samchain/econo-pairs-v1 huggingface dataset:
Moreover, this good starting point has, for example, avoided the need to react to the current losses of revenue by raising taxes, which would have certainly magnified the intensity of the adjustment. That said, the slowdown in spending is having a significant impact on tax revenue, reducing the budget balance very rapidly, so that utmost prudence must be exercised in fiscal and budgetary decisions. The need to provide the appropriate incentives means that it is advisable not to adopt widespread and permanent discretionary budgetary measures that attempt to counter the effects on households and firms of the inevitable reduction in national spending required by the adjustment process. Measures to increase spending would, at best, enable activity to be sustained only temporarily and would not help to improve the prospects for expansion in the  BIS Review 117/2008  3  medium term. And I say at best because, without an improvement in external competitiveness, a large part of the increase in public spending would leak abroad and have only a minimal impact on domestic activity. Likewise, strengthening control over current general government spending is an essential measure in response to a low-growth phase, since it limits the deterioration in the budget balance, signals stability and rigour to the private sector, and provides greater leeway to undertake public investment projects that enable the Spanish economy’s productive base and competitiveness to be enhanced.

In particular, I would like to recognise the pivotal role played by the Asian Institute of Finance, the Asian Institute of Chartered Bankers, and the heads of the affiliate institutions, for their commitment and dedication in taking this ACE project forward as part of key infrastructure in skills and professional development and standards in the financial services industry. It is a significant milestone in transforming the financial education landscape for the financial services industry. 2  BIS central bankers’ speeches
Perhaps more tellingly, the increased competitiveness of our goods exports has succeeded in arresting the persistent decline in our share of world export markets seen over the past 15 years or so. In contrast, exports of services – at least as measured – have fallen. These declines are concentrated in exports of financial and business services, areas in which the UK has particular expertise. It would not be surprising in the current environment if this weakness partly reflects reduced global demand for these types of services. If that is the case, our prospects for net trade will depend in part on the extent to which demand for financial and business services revives as the recovery in world demand continues and the functioning of the financial system gradually returns to normal. Where does all this leave us? Judging the net impact of these opposing forces on the growth outlook is very difficult. The pattern of growth from quarter to quarter is quite likely to be choppy. But smoothing through this, my central view is that over the next few years the economy is likely to grow at rates around or a little above its historical average, supported by monetary policy and the lower level of sterling. This is similar to the outlook in the November Inflation Report. But to repeat the point I made earlier: the depth of the recession means that output and employment are likely to remain below what would feel like normal levels for many companies and families for some considerable time.

8 But that does not mean that equity-financed booms and busts cannot have sizeable macroeconomic consequences via other channels, such as misallocating resources, wealth effects and their impact on confidence. In the 5 years  4  King (2010). See also Tucker (2009) and Haldane (2009). 5  Bean (2010). 6  IMF (2010). 7  See Tucker (2009). 8  See Mishkin (2008). BIS Review 161/2010  5  following the dotcom bust, GDP growth in the US averaged almost two percentage points lower than in the preceding 5 years; this despite a very aggressive easing in monetary policy. Third, as Claudio Borio of the Bank for International Settlements and others have stressed, actions necessary to preserve the resilience of the banking system may not be sufficient to prevent credit cycles altogether. 9 A much-studied example of this comes from Spain. Since 2000, Spain has had a system of dynamic provisioning whereby banks had to put aside more capital as they increased lending. This increased the resilience of the Spanish banks, but it did not prevent a large run-up and subsequent crash in house prices in the Spanish property market. If – and it is a big if – macroprudential policy could be used to prevent such credit cycles it could potentially have even greater benefits for our economy.
But from the onset of the crisis in August 2007, the ECB took swift and decisive action to provide liquidity in the interbank money market in order to alleviate the stresses and ensure, to the maximum extent possible, that liquidity problems would not turn into solvency problems, and that systemic risk would be effectively contained. During this first phase of the crisis, the Eurosystem engaged in active liquidity management adjusting the intertemporal distribution of liquidity provision within the reserve maintenance period, but without changing the total supply of bank reserves over the entire maintenance period. At the same time, the maturity profile of the refinancing operations was altered, but the overall supply of central bank money was kept broadly unchanged. As a result, between the end of June 2007 and the end of September 2008, the balance sheet of the Eurosystem increased only moderately by about 100 billion euro. 4 Therefore, for more than a year since the eruption of the financial market turmoil, the unfavourable combination of, on the one hand, persisting and increasing inflation risks and, on the other, substantial stresses in the financial systems and risks to its stability required a “separation” of the monetary policy stance from the management of liquidity. The former was defined so as to achieve the primary objective of preserving medium-term price stability. The latter aimed at, and was effective in, mitigating pressures in the money market and tensions in other financial markets, as measured, for example, by CDS spreads and corporate bond risk premia, which gradually eased.

