samchain/econo-pairs-v1 huggingface dataset:
On this occasion, a string of scientific and cultural events covering the whole year was organised, namely conferences on monetary issues, banking history seminars, exhibitions, stamp and coin issues, as well as cultural events reunited under the “The Cultural Days of the NBR” project inspired by the excellent cooperation with the European Central Bank in 2009. At this moment in its historical development, when the National Bank of Romania celebrates its 130th anniversary, the institution enjoys the status of a national central bank in the European Union. Our institution is a member of the European System of Central Banks and is currently making strenuous efforts for adopting the euro in the years ahead. If I were to find some key words to define the features of the National Bank of Romania, in fact what it stood for and what it still stands for today, these would certainly be the following: a sound, stable, trustworthy, reforming and dynamic institution. After 130 years, it is all the more relevant that the National Bank of Romania had its ups and downs, similarly to the history of Romania, which has also seen peaceful and progress periods followed by dramatic moments. The common denominator of all these was the fact that the National Bank of Romania has always provided support to the country in order to overcome the trying times. The institution we are celebrating today bore the brunt during World War One, having to cover all the related expenses.

In the inter-war years, the NBR played a paramount role in Romania’s economic reconstruction. As for the present, it is difficult to provide a self-description. Government authorities and public opinion might be in a better position to do that. Within the space of only two decades, the Romanian society underwent major changes. The future generations will judge what we did well and what we did wrong. During all these years, however, particularly since the start of reintegration and reconnection with the European Union, I can assure you that the National Bank of Romania made good use of its institutional expertise and took full advantage of the experience acquired ever since its establishment. I would like to mention that the NBR would not have managed to successfully accomplish its most complex tasks without the substantial contribution of its employees, namely the human  BIS Review 114/2010  1  resources it has created itself: employees, experts, managers. This is the reason why I want to extend my heartfelt gratitude to both present and former members of this high performance team for its professional qualities and integrity, as well as for their contribution to developing and enhancing the prestige of this institution, to the benefit of Romania.
Business cycles have also diverged in other ways. The turnaround abroad, which started in the US in 2000, seems to have been related in particular to overinvestment in the business sector, exaggerated expectations concerning future earnings and equity market bubbles that burst. There have been examples of this in Norway too, and the Norwegian economy has over time been influenced by weak external developments. However, other factors seem to have been more instrumental in generating the turnaround in the Norwegian economy. The high rate of economic expansion is now beginning to ebb away as a result of self-regulating mechanisms and a tightening of monetary policy following overheating in the labour market. Wages and costs rose sharply in Norway but more moderately in other countries, even during the period of strong growth in the second half of the 1990s. In the course of the autumn and winter, it became apparent that developments in the global economy are weaker than we and many others had expected. Many central banks have responded by reducing interest rates further. Interest rates in the US, Europe and Japan are unusually low. Interest rates in the US have not been at such a low level since the 1960s. In the last half of the 1990s, when both Japan and Europe experienced sluggish growth, the US functioned as a global growth engine.

Investment as a share of output and demand is now lower than the average for the past 20 years, but now appears to be stabilising. It may therefore take some time before the turnaround occurs and investment picks up again. Strong investment growth has contributed to a build-up of overcapacity in US manufacturing. Capacity 1 utilisation in manufacturing is low. Low capacity utilisation also reflects the overinvestment that took place at the end of the expansionary period. The household saving ratio has picked up somewhat since 2000, probably as a result of the decline in the equity market - although it is still low. Similarly, the federal government budget deficit - as a result of expenditure in connection with war combined with substantial tax reductions - will increase. The current account deficit in the last quarter of 2002 was equivalent to 5¼ per cent of GDP. The low saving ratio and the substantial current account deficit has contributed to a depreciation of the US dollar. Conditions in the US today are more conducive to growth than they were six months or a year ago. The low interest rate will support an increase in both consumption and investment. Corporate profits and financial balances have improved. Companies’ liquidity is solid. At the same time, however, it is 2 uncertain how far shortfalls in corporate pension schemes will weaken growth impulses. And with low capacity utilisation, it may take time before investment gains momentum.
The LEI has particular features: it is a unique identifier, requires annual verification, carries useful information about company structure, and is a globally recognised ISO standard. The Bank believes it has all the right ingredients to deliver much wider benefits for end users – raising efficiency, competition and productivity. Beyond the financial sector LEIs have the potential to be a transformative building block for the real economy.12 With the LEI as a critical building block, technology holds the promise of delivering efficiencies for end users of the financial system. Rapid identification will enable efficient know-your-customer (KYC) and on-boarding processes. Given the complexities of cross-border transactions, it could unlock substantial efficiencies for importers and exporters. And, it could one day enable a business to build up its own credit data file and use it to shop around for the best products, much like we do as individuals. Our work suggests that a widely recognised and unique digital identifier for all businesses is foundational to delivering that future vision. 11 Following the collapse of Lehman Brothers, one of the key issues regulators had to tackle was the difficulty in unpicking the firm’s exposures, given the large number of distinct but interrelated legal entities that fell under the Lehman Brothers corporate umbrella. The LEI, a globally unique reference for each legal entity, recommended by the G20 and taken forward by the Financial Stability Board, was one solution to prevent recurrence of this problem.

