samchain/econo-pairs-v1 huggingface dataset:
On the one hand, the rise in unemployment, while inflicting a terrible cost on those directly affected, has been a lot smaller than anyone would have expected given the weakness in output. On the other hand, this means that productivity has fallen over recent years, leaving it some 15% below current estimates of its pre-crisis trend path – in sharp contrast to the US. Let’s be clear: we do not understand why productivity has been so weak. And that means that we are highly uncertain about the amount of slack in the economy currently and prospectively; uncertain about the extent of the consequent downward pressure on domestically-generated inflation; and, thus, uncertain about the path of output and employment consistent with non-inflationary growth. That sums up the background to my  1  This is reflected in pages 13–15 of Monetary Policy Committee’s document on forward guidance, available online at http://www.bankofengland.co.uk/monetarypolicy/Pages/forwardguidance.aspx. BIS central bankers’ speeches  1  approach to policy settings over the past couple of years. Provide stimulus; pause to see whether inflation expectations remain anchored; if, but only if, they are and more stimulus is needed, provide it etc. A “probing” approach. The MPC’s framework of forward guidance And, as I see it, that is broadly consistent with the Committee’s new framework of Forward Guidance.

This demographic trend can be measured using the old age dependency ratio, which measures the ratio of people over 64 to the working age population. An ‘older’ population has a higher old age dependency ratio. Chart 3 shows that the old age dependency ratio in Switzerland, as in many other countries, is rising. Pensioners live off their savings. And an ageing population needs to save more today in order to be able to finance a specific level of consumption in the future. Another cause of the increased supply of savings is the integration of China into global financial markets. Savings in China are high as a result of its ageing society and its rudimentary state pension system. In the current economic situation, uncertainty regarding the future development of the economy in certain parts of the world may also have pushed up the supply of savings. While the propensity to save has increased, the willingness to invest may also have fallen. On the one hand, this may once again reflect heightened uncertainty over future economic conditions. On the other, expectations of lower productivity growth might also be playing a role. Furthermore, industrial economies are being transformed into service economies, with potentially lower capital needs. All these factors have resulted in a relatively low real equilibrium interest rate today – across the world, and thus also in Switzerland. Moreover, global monetary policy is expansionary due to undesirably low inflation and subdued economic growth in the wake of the financial crisis.
There are repeated shocks from extreme weather events, followed by reflexive and abrupt but ultimately insufficient policy actions. The scenarios are at best indicative but they have helped us to think of investment actions that could protect the portfolio from large, volatile shifts in asset prices. 14/16  BIS - Central bankers' speeches  Among the four scenarios explored in our study, the failed transition has the worst GDP growth rates and financial market returns over a 20-year horizon, followed by the too-little-too-late transition. The scenarios have helped us better understand the risks from exposures to companies that are dependent on fossil-based carbon intensive products or production methods. Our approach to climate portfolio actions is to start small, learn fast, and scale up as new data provide greater clarity. For a start, MAS has allocated about 2% of our portfolio, or slightly over $ billion, to a climate transition programme. We have done this by tilting part of the equities portfolio towards less carbonintensive companies that are more aligned with the low-carbon transition, rather than by excluding any entire carbon-intensive sector. This approach strikes a balance between reducing the portfolio's carbon intensity while continuing to support companies which are transitioning to lower carbon intensity. We will scale up our climate transition programme as we gain confidence in the effectiveness of the climate indices we have used to tilt our equities portfolio.

