samchain/econo-pairs-v1 huggingface dataset:
But after financial crises, economies often take much longer to recover. Indeed, the evidence suggests that output typically stays well below a continuation of the previous growth path for many years thereafter. For instance, a study by the IMF 2 found that across 88 past crises, output per head was, on average about 10% below such a path fully seven years after the onset of the crisis, though there is considerable heterogeneity in the experience of individual countries (Chart 1). Unless crises are also associated with an equivalent impairment of supply capacity, that implies an increase in the margin of unused resources. 1  http://www.bankofengland.co.uk/publications/speeches/2008/speech342.pdf  2  IMF World Economic Outlook, October 2009. BIS central bankers’ speeches  1  The primary reason for such a slow recovery is that the unwinding of earlier financial excesses takes time. Moreover, banking crises are also frequently associated with a subsequent deterioration of the public finances, as governments provide support to vulnerable financial institutions and tax revenues drop back. Both these features are, of course, present today in many of the advanced economies, including in the United Kingdom. UK banks have made considerable progress over the past year in improving their balance sheet positions, but funding costs remain elevated and over the next two years they face the challenge of replacing around £ billion of maturing wholesale funding. Credit availability to larger corporates has improved significantly, but small and medium-sized enterprises still face difficulties in securing affordable credit.

We can bring all this together by asking what has been the net contribution to inflation of higher global prices, the exchange rate depreciation and the movements in VAT over the past few years. A range of estimates is shown by the blue swathe in Chart 9. The green swathe then just shows the corresponding inflation generated from other sources, such as pay and producers’ profit margins. It can be seen that this has been running at very low levels, especially over the past year and a half. It is worth emphasising that this is, in essence, merely an accounting exercise, attributing inflation to various proximate causes. The green swathe does not provide an estimate of what inflation would have been if commodity prices, the exchange rate and VAT had all remained at their 2007 levels. If that had been so, consumers would have had more to spend on domestically produced output, pushing up prices. And producers utilising imported inputs would also have had less incentive to bear down on other costs, including wages. So, in the absence of the movements in global prices, sterling and indirect taxes, inflation might have been somewhat higher than indicated by the green swathe. But these effects would have to be quite powerful for inflation to be materially above target in those circumstances.
It is vital that governments and parliaments reject these temptations, not only because of the possible budgetary repercussions, but also because it is essential that economic agents adapt to the new realities, however painful these may be. This is even more important when these realities, like the price of oil and the availability of funds on international financial markets, are global phenomena that even countries larger and more powerful than our own have been unable to influence. Thus, the aim should not be to isolate the Spanish economy and protect its agents from the various shocks that we have suffered in recent quarters, but rather to facilitate the adjustment process, permitting changes in relative prices (energy, labour costs, mark-ups) and the reallocation of resources across sectors to take place with a high degree of flexibility. Another approach that must be ruled out is short-termism. In general, economic policy should be designed in all situations from a long-term viewpoint, because many important measures  2  BIS Review 117/2008  (I dare say the most important) are structural, and these are the ones that tackle the economy’s fundamental problems. It is understandable that, when faced with a stream of bad economic news, like at present, public opinion calls for rapid reactions and that the temptation to focus on short-term measures increases. Such proposals are also based on the idea that structural measures only have medium and long-term effects, and are therefore inappropriate for a period of economic weakness. This is not true.

