samchain/econo-pairs-v1 huggingface dataset:
By integrating themselves into the mainstream of the globalizing world economy, the poorest countries will avail themselves of a most powerful instrument of acceleration of development, while, if they preferred to do it alone, they would expose themselves to the risks of marginalization, abandoning several generations to economic stagnation and poverty. The third building block is the universal consensus on the importance of an increasingly open and liberal system of capital flows in order for globalization to deliver on its promises. The fourth building block is what we could call the “golden rule” of transparency, now truly seen as the key for modern management, economic success, and rational behavior of global markets. BIS Review 43/1998  -3-  The fifth is good governance, which is equally essential for strong economies and properly functioning democracies. No doubt, competing for excellence in governance is the modern face of statesmanlike responsibility. The sixth building block could be a set of standards and codes of best practices; this could require a few words of elaboration. More and more we observe an emerging recognition that the global markets still suffer from the kind of anarchy that afflicted our domestic financial markets here in Europe during the nineteenth and the beginning of the twentieth centuries - that is, until various scandals and crises led to the creation of such institutions and rules as securities and exchange commissions, banking supervision, accounting standards, disclosure and prudential rules, and so forth.

What we have to do, in actually operating monetary policy is to monitor all the relevant evidence as it emerges for signs that the economy is proving to be either stronger or weaker than we expect, and modify our view of the prospect for inflation - and our monetary policy - in the light of that. And in that context I repeat the assurance, which I gave recently to the TUC in Blackpool, that we will act symmetrically. We will be - have been - just as rigorous in reducing interest rates with the overall evidence pointing to the balance of risks to inflation on the downside, as we have been - and will again be - in raising rates with the evidence pointing to a significant or sustained overshoot of the inflation target. Now there are those - perhaps even one or two of you here this evening - who regard this assurance as cold comfort. It misses the point - they say - because the present approach to monetary policy focuses too narrowly on inflation. What we want - they say - is a monetary policy which puts more emphasis on growth and employment. You hear this complaint not just in this country but increasingly these days in Continental Europe. I must say, President, that it leaves me totally bemused. What it suggests is that growth and price stability are seen as alternatives - you can have a bit more of one if you’re prepared to accept a bit less of the other.
13 As another example, the MAS recently issued a consultation paper on changes to our Recognised Market Operator (or “RMO”) regime. Under the current approach, Singapore-based market operators must be Approved Exchanges if they are systemically important, or else regulated as RMOs. But new forms of market places have emerged – such as trading facilities that make use of blockchain technology or peer-to-peer platforms without intermediaries. Our regulatory framework will need to be flexible to accommodate innovative business models by market operators with rules that are commensurate with the risks including factors such as retail access and scale of business. 2/4  BIS central bankers' speeches  14 There have been some queries on our regulatory stance towards crypto-currencies, or more generally, digital tokens and ICOs (initial coin offerings). We have issued a public advisory to caution those who “invest” in crypto-tokens to do so with caution and to understand their characteristics including being volatile and non-legal tender. 15 MAS has also issued a guide on digital token offerings last year to explain that our regulatory treatment depends on the digital tokens’ inherent characteristics. For utility tokens, which are for restricted usage within a defined set of products or services, these are not subject to MAS regulations. On the other hand, for payment tokens which are designed to be an alternate form of a medium of exchange, the intermediaries processing these tokens will come into our regulatory ambit under the proposed Payment Services Bill.

