samchain/econo-pairs-v1 huggingface dataset:
The recession was indeed deep, as Iceland lost just over 11% of output during the recession that ended in Q1/2010 and unemployment peaked at 8% in Q4/2010. The shift in the composition of demand was even more dramatic, as is witnessed by the swing in the current account from a deficit 17% of GDP in 2008 to a surplus of 8% in 2009. To a significant degree, this was induced by a drop in the real exchange rate amounting to 44% from the pre-crisis peak to the November 2008 trough. BIS central bankers’ speeches  3  The recovery began as previous imbalances were corrected and the economy found its bottom in the underlying strength of its traditional export sectors, the non-traded goods sector took advantage of the low real exchange rate, and the stabilisation of the economy and later real wage gains rekindled consumption. And then we have had the phenomenal growth in tourism in the recent years, which seems to be due to much more than the historically low real exchange rate. These figures show developments in GDP and employment during the recession and subsequent recovery in Iceland, with predictions extending into 2017 for GDP and 2016 for employment. For comparison, it shows the median and the 1st-3rd quartiles of the distribution of these variables for 30 other European countries, with Ireland and the UK highlighted. It shows that Iceland’s recession was significantly deeper than the median in Europe, and the same goes for Ireland, although to a lesser degree.

But there are significant pockets of financial fragility, with some of the households that bought and borrowed at the peak of the market still facing very heavy debt service burdens. And even though gross public debt is now on a declining path relative to GDP, at 70% it is still high in historical terms. The biggest legacy problem, though, is the comprehensive capital controls. During the early stages of the crisis, the controls were helpful in stabilising the economy and providing the shelter needed to repair balance sheets and rebalance the economy. But over time – and increasingly, as the economy and the rest of the world recover – they become obstacles to economic growth. However, there have been major hindrances to speedy removal of capital controls, due to the legacy balance of payments problem reflected in huge króna positions indirectly or directly owned by foreign residents. These take two forms. The first and more important were the domestic assets of the old banks in winding-up proceedings. The problem here is that most of the claims on these banks are foreign but their net domestic assets amount to 25% of GDP. When considering the complication this creates for Iceland, you should bear in mind that it is partly because the resolution of the third-largest bankruptcy in the history of mankind is taking place in one of the smallest countries in Europe and is intertwined with its balance of payments and international investment position. The second is the so-called offshore krónur owned by foreign residents.
On the first of these, 1996-1997, a high level of interest rates in the previous years had without doubt contributed to both a drop in the general level of demand and to low inflation. The period was also characterised by an occasionally heated debate on monetary policy. The reason the Riksbank decided to keep policy tight at the time was that credibility for inflation-targeting had not yet been established. The two subsequent periods, 1998-1999 and 2004, were completely different. On both these occasions the repo rate had been relatively low the years before at the same time as the general level of demand was growing fast. The main factors generating the low inflation were changes on the supply side of the economy: deregulation, lower import prices and surprisingly rapid productivity growth. The Bank’s policy had hardly been called into question at all when it was conducted in 1996-1997; it was only in retrospect that the criticism came, and this has largely been the pattern in recent times, as I mentioned earlier. If one wants to argue that the Riksbank has systematically conducted excessively tight policy one should reasonably be able to show that other forecasters called the Bank’s policy strongly into question when it was formulated. So, in my opinion, there are on the whole fairly natural explanations for why inflation on average has been somewhat below target over the past ten-year period.

