samchain/econo-pairs-v1 huggingface dataset:
Since 1993, China’s role in the region has reversed from that of a net exporter to a net importer. The share of East Asian exports to China has doubled in the recent decade. Previously, the high economic performance in Asia was driven by the export orientation and investment driven growth. In the recent decade, greater focus has been accorded to domestic sources of growth. Increased emphasis has been accorded to promoting the role of consumption demand in the growth process. Traditionally, the countries in the region have high savings, relative to other regions. ASEAN’s saving rate of 35% is nearly double that of NAFTA and one and a half times higher than the EU’s. There, therefore, remains significant potential for high rates of consumption without resulting in risks to our system. The increased consumption demand has been a factor that has reinforced the trend toward greater intra-regional trade in Asia. There has also been a trend towards greater intra-Asian investment flows in the region. This includes increased reinvestment of the surplus funds back into the region, both in the form of foreign direct investment and portfolio capital flows. The recent establishment of the Asian Bond Fund is a step in this direction. Initiatives are in progress to promote the development of regional capital markets. The  BIS Review 40/2003  1  initiative to develop an Asian Bond Market will contribute towards recycling part of the high savings to finance productive activity within the region.

So far, 21 APG Typologies Workshops have been held since the APG’s formation in 1997, where the last Workshop was held in 2018, jointly with the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) in Russia. These Workshops have contributed to a better comprehension of prevalent money laundering and terrorism financing (ML/TF) threats in the region, by allowing members to understand latest trends, identify key red flags as well as sharing of information on possible counter-measures to respond to the threats. This has assisted members to take the hard decisions to prioritise, apply resources and put in place systems to effectively tackle financial crimes. With so much benefits, the APG is committed to continue holding the Annual Typologies Workshop so that members could keep abreast with the latest ML/TF trends and typologies. As you can see in the agenda, this year’s Workshop aims to discuss two key areas that were approved by the membership earlier. These two topics namely, Digital ID/e-KYC and Financing and Facilitation of Foreign Terrorist Fighters, are timely given the current development in our region. Allow me to touch briefly on these two topics. Digital ID/e-KYC The rapid technology advancement in the last decade has led to significant innovations in the financial sector. Then came the COVID-19 pandemic, which has accelerated the need for financial institutions around the world to shift their operations onto the digitalised platforms. Digital ID/e-KYC is one such innovation and the authorities have responded accordingly.
But at the same time, there is on the other hand, a need to be clear and transparent with regard to the objective for monetary policy. I have shown obvious examples of this conflict from recent years. Another thing that it is important to realise is that what I have presented here are different types of decomposition of the development of inflation. Decomposition can occur in different ways, I have talked about two main methods here, but they both concern decomposition. It is not a question of basic explanations of the development of inflation. Inflation is the result of a very large number of economic agents’ individual 16 [19]  decisions to change prices. This can be a businessman altering a price list, or negotiation between a buyer and a seller, it can be a public procurement, it can be an employee setting prices with the aid of software that compares competitors’ prices on-line, etc. Exactly what lies behind these decisions, what explains them, is not something we can learn from decomposition. 17 [19]  References Apel, M and Jansson, P (1999), “A parametric approach for estimating core inflation and interpreting the inflation process,” Working Paper No. 80, Sveriges Riksbank, April. Andersson, K and Berg, C (1995), ”The Inflation Target in Sweden”, in Haldane, A G (red), Targeting Inflation, Bank of England, pp. 207–223.

