samchain/econo-pairs-v1 huggingface dataset:
Broadly speaking, workers who can build skills and remain nimble can do very well in today’s economy, while those who can’t are much more likely to fall into lower-paying jobs and get stuck there. 2  BIS central bankers’ speeches  A skilled workforce that is matched to the needs of employers is also necessary for the economy to grow and prosper. By pursuing its mandated goals of maximum employment and price stability, monetary policy can help labor markets recover by providing incentives for firms to invest and grow. However, monetary policy cannot by itself solve skill mismatches that may exist in the economy. These frictions must be addressed in other ways, such as by workforce development policies. That is, monetary policy can complement workforce development policies, but is not a substitute for these policies. That is why I believe workforce development is so important for the long-term health of the economy. We need to help workers build the skills necessary to adapt to change. This makes workforce development a top priority for everyone involved: workers, their employers, their communities and the public sector, as well as education and job training institutions. We all need to share in the responsibility of helping people increase and maintain their skills. Successful workforce development needs to include what I call the 3 P’s: Partnerships, Programs and Placement. Partnerships entail the cooperative endeavors between local employers and educational institutions to determine the best strategies to help workers develop the skills that employers need.

Other investment opportunities include in Shariah-compliant real estate investment trusts (REIT), in unit trusts and in the Islamic exchange traded fund (ETF). The capital market intermediaries in Malaysia, that is, the investment banks and Islamic fund management companies have had a key role in supporting the development of this industry. Both retail and wholesale products are being offered in ringgit and non-ringgit currencies. There is also no restriction in investing 100 per cent of the funds abroad. The foreign exchange administration rules now allow for the free mobility of inward and outward movement of funds. Pillar 3: international Islamic banking The Islamic financial system has also been extensively liberalised to allow for the entry of foreign Islamic financial institutions that offer both domestic and international banking business. In addition, the foreign equity ceiling in Islamic financial institutions has been raised to a maximum of 49 percent as part of the effort to promote strategic alliances. The Islamic banking business in foreign currencies can be conducted by the international  2  BIS Review 97/2008  currency business units (ICBUs) that may be set up within existing financial institutions and the international Islamic banks. Such international Islamic banks may be established as either a branch or a subsidiary. Currently, about 16 percent of total assets in the Malaysian banking system is Shariah compliant. Pillar 4: international takaful business The fourth pillar is takaful and retakaful business.
The uncertainty bands are constructed so they are symmetrical around our main scenario and for GDP growth and the inflation rate the breadth of the bands is calculated with the aid of our earlier forecasting errors. This gives an incentive to make good forecasts, as large forecasting errors bear the penalty of broad uncertainty bands and the risk of reduced credibility in the forecasts. The uncertainty band for the repo rate cannot be calculated in the same way, as we have only begun to make our own forecasts for the repo rate this year. There are quite simply insufficient historical forecasts to use as a base. The uncertainty band for the repo rate has instead been constructed with the aid of forecasting errors among the so-called implied forward rates (Figure 14). The implied forward rates reflect market expectations of the repo rate. One problem with this method is that the implied forward rates have systematically over-estimated the future repo rate path for a number of years. However, the over-estimation has been removed from the forecasting errors, with reference to the fact that the forward rates also consist of a risk premium that should not be included when using them for forecasts. Different central banks have chosen different methods of illustrating the uncertainty in the forecasts and we regularly compare notes with one another. We are continuing to develop our forecasts The conclusion from this review is that the Riksbank’s forecasts on the whole are rather good, particularly one year ahead.

For instance, the downswing in inflation in 2003 was captured to a greater extent than the upswing at the beginning of 2001. The inflation forecasts are on the whole more accurate than the time series models. The forecasting memory for the CPIX extends eight quarters ahead (Figure 8). The correlation between forecasts and outcome is almost 0.8 one year ahead and just over 0.5 two years ahead (see Figure 9). None of the other variables has as high a correlation two  7  We have earlier analysed this in the context of a structural model, Ramses. The evaluation appendix to Inflation Monetary Policy Report 2007:1 contains an analysis of, for instance, the effects of productivity shocks on the economy. 4  BIS Review 138/2007  years ahead. The fact that the correlation wanes in time is natural as the uncertainty in the forecasts increases. Is there any bias one or two years ahead in the forecasts? Let us now look at whether there is any bias, that is, systematic over-estimation or underestimation in the forecasts one and two years ahead. The smaller the bias a forecast has, the better it is. One year ahead the bias for annual GDP growth is very small. However, two years ahead the forecasts have been almost been four tenths too high on average, compared with the outcomes, which is not negligible (Figure 10). With regard to the annual development in employment, the bias is just under three tenths one year ahead and two tenths two years ahead.
BIS Review 15/2003  5  Conclusion All in all, most factors indicate that competition in the mortgage market for borrowing and financing will increase. A potential Swedish adoption of the euro, larger markets that generate a bigger financing base, the EU's Financial Services Action Plan, Basel II and the efficiency improvements in the infrastructure for conducting cross-border trade in financial services are all important factors in a future perspective of the capital market. As mortgages are standardised products, lenders will mostly compete through prices, i.e. interest rates on mortgages. Competition will ensure small variation in prices, which is why the question of financing will be of primary importance for mortgage lenders. As competition in the mortgage market increases, the borrowing costs of mortgage institutions will become the decisive factor in their ability to conduct profitable, competitive operations. 6  BIS Review 15/2003

