samchain/econo-pairs-v1 huggingface dataset:
PMI suppliers' delivery times show that supply bottlenecks are having a greater impact in Europe and the United States. Germany has been the most vulnerable euro area country, given that: (i) it is more integrated into, and occupies a central position in, value chains; (ii) manufacturing – particularly the automotive industry – accounts for a high share of its economy; and (iii) its productive processes are heavily reliant on imports of commodities and inputs. In this regard, since summer 2021 more than 50% of German industrial firms have reported the shortage of material and/or equipment as a factor limiting production, as compared with 25% in Spain. Higher energy prices are having a more acute impact on inflation in the advanced economies and, especially, in the euro area. The greater contribution of the energy component to euro area inflation is largely a result of this component accounting for a higher relative share of the consumption basket in the euro area (10.9% of the total versus, for example, 7% in the United States). Moreover, the euro area’s high dependence on external energy sources has been compounded by the depreciation of the euro in 2021 and the outbreak of the war in Ukraine, which has also driven up the cost of the energy component of consumption. The contribution of energy to the rise in inflation in the euro area is particularly important in Spain and, to a lesser degree, Italy, given the larger contribution of the electricity component.

We have digital-driven lifestyles, and so we must strive to preserve shared values that promote societal well-being.” I think we would do well to keep these goals in mind in our efforts to strengthen governance, risk and controls in the era of disruption. On that note, let me welcome you once again to the Conference and wish you productive discussions ahead. Thank you very much. 4/4  BIS central bankers' speeches
Just as when we travel on a journey, we need not only reliable vehicles, but also skilled drivers and passengers that are cautious explorers, and enforceable driving laws to ensure that we arrive at our next destination safely. The fact that the Thai banking system has been able to withstand many incidents in the past years, including the great flood, the subprime crisis, and the economic slowdown, testifies to the fact that we have been on the right path on sustainability. But again, complacency must be avoided. In this context, our banking system needs experienced bankers with good governance, excellent risk management practices and banking regulations to ensure safety and soundness, as well as financially literate customers. In my opinion, banks, as the first touchpoint to the customers, play a central role in promoting financial literacy and usage of new channels such as digital banking. More convenience does not mean a compromise on security and reliability of financial services, critical for customer’s confidence in the usage of digital channels. As QABs are increasingly interlinked with more cross-border transactions, it also calls for closer cooperation on the part of home and host supervisors in line with the global regulatory reforms to ensure stability of the financial system, similar to enforceable international driving laws. Last but not least, human resources are another key aspect that needs to be continually improved as without sufficient talent pool, the above milestones may not be achieved.

It is expected that by 2025, the number of older people in Thailand will account for 20% of the population and exceed the number of children under 15 years old. In an ageing society, banks that are able to cater to the needs of older population and tailor their products to accommodate changing demands would be successful. The next trend, urbanization, happening in many East Asian countries, brings both challenges and opportunities. According to the World Bank Research that just came out early this year, almost twelve million people in Thailand now live in urban areas; about ten million live in Bangkok alone. The number seems low for the area outside Bangkok because of the strict definition of urban areas employed by the World Bank. The same research also says that, cities outside Bangkok are growing at a much faster rate, and some cities such as Surat Thani have more than doubled its population in ten years. Urbanization results in increased purchasing power and fuels domestic demand. More infrastructure investments such as housing, electricity and transportation will be required. This is where the financial sector can contribute and benefit from the development. The trend towards regionalization poses a fourth challenge as well as an opportunity for the banking sector. With the commencement of the AEC in 2015, competition will intensify, benefiting those prepared to pursue opportunities across borders.
These impacts are also difficult to disentangle from the effects of the change in trading arrangements between the United Kingdom and the European Union that may already be weighting on productivity (Bank of England, 2021). However, it is worth bearing in mind that, while the pandemic was a large and unprecedented economic shock, with profound changes to labour markets and the way we work, it is possible that its long-run effects on productivity will be small. For example, the latest ONS estimates of UK labour productivity appear to be in line with pre-pandemic trends. This headline figure, of course, masks several factors at play. There are compositional effects, which appear to have raised productivity measures during the pandemic, because the worst-hit sectors were also the ones with lowest labour productivity. There were also unprecedented challenges to measuring productivity, including the measurement of hours worked during lockdowns. Overall, the long-run impact of the pandemic on trend productivity growth, and hence trend R*, is highly uncertain, though plausibly small. Perhaps a more salient emerging risk for Global R* is the impact of climate change and the transition to net zero. Neither the size nor direction of this effect are clear. For instance, increased investment by firms looking to adopt the latest green technologies could raise equilibrium interest rates, at least during the transition. On the other hand, Global R* could be pushed down due to higher volatility and uncertainty, including uncertainty about the transition path towards carbon neutrality.