Shares of individual regions in global trade % Total  1990  1995  2002  Developed countries  72  67  63  US  12  12  11  UE15  44  39  38  Developing countries  28  33  37  Asia  13  19  20  Source: IMF Direction of Trade Statistics  6  BIS 75 Annual Report, 2005. 7  th  Ciccarelli, Mojon “Global Inflation”, Central Bank of Chile Working Papers No 357, December 2005. BIS Review 32/2006  3  Global capital flows keep growing even more dynamically, whereby the share of the global FDI in the global GDP increased from 8% in 1989 to 22.1% in 2003, and foreign assets expressed as percentage of the GDP increased from 62.6% of the GDP to 186.1% of the GDP, respectively. As evidenced, the role of trade and financial links between enterprises in various countries has become more important over recent years. Previously, in response to growing fuel prices or costs of living, trade unions demanded wage increases, which triggered the so-called second-round effects and central banks had to increase interest rates to mitigate inflation. Nowadays, trade unions must take into account the fact that in the case of wage increases, production and services may be transferred to countries with lower manufacturing costs.
The settlement of a payment by Swish takes place on a platform known as “Betalningar i Realtid, BiR” (payments in real time), which is owned by Bankgirot. Swish payments are thus settled in money issued by a commercial institution and therefore differ from other payments that are settled in central bank money. Another difference between BiR and RIX is that BiR is accessible 24 hours a day, every day of the year, “24/365”. The average transaction in BiR is much smaller than the average transaction in RIX, which is a natural consequence of the payments made with the Swish app being small. However, there are no technological limitations preventing larger payments being settled instantly. But there will then be high demands on the safety of the settlement procedure, and settlement should then be in central bank money. 4 The Riksbank has decided to extend the opening hours for RIX from 0700-1700 to 0700-1800 with effect from  October. 5 Almost all central banks own and operate payment systems with the same kind of functions as RIX. These systems are referred to as “Real-Time Gross Settlement” (RTGS) systems or ”Large Value Payment Systems” (LVPS). 6 Instant payments is the most common term; other terms include “real-time payments” or “faster payments”. For a more detailed description, see The quest for speed in payments, BIS Quarterly Review, March 2017. 7 See Payment patterns in Sweden 2018, Sveriges Riksbank. 3 [8]  ... and in the future?

Inflation expectations themselves have been remarkably stable, including during the recent period when oil prices jumped to levels no one could have expected only a year ago. This, by itself, illustrates the credibility achieved by the Eurosystem of Central Banks, after eight years of existence. Second, European households and companies are reaping the benefits of that credibility. Long term interest rates stand at a low level, 40 to 50 basis points below the level in the United States. So, even after the recent increases in short term rates, monetary and financial conditions remain extremely favourable for investment and growth. And indeed, we might be witnessing in Europe a period of sustained and stable growth, at least if current projections and surveys are proven to be right in the coming months. A third benefit of the Euro is the boost it gives to financial integration in Europe. In many segments, European financial markets have reached the depth and liquidity which, up to now, were the preserve of dollar markets. This stimulates productive investment, helps in restructuring (as witnessed by the current wave of M&As) and, more generally, allows a better allocation of savings and sharing of risks. As a consequence, the euro is becoming extremely attractive, as a vehicle, a transaction, an investment and a reserve currency. As you may know, as central bankers, we remain neutral as far as the internationalisation of the euro is concerned. We are neither encouraging, nor discouraging the process.
They should, for example, consider whether it is desirable to grow in size or develop into niche players. Neither option is an easy one. The opportunities for organic growth in the local market are limited, while competition for niche operations is intense. 2  BIS Review 37/2004  China risk The second important process is the continuing and accelerating integration of the economies of Hong Kong and Mainland China, which will be hastened in the years to come by further financial liberalisation. I have already mentioned the arrangements under CEPA, in which more medium-sized Hong Kong banks will be able to access the Mainland market. Let us not overlook movement in the opposite direction, in which more Mainland banks will seek to enter the Hong Kong market. On the macro level, as the renminbi moves at a measured pace towards full convertibility, it seems inevitable that an increasing proportion of the balance sheet of banks in Hong Kong would be denominated in that currency. The opportunities arising from the developments are promising, but they carry risks as well. The growing banking relationship between the Mainland and Hong Kong will provide important business opportunities for banks in both places. The question for Hong Kong banks seeking to take advantage of this process is whether they have the requisite expertise to properly analyse the business and compliance risks.