Institutional investors have been leveraging on Singapore’s strong connectivity and vibrant fund management ecosystem to access regional markets. There are currently some 220 VC and PE managers located in Singapore. VC and PE assets under management in Singapore has grown at an average 28% p.a. over the last 5 years. More than 75% of their investments are across ASEAN, South and North Asia. Third, the Singapore FinTech Festival. This is the largest financial technology event in the world. It drew more than 30,000 participants from more than 100 countries last year. There were 300 FinTech exhibition booths from 30 countries. The FinTech Festival is a platform for the global and Asian FinTech community – to learn new developments, exchange ideas, network and collaborate. The third edition of the Festival will be held in two weeks’ time, 12-16 Nov. A key component of the Festival is the Global Investor Summit, which brings together FinTech start-ups and investors and facilitates deal-making. This year, we have a new deal-making platform - called MATCH – to curate and showcase promising ASEAN start-ups and enterprises to local and global investors. Do check out the Global Investor Summit. To sum up, Asia is undergoing a digital transformation. The Asian FinTech scene in particular is blooming. Opportunities abound for long term investors. And Singapore sits at the centre of this exciting ecosystem of innovation and growth, from which to tap these opportunities. Thank you, and I hope to see you in two weeks’ time at the Singapore FinTech Festival.
Macro-stress testing models have become the workhorse of macro-prudential stability analysis in the last decade, notably including quantitative impact studies for specific scenarios. Their main purpose is to assess the resilience of the banking and financial systems against extreme but still plausible events. One problem with these models in the past was that even for large shocks they generated hardly any bank failures. This can probably be improved by using appropriate data, more granular than previously available, and by capturing better and a larger number of adverse feedback loops that can play a role in amplifying the transmission of instability in the financial system. These feedback loops could include contagion effects across banks, market liquidity and funding liquidity problems. 14 Another difficulty for these models is whether they should be extended to also capture feedbacks from real economy outcomes to financial stability variables. The assessment task is currently much less developed than the surveillance one. This is not only because it involves considerable analytical sophistication, but also and mainly because there are significant gaps in the information on the financial intermediaries themselves and on inter-linkages between the various parts of the financial system. Viewing the financial system as a network, more information is needed on the key network nodes, and well as on the links between those nodes.

The growth momentum is expected to pick up further after China’ s announcement to formalise the use of RMB in foreign direct investment (FDI) in 2011. The upside is very significant as China’ s total FDI amounted to USD 116 billion in 2011, or RMB 750 billion equivalent. Besides facilitating the rapid development of the sukuk and dim sum bond markets, more importantly, the Pilot Platform will contribute significantly to financial stability in the Asian region. With the advanced economies undergoing structural adjustment and fiscal consolidation, the two-speed recovery will continue to entice portfolio flows into Asia. The key challenges for Asia are to channel such flows to productive use, reduce concentration in short-term positions of the more volatile asset classes, and to avoid such flows spiking up a  BIS central bankers’ speeches  1  property price bubble. Channelling the inflows into the bond market will serve these useful purposes as the investors are typically institutional investors who take long-term positions in strategic economic sectors. The global financial crisis has reminded us of the destructive powers of a liquidity crunch and the need for quick access to local currency liquidity in times of stress. In particular, the increased risk aversion arising from the recent financial crises and heightened alertness to the counterparty exposure have raised the demand for secured lending. As an illustration, the average tripartite collateral management deals outstanding administered by Euroclear Bank increased substantially from EUR 76 billion in 2001 to EUR 325 billion in 2011.
First, there were too many large financial businesses for which an AAA rating was, fatally, more than a description of their credit standing; it constituted their business model. Examples include Fannie and Freddie; the Landesbanks; the US monoline insurers; the SIVs; and, if they can be thought to have a business model, the ABCPs. These institutions distorted the supply of credit across the global economy. (In the case of the monoline insurers, for structured finance they were effectively in the business of providing “end-of-the-world insurance with a settlement period of T+1”.) An even wider group of private-sector AAA institutions were not required to collateralise derivatives-related counterparty-credit exposures. The effect for the system as a whole was to introduce an extraordinary vulnerability to a ratings downgrade of any of these institutions or structures. There was, in effect, a potentially systemic cliff. A second serious faultline in global capital markets – arguably the greatest – was the firm expectation of “no break the buck” in the massive global Money Market Mutual Fund industry; c. $ in the US, more or less the same size as commercial bank deposits. The failure to pay par at a major US money fund when Lehman collapsed helped trigger the unravelling of confidence across global markets.

