samchain/econo-pairs-v1 huggingface dataset:
We will seek feedback on these with the industry. 33 I will now turn to the topic of financial scams, a concern of some retail investors. MoneySense runs regular campaigns to remind investors of the need to be on guard against investment scams. I have highlighted here a web page capture of an earlier campaign where MAS had put out an advertisement to resemble a typical online investment scam. The advertisement showed an island property investment. When a consumer navigated to the scam website and indicated interest to invest, he would be told that the island property investment was a scam and he would have lost money if he had invested. He could then learn about how to spot red flags and protect himself when investing. You may be surprised that quite a few people had actually “clicked” to invest into this. Thankfully, there were others who contacted us to alert on this suspicious investment scheme. 34 Some fraudulent websites have also attempted to solicit investments using fabricated information attributed to well-known personalities. Both MAS and the police have issued 4/5  BIS central bankers' speeches  advisories on these scams. 35 To safeguard your monies, you should approach all investment propositions with a healthy scepticism and challenge exaggerated claims. As it is often said, if it sounds too good to be true, it is probably not true. 36 Financial education and advisories issued by the authorities will not stop those who are out to cheat investors.

5 There are three important enablers: a culture of fostering customers’ trust in the financial industry; strong market discipline that incentivises right behaviours; and adequate and timely public disclosures of pertinent information. Engendering trust in the financial industry 6 Let me start with the theme of trust. It was a decade ago that we had the Global Financial Crisis. With a suite of regulatory reforms that followed, the global financial system is generally safer and stronger. Just being safe is not good enough. A vibrant financial sector must be able to support the smooth functioning of credit and money flows. It should meet the savings, investment and insurance protection needs of the people. Investors on their part want to have the confidence that they are treated fairly by financial institutions and that their savings are safe. This is why building trust in our financial institutions is so important. That trust goes beyond doing what is legally required, to include what is good and what is right. 7 Some of you may have seen recent reports on the Royal Commission review in Australia that investigated widespread misconduct issues in its banking industry. Financial institutions in Singapore are generally well regarded. But we have our share of malpractices too, such as the mis-selling of Lehman Minibonds and other structured or complex products. 8 Financial institutions have a duty to act in the best interests of their customers. However, in our supervisory reviews, we have uncovered lapses in conduct.
It remains to be seen how well they will succeed and how confidence in the central bank as an independent institution will be affected, as well as what consequences this might have. Independence not a given – the central bank may also need to adapt I think that it is important that the central bank never takes its independence for granted. It should always ask the question of whether the policy it conducts can be expected to result in the economic development that was aimed at when the central bank was granted its independence. An important part of this is, of course, that the central bank does its best to attain the objectives it has been allocated. But another part, which has perhaps not received as much attention, is that the central bank must also take into account fundamental changes in the economy that may make it necessary to adapt its behaviour. There could be many examples of changes in the functioning of the economy that could trigger such a need to adapt. But let me illustrate what I mean with an example that has been highlighted, for instance, in the IMF’s most recent World Economic Outlook. A slightly surprising observation in recent years is that inflation has not fallen very much during the recession connected to the financial crisis, despite a dramatic fall in demand in many countries and a sharp rise in unemployment. The contrast in relation to earlier economic downturns, when inflation fell much more, is fairly surprising.

Barbro Wickman-Parak: Independence, inflation targeting and the importance of not being dead certain Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, at a breakfast meeting at Skandinaviska Enskilda Banken AB (SEB), Stockholm, 14 May 2013. *  *  *  I would like to thank Mikael Apel, Advisor in the Monetary Policy Department for his help with this speech. An important lesson When one is, as I am, at the end of one’s professional career, it is natural to reflect on what is the most important lesson one has learnt. If one were to try to pass on one important insight to someone who is just beginning their career, what would it be? Of course, it is difficult to give a simple answer to this question, but one insight that would probably come pretty high up on my list is that it is so easy to fasten in what one might scientifically term the “prevailing paradigm”. By this I mean that it is so easy to believe that the means of regarding the world that is currently dominant is the best one and will apply, if not for ever, at least for the foreseeable future. I have come across this phenomenon numerous times during my professional life – and have of course been part of it myself. What is perceived as true and correct has varied from one time to another and sometimes the pendulum has swung violently.
In itself, a difference in the weight of a small state and a large state may make sense; but if certain EU member states have a much bigger informal impact than others on the positions that the EU takes in international political or economic forums, the big-impact states may be tempted to “nationalise” the voice of the EU. Many attempts at nationalisation of EU positions are due to what might be called the “French complex”: Some leaders of bigger countries still have not fully absorbed the fact that their country is no longer the superpower it used to be and no longer leads the world, so they often try to abuse their EU-wide voice to support their national interests, positions and agenda. When they call for Europe to speak with “one voice”, they often seem to expect that the single voice of 500 million EU citizens will be the voice of their national leaders, articulating their national tastes and priorities. Of course, the agent, the European Commission as an executive arm of the EU, also sometimes has this temptation to define or steal the voice of the EU. Needless to say, the risk that proper integration will be derailed is particularly high when the two effects mentioned above are combined – when the EU administration ceases to behave as an agent of the less powerful principals but remains under the spell of a few very strong principals.