The decisions, which usually pass through internal professional filtrations,  BIS central bankers’ speeches  1  and are made by the Governor and the NBRM Council, are within exclusive responsibility of those two bodies, and since the Governor is also a President (with the new law, a Chairperson) of the Council, I also consider these decisions, particularly if there were bad ones, as my personal responsibility. I actually want to say that the statutory independence of the NBRM over the last seven years was completely preserved. This should remain in the future. The central bank independence is crucial to the macroeconomic stability and very important to the financial system stability. With such position, I consider that we successfully pursued all assignments entrusted by the law: (1) We preserved low and stable inflation as a primary objective of the central bank. The seven-year average (2004–2011, April) equals 2.2%. I know what some may think of the so called “tolerant” or “useful” level of inflation. I leave it to them to “reconcile” their “tolerant” level of inflation and de facto fixed rate. In case they again oppose to the existing regime of exchange rate, to have even higher inflation, we will be decent enough to seek for an elementary analysis of its usefulness, i.e. of the advantages of such alternative. (2) We maintained a stable exchange rate level, without registering misalignment between its level and the economic fundaments.
A telling example is our decision to implement the exchange rate floor vis-à-vis the euro that I mentioned above: with the initiative’s legal limitation in place, we would have been forced during our defence of the minimum exchange rate not only to buy euros, but also to buy gold in large quantities. Our defence of the minimum exchange rate would thus have involved huge costs, which would almost certainly have caused foreign exchange markets to doubt our resolve to enforce the rate by all means. Even worse consequences would result from the initiative’s proposal to prohibit the sale of gold at any time. An increase in gold holdings could not be reversed, even if necessary from a monetary policy perspective. In combination with the obligation to hold at least 20% of total assets in gold, this could gradually lead the SNB into a situation where its assets would mainly consist of gold: each extension of the balance sheet for monetary policy reasons would necessitate gold purchases, but whenever the balance sheet needed to be reduced again for the same reasons, we would not be able to resell our gold holdings. This would severely restrict our room for manoeuvre. Furthermore, because gold pays no interest or dividends, the SNB’s ability to generate profits and distribute them to the Confederation and the Cantons would be impaired. As a final point, note that currency reserves which cannot be sold are not truly reserves.

At the end of the day, out of turmoil, we all come out with new ideas, new concepts and new lessons to be learned and followed. Or, to be more illuminating let me quote Christopher Adam and David Vines – Oxford University: “… The Great Depression led Keynes to write his General Theory, thereby creating macroeconomics as a basis for national macroeconomic policy-making. The Second World War led – via the Bretton Woods Conference – to the creation of international macroeconomics, and to the birth of the IMF… The present global financial crisis will, we think, most likely lead to a major shift in our understanding of the role of finance in macroeconomics, in both theory and in policy-making”. The recent global economic and financial crisis indeed created a room for upgrade of what we knew or what we thought we knew. It clearly illustrated how fragile our knowledge can be emphasizing the need for a continuous capacity building. Bearing all these in mind, one cannot be oblivious to the role which the training centers, such as the CEF, do have in building the architecture of knowledge. In fact, the global crisis accentuated even more their importance. They embrace and combine the latest theoretical and practical views, trying to spread the new ideas and help policymakers deliver optimal policy responses. The CEF has proved to be a leading institution in helping policy makers to improve institutional capacities.
Now, both central banks are members of the Club of Governors of the Black Sea Area. Regarding Sweden I will grasp your attention with a historical moment that incidentally connects Sweden with Bucharest and the Ottoman Empire. One of Bucharest’s landmarks, the Colţei Tower (part of the Colţei Hospital which you can see across the Boulevard) has been built in the early XVIII century by the Swedish soldiers, during King Charles XII retreat to Adrianople after his failed campaign in Russia. BIS central bankers’ speeches  1  I will end now my brief journey into history, which has not been nor exhaustive, not even relevant, and get back to our conference topic. During the debate one should not forget that the size of the economies and the development level is different in these three countries. For example in a list compiled by the International Monetary Fund for the year 2012, Turkey ranks 17th, with a nominal GDP of 795 billion dollars, while Sweden ranks 22th, with a nominal GDP of 525 billion dollars (Romania is 56th, with 170 billion dollars). GDP/capita is also rather different. I do hope that this conference will elicit a lively debate. I believe that we have much to learn from the Swedish and Turkish experience since they have been market economies for a longer period of time compared to Romania. I kindly invite Their Excellences the Ambassadors of Turkey and Sweden to address the audience and to introduce their speakers.

