samchain/econo-pairs-v1 huggingface dataset:
But who could have foreseen in 1990 that we were on the brink of a golden decade that would see a boom in the IT and communications industry? And who would have imagined in 2002 that Norwegian manufacturing would experience a new wave of growth? Fortunately, there are also many examples of innovation, particularly when times have been bad. Nokia managed to make the transition from rubber boots to new technology when the Finnish economy collapsed at the beginning of the 1990s. In Norway, the Norwegian telecom system was deregulated and Telenor developed into a large international company. During the downturn at the end of the 1980s, Tandberg started developing video conferencing systems. In the industrial centres Mo i Rana, Raufoss and Kongsberg, rich technological communities emerged after the collapse of government enterprises in the 1980s. The merchants behind the grocery chains Rimi and Rema started business on a small scale during the downturn at the end of the 1970s. The furniture producer Stokke – makers of the world-famous Tripp Trapp chair for children – started operations in western Norway in the midst of the economic crisis in the 1930s. Economic policy The measures now being implemented are intended to provide a bridge until market economies generate new growth under their own steam. The authorities in many countries are now testing the boundaries of active economic policy. And some have overstepped them.

In addition, the conducive tax regime which accords neutrality in treatment between Islamic and conventional financial products sets the stage for greater innovation to take place to support the progressive development of the Islamic financial services industry going forward. With this strengthened Islamic financial infrastructure now being firmly achieved in the first phase of the Financial Sector Masterplan, the Islamic financial services industry is poised to tap new growth opportunities and maximize the full potential of Islamic banking and finance. The entry of Commerce Tijari Bank Berhad into the Islamic financial services industry at this juncture is indeed timely. The challenge that lies ahead calls for strategic positioning to maximise the potential that a universal Islamic banking licence accords in tapping new growth areas. While Islamic retail, corporate and investment banking product offerings have grown in sophistication, financial activities such as private equity investments, real estate investments, private wealth and fund management are now rapidly gaining prominence. There is therefore a need to allocate adequate resources to build distinct capabilities in these newly emerging areas. The move into these strategic niche markets would also increase the diversity of new asset classes for Islamic investment. This would not only contribute to further enhance the effectiveness and efficiency of the financial intermediation process in the Islamic  BIS Review 26/2004  1  financial system but also enhance Malaysia’s potential as an attractive international hub for Islamic finance.
David Rule: Managing risk in a soft market Speech by Mr David Rule, Executive Director of Insurance Supervision of the Bank of England, at the General Insurance Research Organisation conference, Dublin, 21 September 2016. *  *  *  Good morning. This is my first speech as the Bank’s Executive Director for Insurance Supervision. Since I took on this role in July, I have been trying to meet with as many chief executives and chairmen of UK insurers as possible. I have been struck by the variety of business models and strategies but one theme has dominated discussions of the risks facing insurers: the current low rate environment. For life insurers, this can create direct solvency pressures to the extent that they are not fully matched against the increasing value of their future liabilities as discount rates fall. That can also be an issue for some general insurers with long tail liabilities. More generally, low investment returns mean earnings on the “float” can no longer cushion a poor underwriting performance. The margin for error in the running of general insurance firms has reduced – firms have to underwrite profitably. On the positive side, this emphasises the importance of underwriting discipline. The soft market But of course the current soft market makes profitable underwriting more difficult to achieve. I am going to focus my remarks today on the wholesale London markets.

Solvency II will introduce an enhanced system of governance standards – promoting the embedding of a strong risk culture, demonstrable within the day-to-day operations of insurers. The new regulatory regime will not look to fix firms’ business models to be identical, nor to restrict the level of innovation across the market. Rather, Solvency II seeks to promote a better understanding of the risks being taken, allowing insurers to take informed decisions. 2  BIS central bankers’ speeches  It is for firms’ management to decide upon their chosen risk appetite and the precise details of their risk models. What matters to the PRA is that firms hold capital commensurate to such risk exposures, in line with the Directive. The introduction of the Prudent Person Principle is an example of how risk management and strategic decision making will be owned by the insurer and its management. The Prudent Person Principle will require investment decisions to be made as if being decided upon by the objective “prudent man” and represents a shift from quantitative to qualitative rules. Gone are the old investment limits for asset classes. So insurers will have much more freedom in their investment choices. The PRA does not and will not promote one asset class over another.
For the banks, this is a quite simple way of “creating” kronor, which, under certain circumstances, can be cheaper than borrowing on the Swedish market. The important point here is that, as long as the bank exchanges dollars into Swedish kronor at the same time as it agrees to exchange them back again when the transaction matures, no liquidity risk in dollars will arise. The bank knows, of course, that it can repay the dollar loan when it falls due.3 A third way for the bank to use the dollars it has borrowed is to lend them to its customers. A growing number of the Swedish banks’ corporate customers operate internationally and have cash flows in US dollars. As part of their liquidity management, these companies may occasionally need to borrow dollars for short durations. And the bank wishes to satisfy this need. For example, Swedish banks undertake significant lending in dollars to shipping companies. Dollars are also lent in countries in which lending is strongly dollar-based, such as Russia. This type of lending has obvious liquidity risks. If the customer is unable to repay its dollar loan when this falls due, the bank may have difficulties in paying its counterparty. During the crisis, this is exactly what happened in several parts of the world. Major export companies were not paid by their customers as planned – as the customers could not borrow from their banks as usual – and so they wanted to extend or increase their loans from their own banks.