5/16  BIS - Central bankers' speeches  For example, if MAS wanted to hedge against such negative currency translation effects, we would have to sell US Dollars from the OFR and buy Singapore Dollars. That would negate our interventions in the foreign exchange market to implement monetary policy and cause the Singapore Dollar to appreciate much more, thereby harming the economy and, not to mention, depleting the OFR. The remaining 30% of the loss, or $ billion, was due to net interest expenses from MAS' money market operations to mop up excess liquidity in the banking system. Money market operations are part and parcel of MAS' monetary policy function. Like most central banks, MAS carries out money market operations to manage the level of liquidity in the banking system. In Singapore, money market operations are also a complement to our foreign exchange intervention operations. In general, there are strong appreciation pressures on the trade-weighted Singapore Dollar due to heavy capital inflows. MAS has to periodically intervene in the foreign exchange market by selling Singapore Dollars and buying US Dollars to dampen these pressures and keep the trade-weighted exchange rate within the policy band. When MAS does this, it accumulates OFR and injects Singapore Dollar liquidity into the banking system. MAS then conducts money market operations to withdraw any excess liquidity. There are a variety of money market instruments MAS uses to withdraw liquidity but they all incur an interest cost.
If we look at the performance of the banking industry over the last decade, the Asian financial crisis clearly marks a watershed. Between 1992 and 1996 our research indicates that the profitability of the average bank in our sample, measured by return on assets, improved by around 0.7 percentage points. It appears that this performance owed little to the macroeconomic environment of the time. Rather, it was due to improved performance at the individual bank level, driven by bank-specific factors such as more efficient operations and improving asset quality. In contrast, between 1997 and 2002 the average return on assets declined by more than 0.7 percentage points. This deterioration was largely driven by macroeconomic variables, with deflation contributing most to the worsening profitability. Bank-specific factors were less significant during this period in explaining both average performance and variations in performance across banks. 2  BIS Review 32/2003  It may seem somewhat obvious to say that the lower profitability of the banks over the last few years has been largely due to the poor economic environment. Certainly, as participants in the syndicated loan market, you will be well aware of the impact of the current sluggish state of the economy on loan demand and margins. But the conclusion does have important implications if we look to the future. If the profitability of the banks has gone down with the economy, equally it should go up with the economy as it improves.

And this would benefit the banks in general, not just the select few with a large market share. In fact, our research indicates that with reasonably conservative assumptions regarding growth and inflation over the three years from 2003 to 2005, the profitability for the average bank in our sample would get back to the average return on assets over the past ten years by around 2005. Obviously, the improvement in the economy would need to materialise for this to happen - and I cannot predict whether it will or not. But at least the banks can take comfort from the fact that the current difficult operating environment may to a large extent be due to cyclical factors, which should eventually reverse. I would stress that this does not mean that banks should simply sit back and wait for the rising tide of the economy to lift them up, or that they should ignore the opportunities that may arise from merger and acquisition. Bank-specific factors will still matter in terms of explaining variations in performance across banks, even if their relative importance was less pronounced after the Asian crisis. Among these bank-specific factors, operational efficiency, as measured by the ratio of non-interest expense to total assets plays the most significant role in determining profitability, at least for the banks in our sample. Surprisingly, the effect of credit quality seems to have diminished over time, perhaps reflecting improvements in the banks’ ability to manage credit risk.
In the United States, responsibility for supervision is divided between a large number of authorities and in Europe between a large number of countries, which makes it difficult to take the overall approach required. Another problem has been that the causes of the crisis largely relate to macroeconomic phenomena such as the development of housing price bubbles, while supervision traditionally focuses on microeconomic issues such as how individual institutions manage their lending. Nor have the supervisors reacted to the fact that the banks have built up considerable risks alongside their balance sheets. These risks have then returned to the banks via lines of credit, that is, earlier loan agreements entered into, and in other ways when the funding problems have increased. There are further reasons behind the crisis. For example, the regulations for the financial markets have been procyclical, that is they have tended to reinforce cyclical fluctuations. There has also been a rewards structure among the private players on the financial markets that has encouraged a short-term approach and a high level of risk taking. Handling of the crisis The authorities in Europe and the United States have tried to counter the effects of the crisis in a variety of ways and to restore confidence on the financial markets. The central banks have primarily contributed by adding large amounts of liquidity via loans against collateral to the banks. This has been necessary as the banks have found it difficult to borrow in the short and medium terms.