The European League for Economic Cooperation has been, ever since its foundation in 1946, an independent network of business people who put their knowledge and influence together to deepen European integration. The League has stood out over the decades for a lot of significant reasons, including the very diverse nature of its membership and their interests, as well as a specific concern for independence in formulating their opinions. It is exactly this diversity and independence that prompts ELEC to ask the right questions and, in the answers it provides, to give priority to the common European interest. I salute the close cooperation between government officials in the region with high European officials, as well as, with the private sector and prestigious organizations such as ELEC. The Prime Minister of Romania, Mr. Dacian Ciolos, will have a brief address on this topic. Mr. Achim Irimescu, Minister for Agriculture and Rural Development will chair the round table on agriculture, together with his counterpart from the Republic of Moldova, Minister Eduard Grama and other renowned authorities who are ready to share their expertise on the factors that generate food insecurity in the extended Black Sea region in the context of the 21st century challenges. Mr. Vasile Iuga, Partner at PricewaterhouseCoopers will chair the round table on energy security and together with prominent experts will focus on long term development of energy networks in Central and Eastern Europe. Ladies and Gentlemen, Now, a few words about the topic of this conference.
Mr Erçel reviews the monetary side of Turkey’s ambitious three-year disinflation program  Speech given by Mr Gazi Erçel, Governor of the Central Bank of Turkey, at the Merchant Taylor’s Hall, in London on 25 January 2000. *  *  *  Turkey’s disinflation program: what we are doing and why Starting this year, Turkey has embarked on an ambitious three-year program to disinflate its economy. I call it ambitious because Turkey has suffered from a high and persistent inflation for the past quarter of a century, and any program that hopes to correct such a long-standing problem needs to be ambitious. I will begin by reviewing this new program, especially the monetary side of it. But first I will give you some snapshots, from the past, of the Turkish economy, which I think will give a clear idea why this was the right time to take action. The history of Turkish inflation shows that for the last quarter century inflation has been gradually increasing, never falling below two digits. The average inflation rate for the whole period was 55%. During the last decade inflation has averaged 72%. Reflecting the uncertainties inflicted on the economy by this chronic inflation, growth has been volatile and at the low end of the range of comparable emerging market economies. Turkey’s average growth rate over the last two decades was 4.2%. Average growth for the emerging markets of Asia, where inflation is not a problem, has been much higher.

At the end of last year the percentage of adults infected with HIV was estimated at 0.2% in the United Kingdom, 21.5% in South Africa, 37.3% in Botswana, yet only 3.9% in Angola. Why do infection rates differ so much between countries? In the 1980s the World Health Organization and associated researchers made rather optimistic projections of the impact of AIDS on populations in Africa using extremely detailed computer models of population structure. Complex demographic models were combined with strong simplifying assumptions about sexual behaviour. Unfortunately, this led the modellers to ignore those factors most critical to the spread of AIDS. They assumed that the probability of transmitting the HIV infection was a function of the number of sexual acts, not the number of partners of infected persons. But it is crucial to distinguish between the two.8 Ten acts with one partner have a smaller impact on transmission of the infection than one act with each of ten different partners. As Professor (now Lord) May, President of the Royal Society, pointed out, ignoring this simple and crucial distinction led to a serious underestimate of the rate at which AIDS was likely to spread.9 By building elaborate models of demographic variables for which a great deal of information was available and making simple assumptions for behaviour about which little was known, the large models used by the World Health Organisation produced misleading results.
Gazi Erçel: The role of the euro from the Turkish standpoint  Speech by Mr Gazi Erçel, Governor of the Central Bank of the Republic of Turkey, made during the 6th International Financial and Economic Forum, held in Vienna on 9 November 2000. *  *  *  Ladies and Gentlemen, I would like to thank the organizers of this conference for inviting me to share my thoughts on the euro’s role as seen from the Turkish point of view. Of course, the introduction of the euro is affecting not only the economies that are members of the European Union but also non-member economies that have close links with members. These include emerging market economies much of whose trade and financial transactions is with European Union members. Those whose external debt is largely denominated in European Union currencies will be affected the most. Even though Turkey is not yet a member of the European Union, it has close ties with countries that are. Not only does Turkey carry on a large volume of foreign trade with EU members, it is also the only candidate for membership that has entered into a customs union with the EU, signed at the end of 1995. Turkey’s close relationship with EU countries and the present role of the euro in the Turkish economy are illustrated by the following: •  Europe is Turkey’s largest trading partner.

