samchain/econo-pairs-v1 huggingface dataset:
The changeover to the euro does not call for extensive reforms in Estonia, rather, it is a more exhaustive utilisation of the opportunities Europe has to offer. •  The changeover to the euro cannot and must not be a seasonal election issue but an area where we proceed from Estonia's interests - hence, common sense, analysis of the economic situation, and knowledge of the theoretical foundations of the EMU. 2  BIS Review 26/2004  •  The European Central Bank has indicated that due to the differences in the economies of the new member states, a single approach suitable for everyone for joining the exchange-rate mechanism, ERM II, and adopting the euro cannot be suggested. Besides, a common approach was not possible for the present member states either. An approach that takes into account Estonia's particulars means that accession is going to be based on the present currency board arrangement and that our application to join ERM II will be submitted as soon as possible. Prior to adopting the euro a country has to be a successful member of ERM II for at least two years. Also Estonia's technical readiness for changing over to the euro should be achieved by mid-2006. If such a scenario materialises, we will be among the first new EU members to adopt the euro.

Under the provisions of Art. 10(2) of the Statute, two groups of countries have been formed at present according to the size of their economies and their financial sectors. The first group of five governors has four voting rights and the second group of 14 governors has 11 voting rights. 4  The unweighted qualified majority regime (two-thirds of the votes) is used in very specific cases such as that envisaged by Art. 14(4) of the Statute regarding the performance of functions by the NCBs which might interfere with the objectives and the tasks of the Eurosystem. Where decisions are adopted by weighted majority (Art. 10(3) of the Statute), the rotation of voting rights does not apply. In these cases, an alternate or substitute appointed for the meeting is allowed to vote, which is not permitted for other voting. The votes of the Executive Board have a weighting of zero. The weighted simple majority regime is envisaged for decisions on the subscription of capital and adjustments to shares (Art. 28 of the Statute), on the key for capital subscription (Art. 29 of the Statute) or on the allocation of monetary income to central banks (Art. 32 of the Statute) or of losses and net profits to central banks (Art. 33 of the Statute). Where decisions are adopted by weighted qualified majority, half of the shareholders (10) and two-thirds of the subscribed capital are needed. The type of decisions adopted using this regime are those affecting increases in and payments of capital of the ECB (Art.
Against this backdrop, I will refer to Max Weber’s distinction between ethics of conviction –  Page 5 sur 10 a driver for a broad mandate but also to a risk of overpromising what central banks can actually deliver – and ethics of responsibility – a driver for realism and a more focused mandate. The Eurosystem’s answer to that question consists of a clearly hierarchical mandate, with one primary objective, price stability; if fulfilled, we can and must contribute to its secondary objectives of economic growth, social cohesion or the environment. In addition to preventing potentially conflicting objectives, achieving price stability is like killing two birds with one stone: monetary policy can mitigate income inequality by affecting the movements in and out of unemployment through its effects on the business cycle.iii And let me clarify that the Eurosystem’s strong commitment to fight climate change is motivated first and foremost by its profound implications for price stability, through impacts on the economy and the financial system. In other words, we are acting in the very name of our existing mandate. Inflation has accelerated significantly over the past year, reaching 9.1% in the euro area in August and 8.3% in the United States. Monetary normalisation is consequently fully warranted in the euro area among others. It’s too early to tell the final interest rates. But the neutral rate R* helps us to give some light on the first part of the journey.