Companies report a decline in production, employment and orders for both the export and domestic market. Many companies have moved abroad or are planning to move all or parts of their production out of Norway. In recent years, the shipbuilding and engineering industries have sustained the activity level in Norwegian manufacturing. Shipyards experienced a sharp increase in new orders before end-2000 prior to the elimination of support to the shipbuilding industry in Norway and many European countries. The level of new orders has since then been very low, and the order backlog is nearly exhausted. A sharp increase in petroleum investment could provide positive growth impulses to the offshore-related industry. The demand impulses from petroleum investment to the mainland economy may, however, be weaker than has been the case earlier. Construction and installations with a high import content will account for a large share of the increase in investment from 2002 to 2003. Due to the high cost level in Norway, a growing number of contracts are also being awarded to foreign companies. At the same time, Norwegian shipyards are increasingly using foreign subcontractors in low-cost countries. This is having an impact on the Norwegian engineering industry. Many service industries have had to adjust capacity in pace with changes in operating parameters. Investment in service sectors has fallen sharply, and is expected to continue to fall. There is considerable excess capacity in the commercial building market.
Given their low levels of productivity relative to the frontier (as represented by US productivity), emerging market economies have enormous scope to raise productivity  BIS central bankers’ speeches  3  through capital deepening and adoption of existing technology and modern production methods. •  In China, for instance, despite substantial gains in the last two decades, the productivity level is only about 15% that of the US. •  In Indonesia and the Philippines, it is only about 10% that in the US  •  With the right policies, these economies can sustain good rates of productivity growth for a few more decades. A fourth factor impacting long-term economic growth is energy. Some of the world’s largest economies – the US, Japan, China, and India – are also among the largest net importers of oil. Cheaper and more plentiful energy is akin to a supply-side boost to these economies. •  The shale gas revolution in the US has markedly reduced its dependence on energy imports and helped to boost industrial competitiveness as energy costs stabilise at a lower level. •  It would be unwise to extrapolate too much from the recent fall in oil prices of over 25% (between July and October this year). But a gentle secular decline in the real price of oil is not an unrealistic assumption that, if true, should be a boon to global economic growth.

First, on management oversight and the control culture, the starting point is that the Board of Directors need to understand the risks run by the institution, to set the acceptable limits on these risks, and to ensure that senior management takes the steps necessary to identify, monitor and control these risks. Senior management must then take the responsibility to implement the strategies approved by the Board, to set appropriate internal control procedures, and to monitor the effectiveness of these procedures. This makes it quite clear where the main responsibility for controls rests - and that is fairly and squarely on the shoulders of the institution’s Board of Directors and its senior management, not just on its compliance and audit departments. However, having said that, everyone in an institution shares the responsibility to some extent. A key task for the Board and senior management is to establish the right culture within the institution, a culture in which the importance of internal controls is stressed, and high ethical and integrity standards are promoted. This culture BIS Review 48/1998  -2-  will be determined not simply by what the top levels of management say but what they do. For example, do the institution’s remuneration policies reward risk-taking at the expense of prudence? Does senior management display a casual attitude towards breaches of limits? Do they encourage the right attitude towards regulatory compliance? Is there backing and respect at senior levels for the internal audit and compliance functions?
Second, real interest rates must also be increased with a view to removing the causes behind the differentials. BIS Review 14/2001  5  Interaction with fiscal policy It is important that the annual budgets are based on a long-term strategy that takes into account possible fluctuations in oil revenues from one year to the next. With large and, to some extent, varying budget revenues, the basis for determining central government expenditure and taxes from one year to the next may easily be impaired. If budget spending is allowed to vary in step with oil prices, the Norwegian economy may experience abrupt shifts and instability. Changes in oil prices may then quickly influence wage and price expectations, the exchange rate and long-term rates. In addition, short-term rates would have to be changed frequently and sharply. Budget tightening and spending growth Percentage change from previous year 3  3  Spending growth  2  2  1  1  0  0  -1  -1  Total effect of the budget  -2 93  94  95  96  97  98  99  00  -2 01  In recent years, central government real underlying spending growth has accelerated somewhat. Both in 2000 and 2001, spending growth has been higher than 2 per cent, which is above potential growth in the mainland economy. At the same time, taxes have increased.