Because when the costs for risk-taking are not carried by the party taking the risk, this usually leads to these risks becoming excessive, from a macroeconomic perspective. Would the banks borrow fewer dollars if they had to carry the cost themselves? The banks’ currency borrowing How dependent are the major Swedish banks on borrowing in foreign currency? From a historical perspective, it is fair to say that the dependence has been limited. However, during the last decade or so, the situation has changed dramatically (Figure 3). In 1998, the Swedish banks borrowed foreign currency in an amount equivalent to just over SEK 200 billion (not including borrowing by subsidiary banks). Today, this figure is closer to SEK 1 500 billion. The banks’ rapid expansion, not least outside Sweden, has largely been funded by borrowing on the international financial markets. During the previous financial crisis at the start of the 1990s, the Swedish banks still essentially operated on a national level. This is not the case today. 4  BIS central bankers’ speeches  Over time, the major Swedish banks have also become increasingly dependent on borrowing on the capital markets. Today, they only receive slightly less than half of their funding from normal deposits. The other half is comprised of what is usually called “purchased money”, which is to say money borrowed on the market (Figure 4). And almost two-thirds of that money comes from overseas.
Chart 7 plots the path of real GDP following five UK recessions and subsequent recoveries: the 1930s, the 1970s, the 1980s, the 1990s and currently. The fall in GDP during this time’s crisis is little different than in the 1970s and 1980s and smaller than in the Great Depression. 5  Again, the value for 2014 is an estimate based on projections consistent with the August 2014 Inflation Report. BIS central bankers’ speeches  3  The subsequent recovery in output has been materially slower than in the 1970s, 1980s and 1990s – and slower even than in the 1930s. As a result, the cumulative loss of output from this time’s crisis will very likely be larger than followed the Great Depression. Nonetheless, once you allow for the longer lags, the growth in GDP over the past two years has not been greatly dissimilar to previous recoveries. And if you believe the MPC’s growth forecasts, that recovery is set to continue in the period ahead. At a global level, the IMF’s recent World Economic Outlook paints a not dissimilar picture. Although global growth was revised down, it is expected to pick up from 3.3% this year to 3.8% next and 4.0% the year after. In other words, the IMF also foresees a slow march back to growth normality, albeit at potentially somewhat lower trend rates. So why might this time be different? One illuminating piece of evidence comes from looking at how forecasts for real wages, productivity and real interest rates have evolved during the recovery.

Those distributional differences have, however, persisted and have if anything widened further. Despite having fallen by almost 10% since the crisis, real wages among the top 10% are still over 20% higher than in 1997. But wages for the bottom 20% have fallen by almost 20% since 2007 and are essentially back to where they were in 1997. These polarising forces in the labour market are also evident across industries (Chart 17). BIS central bankers’ speeches  5  Between 2001 and 2007, median annual wage growth across industries was 4% with a standard deviation of 1 percentage point. During 2014, average real wage growth has averaged 1% with a standard deviation of 2.5 percentage points (Chart 18). Wage dispersion has risen markedly. In some sectors wages are growing faster than before the crisis, while in others they are falling in both real and nominal terms. So while strong employment demand has helped sustain wages among the highly-skilled, it has not worked the same magic for the lower skilled. That begs the question – why? The most likely explanation is that rising demand has been more than offset by the rise in the supply of labour for these services. Several factors are likely to have been at play. First, displaced mid-skilled workers may have sought jobs for which they are over-qualified in order to stay in employment. In other words, they have moved down the skill distribution, placing downward pressure on wages. The crisis is likely to have reinforced these trends.
deposits of less than € secured liabilities, such as covered bonds; and liabilities arising from participation in payment systems, along with interbank liabilities with an original maturity of less than seven days. The draft Directive further requires Member States to set up ex-ante resolution funds. These funds will be used to temporarily support banks under resolution by means of loans, guarantees, asset purchases or capital for bridge banks. They will also be used to fund what may be called an “element of flexibility” of the Directive, which I shall refer to in a moment. Over the next 10 years these funds must be built up to a volume equivalent to at least 0.8% of the insured deposits of the country’s credit institutions. In this connection, banks must make annual contributions based on their liabilities. The draft Directive leaves to the discretion of the Member States the matter of whether resolution funds and deposit guarantee funds are merged or kept separate. Finally, as I said earlier, the Ecofin agreement introduces an “element of flexibility” so that national resolution authorities, in certain exceptional cases and subject to strict criteria, may fully or partially exclude any category of liabilities from the bail-in, and use the resolution fund to finance this exclusion. However, as a general rule, they may only resort to such flexibility after losses have been imposed on shareholders and creditors for a minimum amount of 8% of the total liabilities of the bank subject to resolution.