But capital flows may also demonstrate an imbalance between demand and output in an economy, which must eventually correct if debt and wealth stocks are not to become unsustainable. Sharp corrections in rates of domestic absorption and/or capital flows could then result, with attendant output costs. In that sense, global imbalances may also be bad cholesterol. 1 So which are capital flows today? Historical evidence is illuminating. Chart 1 plots (the absolute value of) current account balances in thirteen countries, as a % of GDP, since 1880. Other than in wartime, global imbalances are at their highest in well over a century. They have surpassed levels which prevailed during the classical Gold Standard and are more than twice levels during the Bretton Woods period (Chart 2). For some individual countries, these capital flows look larger still, both absolutely and relative to historical norms (Chart 3). It is not just the size of these global flows that is unusual. So too is their direction. Contrary to theory, capital is flowing from developing countries with a low capital stock, towards developed countries with a high capital stock (Lucas (1990)). In other words, capital is flowing “uphill”, away from countries where the marginal product of capital should be high and towards countries where it should be low. This makes the pattern of global capital flows doubly perplexing. 1  Blanchard and Milesi-Ferretti (2009) discuss the causes of “good” and “bad” imbalances. BIS Review 174/2010  1  Perplexing need not mean bad.
Since the Bank was established in 1816, its position has been regulated through specific legislation. But confidence will always be essential for true central bank independence. That confidence is only on loan. Changing circumstances require the ability to adapt and think differently, and the same applies to central banks. What matters is results, and how they are achieved. Norges Bank’s first demanding objective – to restore confidence in the monetary system – was achieved and made an important contribution to the success of the nation building process of the 19th century. The Chair of the Bank’s first board of directors, Jacob Fredrik Oxholm, also enjoyed success in other arenas. He was an acclaimed amateur actor – right here in Trondheim. The institution he directed – Norges Bank – is not looking for acclaim and enthusiastic cheering. The Bank has a more sober objective – to be a useful public institution and a dependable guardian of Norway’s monetary system. But just tonight, we would not say no to a little applause. And let me wish Norges Bank many happy returns! BIS central bankers’ speeches  5

Let me go over some of the reasons why we chose this path. The euro area crisis, and in particular the more acute episodes of banking turmoil, revealed a number of basic weaknesses at the heart of the monetary union. i)  First, the problems encountered by some of the big banks severely damaged the fiscal stance in certain countries, where the state had to step in to save these banks. This, in turn, undermined market confidence in the sustainability of the resulting fast growing public debts, which led to sharp rises in the rates at which those countries could borrow on the market, as, for example, in the case of Ireland. ii)  Second, there was a perception that countries with impaired public finances would have difficulty bailing out their respective financial systems in the event of a problem. This resulted in a widespread loss of confidence and pushed up borrowing costs for banks and sovereigns, as in the case of Italy. iii)  In response to these tensions, the European Central Bank took unprecedented steps to lower the cost of bank refinancing, cutting its key policy rates to historically low levels and providing unlimited 3-year liquidity. But even this proved insufficient to calm market tensions. In some countries at least, monetary policy measures were simply not being fully transmitted to the real economy. What was the reason behind these three phenomena, which were largely responsible for the escalation of the crisis in the euro area?
The orientation of Islamic finance towards real underlying assets is aligned to the nature of the investment opportunities in both regions. Infrastructure and project finance in both regions are particularly suited for Islamic finance. The emphasis in Islamic finance on risk-sharing and the equity-oriented nature of such financing also suits the requirements. The Islamic financial structures clearly distinguish the roles and responsibilities as well as risk and profit-sharing profiles of the parties involved. This clear delineation of the roles also promotes greater transparency and the appropriate governance. The nature of the structures also enables the risks to be transferred to those more able to contribute towards value creation. In addition, the use of Islamic finance promotes stability in the financial markets and the financing flows, which is important for emerging market economies such as those in Asia and the Middle East. In Islamic finance, strategies to minimize and manage the risks involve integrating with the risk in the real activities. The real activities therefore needs to generate sufficient wealth to compensate for such risks. In contrast, conventional instruments generally separate the risks from the underlying assets. As a result, risk management and wealth creation may at times move in different or even opposite directions. Conventional financial instruments also allow for the commoditisation of risks, leading to its proliferation through multiple layers of leveraging and disproportionate distribution. These could result in higher systemic risks, increasing the potential for instability and inequitable concentration of wealth.

