samchain/econo-pairs-v1 huggingface dataset:
The gap between richest and poorest region is around 150%. For wealth per household, the North-South divide is also large, with a gap between richest and poorest of 130%. These are striking differences. But are they unusual compared either with the past or other countries? 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  Chart 2: Cartogram of UK income per head  Sources: Eurostat and Bank calculations. Notes: Purchasing power standard (PPS) per inhabitant for NUTS 1 regions. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Chart 3: Cartogram of Great Britain wealth per household  Sources: ONS Wealth and Assets Survey and Bank calculations. Notes: Data refer to 2014-16 for NUTS 1 regions, re-sized and coloured by median household wealth. No equivalent data available for Northern Ireland. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  On the first of those, Chart 4 plots the distribution of income per head across UK regions on three dates: 1997, 2007 and 2016. All of the distributions are centred on mean levels of income in 2016. This suggests a modest increase in the degree of regional income dispersion over time. The 2016 distribution has somewhat fatter tails, lower and upper, than in earlier periods.12  Chart 4: Distribution of UK income per head over time (mean-aligned)  Sources: ONS and Bank calculations. Notes: Chart shows regional gross disposable income for different time periods at current basic prices, centred around the 2016 mean.

The guidelines are based on the above-specified supervisory bodies’ considered opinion that there is no legal or substantive rationale for the maintenance of the previous interest rates (which were determined with reference to foreign interbank rates) after the portion of loan principal bearing such interest has been uncoupled from the exchange rate of the currency concerned by means of the recent Supreme Court decision. The supervisory bodies are of the opinion that such an interpretation of the Supreme Court judgement, were it implemented to the fullest extent possible, would represent such a heavy blow to financial undertakings’ equity that the Treasury would be forced to contribute substantial new capital to them. That expense would ultimately be borne by other members of society. The method recommended by the Central Bank and the Financial Supervisory Authority will preserve the stability of the financial system even in the event that a majority of loan agreements with exchange rate linkage clauses are deemed unlawful, although it could take quite a long time to determine this conclusively. Financial undertakings’ equity will sustain a considerable blow in any case, if judgements by the Supreme Court ultimately extend to a large portion of their loan portfolios. Offsetting this is the fact that uncertainty will have been eliminated, which could provide an opportunity to re-evaluate economic capital at a later time. The financial system should therefore remain sound. Many borrowers with foreign-denominated loans are in an extremely difficult position. Their anger and disappointment are understandable.
The new technology made state-regulated monopolies less expedient and led to greater difficulty in upholding the regulations on the financial markets. At the same time, the deregulation processes were an important condition for the rapid success of the new technology. It is also worth reminding ourselves that the IT sector stands outside of the traditional Swedish labour market regulations. The effects may take some time The effects we have seen so far are probably the result of better economic policy and technology introduced earlier, such as computers, networks and mobile communications. However, the large productivity gains experienced in times of major technological transformation usually due not come until the transformation has reached a stage of maturity, whereby a general spread has been achieved through the new technology being used by at least half of all households and companies. With regard to the Internet, available figures indicate that Sweden has only recently passed this stage. Achieving  3  BIS Review 93/2000  the maturity stage with its large gains in productivity also requires that companies find organisational forms that utilise the opportunities provided by the technology. Tougher international competition may bring about this type of adaptation relatively quickly, but for me it is still not evident that Sweden is at a stage where the new technology has major macroeconomic effects. Further changes The majority of the effects of information technology may thus lie ahead of us.