European Central Bank: Press conference – introductory statement Introductory statement by Mr Jean-Claude Trichet, President of the European Central Bank and Mr Lucas Papademos, Vice-President of the European Central Bank, Frankfurt am Main, 4 September 2008. *  *  *  Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by Commissioner Almunia. On the basis of our regular economic and monetary analyses, at today’s meeting we decided to leave the key ECB interest rates unchanged. The information that has become available since the last meeting has confirmed that annual inflation rates are likely to remain well above levels consistent with price stability for a protracted period of time and that upside risks to price stability over the medium term prevail. While the growth of broad money and credit aggregates is now showing some signs of moderation, the still strong underlying pace of monetary expansion points to continued upside risks to price stability over the medium term. The latest economic data also confirm the weakening of real GDP growth in mid-2008. This reflects partly an expected technical reaction to the strong growth seen in the first quarter as well as dampening effects from global and domestic factors, including direct and indirect effects from high commodity prices. In this environment, it remains imperative to avoid broad-based second-round effects in price and wage-setting.
Leaving on one side possible, though not necessarily likely, international developments outside our control - a hard landing in the US, for example, or a precipitate realignment of exchange rates, or a further spike in the oil price - there are two major uncertainties. The first is the familiar uncertainty relating to the path of overall demand growth. On almost any basis, we start from a position in which the economy as a whole is operating close to capacity. That is reflected in the evident tightness of the labour market, including increasing evidence of skills shortages. If we are to avoid a potentially sharp reversal in earnings growth and accelerating inflation, we need to see a slowdown in the rate of domestic private sector demand growth to accommodate not only the stabilisation of our external current account balance but also the public sector expenditure growth which the Chancellor has already announced, not to mention whatever he may be planning to announce tomorrow. There are signs that this slowdown in private sector demand growth may be beginning to happen, but that is certainly not yet assured - and over-generous tax cuts would not help. I must tell you that I am surprised by the billions of pounds that some commentators have suggested the Chancellor could safely give away tomorrow. Going in the opposite direction, we have recently seen a more benign relationship than we might have expected between developments in the real economy and earnings and price pressures - the nominal side of the economy.

No doubt at some point such perceptions will change - or the anticipated differences in future earnings growth be discounted by the change in asset prices, including the effect of exchange rates. There are some tentative signs that this may be beginning to happen. But in the meantime it is not at all clear that there is much that we could do - even if we wanted to - to weaken sterling against the euro by marginal changes in short-term interest rates. As it is our interest rate differential over the euro zone has halved since the euro started, while our exchange rate against the euro has appreciated by around 15%. We do already, of course, take full account of the exchange rate - and other prices - in both our forecasts and our policy decisions. Indeed, it was partly to avoid pushing sterling higher and so aggravating the imbalance within the economy, when we were not wholly convinced that we needed to take that risk in order to achieve the inflation target, that the Committee refrained from further monetary tightening over the past eight months. But looking ahead the risks and uncertainties are such that it would be unrealistic to suppose that we can altogether exclude the need for further tightening at some point.
Thus, along with more incentives to promote short sales, steps should be taken to facilitate the timely and orderly absorption of these properties back into the market including as renteroccupied housing. An interagency group including the Federal Reserve is working on issues relating to REO-to-rental conversions. Appropriate policies would simultaneously lessen downward pressure on home prices and upward pressure on rents. 8  BIS central bankers’ speeches  Among other steps, investors could be encouraged to purchase REO to be made available as rental housing. Fannie Mae and Freddie Mac could increase the number of loans offered to individual investors, provided the investor puts up an adequate amount of equity for each mortgage. And REO properties in a given locality could be bundled for sale. The government might consider a package of tax incentives for purchases of REO that are used as rental properties. Such incentives might include a reduction of the current 27½ year depreciation period and/or a reduction of capital gains tax liability if the property is held for a minimum period, such as five years. One idea developed by my staff – let’s call it “homes for heroes” – would be to create a new tax credit or other home purchase subsidy specifically for veterans of our foreign wars that would enable these veterans to purchase such properties at a discount.