In the context of the financial turmoil of the Middle Ages, in around 1355, Nicholas Oresme, a French scholastic philosopher, wrote his visionary Treatise on the origin, nature, law and alterations of moneyii in which he asserted that the currency does not belong to the “prince” but to the people, and therefore should not be manipulated. But it took several more centuries for trust in money to be "dematerialised": to move from trust in a physical medium - gold and silver, and metallic currencies - to trust in an institution. The 19th century, with the industrial revolution, saw the  Page 4 sur 10 expansion of banking and finance, and the creation of many central banks. It was a first decisive step: a dedicated guardian was put in charge of issuing banknotes, as a first “immaterial” currency. The second decisive step, mainly from late 20th century, was to make central banks independent from political power: in the 1980s and 1990s most central banks enshrined their independence in their statutes, including the Eurosystem in order to ensure the stability of the single currency. The Eurosystem also defined a target for inflation, as did the Fed in 2012, a few years after Ben Bernanke strongly advocated for it. But independence – which I cherish – does not mean isolation.
As we are lagging behind advanced Europe in terms of income and productivity, sustaining banks' financing can contribute in narrowing those gaps. At the same time, climate change and technological innovation continue to accelerate, pressing on our societies to transform towards greener and digital future. Banks can have a crucial role in financing the twin transition. To sum up, as policy makers we do face a difficult conundrum. After long time of economic moderation, all of the sudden we have to deal with major global shocks that impose tectonic shifts in the economic order, modify conventional macroeconomic paradigms, and accentuate the tradeoffs in policymaking. In this current context, it is crucial to preserve stability- stability of prices, as our primary objective and contribute to stability of the financial system. We all recall how profound consequences and scars instability causes, which is why we have to remain determined, focused and clear. It is the only way to preserve public trust, and as Brunnermeier said "the public is the ultimate source of central banks power and independence". Thank you and looking forward to the insightful debate! 1 Cited from "Monetary Policy in a High Inflation environment: Commitment and Clarity  ", Lecture by Christine Lagarde, November 2022. 2 Geopolitical risk dashboard, Black Rock, December 6, 2022 3 "Front-loading" monetary tightening: pros and cons", BIS Bulletin 63, December 2022. 4 Three have increased the rate (Slovakia, Bulgaria and Czech Republic) while other  four introduced the buffer for the first time (Croatia, Romania, Hungary and North Macedonia).

Starting from 1986, our economy has had an average annual per capita real growth rate of 2.3 percent, a moderate inflation (on average 4.0 percent), a debt to GDP ratio of 44.1 percent, which is still manageable, and a level of international reserves that is more than adequate (currently at 8.7 months of import payments). In the last two decades, Aruba has made great economic progress: we chose to invest in tourism and, currently, Aruba is one of the most popular tourism destinations in the Caribbean. Two out of three of our visitors are Americans, which does not make it strange to hear that the US dollar is a widely accepted means of payment in Aruba. These economic and institutional developments demonstrate that it is possible to issue and manage a local currency successfully in a small open economy like ours. 6. The case of the Netherlands Antilles  Now, I would like to turn to the case of the Netherlands Antilles. I know that dollarization of the Antillean economy has been discussed before. As early as 1986, de Boer and Kamps investigated the possibilities of dollarization in the Netherlands Antilles in a study initiated by the University of the Netherlands Antilles. 1 The authors advocated prudence with respect to  1  J. de Boer / J.A. Kamps – Dollarisatie op de Nederlandse Antillen. Een verkennende studie. UNA Cahier, No. 21, June 1986.
In the 11 FYs since the last recapitalisation, MAS returned a total of $ billion to the Government, more than two times the amount of the latest increase in capital. In sum, the $ billion net loss is not cause for concern though the investment performance bears close watching. The loss does not impair MAS' ability to carry out its functions. More importantly, it does not change how we will conduct monetary policy. The loss does not result in a draw on MAS' past reserves. The OFR position remains healthy even after MAS transferred $ billion of excess OFR to the Government. But the investment performance is likely to remain weak amid a challenging macroeconomic and financial market environment. A return to profitability and ability to contribute again to the Government's Consolidated Fund will take some time. HOW IS MAS HARNESSING THE BENEFITS AND ADDRESSING THE RISKS OF WEALTH INFLOWS? I will now move on to the topic of wealth flows into Singapore. This issue has attracted much media and public interest. MAS has focused on harnessing the benefits of these wealth inflows while addressing their risks. But before explaining how we do this, let  9/16  BIS - Central bankers' speeches  me try to set the wealth inflows in context. First, as a trusted, vibrant, and well-regulated international financial centre, Singapore has attracted large inflows of wealth to be managed here. Assets under management (AUM) have grown an annual average of 15% during 2017 to 2021.