In particular, the FPC is charged with ‘the identification of, monitoring of, and taking of action to remove or reduce, systemic risks with a view to protecting and enhancing the resilience of the UK financial system’, but this does not ‘require or authorise the Committee to exercise its functions in a way that would in its opinion be likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term’. 7 This approach, of proposing and testing, is similar to the notion of ‘discursive governance’ proposed for independent regulatory agencies by Gehring (2004) and discussed in the financial stability context by Demekas (2019). 6  7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Together, these three ingredients mean we have a clear mandate to follow but, at the same time, we have the flexibility that’s needed to manage financial stability efficiently and effectively. An example – resilience of major banks Our approach to how resilient major banks should be to economic shocks captures all of these ingredients. We started with Parliament’s preferences: resilience but not at the expense of growth over the medium to long term. Using all the evidence available, we’ve balanced the benefits and costs. On the benefit side of the ledger: the fact that the system will not magnify severe downturns.
A stronger variation would be to condition the policy rate path on economic outcomes, that is, to communicate that the policy rate will be zero per cent until, for instance, inflation has reached two per cent. 46  The financial system has changed Swedish companies have historically financed themselves through bank loans, but issuing commercial paper and corporate bonds has now become increasingly common. As the Riksbank purchases these assets when there is turbulence on the financial markets, the risk premiums on the assets may be held back, but the purchases can also help maintain credit granting in a broader sense. Although it is primarily larger companies that obtain funding on the bond market, these companies also often have promised lines of credit from their banks. If problems arise on the bond market, the large companies will often reduce their issuing of bonds and  44 See also Goodhart (2010), Miles (2014) and Vredin (2018) for a discussion of this. 45  For a discussion of the risks with a large balance sheet, see Flodén (2018). 46 See the Committee on the Global Financial System (2019). 19 [35]  instead turn to the bank to borrow, which may mean pushing out other bank lending. The market for mortgage bonds has grown in significance and is currently the largest bond market in Sweden, see Figure 12. It is a market that it important to Sweden's asset purchases as it is so dominant.

If a bank sells a portfolio with mortgages, the capital requirement is less binding and one has scope to give new loans. So far, however, securitisation has not been as common in Sweden as in, for instance, the United States or the United Kingdom. Moreover, it has become less common since the global financial crisis. However, new products are being created all the time, that can entail risk. Recently, for instance, there has been a focus on SPAC (Special Purpose Acquisition Company). Instead of taking a bank loan when starting a company, one forms a ‘shell’ company that takes in money and then buys a company. Market financing increases sensitivity to disruptions in the financial markets Many companies have begun to rely on market financing to a greater extent than before, that is, they issue their own commercial paper or corporate bonds instead of obtaining financing through bank loans. And this makes the companies more sensitive to disruptions on the financial markets. Around one third of the companies’ loan financing is currently in this form, see Figure 4. There are probably several factors behind this development. For instance, the low interest rates have increased investors’ willingness to take risk and demand for corporate bonds. However, more structural changes have also made it easier for companies to issue 31 See Rajan (2005). 14 [35]  bonds, such as the increased demand from asset managers, insurance and pension companies, which in turn reflects an increase in household wealth.
We in the Executive Board will convene for our next monetary policy meeting at the start of December. At that time, we will also have to factor in the information that has been released up to then. 6/6

Earlier in my speech, I pointed to the imbalances in wage formation that could lead to inflation accelerating if they are handled incorrectly. This would make monetary policy tightening necessary that would risk interrupting growth and structural transformation, because the inflation target is mandatory and will not be given up. The Riksbank has both the instrument and the political mandate to achieve the target of 2%’s inflation. The issue then is not whether the inflation target will be met but the consequences that achieving the inflation target will have for the rate of growth and employment in the medium term. The Riksbank is responsible for achieving the inflation target, but responsibility for the positive development that we can now see in front of us being sustained over a longer period, is shared by everyone in Sweden. 5  BIS Review 126/1999
In the face of these risks, and with monetary policies in the main areas closer to a neutral stance (which also entails greater uncertainty about their future course), central banks must persevere with those decisions that bolster the credibility of these policies, since price stability is the best contribution we can make to economic growth. A second main factor of risk is that continuing world growth might be jeopardised by the presence of growing global imbalances. These could trigger or amplify significant adjustments on international financial markets, such as sharp increases in interest rates and in risk premia. Correcting the imbalances requires the adoption of appropriate economic policies in each of the main economic zones, policies which will, fortunately, also shore up the foundations for growth in each of these areas in the long run. A clear instance of this complementarity can be found in US fiscal policy, whose moderation would contribute to reducing its external imbalance and would improve its mediumterm growth prospects. As to the emerging Asian economies, further steps towards making their  2  BIS Review 60/2006  exchange-rate regimes more flexible will be needed, especially in China. This will not only contribute to more harmonious and sustainable world growth, but will be an essential ingredient for entrenching progress in China towards higher levels of well-being.