This pattern is suggestive of a structural trend in the underlying global trend real interest rate, in other words Global R*. This concept can be estimated, using a variety of statistical methods, all of which extract an underlying slow-moving trend from the more volatile data. Some of these estimates, from a range of different academic papers, are shown in Chart 3. The teal line shows a new estimate by Bank staff, based on data for 31 high-income countries. Though there are relatively wide error bands around this central estimate, and alternative estimates from the literature exhibit different patterns, the direction of travel has been clear. In other words, a decline in Global R* over recent decades is common across estimates. Page 6  Chart 3: Empirical measures of Global R* have fallen in recent decades  Source: Consumer prices indices, short-term interest rates and government bond yields for the calculation of Cesa-Bianchi et al. (2022)’s global measure of R* from the Jordà et al. (2017) Macrohistory Database and Eikon Refinitiv. Other estimates from Del Negro et al. (2019), Hamilton et al. (2016), Holston et al. (2017). While these statistical estimates help us to understand the dynamics of the trend real rate, they do not tell us why it has been falling. The dynamics of the trend real rate are determined by slowmoving structural factors that affect the balance between the demand for capital for production and the stock of wealth available to finance it.
In addition, the Fed has been conducting large-scale repo operations and purchasing sizable quantities of U.S. Treasury securities and agency mortgage-backed securities to support market functioning at a time of extraordinary volatility in markets.8 These actions averted a potential shutdown in the availability of credit, which would have made the current economic crisis even more severe. Although functioning in financial markets has improved since March, the Federal Reserve has indicated that it will continue to increase asset holdings to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions.9 In addition to stabilizing financial markets, the Federal Reserve has instituted a number of programs to support the flow of credit to households, businesses, and state and local governments. These actions will enable them to continue to do their work, both now and when normal life resumes.10 Taken together, these programs have helped restore the functioning of financial markets, foster favorable financial conditions, and support the continued flow of credit to businesses and households. Conclusion I'll conclude with this: This pandemic and this recession form a pivotal moment for the Federal Reserve. We are seeing signs that the economy has started to recover. Still, the economic outlook remains highly uncertain and it's going to take considerable time to restore the economy to its full potential. But rest assured, we are committed to using our full range of tools to support the economy and bring about a full and robust recovery.

1 COVID-19 Dashboard by the Center for Systems Science and Engineering at Johns Hopkins University,  accessed June 29, 2020. 2 The impact on lower-wage workers is analyzed in Cajner, Tomaz, L.D. Crane, R. A. Decker, J. Grigsby, A.  Hamins-Puertolas, E. Hurst, C. Kurz, and A Yildirmaz., 2020. “The U.S. Labor Market During the Beginning of the Pandemic Recession.” Becker Friedman Institute, University of Chicago, Working Paper, No. 2020–58 (June). 3 U.S. Census Bureau and Department of Housing and Urban Development, Monthly New Residential  Construction, May 2020, June 17, 2020. 4 An example at the New York Fed is the bi-weekly publication of the Weekly Economic Index. 5 Empire State Manufacturing Survey, Federal Reserve Bank of New York, June 2020; Business Leaders Survey,  Federal Reserve Bank of New York, June 2020. The data on small business revenue come from Womply, a software-as-a-service provider focused on customer relationship management. 6 See Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, March 3,  2020; and Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, March 15, 2020. 7 See Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, April 29,  2020; See Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, June 10, 2020. 8 See Board of Governors of the Federal Reserve System, Federal Reserve Announces Extensive New Measures  to Support the Economy, March 23, 2020.
Thus it is not only the regional authorities who must avoid any action which may deflect banks from their essential objective of serving households and firms; also, those who are now at the helm of savings banks must hasten the reform of their corporate governance because very likely the market will not lend again to anyone unable to give it an assurance of professionalism and corporate governance on a par with that of commercial banks. Going back to the economy, we must be patient. Immediately ahead of us, the adjustment phase will continue. True, there has been a notable correction in some of the main imbalances in recent years. But it is still too early to say that the Spanish economy is at a stage where it can once again resume robust growth. Further effort will be needed to digest the excesses of the housing boom, and it will be some time before net job creation gains momentum, unless ambitious reforms are implemented. The structural reforms launched in the past year represent positive progress. At present it is essential to persevere with these measures – such as the fiscal consolidation process – and maintain the pace of reform, tackling the reforms needed in areas which are essential for competitiveness and for boosting the Spanish economy’s potential growth. The key issue now is not to stop, but to push ahead with the reforms, with all of them, including of course the restructuring of the savings banks, which has been the subject of my speech.