BIS Review 65/2009  9
If we were too hasty and mistaken in  concluding that supply shocks have durably depressed potential output, we may subject the economy to excessive tightening. If not corrected quickly, this could result in a permanent loss of output as productive capacity adjusts to significantly and persistently lower demand. [4] And that scar may prove difficult to heal. Being prudent does not rule out the possibility of us having to move from withdrawing accommodation to restricting demand. But in the absence of clear second-round effects, we would need convincing evidence that the current shocks are likely to keep having a more adverse effect on supply than on demand. This balancing act – weighing the various factors at play in a forward-looking way – is the ultimate purpose of projections and policy judgement alike. Models and measurements should be challenged and improved – indeed, this is what this conference is about – but selective anecdotal evidence is certainly not a better guide. Our policy decisions should continue to be informed by comprehensive analysis of the data; there is simply no substitute for that. The origin of the shocks The origin of the shocks – that is, whether they originate more on the demand side or on the supply side – matters considerably for monetary policy. A central bank would typically want to adjust policy gradually in the face of supply shocks. [5] But it should react immediately to demand shocks that risk bringing mediumterm inflation above target.

A recent innovative arrangement introduced this year is the risk-sharing arrangements between the government and banks to provide opportunities for the lower income and younger segments of the population to own homes and thus accumulate wealth at an earlier age. Another important form of wealth accumulation is the collective investment schemes such as unit trusts. The pooling of savings provides economies of scale, access to professional investment managers, as well as a diversified investment portfolio. In Malaysia, this was initially promoted through the establishment of government sponsored national savings scheme (Amanah Saham Nasional). Participation of the average household has now paved the way for the growth in the private unit trust industry. The formation of such national savings schemes has also contributed to the development of an institutional investor base in Malaysia that has been able to mobilize substantial volumes of savings. The mobilization of these funds provides the potential for funding of businesses and the corporate sector and for project financing including for infrastructure development. As SMEs and micro enterprises form the majority of business enterprises in most countries, and as they contribute significantly to GDP, employment and wealth creation, efficient access to finance is critical. The Malaysian experience to address this has been the establishment of the Credit Guarantee Corporation to assist viable SMEs with inadequate track record to access financing by providing guarantees and credit enhancements for SME financing. The credit evaluation is carried out by banks, and by the CGC.
Jon Cunliffe: Ending Too Big to Fail – progress to date and remaining issues Speech by Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, at The Barclays European Bank Capital Summit, London, 13 May 2014. *  *  *  We are now a little short of five years on from the deepest point of the recession that followed the global financial crisis. Advanced economies seem set on the path to recovery – though as every central banker will feel compelled to tell you, very real risks remain. It has been a long, hard slog to get to where we are and the damage – to jobs, to wealth, and to the productive capacity of the economy going forward – has been great. Economic theory tells us that recessions which follow financial busts are deep and long lasting. Recent history bears that out. There is a determination – in politics, in the regulatory community of which I am part and I think in the financial services industry itself – to learn the lessons of the recent past. There are different views – some more extreme than others – on all sides about what is necessary. On how far-reaching change should be? And how far reaching change can be if the financial sector is to continue to play its vital role in the economy of channelling credit efficiency between savers and borrowers?