These developments have led to a rapid pace of innovation and enhanced international interdependence and inter-linkages. This has generated an environment that is increasingly more complex, competitive, uncertain and ambiguous. The recent episodes of financial turmoil, have shown that even financial systems in developed and advanced economies continue to be vulnerable to financial stress. This more difficult operating environment demands new skills and the ability to manage these new challenges. Indeed, the role of leadership has changed. It is essential to have the talent that are not only able to see the new emerging opportunities, but also to be able to deal with the high level of unpredictability and navigate through turbulent conditions. The industry leaders need to be visionary and comprehend future trends, chart strategic directions and adapt to changes to stay competitive and relevant. Effective leaders in this era, will be those who are continuous learners, who are on the cutting edge of excellence, who have strong convictions, and yet, having humility to recognise the need to reinvent themselves and inspire their organization to adapt to the new environment. Such attributes are vital if the financial services sector is to forge ahead and remain at the forefront of new innovations and thus secure long-term competitiveness. In this process, there needs to be avenues for continuous learning. The establishment of ICLIF is part of our commitment towards providing such an avenue to enhance leadership capability and develop world-class leaders in the financial services sector.
Among these, Loan-to-value and Debt-to-income are found by a large majority of studies to have a significant impact on reducing credit growth, banking leverage and growth of Real Estate prices. Similarly, but with a slightly smaller majority, Provisions – which includes Dynamic Provisions –, and Countercyclical Capital Buffers have a statistically significant impact on the aforementioned variables. Finally, Reserve Requirements and Caps on Credit (or its Growth) do not have the same empirical support as the other policies in attaining their intended goals. 3. Monetary policy and macroprudencial policy  Again, there is enough consensus that macroprudential policy is distinct from monetary policy, in the sense that they have different targets, methods and tools. Despite all the advances made, there is still valid debate ongoing about the connection between these two policies, focusing on whether monetary policy should be used for macroprudential purposes, and how the monetary authority should be involved in the implementation of macroprudential policy. With regard to the first question, at the Central Bank of Chile we are rather skeptical about using the monetary policy rate as a financial stability tool, for several reasons. Firstly, it is not clear that the interest rate is an effective tool for dealing with the overexpansion of the financial system during booms, nor for containing systemic events during busts. The interest rate is too broad an instrument to play this role, as it affects not only the financial system, but real businesses and households as well.

The objective of safeguarding the stability of the financial and payment systems has a long history in central banking. Indeed, it can be argued that the role of lender of last resort, that allows central banks to reduce the likelihood of a financial crisis, existed before its more modern role of preserving price-level and macroeconomic stability. Thus, the call by some authors to central banks to consider financial stability as a mandate appears to be based on the experience of specific institutions and jurisdictions rather than on a historical and global perspective (Peek et al., 2015). However, the global financial crisis that began in 2008 highlighted the importance of the goal of financial stability and prompted an intense international debate on the need for a policy framework that would explicitly focus on this objective since its achievement would not be guaranteed by just macroeconomic stability and good prudential regulation and supervision. This new policy framework, aimed at preserving financial stability, is what has come to be known as macroprudential policy. Although at first the purpose, tools and implementation of macroprudential policies were unclear, the heated debate of some years has gradually created some common beliefs and visions. For example, significant consensus has been reached that the objective of macroprudential policy is to reduce the systemic risk resulting from credit being too procyclical and from interconnections between financial institutions, among other factors.
There are however a few things that make our situation even more problematic than that of other large economies. First, the decline in trend growth has gone much further here than in, for instance, the US: the European Commission estimates potential output growth in the euro area to be about 1% this year, half  BIS central bankers’ speeches  1  of the equivalent figure for the US. In contrast, the difference in 1992 was small: euro area potential output growth was estimated at 2.6%, compared with 2.8% for the US. [5] Although this is already a serious problem in itself[6], a close examination of the composition of potential output uncovers the full extent of the problem. Total factor productivity in the US has consistently outperformed the euro area for the last 15 years and is expected to continue doing also in the coming decade[7]. In other words, using Paul Krugman’s famous words, the euro area trend growth risks becoming a product of “perspiration rather than inspiration”[8]. There are two issues associated with this observation. First, as we know from the growth literature, input-based growth risks incurring diminishing returns. Second, in an imperfect monetary union, it raises the question of how those inputs are being allocated. Indeed, when it comes to allocating capital, we are still making a bad job of allocating and utilising existing resources[9].