For these reasons, central banks need to be - and they are - very cautious in identifying and pointing to the existence of a bubble. However, a number of indicators may help us to form an assessment about whether an asset price misalignment or a bubble is under way. A widely used indicator to gauge major stock price misalignments - which I am sure many of you employ in your professional activities - is to compare price-earnings ratios with historical averages. In the housing market, one method is to look at trends in the price-rent ratio relative to the historical averages, or at affordability (price-income) measures. All these indicators can be informative in judging the sustainability of asset price valuations. In addition, a number of researchers have stressed that important complementary information for assessing the sustainability of asset price movements can be derived from monetary and credit developments. In particular, it has been shown that periods of high money and credit growth often give rise to boom-bust cycles in stock and property prices, which then causes high costs in terms of macroeconomic stability. Overall, we have several tools which could help us to detect bubble phenomena. While individual tools are subject to caveats, applying a broad range of methodologies should help limiting the risk of making mistakes in the assessment of asset prices. 4  BIS Review 66/2004  What can central banks do about bubbles?
Against this background, I would like to organise the rest of my remarks today around three issues. First, why do we find ourselves in the current, low inflation predicament? I sustain that inflation fluctuations have been somewhat surprising ever since the beginning of the Great Recession. In part, they were the result of adverse exogenous shocks. To some extent however, they were also connected with unwarranted variations in markets’ expectations of the future stance of monetary policy. Second, I will argue that the Governing Council meeting at the beginning of June is important not only for the decisions that were actually adopted. It is important also for the clear signal that we provided about the determination to do more in the future, in the event of additional downward pressures on inflation. I will develop these two points which deal with the way our recent policy decisions will produce effects. The third question is: how would the ECB react, should the risks of a protracted period of low inflation materialise? At this point in time, this is essentially a scenario analysis – and specifically an analysis of a low probability scenario. Outright purchases of a range of financial assets would be effective in this situation, but structural reforms would also be essential to spur economic growth. 3  See Giannone, D., M. Lenza, H. Pill and L. Reichlin (2011): “Non-standard policy measures and monetary developments”, ECB Working Paper Series No. 1290; De Pooter, M., R.F.

We are setting out a roadmap for mandatory climate-related financial disclosures for all our financial institutions. Next year, we will conduct stress tests for the financial industry under a range of climate scenarios. We are supporting capacity-building among central banks and supervisors in addressing environmental risks, such as through the COP26 Climate Training Alliance initiative. A successful transition to net zero will require collective efforts across governments, businesses, and industry leaders globally. We must act now, and we must act together, to secure a cleaner and greener future. 1 Link  to “NGFS Glasgow Declaration Action”: www.ngfs.net/sites/default/files/ngfsglasgowdeclaration.pdf  2/2  Committed  to  BIS central bankers' speeches
Reduced net debtor position Throughout the years, the flip side of the structural fiscal surplus has been a significant reduction in public debt as a percentage of GDP, accumulated resources in foreign currency in sovereign funds, and an improvement of the net financial position of the Chilean economy relative to the rest of the world. This improvement also contributes to a more appreciated exchange rate via lower sovereign risk, access to external credit in more favorable conditions and a higher permanent income from interests paid on savings abroad (figure 4). Sectoral heterogeneity Because of heterogeneity in global recovery and currency evolution, the average path of the real exchange rate blurs the diversity of bilateral or regional parities. As I have pointed out before, the peso’s real appreciation centers in the US and Europe, while it is more stable with respect to the currencies of other emerging economies or commodity exporters that compete with Chile in various markets (figure 5). Such a disparity means that the effects of the appreciation of the peso have been heterogeneous across the different economic sectors. In some, the appreciation has been more than offset by higher export prices (mining), while in others the effects have been mitigated by appreciated currencies in some countries of destination. The agricultural industry, where nearly 70% of its sales go the United States and Europe, has seen a greater appreciation (figure 6). III.

Nonetheless, probably the most important factor is that the banking sector is one of the most highly regulated sectors in society and is subject to strict supervision. A bank cannot operate without a licence, and banks are required to satisfy a number of requirements relating to capital adequacy and liquidity management, all of which limit bank lending and money creation. Norwegian banks cannot behave as Stockholms Banco did in the 1600s. By ensuring that banks are solid and sufficiently liquid, regulation and supervision also underpin trust in the money we use. The financial crisis in autumn 2008 was triggered by the collapse of an under-regulated financial institution – the Lehman Brothers investment bank.10 In the years preceding the crisis, Lehman’s equity was less than two percent of its assets. With so little capital supporting loans, it does not take more than a puff of wind to bring down a house of cards. New forms of payment and new forms of money Trust is necessary, though not sufficient, for money to function as a universal means of payment. It must also be efficient and safe to use. When you make a payment in a shop using a bank card, one of the largest systems we have is set in motion. Payments move back and forth between banks. Banks settle the payments by transferring money between their accounts at Norges Bank. Your payment then becomes available in the recipient’s account, normally a few hours after the payment process was initiated.
MPC members have always voiced their different views in public, and while this  6  Basu, S, Fernald, J G, Oulton, N, and Srinivasan, S (2003), ‘The case of missing productivity growth: Or, does information technology explain why productivity accelerated in the United States but not the United Kingdom?’, forthcoming in Gertler, M and Rogoff, K (eds) NBER Macroeconomic Annual 2003, MIT Press. Available from the NBER website: www.nber.org. 6  BIS Review 11/2004  is not without risk to the clarity of the message, and has occasionally led to an uncomfortable personalising of decisions, I see it as an inherent part of system not a quirk of particular personalities. The big prize is long term credibility, and nowadays there is no credibility without openness. This is what gives the present framework the flexibility to respond to changing circumstances, and allows members of the MPC to change their minds in the light of experience. And in an uncertain world this openness to learning is a precondition for success under any policy regime. BIS Review 11/2004  7