I shall now describe these tools distinguishing, for the purpose of my address, between those that affect the capital requirements on credit institutions and those that fall on borrowers. Macroprudential tools that affect the capital requirements on credit institutions The banking regulations in force require banks to have sufficient capital set aside to cover unexpected losses and to maintain their solvency in the event of a crisis. The amount of capital required depends on the risk linked to a specific bank’s assets and, in fact, is expressed as a percentage of risk-weighted assets. The concept of risk-weighted assets basically means that a lower capital allocation is attributed to the safest assets, while the riskiest assets are assigned a greater risk weighting. In other words, the riskier assets are, the more capital the bank will have to hold in reserve. In parallel, specific grades are assigned to capital, depending on its quality and on risk.4 First among the macroprudential tools made available to the authorities is the possibility of directly influencing credit institutions’ capital by means of requirements additional to the traditional microprudential capital requirements. This greater requirement of capital increases banks’ loss-absorption capacity and, moreover, influences their appetite for risk, given that the losses that shareholders must bear in the event of difficulty (“skin in the game”) increase as a result. If they are to function correctly, these additional capital requirements must be activated when banks begin to build up risks, and they must be drawn down when risks abate or when they materialise.
But income diversification has become more important, with banks increasingly having to develop their fee-generating businesses to be more profitable. We are seeing this particularly in the move by a number of banks into wealth management, such as securities, unit trusts, insurance, pensions and private banking. A further opportunity for business diversification for the medium-size banks will come from the ability to branch into Mainland following the relaxation of the asset size criterion under CEPA. The eight banks that will benefit from this would, according to our calculations, have the scope to open a total of as many as 20 branches in the Mainland over the next three years. This would be a significant addition to the 40 or so branches that banks from Hong Kong already have on the Mainland. We should certainly not regard Mainland access as a panacea, and the benefits will take time to come through. But the important point is that the medium-size banks now have an alternative avenue to grow their business outside the Hong Kong market. Indeed, more generally, banks in Hong Kong will benefit from the increasing financial and economic integration with the Mainland. In the syndicated loan market, we can see this in the growing trend towards Mainland-linked borrowers. One development of this trend is likely to be the growth of the syndicated loan market in RMB. This should create opportunities for foreign as well as domestic banks within the Mainland. Let me summarise the argument I have been making.