In 2015 only 4% of CSRs were fully implemented, down from 7% in 2014. In some countries excessive economic imbalances 4  BIS central bankers’ speeches  persist and could harm other Member States. More can be done to improve national implementation and I see a lot of merit in the IMF's proposal that CSRs should be linked to outcome-based benchmarks that are concrete, measurable, and clearly linked to the ultimate reform objective[28]. The dismal implementation record of the CSRs nevertheless suggests that a governance framework that envisages European economic policy priorities being legitimised and implemented at national level has its limits. Looking forward, we will need to engage in a process at European level, based on shared institutions, that provides both economic resilience and the appropriate legitimacy. In such a process, consensus would be needed on (i) the policy areas that are crucial to preserve the resilience of the euro area, and on (ii) designating those policy areas as shared competences with democratic legitimisation at European level. And as I have said before, getting there will require both economic and political convergence. The success of the Single Market is one of the few uncontroversial achievements of the EU. It has shown that shared competences can be used to implement economic policies that lead to greater prosperity in each country and, at the same time, ensure greater resilience of the euro area and the EU as a whole. We should build on it if we want to make further progress.
Recent Bank of England research has suggested this may have been a potent crisis propagation channel for smaller businesses during the crisis. 14  As asset  prices have recovered, however, this channel cannot explain the persisting productivity puzzle. A third channel through which the crisis might have slowed productivity is by hindering resource reallocation between firms and across sectors. 15  Flows of capital and labour between companies are one of the key  channels through which technology and ideas are diffused. 16  Since the crisis, rates of labour market churn  between companies have been low and the dispersion in rates of return across sectors has been high. 17  Both are consistent with lower rates of factor reallocation having contributed to low productivity. (c) Forbearance and monetary policy  Some have contended that productivity may have been held back by the actions of the authorities, in particular regulatory forbearance and accommodative monetary policies. By supporting low-productivity companies who would otherwise have failed, policy actions may have prevented the “creative destruction” of 18  firms. Certainly, the level of company liquidations and firm exits has remained low in many countries since  the financial crisis, probably lower than would have been expected given the path of GDP. A number of studies have considered the evidence on the impact of regulatory and monetary policies on firm death and productivity.

30  There are a number of possible explanations for such a phenomenon. Stifled competition in certain sectors and for certain products may have prevented the trickle-down of innovation. 31  For example, restrictions on  patents and intellectual property (IP) might restrict new entrants and retard replication. A related hypothesis is that, in today’s globalised markets, network economies of scale and scope are more potent, generating natural monopolies in which single or small sets of players dominate market share. 32  A third hypothesis is that the emergence of a long tail of non-frontier companies, failing to keep pace with innovation, is the result of management failings. For example, Nicholas Bloom and John Van Reenen have shown that weaknesses in management processes and practices go a long way towards explaining the long  21  Gordon (2012) and Cowen (2011). Gordon (2012). 23 Decker et al (2016) argue there has been a fall in entrepreneurship in high tech sectors over recent decades. 24 Gordon (2014). Jones and Romer (2010). 25 See Tuuli and Batten (2015) for a summary of this debate. 26 Craft (2004). 27 Brynjolfsson and McAfee (2011). 28 Mokyr (2014a and 2014b) and Baily et al (2013). 29 Comin and Hobijn (2010). 30 Andrews et al (2015). 31 Andrews et al (2015). 32 For example, Haskel and Westlake (2016). 22  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  tail of low productivity manufacturing companies.