Your Excellency, the Zambian Government recognises the importance of expanding financial services to our rural areas, as part of its overall strategy to reduce poverty. The importance of the agricultural sector to the economy, in general, and small-scale farmers in particular, has made provision of financial services to rural areas a priority on the Government’s agenda. The need to improve financial services in economically disadvantaged areas also comes in light of the reduction in the presence of a number of banks in these areas over the last ten years. These areas need banking services from both commercial banks and non-bank financial institutions. Distinguished Ladies and Gentlemen, although this has been the case, the Microfinance Institutions (MFIs) have risen to the occasion to fill-up the gap in the provision of financial services such as small loans and savings facilities in the periurban and rural areas. In addition, the National Savings and Credit Bank (NSCB), formerly known as Postal Bank, which has a rural network has been providing financial services to the remote parts of the country. Your Excellency, coming to economic developments, I wish to state that the Zambian economy has performed relatively well in recent years. Inflation and interest rates have been coming down while the exchange rate of the Kwacha against major currencies has relatively stabilised, following a steep appreciation in 2005. Distinguished Ladies and Gentlemen, in 2005, the economy registered growth of 5.0% in real terms, marking the seventh consecutive year of positive real growth in output.
In a crisis, sovereign countries care about the international distribution of losses. Standard setters should look into this. They should do so in the light of the principles and policies that have been agreed on how to improve the resolvability of banks – at both the consolidated and solo level. Because, quite simply, it is legal entities that fail. 5  For the most recent version see BIS (2012), ‘Core principles for effective banking supervision’, available online at: http://www.bis.org/publ/bcbs230.htm. 6  Paragraph 33 of the foreword to the Core Principles states that “countries undergoing assessments by the IMF and/or the World Bank can elect to be graded against the essential and additional criteria. It is anticipated that this will provide incentives to jurisdictions, particularly those that are important financial centres, to lead the way in the adoption of the highest supervisory standards. As with the essential criteria, any assessment against additional criteria should recognise the concept of proportionality.”  7  See BCBS (2013), ‘Basel III: A global regulatory framework for more resilient banks and banking systems’, available online at: http://www.bis.org/publ/bcbs189.pdf. 8  To understand the difference of applying capital requirements on a solo basis relative to a sub-consolidated basis, imagine Bank A owns Bank B which in turn owns Bank C. Under both approaches, capital requirements apply to the group on a consolidated basis.

The most recent of these measures is the activation, in February this year, of the countercyclical capital buffer (CCB). These measures were necessary and useful. For example, this year a  2  BIS central bankers’ speeches  few large domestically focused banks – citing, among other reasons, the activation of the CCB – have taken steps to strengthen their capital and thereby their resilience. So far, however, the package of measures has not been enough to prevent a further build-up of imbalances on the mortgage and real estate markets. In an environment of persistently low interest rates, coupled with banks’ undiminished appetite for risk, the danger of a further build-up of imbalances remains considerable. For this reason, the SNB continues to monitor the situation very closely, and regularly assesses whether the CCB should be adjusted. Supply of secure banknotes ensured at all times Now I would like to say a few words on the subject of banknotes. At the beginning of October, we informed the public that, since autumn 2012, a small number of Swiss 1000-franc banknotes have been in circulation which were not issued by the SNB. As you know, these notes were abstracted during the production process at Orell Füssli, before they had been through all stages of production. Out of consideration for the investigation by the Office of the Attorney General, this information was only made public after some of these notes appeared in Switzerland.
Our priority throughout this transition has been to ensure that it has been and continues to be managed in a way that promotes the robustness and resilience of the payment systems, and of wider financial stability. And a considerable amount of work was undertaken to achieve this - by the retail scheme operators, their participants and the NPSO. What we now expect to see: Tangible progress has been made, and this should rightly be recognised. But, as with any journey, we cannot lose sight of the work that lies ahead to deliver these benefits from consolidation. The NPSO’s primary focus should be on completing integration of the payment systems and embedding robustness and resilience within all of its activities, including the New Payments Architecture (NPA) programme. There is still much to do to complete the integration of these systems, from an organisational perspective, but also at the system level; completion of which will allow the NPSO to begin realising the ultimate goal of strategic leadership and higher standards of management and control. For this to succeed, the NPSO’s strategy will need to be realistic and consistent with its objectives and capabilities. It will also need to include an appropriate focus on reviewing and enhancing the activities the NPSO has inherited, to manage its own risk profile, its outsourced infrastructure partner, and risks to the wider system emanating from participants.

The consolidated entity is expected to deliver a range of benefits, including:      Strategic leadership that is forward looking and proactive, with an enhanced ability to identify the challenges and risks of tomorrow and prepare for them today; Higher standards of governance and risk management, with an improved ability to leverage best practices across the schemes. As an example, a variety of access models have evolved in schemes over the years, and the NPSO is now in a great position to look across the schemes and consider which models deliver the best outcomes and risk management; and The development and delivery of a best in class New Payments Architecture. The NPSO is also set up to be a leader in the field of retail payments. And the Bank is now their counterpart in the UK wholesale payments space, following the move to direct delivery of CHAPS, the UK’s high value 3  payment system (HVPS) in November of last year. Collectively, these developments should lead to a considerable step change in risk management expertise, standards, and capabilities across the entirety of UK payments. As an example of the two organisations working together to bring such change to the payments industry across wholesale and retail, the NPSO and the Bank recently launched a joint consultation on ISO 20022. 4  This move towards harmonised messaging standards will enable the transportation of richer payments data, improved compatibility and therefore redirection across payment schemes, and new opportunities for collaboration and product development.
BIS Review 20/2008  3  Figure 4: Commodity Prices 620  Commodity Prices  Metal Prices  Energy Prices (right axis)  Agriculture prices (right axis)  420 380  580 540  340  500 300  460  5  420  260  380 220 340 300 180 17-01-200611-05-200605-09-200628-12-200625-04-200717-08-200711.12.2007 Source: Goldman Sachs. Figure 5: International Developments in Inflation: Inflation in the USA, Euro Zone, and Emerging Economies Implementing Inflation Targeting b. Inflation Gap Between Turkey and Other Emerging Economies under Inflation Targeting *  a. Inflation Rates*  9  USA Euro Zone  6  8  Infl. Targeting  7  5  6  4 5  3  4 3  2  1207  1007  0807  0607  0407  0207  1206  1006  0806  0606  0406  0206  1207  1007  0807  0607  0407  0207  1206  1006  0806  0606  0406  0206  1205  1205  2  1  *The sample of emerging economies under inflation targeting covers Brazil, Czech Republic, Colombia, Philippines, South Africa, Israel, Hungary, Mexico, Peru, Poland, Romania, Chile, Slovakia and Thailand. Source: Web sites of related countries’ central banks. 2. Monetary policy reaction and outcomes  Distinguished Press Members, The monetary tightening exercised since June 2006 has had a manifest impact on private sector demand for the last one and a half year (Figures 6&7).