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.
This is a challenge that calls for the involvement of all levels of government. From this standpoint, it is very important to adapt the analysis of public finances and its economic policy implications to the current Spanish situation, marked by highly decentralised public spending. Leaving aside the transfers between different tiers of  BIS Review 117/2006  5  government and interest payments, which reflect past financing patterns, the volume of spending by territorial governments is almost two and a half times that within the State sphere. Such a figure shows the enormous increase in the role of these agents, which has significant consequences for budgetary policy conduct, both in terms of its contribution to macroeconomic equilibrium and as regards its influence on the economy’s growth capacity in the medium and long run. From the standpoint of the contribution to macroeconomic equilibrium, the initial data on the regional governments' budgets for 2007 point to a balanced budget target for the year. We might wonder, however, whether the macroeconomic situation I have described, at a cyclical juncture marked by a prolonged expansion, would require the setting of somewhat more ambitious targets, in line with the spirit of the new Budgetary Stability legislation, even though these are only legally binding as from the 2008 budget. Also, from the standpoint of their contribution to long-term growth, the role of the territorial governments in managing the public spending items of most relevance for improving the Spanish economy's competitiveness acquires considerable importance.

The manufacturing sector, however,  BIS Review 117/2006  3  has recently seen high productivity gains and some stabilisation of unit labour costs relative to the euro area countries. Turning to inflation, we have seen two very different trajectories in 2006. In the first half of the year, price increases were very high, driven by labour costs and by widening margins, but especially by higher oil prices. The 12-month rate of increase of the CPI held at close to 4% until July, with a differential in relation to the euro area that at one point was 1.8 percentage points (pp), above the average differential observed since 1999. However, the decline in oil prices that began in August has swiftly passed through to prices in the Spanish economy. As a result, the CPI rate stood at 2.5% in October, 1.4 pp below the July rate. That enabled the differential with the euro area countries to be cut by 1 pp, to slightly below the average in recent years. The improvement in underlying inflation was, however, very limited, and this variable is holding at a rate of close to 3%. Admittedly, 2006 may possibly close with a growth rate somewhat higher than that of the previous year. But the outlook for 2007 points to a slight slowdown in GDP growth, as part of a continuation of the patterns in recent quarters I have described to you.
But in major part the measures are a result of the 4/5  BIS central bankers' speeches  ECB adapting to the secular downward shift in equilibrium interest rates over the past three decades. The measures have been successful in stabilising output, helping to reduce unemployment and have begun to help steer inflation back towards our objective. We will keep the measures in place until output growth and inflation are back on sustainable paths. While some redistribution between households is inevitable with monetary policy actions, it is clear that to date there has not been an inequitable redistribution in the euro area. Indeed, the distributional consequences of policy inaction would have been worse. The ECB will continue to use appropriate measures available in our mandate to achieve our inflation objective. This includes the temporary use of the unconventional measures introduced since the crisis until growth and inflation are once more self-sustaining. In enhancing macroeconomic stability and inhibiting the short-term effects of the crisis from weighing on longterm economic prospects, monetary policy is providing its best possible support to long-run saving. And it is important to view the contribution of monetary policy in the wider context of macroeconomic policy. Fiscal policy can play a greater role in stimulating demand, reducing the burden on monetary policy. Public investment as a share of GDP has declined for a number of years. It is vital that fiscal authorities re-balance towards more growth-friendly policies. Furthermore, the secular decline in rates is not inevitable.