Growth in the domestic facing sectors is likely to taper, as consumer demand slows in the face of higher interest rates and more moderate wage increases. Singapore's GDP growth for 2023 is expected to slow to a below-trend pace within MTI's current forecast range. Consequently, the output gap is estimated to turn mildly negative, to around -0.5%, from the positive 0.6% recorded last year. Inflation in Singapore has clearly peaked and has discernibly moderated. In assessing inflation trends, it is instructive to focus on month-on-month momentum and price trends going forward rather than year-ago averages. Core inflation on a month-on-month seasonally adjusted annualised basis has come down sharply, to 3.6% in May 2023 from a peak of 9.1% in June 2022. The disinflation has been broad-based across most components in the core CPI basket. Notably, imported inflation has turned negative, reflecting the decline in global energy and food prices and the effects of a stronger Singapore Dollar. Even excluding oil, whose prices have fallen most sharply, imported inflation was minus 1.2% in May this year. The fall in inflation momentum is gradually translating to lower year-on-year inflation. Core inflation on a year-on-year basis moderated to 4.8% in Apr-May from 5.4% in Q1. Headline inflation slowed to 5.4% from 6.1% over the same period. Singapore should see further reductions in inflation by the end of the year. One, imported inflation should remain negative over the rest of the year.
Global Money Week takes place on the 10–17 March and is a worldwide celebration through events and activities to help empower children and youth to be confident and responsible economic citizens. During this week, children are encouraged to engage in learning on how money works, including saving, creating livelihoods, gaining employment and entrepreneurship as well as living financially smart lives. And so for Samoa’s contribution to the event, the Central Bank decided to conduct a financial literacy poster competition to encourage kids to use their imaginations and knowledge about money choices, and help provide a creative outlet to demonstrate their knowledge. For this year’s poster competition theme “I can grow my money by...” myself and Mrs Vicseta Meredith of Business System Limited had the pleasure AND the hard task of judging the entries. We were very impressed with the quality of entries that were presented to us – so it pains us that there are only a limited number of awards we can give out for the competition. “Financial literacy” or “the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources” is an important life-skill in our diverse capacities as students, employees, consumers, savers and investors etc. In short, it is important for all responsible economic citizens to have. – So why not start now and start young? Start young on financial fitness...it will be fun and worth it!

Soifua ma ia manuia. 2  BIS central bankers’ speeches
But a more careful analysis shows that other factors played an important role, such as the rapid growth of new financial instruments, the increasing presence of very active and highly leveraged financial market participants. Moreover, ample market liquidity also reflected an increase in risk appetite and a rise in leverage. And the recent market developments showed that an abrupt and sizeable increase in risk aversion caused an evaporation of liquidity in many markets and a rise in market volatility. Therefore, although financial globalisation can play a role in containing market volatility, it cannot be expected to have a dominant and permanent impact. Impact on financial stability – the financial market turmoil What are the broader potential implications of financial globalisation for the stability of financial systems? How are real and financial shocks likely to propagate across borders and asset classes in a financially integrated world? On the one hand, there is obviously an augmented risk of cross-border contagion of asymmetric shocks to the rest of the world if cross-border asset holding is widespread. On the other hand, this risk has to be weighed against the positive side of the very same coin, which is the benefit gained from an increase in international risk-sharing by means of diversification. The resilience of financial asset prices to negative shocks is improved when the market is more liquid and the investor base more heterogeneous.