But the catastrophic risk, of dealers withdrawing from market making altogether because balance sheets have become dangerously overstretched, should be much reduced. Managing the impact of failure With a zero-failure regime neither feasible nor desirable, reform is also underway to reduce the impact of failure as well as its probability. And specifically to allow even the largest banking groups to fail and be resolved in a safe way without recourse to taxpayer funds. The key is to be able to recapitalise a failed group safely, quickly and credibly by bailing in the group’s uninsured, unsecured creditors, such as debt-holders. To be clear, the aim is not to resurrect every failed business, though that may be the outcome in some cases. The aim is to enable the critical parts of the group – the parts vital to the real economy and the parts that financial stability depends upon – to keep operating so the group can be safely resolved over time. The ultimate solution could involve a mixture of sales, administrations and run-off. The bail-in provides the time and the loss absorbing capacity to allow that to happen. The required legal framework is well progressed. In both the UK and US, it will in future be possible to bail-in debt holders. An EU framework has been agreed with the Banking Recovery and Resolution Directive, which will come into effect in January next year. This not only provides the powers for bail in.
It is therefore important to take very seriously the discussion going on within the trade union movement regarding larger than expected price increases. The weak exchange rate, with the potential economic stimulus it represents via exports, is more complicated. In the past, a marked improvement in costs for Swedish exports relative to the main competitor countries has tended to lead to an increased export market share. At the same time, there is no denying that the international economic slowdown is particularly evident in markets of importance for Sweden’s economy. As long as those markets remain weak, a larger market share for Swedish firms will not yield a notable increase in volume. Another matter here is that in the IT and telecom sectors, on which the Swedish economy became increasingly dependent in the 1990s, the problems are not dependent on the krona’s exchange rate; here it is more global factors that are decisive. However, it can also be noted that the order inflow to manufacturing is now falling less markedly than earlier this year. There are certain signs of a levelling out, usually an early indication of a possible upturn in the coming quarters. Analysts’ expectations of this year’s profits for listed companies have clearly worsened during the autumn but this has been accompanied by a substantial upward revision of next year’s profits. So the overall appraisal of the krona’s exchange rate and its stimulatory effect is not entirely self-evident. Finally there is the question of economic policy’s aggregate impact on demand.

This is a remarkable achievement in the face of global and regional uncertainties, political and economic crises, wars and conflicts and the volatilities of the oil and currency markets. SAMA's focus on achieving and maintaining financial stability is premised on the belief that it is a fundamental precondition for sustained and dynamic economic growth in which all market participants are able to make optimum contribution to the economy. Financial stability not only promotes efficient domestic investment activity but also creates a positive environment to attract foreign capital and foreign investors. Dear Audience, Over the past decade, the Saudi Arabia's financial system has been changing at an escalating pace. The banking sector, being one of the pillars of the financial system, has 20 licensed banks including 16 that are operational and 4 that are planning to become operational over the next year. The newly licensed banks include 6 regional and 3 major international banks. As for the Insurance Industry, SAMA has recently been involved in licensing of 14 Insurance companies that are now in the process of becoming operational within this year. SAMA also continues to regulate a number of money-changer organizations as well as a few lease finance and consumer finance companies. The financial sector also includes several autonomous government financing agencies as well as the state-owned pension fund and the General Organization for Social Insurance.
The present lowincome countries, when they have to struggle in this unsympathetic environment, need more understanding; greater allocations for funding and investment; increased direct aid flows; and tangible support and direct concessions to recognize satisfactory “compliance”. At this stage, I would like to acknowledge a step in the right direction that has been followed by some advanced countries through certain targeted schemes, such as the GSP+ scheme, which provides some welcome relief to low-income countries. Unfortunately however, even such concessions are often coupled with stringent criteria such as Rules of Origin which again adds to the ever growing list of “do’s and don’ts”, which list must be quite a nightmare for those who have to keep track of these! Of course all this has served to create a new breed of corporate executives titled, “Compliance Officers” (CO’s), who may at this rate, soon end up becoming even more important than CEO’s!! Your Excellencies, Honorable Ministers, Distinguished Guests, The Principle in relation to addressing income and wealth disparity among nations is equally applicable to societies within nations as well. Towards that end, I am pleased to announce to this distinguished audience that Sri Lanka has already developed a comprehensive policy framework “Mahinda Chintana”, based on the election manifesto submitted by President Mahinda Rajapaksa at the last Presidential Elections which addresses this issue comprehensively. This policy framework provides a sustainable development strategy designed to address growth and livelihood issues, while covering the income – disparity issue that prevails in our own country.