The draft Directive establishes an array of instruments with which to tackle banking crises in three phases or stages: in the preventive stage, in the case of early intervention and in the case of resolution. In the preventive phase, banks must draw up recovery plans in the event that their situation should significantly worsen. The authorities will, in some cases, be empowered to appoint managers at banks. The principal resolution measures would be the sale of part of the business; the establishment of bridge banks for the temporary transfer of healthy assets to a bank controlled by the public sector; the segregation of assets through the transfer of impaired assets to a management vehicle; and measures that impose losses on shareholders and uninsured creditors, known as a bail-in as opposed to a bail-out, which involves or usually involves the assumption of losses by the public sector. The bail-in tool will allow the resolution authorities to cancel or convert into capital the entitlements of the shareholders and creditors of banks that are insolvent or close to insolvency. Under the decision by Ecofín, the deposits of individuals and of small and medium-sized enterprises, along with liabilities to the European Investment Bank, will have preference over uninsured creditors and over the deposits of large corporations. The Deposit Guarantee Fund will at all times make good any guaranteed deposits, i.e. those of less than € which will have greater seniority or preference over other deposits. In any event, the bail-in will exclude, inter alia, insured deposits, i.e.
Speech  23 September 2021, 5.30 pm  Fifth Karl Brunner Distinguished Lecture Introduction of Carmen M. Reinhart  Thomas J. Jordan Chairman of the Governing Board Swiss National Bank Zurich, 23 September 2021 © Swiss National Bank, Zurich, 2021  Page 1/4  Ladies and Gentlemen  Good evening. My name is Thomas Jordan and I am the Chairman of the Governing Board of the Swiss National Bank. We are very pleased to welcome you all to the fifth edition of the Karl Brunner Distinguished Lecture. We are delighted and honoured that Carmen Reinhart has accepted our invitation to give the lecture. This lecture was planned for September 2020, but had to be postponed by one year due to the pandemic, with the hope of welcoming Carmen and all of you in person here in Zurich. Given the still difficult situation with coronavirus, this has unfortunately not proven possible. Consequently, the fifth Karl Brunner Distinguished Lecture now takes place in a virtual format. The Swiss National Bank established this lecture series in commemoration of the Swiss economist Karl Brunner, who was one of the leading monetary economists of the twentieth century. Our aim is to contribute to the public debate on questions related to our mandate, by inviting prominent academics whose research is relevant to central banking. Carmen Reinhart is one of the most cited economists in the world, with contributions that cover a remarkable variety of topics, including financial crises, exchange rate policies and public debt.