The exercise considered minimum capital thresholds which had to be exceeded in each of its parts: the asset quality assessment and the baseline and adverse scenarios of stress tests. Banks not exceeding any of these thresholds had to submit within two weeks a capital plan for remedying their capital shortfall within a period of six to nine months. With the methodology used, 25 of the 130 banks assessed had a capital shortfall, which for the whole of Europe amounted to € billion. It should however be noted that, in anticipation of the exercise, many European credit institutions strengthened their solvency over the past year. Of the aforementioned 25 banks, 12 increased their capital sufficiently in 2014, so only 13 of them, with a capital shortfall of € billion, will have to take additional action to reinforce their solvency. We consider the results of the Spanish banks to be positive. Only one bank was below the threshold in one of the parts of the exercise, specifically in the asset quality review. In this case the estimated shortfall was very small and, during 2014, the bank took measures to strengthen its capital by an amount well in excess of that needed to cover its shortfall. Taking  BIS central bankers’ speeches  5  into account these actions, at present all Spanish banks amply exceed the thresholds set in the exercise.
For example, Schularick and Taylor (2012) find in a study of more than 200 recession periods in 14 economies during the years 1870–2008, that the more households and companies borrow during an economic upturn, the greater the risk that the upturn will be followed by a deep recession and a slow recovery – regardless of whether or not a financial crisis occurs. They also find that recessions linked to a financial crisis are more costly than normal recessions as production then falls more. An obvious example of a credit cycle that  3  For a few examples, see Geanakoplos (2009), Aikman, Haldane and Nelson (2010) and Borio (2012). 4  See, for example, Mian and Sufi (2010). There is a debate, so far mainly in the United States, on what has caused the main problems for the macro economy – the crisis in the banking system or households debt overhang (see, for instance, Krugman, 2013). An increasing number of people consider it has been the latter. 5  See, for example, Schularick and Taylor (2012). BIS central bankers’ speeches  3  went wrong close to home is the boom that contributed to a bank and property crisis and deep recession in the early 1990s. After the crisis – pay greater attention to the credit cycle!

Figure 1 is a good basis when one wants to illustrate different questions regarding monetary policy and central bank operations that have arisen due to the crisis and are now being discussed both internationally and in the debate here in Sweden. The perception prior to the crisis could be described, in a rather simplified, but not misleading, manner as central banks in principle being able to disregard the credit cycle and focus solely on the economic cycle. It was assumed that those cases in which the credit cycle pulls down the economic cycle, which were presumed to be fairly rare, would be relatively easy to manage. Correspondingly, the current international discussion on how central banks should act from now on – the question I began with – can essentially be about how one should take the credit cycle into account in a good way and incorporate it into the economic analysis and into practical policymaking. As the origin of the economic recession is the earlier excessive credit boom, much of the focus is on the question of how one can best ensure that this increase in credit becomes more balanced and that the credit boom thus does not go wrong. It is not merely a question of avoiding crises.
Partly as a result, in 2012 the UK economy created firms at more than three times the rate of the US.7 Taken together, these measures promote competition and spur innovation which ultimately benefits us all. And the UK has managed to combine some of the most flexible labour markets in the G7 with some of the most cooperative labour relations (Charts 9–10). This relative labour market flexibility helps the economy to absorb shocks, illustrated by the experience of the Great Recession. UK unemployment rose by less than in the US, and has fallen faster than in the euro area. Since the start of the Global Financial Crisis, UK jobs have grown 3 percentage points more than the US. Moreover, people’s attachment to the workplace has remained broadly intact. Compare that with the case of some euro members, where youth unemployment in particular has been devastatingly high, and with the US, where there was an unexpected rise in worker discouragement, with many working age adults exiting from the labour market altogether.8 This out-performance is positive for the UK’s dynamism in the medium run. More to the point, that means more people in work, building not losing skills, with real prospects for higher wages and better living standards. That is important because the UK still has work to do to close the gap between its productivity performance and the world frontier, defined by the United States (Chart 11). However, over the broad sweep of its EU membership, the UK’s productivity growth performance compares favourably.