Causes of the financial market turmoil What have been the underlying main causes of the financial market turmoil? What have been the key weaknesses in the functioning of the financial system that have been revealed? And what are the appropriate further responses of market participants and policy-makers? A full diagnosis of the causes and weaknesses is not yet complete and, indeed, not possible as the  19  8  See ECB (2007b), Box 7, on the propagation of the sub-prime shock to other markets. BIS Review 9/2008  market adjustment is still ongoing. Nevertheless, I would like to highlight four areas that are also pertinent to the issues of financial integration and development we are discussing. •  First, the underlying causes and triggers are to be found in the price dynamics of the US housing market and the excesses and shortcomings (in the practices) in the US sub-prime mortgage market. So, a main determining factor of the financial market turbulence is that same one – property price overvaluation – that characterised previous episodes, as emphasised by Kenneth Rogoff. •  Second, weaknesses in the functioning of the market for structured finance products. These included valuation uncertainties due to the complexity of many products, the imperfect information available about the underlying asset characteristics, inadequate appreciation by investors of the embedded risks, and excessive reliance on the ratings of such products by credit rating agencies.
As a result, the structure of the euro area financial sector is changing. In 2008, total assets held by investment funds were only 15% of banking sector assets. In 2017, euro area investment fund assets had grown to 42% of total banking sector assets, amounting to EUR 12 trillion. This major growth in relative size is likely to have far-reaching implications for the ability of the financial system to absorb shocks and for the financing of the economy more broadly. On the positive side, an increase in market-based finance through the issuance of debt and equity instruments can help diversify the funding base of the real economy. It also gives investors more choice and enables them to benefit from diversification effects offered by investment products. This holds true for retail and institutional investors alike, as an increasing share of institutional investors are using professional asset management services. The growing share of investors outside the core financial system tends to increase the system’s risk-bearing capacity, as traditional end-investors, typically not leveraged, can absorb any potential losses more smoothly. One should also acknowledge that thanks to significant efforts in the last ten years, investment funds in the EU are subject to an enhanced regulatory framework.

Second, at the global level, tensions have grown in emerging market economies on the back of a stronger US dollar and increased trade frictions. These developments may undermine global growth prospects and ultimately lead to abrupt increases in risk premia. This could trigger a domino effect – leading to a sharp sell-off and further price pressures in assets with stretched valuations – with the potential to spill over to euro area financial markets. Third, in Europe we observe re-emerging debt sustainability concerns, both in the public and private sector. As regards public finances, Italy is the most prominent case at the moment in light of the overall debt level and the political tensions around the Italian government’s budget plans. The strong market reactions to political events have triggered renewed concerns about the 1/7  BIS central bankers' speeches  sovereign-bank nexus in parts of Europe. Although contagion has been limited so far, it remains a possibility. This underpins the call for fiscal discipline and for observing and applying fiscal rules in Europe. But in the non-financial private sector too, debt levels remain high by both historical and international standards. In a number of countries, debt is above thresholds that are normally associated with a debt overhang. And growing debt levels should also be seen in the context of buoyant real estate market developments in a number of countries.
Productivity gaps between regions and between large and small firms point to regulatory fragmentation which still needs to be addressed. To enhance productivity, measures to increase the scale of small firms in the SME sector, which tend to be smaller than in peer countries, need to be pursued. More attention needs to be placed on the education system and professional training to enhance human capital and reduce skills mismatches. Finally, greater investment in R&D and innovation by Spanish firms would enhance their competitiveness and contribute to generate more growth through higher value added. Only by raising productivity and correcting macroeconomic imbalances can the long-term growth potential of the Spanish economy rise. This is a condition to place Spain on a solid growth path, increase employment and raise wages to finally leave behind the financial crisis that erupted ten years ago. Let me conclude. The importance of increasing long-term growth potential is true for Spain as it is for the whole euro area. 3/4  BIS central bankers' speeches  At the same time, I cannot emphasise enough that a robust euro area economy has to rely on sound economic governance. Solidifying the institutional architecture of EMU is essential at this juncture in order to foster cohesive economic performance without fragmentation or excessive imbalances. Reforms at the national and EU level are needed to uphold a stable financial system and a resilient monetary union.