Despite her impressive academic track record, Carmen has had at least one foot in the world of policymaking throughout her career. Given her influence among both academics and policymakers, Carmen is an ideal person to hold the Karl Brunner Distinguished Lecture. Karl Brunner himself maintained close contacts with decision-makers around the world, always emphasising the importance of a continuous dialogue between academia and practice. Carmen’s biography reads like a screenplay for an American success story. She was born in Havana, Cuba. A few years after the regime of Fidel Castro came to power, Carmen’s parents emigrated to the United States, leaving almost all their belongings behind. Carmen arrived in the United States at the age of 10, barely speaking any English. The family settled in Florida, where Carmen attended college. After finishing college, Carmen moved to New York to pursue graduate studies in economics at Columbia University. She then embarked on a successful career on Wall Street, where she rose to the position of Chief Economist at the investment bank Bear Stearns in the 1980s. After a few years in the financial industry, Carmen decided to return to Columbia to finish her dissertation. This was followed by an eight-year spell at the International Monetary Fund, before Carmen was appointed professor at the University of Maryland in 1996. In 2012, Carmen moved to Harvard University, and since June of last year, she has been Chief Economist at the World Bank.
Empirical research shows that compared with other developing countries the transition countries are characterized by a relatively higher current account deficit. Certain research of the IMF 1 shows that for the period 1995-2004 the average current account deficit for the countries from Central and Eastern Europe amounted to 5.5 percent of GDP 2 , compared to the deficit of 2.2 percent of GDP in the countries from Latin America and to the current account surplus of 3 percent of GDP in the Asian countries. Simultaneously with the larger current account deficit, the first two groups of countries also registered a significant increase in their external indebtedness, i.e. a fast growth of their net foreign liabilities. Ladies and Gentlemen, It is a fact that the current account deficit is a variable of great importance for the monetary policy conduct. Nevertheless, it is also a fact that the control over the current account balance could not, neither it is done only through the monetary policy measures, which without any doubt puts the central bank in a delicate position when the external position is deteriorated, since the current account is a function of the interactions between the private sector entities' decisions and the decisions of the economic policy decision-makers. Therefore, the identification of the factors that cause these movements and the implications for the monetary policy conduct are essential. The analyses of the main features of the balance of payments in transition countries indicate that the key and dominant factor for the external disequilibrium is high trade deficit.

In order to evaluate in retrospect the monetary policy that has been conducted, we can also examine developments in actual inflation and the krone exchange rate. It should be mentioned, however, that we cannot solely consider whether developments in inflation and the exchange rate have been satisfactory in relation to the objective. We must also, on a discretionary basis, evaluate whether the exchange rate and inflation could have been stabilised at lower real economic costs. When assessing monetary policy in retrospect, the decision-making basis that existed at the time must be taken into account. The decision-making basis may change as a result of revisions to data or new information about economic developments, or our interpretation of the information available may simply change. Even though it is difficult to find a simple and precise performance measure, some general evaluation criteria may be identified. If the krone exchange rate is stable at approximately the initial range, as defined in the Exchange Rate Regulation, and inflation is approximately on a par with the level aimed at by the ECB, it may be said that monetary policy, on the basis of the objective established, has been successful. With a weak exchange rate and high inflation, it is natural to raise critical questions about monetary policy. It may then have been too expansionary. Similarly, with a strong exchange rate and with inflation close to zero or deflation, monetary policy has probably been too tight.
19  Hermod Skånland writes about the need to hold someone accountable for the hardships of the 1920s: “The government is usually a good target for criticism, but there is little appeal in firing shots at a government that is no longer in office, and through the 1920s there had been so many governments that no single government stood out as more responsible than others. On the other hand, there had been one central bank governor, who had also been a prominent figure. Nicolai Rygg became the obvious scapegoat, open to attack from both the masses and from historians, without any economists springing to his defence. Thus, the myth became established that the economic difficulties of the 1920s were due to parity policy, and that Nicolai Rygg was responsible for them. From there, it was only a short step to a general scepticism towards monetary policy combined with a more specific distrust of central banks and central bank governors.” Hermod Skånland (1998): “Mytedannelsen om paripolitikken” (Myth-making about parity policy), Aftenposten 30 May. BIS Review 154/2010  5  virtually solely responsible – for a policy that became a crucial deterrent to central bank independence for generations of economists and politicians – myself included.” 20 The postwar period of coordination and regulatory optimism Views on economic policy changed considerably from the end of the 1930s. The Bretton Woods system of fixed exchange rates against the US dollar was established, with the US dollar pegged to gold.

Both the Spanish economy and its banking system suffered and continue to suffer from the coincidence of these three high-intensity crises, any of which may return at any time, since the economy moves in waves. But it appears highly unlikely that the conjunction of three such crises could recur for many years. The challenges Spain had to face at the onset of the crisis were enormous. Public attention has focused on cutting the budget deficit, but the tasks of reducing the towering debt accumulated by households and firms, and that of regaining lost competitiveness within a monetary union are also huge. A Latin American colleague used a metaphor which, while exaggerated, clearly expressed the difficulty ahead of Spain: “regaining competitiveness”, he said, “is like painting a house. If your brush is the exchange rate and it is flexible, you simply let it move from the top downwards. But since in Spain you’re in the euro and you can’t move the brush, all you can do is move the house upwards from below”. The task is an arduous one but not impossible if we believe that, though it is very difficult, we are capable of changing and reforming. This is why I shall begin my speech with an optimistic message, offering you some examples showing how Spain has already progressed with some adjustments and has undertaken major reforms during the difficult times we have faced during these years of crisis.