One is hard pressed to find examples in history, where sovereign nation states voluntarily chose to cede or share sovereignty in the monetary field. It is therefore clear that European Economic and Monetary Union has been and will continue to be part of the wider economic and political project that the process of European integration process has represented from the very start. Monetary union is certainly not only about money. It is an important element in the very successful quest for lasting peace, stability and prosperity in Europe. This quest involves the building of trust and the sharing of sovereignty among European partners and the building of common institutions, in cases where this is desirable for the benefit of all. Europe is more than a collection of nation states, but it also stops far short of becoming a single federal entity. I do not believe that a stable monetary regime necessarily must have its root at the level of the nation state. Going back in history the international gold standard coincided with an era of stability. It was a system that was fundamentally based on rules and which transcended the nation state. Nevertheless, as a currency that is new and not linked in the traditional way to the nation state the euro does face particular challenges in winning the trust and the hearts of the people. Money is clearly regarded as more than simply a medium of exchange or a unit of account.
Regarding inflation, the main development of the past few months have been sharp rises in the prices of non-perishable foods (i.e. grains, powdered milk and others) and of fuels, which combined with the also sudden increase in the prices of perishable foods, have resulted in a major rise of measured CPI inflation, way above projections in May’s Monetary Policy Report. As a result, CPI and CPIX variation stands at 3.2% per annum, while CPIX1 inflation stands at 3.5%. The rebound of CPIX1 inflation has reflected the sharp increase in the prices of some non-perishable foods, the CPIX has been influenced by the above plus the rise in electric rates, and the CPI by all the above plus the rise in prices of fuels and perishable foods. The different measures of trend inflation have risen in recent months, in line with the reduction in output gaps and the upturn of the prices of foods. In contrast, labor cost pressures are limited despite the strong increase in the wage index. Short-term inflation expectations have also changed, and there is widespread belief that inflation will be, in the short term, higher than foreseen in May’s Monetary Policy Report. Short-term inflation expectations one year ahead are close to 4%. Over a longer horizon, expectations remain well anchored to 3%, reflecting the credibility of the Central Bank’s commitment with target inflation. Long-term interest rates have increased recently, partly because of the rise in international rates for the same maturities and because of stronger growth rates.

On the demand side, private consumption remains strong, growing more than 7% per annum in the first quarter of this year. Consumption is backed by the sustained growth in salaried employment and good financial conditions. But the main change has been the recovery of fixed capital investment which went from an average increase of 2.4% during the last three quarters of 2006, to a solid 7.9% in the first quarter of this year. Behind this strong investment are good corporate profits and favorable credit conditions, the progressive exhaustion of output gaps and good prospects for growth. In addition, exports of goods and services have strengthened, going from average growth of 3.8% in the last three quarters of 2006, to an average around 10% in the first quarter of 2007. Recent fuel price hikes begun in January have acted as a brake to the expansion of private consumption, through their effect on households’ disposable income. The renewed strength of output has also contributed to a remarkable improvement in the labor market, with significant job creation and reduction in the seasonally-adjusted rate of unemployment. From a longer perspective, in the past 13 quarters GDP has grown at an average annualized quarterly rate of 6%, considerably above trend GDP growth. Over the same period, the seasonally-adjusted rate of unemployment went down from 9.5% in 2003 to only 6.8% in the quarter ending last May.
Looking at the prospects and having in mind the country’s strategy for expeditious accession to the euro area, however, this is a macroeconomic variable which faces the country with the greatest challenges. The inflation criterion, as defined in the Maastricht Treaty (this is not the place to deal with the issue how good this definition is), is very strict and requires a purposeful policy going beyond the monetary and fiscal policies. In Bulgaria’s case, under the currency regime of fixed exchange rate and extremely conservative fiscal policy, untapped prospects should be sought in encouraging competition and improving the business climate, thus ensuring to the economy the flexibility to respond to exogenous changes (including with regard to the prices of raw materials) and enabling supply to react more promptly to increases in demand (both domestic and external). In the past year, inflation reached 6.5 % under the strong proinflationary impact of the increase in the prices of energy resources (direct contribution of 1.0 % in the overall price increase).In addition, the largescale floods resulted in an unexpected increase in foodstuff prices (contribution of 2.6 % in the overall price increase). This year, inflation is expected to decline to 6.0%. The slow process of decreasing inflation is mainly determined by the harmonization of indirect taxes with the minimum levels in the EU, pursued early in the year.