I don’t think any of us want to return to the Great Inflation of the 1970s. Inflation also tends to become more variable at high levels, making it more difficult for both businesses and households to plan ahead and make financial decisions. By keeping inflation low and stable, we contribute to maintaining economic activity and employment at a high level. 2/3  BIS central bankers' speeches  High and variable inflation rates also have distributional implications. As an unexpected rise in prices will not automatically be followed by an increase in wages and benefits, the result will be a reduction in purchasing power, particularly for those with low incomes and small margins. Norges Bank cannot influence international commodity prices or water reservoir levels. Inflation caused by these factors is beyond our control. But we can take steps to prevent inflation from becoming entrenched. Higher interest rates have the effect of reducing demand for both labour and goods and services, thereby pushing down wage and price inflation. In addition, higher interest rates can contribute to strengthening the krone, which can in turn curb the rise in prices for imported goods. Chart: Household debt has increased As the policy rate is raised, residential mortgage rates will rise. Norwegian households are highly leveraged. Over the past 30 years, household debt as a percentage of disposable income has doubled. With higher debt, increased interest rates will have a stronger impact on household budgets and, combined with the high level of inflation, will curb growth in household consumption ahead.
After all, the danger of inflation is hardly a pressing concern nowadays (but rather the lack of it) and the pursuit of financial stability is ultimately a shared responsibility, since it implies close cooperation with the government and other authorities and may ultimately involve recourse to public funding. I share Stanley Fisher’s view that it would be a costly mistake to give up central bank independence. That would mean “the benefits of having a central bank that can take a longer term and apolitical view of what is good for the economy and take actions in support of that view will be lost”. If a long-term perspective and a shield against political pressure are required for achieving price stability, these may be even more important if explicit concern for financial stability is added. And frankly, I do not see the need for close cooperation with the government as something that implies abandoning central bank independence, but rather as a pre-requisite – which has always been there – for promoting effective policies. Irrespective of how well-designed the policies of the central bank may be, they cannot substitute for a consistent macroeconomic policy mix, and in the absence of this consistency they are likely to achieve at best sub-optimal outcomes. Having said that, I think there are a few questions worth asking – I must confess I do not have the answers, but I believe that the future of central banking hinges upon them.

Relatedly, we have an obligation to the public to be accountable for all our actions. To maintain the integrity of our actions, this involves strong governance, risk management, and independent oversight, all of which have been implemented for the facilities. Now that the facilities are operational, our focus is on extending access to the facilities. Access can take two forms: access for borrowers, and access for service providers. Access in the first sense is important to broaden the reach of the facilities, thereby supporting the flow of credit and strengthening backstop support for the economy. The Municipal Liquidity Facility, for example, broadened the program's eligibility so that smaller cities and counties could qualify to participate, expanding the potential issuers from around 75 in the program's original terms to nearly 400 now. The Main Street Lending Program also eased borrowing terms and expanded participation to include nonprofit organizations, which are playing a critical role in supporting disadvantaged communities during the pandemic. Access for service providers also matters, for several reasons. First, expanding the reach of our facilities to borrowers requires a broad-based and diverse set of service providers. Second, having a less concentrated set of service providers reduces the New York Fed's dependency on any individual firm, diversifying our risk exposures and enhancing our operational resilience. Third, we recognize that establishing a broad and diverse set of service providers may also prove beneficial to the service providers themselves, beyond the purely remunerative aspects.