Impact of the global economic crisis on Zambia  The Zambian financial sector did not immediately or directly become adversely affected by the credit crunch as was reflected in the continued stability of the banking sector, with most banks being adequately capitalised and the inter-bank market operating normally. This was mainly due to the sector’s limited integration into the international financial markets. Further, our financial sector had no exposure to toxic assets, which led to the credit crunch in most developed markets. However, the ensuing global financial crisis, with the global economic  BIS Review 161/2009  1  recession that followed, adversely affected Zambia, like most global economies, mainly through: reduced revenue earnings from mineral resources; job losses, particularly in the extractive industry; lower foreign capital inflow (both foreign portfolio investment (FPI) and foreign direct investment (FDI)); loss of foreign exchange reserves; rising domestic inflation driven by pass-through effects of the depreciation in the exchange rate of the Kwacha against major currencies; and declining number of foreign tourists. Reduced revenue earnings from mineral resources As you may already know, Zambia, like many African countries, relies heavily on commodity exports. This made the country more vulnerable to the global downturn. The global financial crisis and the plummeting commodity prices on the international market negatively affected Government revenue. The global economic recession resulted in a reduction in world demand for copper, which in turn, led to the precipitous fall in copper prices.
In addition, the government uses more of the petroleum revenues than before. Growth in public expenditure started to accelerate in 1997 after having been low in the mid-1990s. Spending growth has also been fairly strong in recent years, but perhaps somewhat slower than earlier. 6/7  The fiscal rule for the budget implies that the government can use 4 per cent of the Fund over time. This year, around 6 per cent is being used. The deviation partly reflects an unexpected shortfall in tax revenues in recent years. The government budget deficit is the difference between total revenues and total expenditure. They each account for about half of total GDP in Norway. Even small deviations from expenditure and revenue projections can have a major impact on the deficit. Exchange rate changes will also lead to fluctuations in the value of the Petroleum Fund. For these reasons alone, the use of petroleum revenues may in periods deviate from the 4 per cent rule. Spending was also increased in response to the economic downturn. We can, therefore, safely affirm that the fiscal rule has been normative for fiscal policy. Together with the fiscal rule, the monetary policy guidelines provide the framework for economic policy in Norway. The various components of economic policy have varying effects. This is why they have different functions: •  Monetary policy steers inflation in the medium and long term and can also contribute to smoothing swings in output and employment.

It is reasonable to distribute our petroleum wealth equitably among generations. The size of the cash flow from petroleum activities also varies considerably. If petroleum revenues were to be used as they accrue, this would lead to wide fluctuations in demand in the Norwegian economy. Cyclical fluctuations would be much more pronounced. Third, the use of petroleum revenues will have an impact on competitiveness in Norwegian business and industry. The level of and fluctuations in the use of petroleum revenues will have a considerable impact on the exchange rate and thus on growth in regions with extensive export activities. The Government Petroleum Fund was established in 1990 with a view to safeguarding long-term considerations in the use of petroleum revenues. In March 2001, the fiscal rule and new guidelines for monetary policy were introduced. The fiscal rule implies that the central government budget deficit shall be equivalent over time to the expected real return on the Government Petroleum Fund. The new guidelines for economic policy received broad support in the Storting. The rule specifying that only the real return on the Petroleum Fund is to be used means that the capital in the Fund shall not be depleted. The capital in the Petroleum Fund will increase as long as there is a positive cash flow (to the central government) from petroleum activities.
BIS central bankers’ speeches  1  Long term prospects for the hedge fund industry remains positive Nonetheless, if we look beyond the immediate economic challenges, the long term prospects for the alternative investment industry remain positive. A number of studies have identified a growing interest from institutional investors for yields in the alternative space. In the 2012 Towers Watson Global Pension Asset Study, asset allocation to alternatives in the seven largest pension fund markets has increased from 5% in 1995 to 20% in 2011. In another recent study, McKinsey estimates that global alternative investments across the retail and institutional segments doubled in assets under management between 2005 and 2011, to reach $ trillion. This represents a compound annual growth rate of 14% over this period, exceeding the growth of the traditional asset classes. Specifically in the hedge fund space, institutional investors have increased allocations to hedge funds significantly over the last decade, from only $ billion in 2002 to approximately $ trillion as of end 2011. Looking forward, institutional investors in the major markets have indicated their intent to increase allocations to almost all alternative classes, including hedge funds. Increased institutional participation will drive growth as hedge funds become an important part of the investment landscape. To meet the demands of institutional investors and global regulatory standards, hedge funds have taken steps to beef up their risk management and compliance functions.

Conclusion As a source as well as a destination for investments, Asia presents compelling prospects for the hedge fund industry. Singapore’s strategic location makes us well-placed to serve as a hub with strong physical connectivity, trade and financial linkages to the rest of Asia. Together with our strong commitment to growing a well-regulated fund management industry, this makes Singapore an ideal vantage point for asset managers to understand Asia and to manage pan-Asian investments. So it leaves me now to congratulate SALT on its inaugural Asian leg of the SALT Conference. I wish all of you a fruitful conference ahead. Thank you. 7  Preqin/Global ARC Study of Asian Institutional Hedge Fund Investments 2012  BIS central bankers’ speeches  3