4.2  Financial stability  The impact of EU membership on financial stability is more challenging. Given the close integration of the UK financial sector with the rest of the EU, it is imperative that the EU has a robust regulatory framework. This is in the process of being achieved. Through its membership of the EU, the UK is promoting a strong global regulatory framework, and UK authorities have worked in close concert with our European partners to find solutions to the fault-lines of the past. Examples include moves to end Too Big To Fail by enhancing bank recovery and resolution, a solution developed locally at the Bank of England, implemented regionally in the European Union, and now agreed globally through the Financial Stability Board. Given the scale of the UK’s financial sector relative to its economy, the Bank of England also has a special responsibility to the UK, to Europe and the world. The UK must ensure that the  11  See Broadbent, B (2011), “Rebalancing and the real exchange rate”, Speech at Thompson Reuters, London. BIS central bankers’ speeches  7  system is robust to shocks and that financial institutions can be resolved in an orderly manner. After all, financial stability is a national responsibility, with the UK taxpayer serving as the ultimate backstop of the UK financial system. The comprehensive reform of the UK’s institutional framework for financial stability since the crisis creates a coherent architecture of national macroprudential and microprudential regulators and supervisors.
Extrapolation of pre-crisis trend based on continuation of average growth from 1971 and 2007 beyond 2007Q4. Chart 4: Productivity in UK, US, Germany and France  Level of productivity 70 60 50 40 30 20 10 0 1970  1975  1980  France  1985  1990  Germany  1995  2000  2005  United Kingdom  2010  2015  United States  Sources: OECD and Bank calculations. Notes: Productivity is output per hour worked in $ at constant prices, using 2010 PPPs. 29  All speeches are available online at www.bankofengland.co.uk/speeches  29  Chart 5: Services and manufacturing firm-level productivity dispersion Services (levels)  Manufacturing (levels) Log (90/10) ratio  Log (90/10) ratio  5.0  3.0 2.5  4.0  2.0 3.0 1.5 2.0 1.0 Denmark France Japan New Zealand 2001  2003  2005  Finland Italy Norway UK  2007  2009  2011  2013  Denmark Italy New Zealand  1.0  0.0 2015  2001  2003  2005  Finland Japan UK 2007  2009  France Norway  2011  2013  0.5 0.0 2015  Sources: OECD and Berlingieri, Blanchenay and Criscuolo (2017); ONS Research Database and Bank calculations. Notes: Charts show the log difference between the 90th and 10th percentiles.

The existence of fiscal rules at the EU level, codified in the Stability and Growth Pact and in the  4  BIS central bankers’ speeches  Treaty Excessive Deficit Procedure, was motivated by the need to ensure fiscal discipline, preserve fiscal space and hence allow automatic stabilisers to play out in full during downturns. More fundamentally, the fiscal rules were supposed to prevent countries from pursuing irresponsible fiscal policies with negative externalities on the rest of the monetary union. However, the previously existing framework did not have sufficient “teeth” and its implementation by Member States within the Eurogroup remain insufficiently strict. As a result, EU fiscal rules did not constrain budgetary policies sufficiently.5 At the beginning of the crisis, it became painfully evident that the euro area was also lacking effective crisis management tools. First, the design of the euro area assumed that stabilisation would take place at the national level and to a large extent automatically. The crisis has shown us, however, that shock absorbers at the national level are insufficient in case of a major financial and economic crisis. Indeed, the scale of the shock after the 2008 financial crisis was unprecedented in a number of countries and it far exceeded their national shock absorption capacity. The euro area had no mechanisms to provide financial support for countries in difficulty, ensure efficient risk sharing and prevent cross-border contagion; notably, there were no area-level institutions to prevent fiscal sustainability from being jeopardised by severe problems in their domestic banking systems.
This policy of “prepare and decide” has subsequently been confirmed by the publication of a National Changeover Plan, which sets out the key steps that would be involved in the transition following a positive decision on UK entry. This remains the Government’s policy. In the meantime, we continue to pursue macro-economic - both fiscal and monetary - stability and supply-side flexibility alongside our European partners, in our own national economic interest, which will also help to bring about closer convergence between our economies. Over the past seven years or so we have in the UK achieved the longest period of sustained low inflation we’ve known for a generation. Retail price inflation - on the Government’s target measure has averaged 2.6% since the beginning of 1993 and is currently running at 2.2%, or only 1% on the European harmonised index of consumer prices. But alongside low inflation we’ve had the lowest nominal interest rates that most of us can remember. Short-term rates have averaged some 6¼% since the MPC’s first decision in June 1997 compared with some 9.25% over the preceding decade. And 10 year government bond yields have fallen, with inflationary expectations, to around 5¼%, which apart from a brief period last year is the lowest they’ve been for nearly 40 years. Much more fundamentally we’ve enjoyed the longest period of uninterrupted, quarter by quarter, economic growth since records began some 45 years ago - with annual growth since Q3 1992 averaging 2.8% - between ¼ and ½% above most estimates of our underlying trend rate.