Second, in the U.S., the banking system was recapitalized and deleveraging occurred quite quickly following the financial crisis. Capital from the Troubled Asset Relief Program, or TARP, was put into the large banks and soon many of them replaced this TARP capital by raising new equity. The SCAP stress test in 2009, and the annual CCAR stress tests that followed, worked to constrain the rate of bank capital distributions and, thereby, helped to build up bank capital ratios. And, U.S. banks worked hard to clean up their balance sheets. Poor assets were managed down or run off, and underwriting standards were tightened. Third, the Federal Reserve was particularly aggressive early on in its pursuit of monetary policy accommodation in order to keep inflation expectations well-anchored. This is a necessary condition, in my view, to maintain the efficacy of monetary policy. If inflation expectations were to get unmoored to the downside, then it becomes more difficult to pursue a stimulative monetary policy. Could things have been done differently in the U.S. in such a way that would have led to better outcomes? Absolutely. With the benefit of hindsight, we could have and should have been even more aggressive on the monetary policy side. While we made progress with some of the innovations on monetary policy that we eventually introduced – such as the openended purchase of $ billion of Treasury and MBS securities per month – it would have been better if we had done this sooner.
Bahaj, S, Foulis A, Gal, P and Pinter, G (2016), ‘Productive and Unproductive Leverage’, mimeo, Bank of England. Baily, M and Montalbano, N (2016), ‘Why is productivity growth so slow? Possible explanations and policy responses’, Hutchins Center Working Paper No 22. Barnett, A, Batten, S, Chiu, A, Franklin, J and Sebastiá-Barriel, M (2014), ‘The UK productivity puzzle’, Quarterly Bulletin, Vol 54 (2), Bank of England. Bank of England (2016), ‘Understanding and measuring finance for productive investment’, Bank of England Discussion Paper. Barnett, A, Broadbent, B, Franklin, J and Miller, H (2014), ‘Impaired capital reallocation and productivity’, National Institute Economic Review. Barro, R and Sala i Martin, X (1992), ‘Convergence’, The Journal of Political Economy, Vol 100 (2), p.223251. Bean, C (2016), ‘Independent Review of UK Economic Statistics’, available at https://www.gov.uk/government/publications/independent-review-of-uk-economic-statistics-final-report. Bentolila, S, Jansen, M, Jimnez, G and Ruano, S (2013), ‘When credit dries up: job losses in the great recession’, Discussion Paper 9776, CEPR. Berlingieri, G, Blanchenay, P and Criscuolo, C (2017), ‘The Great Divergence(s)’, OECD STI Policy paper, forthcoming. 38  All speeches are available online at www.bankofengland.co.uk/speeches  38  Big Innovation Centre (2017a), ‘The Purposeful Company’, BIC Policy Report, February Big Innovation Centre (2017b), “Intangible Gold” final report, forthcoming Bloom N and Van Reenen, J (2007), ‘Measuring and explaining management practices across firms and countries’, Quarterly Journal of Economics, Vol CXXII (4). Bloom, N, Sadun, R and Van Reenen, J (2012), ‘Americans Do IT Better: US Multinationals and the Productivity Miracle’, American Economic Review No 102 (1), p167–201, doi:10.1257/aer.102.1.167.

Let that be a warning to those countries which have not yet signed up to the monetary integration project. The fall of the former hegemon is relevant not only for the current crisis, but also for the future of the monetary order in Europe. And here I do not see any positive perspectives, I must bitterly admit. I am not saying that the euro has to collapse, but I am pretty sure that if it prevails, it will be a completely different currency implying completely different monetary conditions from what the Germans in particular hoped for. And Germany faces a tough choice – further integration or a perfect monetary order. This question is rather new and painful. The answer to it will influence all of us, I believe. So let’s wish them good luck. Thank you for your kind attention. BIS central bankers’ speeches  3