With reference to the question above, I can tell you that there have been several reasons to begin with these three countries, but the main reason for which we compare today the present situation in Sweden, Turkey and Romania is due to the diligent and assiduous activity of the Ambassadors of these two countries in Bucharest. Then, I would like to salute their presence here today: His Excellency Mr. Anders Bengtcén, Ambassador of the Kingdom of Sweden, and His Excellency Mr. Ömür Şölendil, Ambassador of the Republic of Turkey and to particularly extend my gratitude to them and to all the persons involved in the materialization of this conference. I also thank Mr. Klas Eklund, Senior Economist at the Swedish Bank SEB and Adjunct Professor of Economics at the Lund University and Mr. Çağri Memişoğlu, Deputy General Manager at Garanti Bank Romania. There are, of course, historical links between the three countries. I do take this opportunity to highlight a few of them. With the Republic of Turkey one could go back to the proclamation of the new state as a republic, last century, and even more, centuries of ties between the Romanian Principalities and the Ottoman Empire. I also like to notice the connection between our two central banks. In the National Bank of Romania’s archives there are letters, exchanged between Governor Mitiță Constantinescu and Governor Salâhattin Çam, regarding the organization of a conference for the governors of the central banks in the Balkanic Coalition, in November 1937, in Ankara.
It is interesting that, whether positive or negative, the current account balances of individual countries have had the same sign for prolonged periods. Germany, for example, has registered a surplus since 2002, while the US has had a deficit since 1992. Third, total current account surpluses or deficits increased steadily until the onset of the financial crisis. After the crisis, however, they declined and have remained more or less stable since then. To summarise: Although global current account surpluses and deficits have not increased further since the financial crisis, some countries have persistently high current account surpluses/deficits. Switzerland is one of them. The question is: is this sustainable? This leads me to my next point – the question of why it is that many countries have persistent current account surpluses or deficits. Drivers of current account balances In principle, current account surpluses and deficits allow countries to optimally distribute consumption over time. This desired intertemporal distribution is driven by structural factors such as demographics and future potential output. Let me explain this using two examples. Page 6/13  India is an emerging economy with a young population. The country needs to invest a lot today but does not have enough domestic savings available. In order to finance current consumption and investment, it imports capital from abroad and has a current account deficit. The opposite is true in Japan. A rich, advanced economy, it has a shrinking – and, above all, a rapidly ageing – population.

– Analysis of the  size and depth of capital markets in the EU27”, New financial, September 2019  4/4  BIS central bankers' speeches
Wage increases are not sustainable unless they are financed from higher productivity and economic growth. Financial stability The financial sector clearly plays a crucial role in the economy. This sector is a prominent employer of trained professional staff, with financial and insurance activities on their own employing 7,280 persons or 4.3% of the gainfully occupied population and contributing 8.5% of gross value added in 2011. The gap between these two ratios is a sign of the relatively high level of productivity in this sector. 1  International Monetary Fund 2011 Article IV Consultation – Staff Report, May 2011. BIS central bankers’ speeches  5  As a matter of fact, as shown in Chart 11, productivity – as measured by the value added per employee in the sector – has risen considerably in recent years and in 2011 stood at nearly EUR 65,000, significantly more than the corresponding per capita value added in the services sector in general, which stands at around EUR 34,000. Bank credit remains the main source of external funding for non-financial businesses in Malta. Moreover, as in most other European countries, bank financing is regarded as the main, if not the only, avenue of external financing for SMEs. External funding is however primarily suitable for large corporates, given the costs and regulatory requirements associated with debt issuance. A more active and innovative debt market is in the interest of the country’s economic growth potential. Undoubtedly this needs to be harnessed through an appropriate macro-prudential policy safeguard of financial stability.