On the plus side, the crucial and unique economic advantage of monetary union is nominal exchange rate certainty within the Eurozone - which takes over half UK exports. I’m not talking just about reasonable exchange rate stability - which might result over time from each country pursuing disciplined macro-economic policies in parallel. I’m talking about nominal exchange rate certainty for the indefinite future. That very real economic advantage is well understood in the UK. It is particularly well understood by those businesses in the UK that export to, or compete with, businesses in the Eurozone, especially given the euro’s unexpected - and puzzlingly persistent - weakness since its inception at the beginning of last year. On that ground alone many of them, who are under intense competitive pressure as a result of sterling’s excessive strength against the euro, though not against other major currencies, would see our joining the single currency as an advantage - provided, of course, the exchange rate at which we joined was fixed at an appropriate level, which most of them - and indeed most analysts looking at the economic fundamentals - think should be substantially lower than at present. At a broader macro-economic level the potential benefit of joining - as a result of greater transparency of costs and prices and lower transaction costs - leading to greater competition and more efficient economic resource allocation is well understood.
Zeti Akhtar Aziz: Fifty years of central banking – stability and sustainability Address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Ceremony for the 50th Anniversary of Bank Negara Malaysia: "50 Years of Central Banking – Stability and Sustainability", Kuala Lumpur, 8 February 2009. *  *  *  Bank Negara Malaysia opened its doors as a Central Bank on January 26, 1959, just over a year after Malaysia gained independence in August 1957, reflecting the importance that was being accorded by our founding fathers to the institution of Central Banking. At the very outset, the Central Bank was entrusted to provide leadership in performing the traditional Central Bank mandate of promoting monetary and financial stability. Equally important was the mandate to develop the domestic financial system – a financial system that would facilitate economic growth and development. It is my very great honour to welcome distinguished guests that have come from different parts of the world to join us on this special occasion to commemorate the fiftieth anniversary of Bank Negara Malaysia. We also wish to express our appreciation to the Prime Minister of Malaysia for his presence as the guest of honour at this occasion. Introduction Allow me to share our experience during these fifty years and our aspirations moving forward. These five decades have been highly challenging but rewarding with many fulfilling outcomes and there were also lessons learned.

It will be important to have sound estimates of costs and timings before the plans are finalised and the heavy machinery starts to arrive on site. We have some clear design parameters for the build. The government has set out three objectives to ensure the review is tailored in the right way1: to spur a vibrant, innovative, and internationally competitive insurance sector; to protect policyholders and ensure the safety and soundness of firms; and to support insurance firms to provide long-term capital to support growth, including investment in infrastructure, venture capital and growth equity, and other long-term productive assets, as well as investment consistent with the government’s climate change objectives. I want to talk for a few minutes about the second objective, policyholder protection and safety and soundness, and why we think of it as the foundation stone on which any measures to reach the other two objectives must rest. Policyholder protection is ultimately the business we are all in. Insurers protect policyholders by reducing risk and uncertainty from their lives and businesses. Doing so provides certainty and security, allowing companies to innovate and grow, and individuals to plan for the future. For the system to work, policyholders need to have confidence that the promises made to them by insurers are going to be met. And we in the PRA have been clear that having left the EU, our approach to policy making will continue to have robust prudential standards at its heart, to safeguard UK financial services and policyholders.