Time is limited, and this is, after all, a luncheon speech, so I shall not go into detail about these standards. The point to make here is that, as an international financial centre, we have no alternative but to implement these standards as fully as we possibly can and as soon as international agreements have been reached on them. Many of these standards will be, to put it mildly, quite onerous. In this connection, I wish to ensure you all that the HKMA has been adopting a proactive approach in participating in the relevant international standard setting forums and in influencing the standard setting processes in the best interests of Hong Kong. We have also consulted widely in Hong Kong. Insofar as the banks are concerned, there is a clear need for bank management to allocate adequate resources to the process of implementation, which will involve substantial changes to IT systems and compliance arrangements. For Basle II, for example, banks should not be acting under the misapprehension that they can simply sub-contract the implementation processes to third party service vendors, such as their external auditors. Active involvement of bank management is crucial in ensuring that most, if not all of these international standards are properly incorporated into the daily operations of banks, especially since each bank may face different focuses and challenges in the process.
One element of this is the response of regulators to the financial crisis (to which I will return later), while the other is a product of the rapid development of technology and trading strategies. The effects have probably been offset to some degree by beneficial influences from central bank monetary policy actions which have increased market liquidity. Measures of risk that reflect the overall demand for and supply of financial assets, including liquidity risk premia, remain low by historical standards, notwithstanding recent events. In part, this likely reflects the continued intended effects of monetary policy setting and the communication of policy looking forward. This has, as intended, provided an incentive for risk-taking by investors, and thus the market environment has been conducive to the so-called “search for yield”. But, as described, underlying conditions in financial markets suggest that the current situation could be fragile. 5 Shocks that might prompt large-scale asset disposals are of particular concern. The global asset management industry is both large in size in its own right and relative to the size of the commercial banking system. A key issue is the degree to which asset managers (or shadow banks) typically offer shortterm redemptions against potentially illiquid assets. This capacity to realise assets without unwanted disturbance to financial markets is therefore critical and is shaping the work of authorities. The risk is inherently global in nature, thereby suggesting that internationally– coordinated policy action is the preferred outcome where necessary.

U.S. companies with near-term bond maturities spent more than $ trillion on capital expenditures last year, just over one-third of the total. This translates into spending that touches multitudes of other firms and their employees throughout the economy, including private and smaller firms. Third, the removal of tail outcomes in the credit markets matters for employment decisions. Researchers have documented this relationship through an association between credit market sentiment and employment forecasts.18 Holding all else equal, if excess credit risk premia remained at their March highs, the median payroll forecast as of the third quarter of 2020 would be lower by approximately 1.8 million jobs. Meanwhile, at the fifth percentile—a proxy for the adverse tail scenario—payrolls would be lower by seven million jobs.19 You might interpret these findings as a rough sketch of the counterfactual. Had we not provided a robust funding backstop, how many more companies would have shuttered operations and laid off workers, either out of necessity or out of caution? If companies had been unable to refinance maturing bonds, how would their defaults have cascaded through supply chains and employment outcomes? We’ll never know these counterfactual scenarios with precision. Suffice it to say, though, that considering the downside risks to the economy we faced in March, the CCF’s $ billion of purchases and committed backstops have provided enormous benefits to the country.
First, the NPLs ratio dropped from 22% at end-2013 to 6.4% at end-2017, making it the largest adjustment in Europe over a relatively short time period. At the core of this adjustment were conservative requirements for provisioning NPLs, our hands-on supervision approach, and a fiscal facility that was conducive to the development of the secondary market for NPLs. Second, the share of local currency denominated loans in the total stock of loans has increased from one third prior to the crisis to two thirds nowadays. This reduced the contagion risk and improved the transmission mechanism of the monetary policy. A somewhat higher inflation and an earlier start in the policy normalization cycle have to be considered in view of another challenge, which is the lower level of financial intermediation. Some countries are facing the dilemma recently portrayed in a Bruegel Institute paper, between raising inflation and decreasing appetite for risk, the latter being reflected in the lower levels of credit to GDP. The solutions adopted are diverse. While some central banks are embracing a higher inflation, and try to stimulate financial intermediation, others try to reign in inflationary expectations and have already started the tightening cycle. Nevertheless, the issue of financial intermediation remains important, as credit for the corporate sector would need to replace direct fiscal incentives in most of these economies as a driver of growth, if we want growth to remain sustainable. The low financial intermediation in the banking sector comes, first of all, from the demand-side.

According to European legislation, treasury functions, risk management and IT services are the most important areas of operational independence to be secured – and, therefore, they are at the heart of the home-host issue. This is particularly relevant for non-euro Members States from Central and Eastern Europe. We agree that, at least until the conditions for an MPE strategy are met, the parent banks should continue to provide support for their subsidiaries. But how to do this it is a more delicate issue. One way would be to transform subsidiaries into branches. Indeed, from an operational point of view the switch from subsidiaries to branches could bring some benefits. However, a higher burden will be placed on home countries’ authorities, as these will have to take into account and protect financial systems and economies in the host countries. The home Deposit Guarantee Scheme (DGS) will be subject to a very high pressure in case the group fails and it must pay for the guaranteed deposits. Although equal treatment and solidarity are desirable, the branches seem to escape the safetynet that has different patterns in each country. National legal frameworks for resolution and liquidation procedures would still be the main drivers in a failing situation, but these are limited. An alternative solution for securing a de facto group financial support for the subsidiaries by using market instruments would relate to MREL (minimum requirement for own funds and eligible liabilities).