The government’s five largest stakes in Norwegian companies can be roughly estimated at NOK 300 billion. In general, concentrated ownership requires a more strategic ownership approach and gives rise to higher risk than diversified ownership. 10  BIS Review14?/2001  Risk associated with state ownership NOK bn 300  The five largest state enterprises Petroleum Fund's bonds Petroleum Fund's equities  200  100  National Insurance Fund's private bonds  National Insurance Fund's equities  0 0  10  20  Return risk  This is illustrated further in the chart. The composition of government assets is broken down into equities and bonds in the Petroleum Fund and the National Insurance Fund and government ownership interests in the five largest companies. The horizontal axis provides a normal measure of risk, in other words the standard deviation of the return. The risk is estimated on the basis of the historical performance of the companies’ share prices. For unlisted companies, we have used share price performance for comparable international companies. Higher risk means that the assets are more exposed to fluctuations in return. As a whole, the return on the Petroleum Fund and the return on private bond holdings in the National Insurance Fund feature a moderate risk profile. The risk is higher for both the National Insurance Fund’s equities and the state’s ownership interests in the five largest companies. For a given expected return, the owner should aim at reducing risk because future income will then be more secure.
There is a concern by the U.S. correspondents 2  BIS central bankers’ speeches  transferring funds for Middle Eastern customers that the correspondents might unwittingly be providing services to a terrorist organization, or be enabling a person or affected sovereign to evade economic sanctions. So, the correspondents close accounts for all banks in the Middle East. Similarly, there is a concern by the U.S. correspondents transferring funds for Latin American customers that they might unwittingly be providing financial services to drug traffickers, a money laundering risk. So, they close accounts for all banks located in Mexico, Venezuela and Colombia. The de-risking exercise succeeds in its risk-reducing objective, but it succeeds in an overly broad manner by cutting services indiscriminately to so many. The adverse and unintended consequences for certain regions of the world are clear and present. There are also implications for U.S. policy with respect to the role of the dollar as the international medium of exchange. These issues, while highly consequential, are not the object of my remarks today; rather, they are a symptom of what compliance can lead to – namely, a reason to restrict business activity. Given the size of penalties for violations, and the potential reputational damage associated with this business, it is very difficult to quarrel with the business judgment. The success of compliance over the last 20 years has conditioned business leaders to think about compliance as a pathway to terminate or constrain a risky business relationship.