Thirdly, the significant and long-lasting growth since 2003 in the prices of oil and other energy resources considerably contributed to the international imbalances, and more particularly to Bulgaria’s current account deficit. This process accounted for the considerable growth of the expenditures for imports of energy resources incurred by the importer countries, and for the enormous cash flows channeled to the exporting countries. For Bulgaria, these developments in energy resource prices resulted in an increase in the costs of import of such products from EUR 1.7 billion in 2002 (the year after which the process of sustainable oil price increase started) to almost EUR 3.0 billion in 2005. This trend was very strongly manifested in the past year, when the country’s expenditures for energy resource imports grew by 52% against 2004. These three global trends, in combination with the approaching full-fledged EU membership of our country, produce a unique environment that the Bulgarian economy has never before faced. This makes the analysis of the processes and economic policy decisionmaking very complex and difficult. As I have already noted, in the recent several years, enormous volumes of capital were channeled into the country, the banking system acting as the natural intermediary for the effective distribution of these resources. This is not surprising at all, given the successfully implemented privatization of the banking sector in Bulgaria. At present, over 80% of the Bulgarian banking sector is owned by foreign investors, the majority of which are from euro area countries.
How can research help address these issues and, more generally, improve the overall supervisory stress testing regime? I want to suggest two general areas of research – one tactical and the other much bigger picture and strategic. The tactical area is research that helps improve supervisory models. First, developing additional ways of projecting revenues and non-credit expenses in stressed environments is a particularly ripe area for additional work, in my view. As I noted, an important innovation in the SCAP was the recognition that a comprehensive stress test focused on net income needed to incorporate projections of interest and non-interest income and non-interest expense. While a number of models already existed for making such projections – for instance, those used by banks in their budgeting and planning processes – these were nearly all calibrated to produce projections assuming business as usual conditions, rather than the stressed environment assumed in the SCAP. The SCAP PPNR projections were thus based on stylized supervisory models that used available historical data on bank performance during recessions. Since then, the supervisory PPNR models have become considerably more sophisticated, but at their heart, they continue to rely on historical outcomes for revenues and expenses, rather than fully incorporating the fundamental drivers of those outcomes at the business line level. Additional research and data 5/8  BIS central bankers' speeches  collection on these fundamental drivers and their performance under stress could make the PPNR projections more robust to changing business strategies and focus. A second tactical research area concerns measuring model risk.

BIS central bankers’ speeches  17  Appendix Chart 1: GDP per capita since 1750 log GDP per head, 1990 International $  9  8 IT revolution  Industrial revolution  Mass industrialisation  10  7  6  1750  1800  1850  1900  1950  2000  5  Source: DeLong (1998). Chart 2: GDP per capita since 1000 BC GDP per head, 1990 International $  7000 6000 5000 4000 3000 2000 1000  -1000  -750  -500  -250  0  250  500  750  1000  1250  1500  1750  2000  0  Source: DeLong (1998). 18  BIS central bankers’ speeches  Chart 3: Male heights from skeletons in Europe, 1–2000 AD Male height, centimetres  180  Skeletal remains, Europe Sweden  178  USA, native born  176 174 172 170 168 166 164 162  0  500  1000  1500  160 2000  Source: Clark (2009). Chart 4: Social development index Social development points, log linear scale  1000  100  10  -1000 -800 -600 -400 -200  1  200  400  600  800 1000 1200 1400 1600 1800 2000  Year Source: Morris (2010, 2011). Notes: This chart shows the average of “Western” and “Eastern” social development scores reported in Morris (2010, 2011). These scores include energy capture, organisation, war-making capacity and information technology.