Few times ago, I have been informed about a new EU initiative, which requires to set up, within a certain period of time, among others a unified payment system within the euro area, including payments with cards. Presently, small and medium businesses in the euro area have not the same payment opportunities as they have in their respective countries on a national scale. Such a case includes credit cards, which cannot be employed equally across the borders. For this purpose I would suggest that respective experts from the Association and Bank of Albania be as soon as possible informed about this project, making the relevant suggestions in this direction. I personally remain consistent in my position that in Albania we have to adopt the most advanced solutions in all the infrastructure projects that we are going to implement. I believe that we do not need to examine old-fashioned models, which, in addition to the initial cost, will continuously require other funds for maintenance and modification. Besides the developments in the field of payments I would welcome from you a broader commitment even in other directions. I think that the system must further expand its geographical coverage, aiming at including also areas, which, though having at first sight the appearance of being inactive, have large financial potentials in the form of threasurised savings outside the system. Also, the service level should be further improved.
•  While many firms in these sectors successfully upgraded themselves and became more efficient, there was a substantial reduction in the size of these sectors by the early 2020s. But the decisive turnaround in the quest for productivity came when services industries with a traditionally domestic orientation, like education and healthcare, re-positioned themselves by scaling up, investing in technology and talent, and exporting their services. The idea of Singapore as a Global School House was not new but it was pursued with renewed vigour and came to full fruition only during this period. Singapore positioned itself as a choice location for quality education for a growing Asian middle class. •  By 2025, international students studying in Singapore could be awarded joint degrees from 10 of the top 20 universities in the world. •  Singapore was well on its way to become the premier educational hub of Asia. Similarly, the healthcare sector was opened up. •  By 2025, Singapore had become a multi-faceted medical hub hosting the world’s top medical professionals and multi-national healthcare companies. •  This led to a vibrant ecosystem that created jobs in areas from research and training to conventions for medical professionals both locally and abroad, in addition to the large and diverse number of good jobs in hospitals. This third phase of Singapore’s economic history marked the most significant step-down in Singapore’s economic growth, with real GDP growing by 3.6% per annum. However, it also marked the painful but successful economic transition towards productivity-led growth.

In 2030, the most ambitious blueprint of the ASEAN Economic Community process came into being, with the establishment of the ASEAN Free Economic Zone, or AFEZ. •  Unlike traditional economic zones like the ISEZ which were contiguous entities, the AFEZ was a network of the major cities across ASEAN connected by extensive road, rail, air, and sea links, not to mention advanced digital communications. •  There was free movement of goods, services, capital, and people between these cities, which become vibrant hubs for trade and enterprise. While the bulk of the economic benefits of the AFEZ rightly accrued to the developing economies of Indo-China, Singapore benefitted from being the nerve centre of this network with extensive backward and forward linkages between the offshore economy and the territorial economy. The Singapore economy which had hitherto been characterised by the export of goods and services was increasingly being driven by the export of capital and people. •  Singapore firms shifted a substantial volume of production offshore and increased ownership of production facilities in the AFEZ. •  Increased connectivity enabled large numbers of Singaporeans to work in the AFEZ while maintaining home in Singapore. •  The government partnered the private sector to build offshore satellite towns and industrial parks in the AFEZ to cater to the needs of Singapore MNCs and overseas communities. The gross inflows of income derived from the deployment of Singapore’s capital and people abroad rose by 50% between 2026 and 2040.
These different characteristics also determine in essence: •  The way the insurance institution is established and functions,  •  The way the insurance fund is managed and the forms the institution possesses for increasing its value in extraordinary cases, which is the level of the contribution amount by the insured institutions in ratio to the objectives for increasing the insurance fund and for raising the covering capacities;  •  Relation to insured institutions;  •  The role of the state in the insurance institution’s capital;  •  Requirements with regards to necessary human resources and objectives on the intended level of personnel’s expertise;  •  The way the banks and foreign bank branches are insured;  1/3  •  The way of determining the payment of the insurance contribution on the basis of insured institutions risk profile, etc.

It is aimed at adopting best practices in this area, and at implementing the recommendations given by specialized assessments of international financial institutions that assist this process. Allow me to state once more that the Bank of Albania is completely committed to provide all the necessary assistance for strengthening the capacities of the Deposit Insurance Agency in Albania, in view of its very important mission. I wish good proceedings to this seminar. 3/3