on three of the qualities that I have personally witnessed, and that have marked you out as one of the pre-eminent leaders of your generation: your commitment, your rigour and your statesmanship. Wolfgang is receiving this award tonight in recognition of his commitment to a unified Europe and stable democracy in Germany. Commitment is a quality that has run like a thread throughout your public life. On this very day 30 years ago, only a few blocks from here, a million people demanded reform, democracy and freedom in the largest demonstration East Germany had ever seen. The fall of the Berlin Wall ushered in a profound transformation of German and European history, and you, as Minister of the Interior, were at the heart of this process. Your commitment to your own country was always matched by a commitment to Europe – and you understood that each made the other stronger. You saw immediately that German reunification could trigger optimism at home but anxiety abroad. You knew that the best way for Germany to demonstrate the strength of its historical responsibility to Europe was to share a currency with its neighbours. At the same time, a single currency would safeguard the single market against the risk of competitive devaluations.
With regard to the regulatory and supervisory architecture of the financial system, we now have new arrangements underpinned by the European System of Financial Supervision and by the Banking Union in the euro area. New and more powerful regulatory and supervisory tools are at hand, including higher capital requirements, increased in the case of systemically important institutions, and the new instruments provided by macroprudential policy and resolution policy, also within the European framework. There is still work to be done with these arrangements, mainly the development of the third pillar of the Banking Union, comprising a common deposit guarantee scheme and the pooling of resources in the Single Resolution Mechanism. The Spanish financial system, for its part, has undergone most significant restructuring. This is reflected in the reduction in the number of institutions, mainly among savings banks, whose number fell from 45 to 10 institutions, 8 of which are currently banks; and in the reform of the banking sector which, from 2008 to 2015, saw the number of offices fall by one-third and staff numbers by more than one-quarter. Spanish banks are today better capitalised. Deposit institutions’ overall solvency ratio rose, in terms of capital relative to risk-weighted assets, from 10.6% at end-2007 to 14.5% at end-2015. From 2008 to 2015 the sector undertook a major clean-up of its balance sheets 11/14  through provisioning totalling almost € billion, close to 20% of the total credit to residents at the time the crisis broke and to 28% of GDP in 2015.

It would not be until 2011 that, with the reform of the FROB, the way was paved for capital contributions with public funds and, into 2012, with the MoU, for further injections of public funds and for the creation of Sareb. From a fiscal standpoint, the option of massive and early capital injections with public funds could, perhaps, have been viable in Spain until 2007, while public finances were still running a surplus and GDP growth stood above 3.5%; and there was still some leeway in 2008, despite the slowdown in growth and the increase in the fiscal deficit, which rose that year to 4.4% of GDP. Nonetheless, from 2009 it became very difficult, if not indeed impossible, against a background of recession, with a decline in GDP of 3.6% and a rapid deterioration in public finances. In 2009, the budget deficit climbed to 11% of GDP; and public debt increased in only two years by almost 20 pp of GDP to 52.8%, compared with 35.6% in 2007. It should moreover be borne in mind that Spanish credit institutions generally had, in the initial years of the crisis, high levels of provisioning and profitability, which probably contributed to generating excessive confidence in their ability to finance, through exclusively private means, the restructuring and strengthening of their capital.
Philipp M Hildebrand: Policy implications of the financial crisis Speech by Mr Philipp M Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Conference, “From Fragility to Stability”, University of Geneva, 18 November 2009. I would like to thank Jürg Blum and Rita Kobel for their valuable support in drafting this speech. I also want to thank Nicole Allenspach, Philipp Haene, and Signe Krogstrup for helpful comments and discussions. *  *  *  Introduction It is an honour to speak at the University of Geneva this evening. I want to thank Rajna Gibson for her kind invitation. A year ago, we were in the midst of a perfect financial storm. Following the bankruptcy of Lehman Brothers in mid-September, the imminent collapse of the global financial system became a distinct possibility. Since those dark days, the situation has manifestly improved. A bold and unprecedented global policy response has had its intended short-term effect. While important questions remain as to the sustainability of the global recovery, we are no longer staring into the abyss of financial and – potentially – economic chaos. The worst financial crisis for at least 70 years has not resulted in a new Great Depression. On the other side of the ledger, the tangible and intangible costs of this crisis are enormous.

In difficult times, banks will be allowed to fall significantly below the target levels defined for good times. Allowing banks to draw down capital without violating any minimum requirements should help mitigate the potentially harmful effects of de-leveraging. 8 In Switzerland, compatible with these features, FINMA issued decrees imposing higher capital requirements on the two big banks at the end of last year. According to these decrees, the big banks will have to meet risk-weighted capital requirements that are double what they were before the crisis. As a complement, FINMA has introduced a leverage ratio. In good times, the capital base has to account for at least 5 per cent of the total adjusted assets. 9 To prevent a procyclical impact, these targets will apply as of 2013 at the earliest, giving banks enough time to recover from the crisis. Furthermore, the big banks will be allowed to temporarily fall short of these targets in bad times. The Swiss experience suggests that the largest banks can adjust rapidly, even to ambitious new capital requirements, without causing collateral damage to the overall economy. To reduce uncertainty and to facilitate the planning process at banks, it is crucial that the ultimate target levels are clearly communicated, and that a sufficiently long phase-in period is provided for. This will enable banks to adjust to the new rules in an orderly fashion.