As a consequence, consumers can benefit from lower prices, higher real incomes, and greater variety and quality of goods and services. Increased openness may also reduce wasteful rentseeking behavior on the part of protected industries and the related costs of corruption. These benefits from open trade are very evident in India. Academic research has found substantial gains for India following its dramatic trade reforms in the 1990s, which benefited consumers via lower prices and firms via higher markups. These higher profit margins spurred innovation and provided funds for the development of new products. Looking ahead, the upcoming implementation of the goods and services tax in India—which will create a common market internally—is expected to provide many of the same benefits as trade liberalization does internationally. Openness to trade has certainly played a large role in the economic ascent of Asia. Following the rise of Japan, Korea, Taiwan and others, fast growth in China and India has lifted hundreds of millions of people out of extreme poverty—an unprecedented feat in human history. The benefits 2/6  BIS central bankers' speeches  of economic integration and other reforms are exemplified in India’s higher growth rate since the introduction of market reforms in 1991. Growth has averaged 6.5 percent annually in the postreform period, compared to about 4 percent annually over the prior 40 years. Indeed, India is the fastest-growing major economy in the world today.
The “loans” to the special-purpose vehicle did not have to be backed by equity as long as the maturity of the loan commitments remained under one year. So it soon became standard practice among banks to limit the maturity of such credit lines to 364 days and to prolong them accordingly at maturity. The consequences of this practice became clear at the start of the subprime crisis in 2007 when German banks were among the first to run into difficulties because of these credit lines. •  The past thus shows that financial markets do not always behave rationally. In fact, markets tend towards exaggerations even more than individuals; crowd psychology plays a significant role in pricing. •  Given the potential for damage as a result of undesirable developments and the incentives to which participants are exposed, it is obvious that self-regulation alone is not sufficient in financial markets. 3. Requirements to be met by regulation and supervision  Against this background, the question is which regulatory or supervisory approach is the right one for a modern financial system. Should financial markets be subject to all-encompassing regulation in which every single activity is regulated down to the smallest detail? My answer is “no” – because this would not have a satisfactory outcome, either.

To restore confidence, we  BIS central bankers’ speeches  3  need less complexity and more transparency. Not every portfolio or risk can be modelled. For these portfolios, we must use simple, standardised approaches. We must reduce the complexity of the model-based approaches to a level which allows both the banks’ supervisory bodies and the supervisory authorities to understand and review them within a reasonable period of time. Standard approaches should also be used here as a control variable and indicator for capital savings. •  Given the great number of regulatory measures, it is important not to lose sight of the bigger picture. We will therefore carry out a comprehensive analysis of the overall effect of regulatory measures. This project is already being planned and prepared by the Basel Committee. Such an exercise will do us good and will also be beneficial to the general debate on regulation, helping objectify it. I hope that this work will not only result a list of overlaps, duplication and other inefficiencies which we would subsequently clear up. I also expect that we will address unintended consequences of the new rules. In supervision, too, much needs to be changed. The crises of recent years did not come about solely because there were weaknesses in the regulatory framework. The supervision of banks did not function optimally, either.
Third, the banks need to assume that bank secrecy in cross-border operations will be replaced by the automatic exchange of information (OECD Standard for Automatic Exchange of Financial Account Information). However, for honest tax-paying customers, protection of privacy and the associated legal certainty remains a legitimate concern, even under the OECD standard. In order to remain attractive as a global wealth management centre, Switzerland must therefore develop a plan within the context of this OECD standard which guarantees protection of privacy in the long term. This could create an important element of differentiation for the Swiss banking centre. It will be important to separate the issue of protecting privacy from that of tax conformity. In other words, enforcement of the legitimate protection of privacy must not be abused in order to elude tax obligations. Vice versa, measures aimed at ensuring compliance with tax provisions must not lead to any diminishment in the protection of privacy. For instance, this means that customers must know, right from the start, which data will be passed on from one tax authority to another, and for what purposes – and which not. At the same time, care must be taken to ensure that such a plan can be implemented in accordance with the international standards. This will guarantee legal certainty for customers while guarding against continual vulnerability of the future Swiss legal framework to attack.

From the international perspective, it seems that the overall situation is increasingly more supportive. Advanced economies, together with large emerging economies are in a phase of full recovery, underpinned mainly by the boost in aggregate demand. Interestingly, the euro area, which includes most of our trading partners, is experiencing an overall positive momentum concerning economic growth, and forecasts are optimistic. There is a broad consensus that the economies of the South East Europe region, in the first half of 2017, registered a satisfactory performance in terms of recovery; in the meantime, according to key indicators, such performance is expected to strengthen further in the third quarter of this year. Albania is no exception to the regional context. In the previous quarter, the economic and financial situation in Albania was set on a path of constant improvement. Growth and employment indicators followed an upward curve and expectations for 2018 remain positive. Consumption and foreign investments have contributed positively to economic activity and are expected to generate further increase in productivity and competitiveness. At the same time, income from the export of goods, and especially of services contributed to the reduction of the current deficit and the strengthening of the external position of the economy. The effects of the monetary policy have maintained the stimulating trend, aiming at closing the negative gaps of prices and output. Financial stability is also characterised by a positive situation.