Levels of savings If we follow the consumption smoothing theory, individual savings behavior is driven by the life-cycle: individuals tend to increase their savings as they earn more and then decrease their savings until they actually become negative when they retire and earn less, thus leading to a hump-shaped pattern for their accumulated wealth. Consequently, as the proportion of the aged population increases, private savings, as a proportion of income, should decrease. However, this decline may be gradual with the negative impact of ageing on the levels of savings prevailing in the longer run. Structure of savings In terms of structure, the fact that elderly people account for an increasing share of the population could change savings habits and have an impact on the demand for certain classes of assets. In particular, given that elderly people are more risk adverse, this could increase the already high demand for low-risk assets. Investment The standard production function exhibits two productive inputs: labour and capital. If the labour force tends to decrease or decelerate because of demography, then the production process may become more capital intensive, leading to a fall in the productivity of new capital and, in theory, a decline in the rate of capital return. Investment could be less dynamic and negatively impact potential growth. This would in turn have an adverse impact on the real interest rate, so that domestic savings and investments would balance.
Asset purchases to push down general interest rates and thus further stimulate the economy can be justified under certain conditions, for example in a situation where the credibility of the inflation target is threatened or when the transmission mechanism via the banking system is weakened.44 But I believe that the threshold for extensive purchases of bonds to safeguard the inflation target should be high. There are sometimes negative side effects of extensive asset purchases that we need to take into account, for example, they may have a negative effect on the functioning of the markets. In addition, it can be difficult to liquidate large holdings when the situation normalises. 43 For a discussion of this and an overview of the literature on asset purchases, including the Riksbank's pur-  chases, see Akkaya et al. (2023) and Andersson et al. (2022). 44 See also my colleague Martin Flodén's discussion of the effects of the Riksbank's purchases in the speech "The Riksbank's losses do not reflect the socio-economic results", 2022. 23 [30]  So we need to learn more about the effects of phasing out or normalising asset holdings. At the moment, of course, there is little experience of this, but we learned back in 2013 that reactions in the financial markets can be strong, when the Federal Reserve announced that it would start tapering its asset purchases. We should consider whether we should not have an exit plan prepared before the next time we need to make major asset purchases.

It follows inevitably from this that there will be tensions and arguments between regulator and regulated. However, these frictions should not be bigger than they have to be – in other words, we should aim for a system in which the burdens on firms created by our regulation are no greater than they need to be to achieve the objectives set by Parliament. Part of this is about the ability to adapt regulation for different types of businesses, as given the enormous diversity of financial firms operating in the UK it is unlikely that one size will fit all in all cases. The other side of this coin is that we cannot run a zero-failure regime. 4. Dynamism and responsiveness. Sometimes these words – “dynamism”, “responsiveness” and indeed “proportionality” above – are understood to imply weak regulation, which unsurprisingly we at the Bank are firmly against. So because of this danger of a whiff of weakness we have thought very carefully about whether it is important to have something like this as part of our list of principles. We have concluded that it is necessary for a simple reason: the financial system is an extraordinarily adaptive organism and is constantly changing. Sometimes this is for good reasons, for instance as it adopts new technologies in order to deliver a better product.
These weaknesses make it necessary to design specific policies to address this objective and to adapt the institutional and regulatory framework so that the smooth functioning of the markets will drive the innovation and development of new activities that will focus the productive structure on sectors in which demand and value added are greater. As a result of the launch of the new Plan to achieve a dynamic economy and to foster productivity, certain measures were adopted to promote competitiveness (of a sectoral nature), which will unquestionably play a part in improving productivity. The Banco de España particularly welcomes those measures addressing the financial system. However, what is most important is that this Plan should clearly steer reform policy priorities in the right direction and maintain the momentum of reform. The commitments announced must be implemented ambitiously and complement other actions aimed at fostering improvements in human and technological capital and in the workings of markets and institutions. This is not the appropriate setting for a detailed and exhaustive review of the range of measures and reforms required by the Spanish economy. I have referred only to some of the most necessary ones, but this list would be incomplete if I did not mention steps to mitigate the potential effects of household indebtedness and of house price rises on the sustainability of growth.

A more flexible and efficient labour market is necessary to overcome the distortions that are contributing to a deterioration in competitiveness and to provide an appropriate framework so that firms will find sufficient stimulus for job creation, the introduction of new technologies, the efficient use of factors of production and the enhancement of productivity. 8  BIS Review 45/2005  In this setting, the persistent ratio of temporary to permanent employees, which seems to have encountered a floor at levels above 30%, with the attendant negative consequences for productivity and human capital accumulation, makes it advisable to review the effectiveness of the incentives in force to hire permanent workers in recent years. This would involve redefining the measures designed to reduce non-wage costs linked to this type of employment and introducing incentives to rationalise the use of temporary employment contracts. It is also necessary to set in train a reform of collective bargaining to make the wage-setting mechanisms more flexible, so that compensation is brought into line with the specific conditions of the productive sector and of firms and with the characteristics of workers. This reform would also eliminate, or at least reduce the emphasis on, wage-indexation mechanisms. The stepping-up of investment in training, in physical capital and in technological capital in line with the objectives of the Lisbon Agenda is fundamental for boosting productivity. As mentioned, Spain has notable weaknesses in the areas of innovation and of its incorporation and diffusion in the productive system.