Their model has positive features: (slide 10) equity capital amounts to 121% of GDP in the United States, compared with only 52% in the euro area, which means that in the United States innovation finds appropriate financing more easily. But it also has limitations that we should be mindful of: excessive cost of equity can have harmful effects. To meet the financial challenge, savings have a central role to play. I will focus on two avenues for steering them into productive investment. First, savings should be reoriented towards the long-term, more easily than towards direct risk-taking. French and, more generally, European savers are more risk-averse than American ones – and this is probably not going to change. The first savings motive in the euro area is indeed insurance against unexpected events (mentioned by more than 50% of households).viii But at the same time, savers are more and more concerned by the increase in life  5 expectancies and the need to prepare for retirement: old age provision ranks as the second most important savings motive (nearly 40%).ix Therefore it makes sense to offer savers new, complementary forms of savings products, that are less liquid during the first years, but that include some form of longterm capital guarantee. These new products would provide financial intermediaries – in particular life insurers – with liabilities long enough to take pooled risks – in the form of equity investments essentially – and savers with the higher returns offered by equity over the long run.
However, as the last line of defense, monetary policy can be used to lean against the winds of excessive asset prices. The prudential measure we implemented some time ago – a loan-tovalue limit of 90 percent for condominium purchases – is an example. The measure in itself is not particularly binding; it is more significant as a pre-emptive move designed to signal policy resolve in mitigating possible build-up of real estate bubbles. At present, the risk of real estate bubbles is not significant but should capital inflows surge again amid strong  BIS central bankers’ speeches  3  domestic demand and credit growth in real estate, macro-prudential measures may need to be tightened. On capital flow liberalization, we are moving to liberalize capital outflows so as to foster more balanced capital flows. This will help to balance fund flows and support exchange rate movements in line with economic fundamentals. In addition, with the rise of the AEC, crossborder investment will facilitate regional competitiveness and realize supply-chain synergies. Lastly, on financial sector liberalization, ongoing financial sector reform will also build financial sector resiliency to shocks from within and without. Thailand’s financial master plan, now in its second phase, continues, and focuses on liberalization through increased competition, raising efficiency, and strengthening the financial infrastructure. We also view an efficient financial sector as supportive of unleashing long-term engines of growth, such as structural change.

Our research shows that the gains from structural change can be considerable although adjustment costs, in terms of the reallocation of labor and capital, will also be significant. Now we arrive at the third and final question. Given the euro crisis and Thailand’s prospects for growth, what should monetary policy do? The dilemma here is how to bridge short-term stabilization with long-term goals of structural change. The challenge for policy is to maintain an overall framework where the trend of increasing economic integration can continue while containing crises. Given our baseline scenario of a prolonged recovery without a liquidity seizure we lean towards long-term goals – for example, maintaining capital flow liberalization, financial sector liberalization and market-led exchange rates – but with a readiness for monetary stimulus should a clear need arise. Let me discuss the policy tools at our disposal and how they fit into our overall policy objectives. On the interest rate, the policy rate has been on hold at 3.00 percent since January this year. At the moment we view it as supportive of growth amid global risks and consistent with our inflation target. However, I must stress that the interest rate is poised to go either way depending on developments in the advanced economies, in particular the euro area and the impact on the overall Thai economy. We recently saw how the impact of the euro crisis is spreading to Asia in the form of a broad-based slow-down in Thai exports.
17  All speeches are available online at www.bankofengland.co.uk/speeches  17  Chart 13: Heat maps of health in Belfast, Cardiff, Edinburgh and Inner London  Sources: 2011 Census. Notes: Data show percentage of respondents declaring themselves to be in bad or very bad health at electoral ward level. I draw two conclusions from these micro-level visualisations. First, however striking the regional differences in economic and societal health across the UK relative to historical and international standards, these conceal even more striking differences in levels of health, wealth and happiness within regions. To the extent there is an inequality issue in the UK, it is as much or more a local rather than regional one. 18  All speeches are available online at www.bankofengland.co.uk/speeches  18  A second, nerdier, point is what this means for our understanding the economy. Many systems – social, natural and physical – exhibit a pattern in which the distribution of outcomes does not converge at higher resolutions; it remains constant or even expands. These systems have a fractal property with patterns that are self-similar at different levels of resolution. Snowflakes and shorelines are the best-known examples. The violins charts suggest economic systems may also exhibit some of these properties, with distributions which do not converge at higher resolutions and may even expand. Outcomes in these systems are not distributed like a bell-shaped, Normal distribution.

It is clear to me that only if the industry and supervisors work together - each meeting our responsibilities and reinforcing the other - will we be able to successfully manage and supervise a modern financial system. While perspectives may differ from time to time, our objective is the same to maintain a strong and vibrant financial system over the long term. Thank you very much. 6  BIS Review 15/2003