That compensation is paid for by those seeking to spend more today than their current income, such as people buying houses, or firms investing in new capital, who in return will not consume all their income in the future to repay the debt. There are two parts to interest payments – the real component which is the extra amount of goods and services you can buy in the future relative to today and the inflation component which compensates for the changes in the prices of goods and services in the future. Long-run nominal interest rates have been falling across major advanced economies for more than three decades. In major part, this is due to the success of central banks in taming inflation. The expected inflation rate and the inflation risk premium incorporated into long-run interest rates have fallen. Yet changes in expected future inflation that are in turn realised are benign for savers – it is changes to the amount of goods and services that can be purchased in the future that matter, not changes in nominal prices. But it is not just long-term nominal interest rates which have been declining; longterm real interest rates have also fallen. Factors beyond monetary policy have played a role in driving real rates lower, which are less benign. There has been a secular decline in productivity growth rates in advanced countries, and increased pessimism about future growth. With lower expected return on capital, firms are more reluctant to invest.
This is an area that should always be a top priority for us all. But I stress it today in the context of the risks and potential rewards I outlined earlier. Simply put, the stakes for each of us – for our institutions, the industry and indeed for Hong Kong – are higher now than ever before. We should therefore invest in talent and professional development accordingly. To make this concrete, the HKMA and the SFC – with, I’m pleased to note, the warm support of the private banking industry and professional bodies – have set up a taskforce to work out an enhanced competency framework for private banking practitioners. Our initial thinking is that the framework should emphasise vocational training and practical application, as well as ethics. Under this framework, private banking practitioners could take different examinations provided by, say, the HKIB and the Hong Kong Securities Institute, and ultimately acquire a professional qualification. To ensure continuous development, practitioners would also take additional regular training. Under the same proposed new framework, the HKMA intends there to be more emphasis in future on practitioner competency, continuous professional training and adherence to common set of professional ethical standards. Getting this right will be an important piece in the puzzle towards building a world-beating sector here in Hong Kong. Getting it right means raising competence and professional standards and, consequently, raising levels of trust and custom. To achieve that will take a full, team effort.

Harnessing Green Finance for Sustainable Development 2/4  BIS central bankers' speeches  The second area where Chongqing and Singapore can work closer together is green finance. COVID-19 has made us all more aware of the value of protecting the environment. China has committed to ambitious green policy goals including carbon neutrality by 2060. Chongqing has the important task of leading sustainable development in the Western Region and along the Yangtze River Economic Belt. Green finance will be a powerful tool to help achieve this. Green finance is also a key area of focus in Singapore. MAS has worked with the financial industry to launch a Green Finance Action Plan. It has four key strategies: strengthen the financial sector’s resilience to environmental risks; develop green financing solutions and markets for a sustainable economy; harness technology to enable trusted and efficient sustainable finance flows; and build knowledge and capabilities in sustainable finance. ASEAN too has prioritised green finance. Green finance volumes in ASEAN doubled last year and remained robust in 1H 2020, despite COVID-19. As Asia continues to urbanise, its demand for affordable and sustainable energy will only grow. There is great opportunity for the Western Region and ASEAN to collaborate on initiatives to support the large scale of green financing that is needed. Last year, Chinese and Singapore banks jointly issued over USD 2 billion in green bonds and loans in Singapore to finance Belt and Road projects.
Allow me to cite (from Finanstidningen, 14th October 1996): “There is no direct link between our coming wage claims and the number who are unemployed”. This is an illustration of the theories about insiders and outsiders in the labour market. The costs of hiring and firing labour are one source of insiders’ influence over wage formation, which can affect the possibility of bringing unemployment down. During the latest economic upswing in Sweden the number of hours worked rose by the equivalent of 130,000 new jobs but the increase in the number of persons in employment stopped at 85,000. The direct explanation is that average working time lengthened, which naturally may have reflected a rising propensity to go from part-time to full-time work and to do overtime in order to ease a strained personal economy. But it is also conceivable that employers have become less inclined to hire additional labour and more prone to make greater use of the existing labour force to cope with rising demand. An indication of this could be employers’ willingness to introduce working hours related to the activity in the economy. The differences between the explanatory models should not be exaggerated. They have several features in common and this makes them difficult to separate clearly in practice. Most of the evidence suggests that the high equilibrium unemployment in Western Europe as well as in Sweden has several causes.

At the same time, the forecast based on the market’s assessment of the future repo rate shows that there didn’t have to be any hurry to begin to hike rates. A repo rate path consistent with implied forward rates led in this example to inflation never reaching the target. Examples like this can of course never give an exact answer to when the repo rate should be adjusted. What they can do is increase our understanding about the consequences of different options. In this case they can help us to narrow down a number of reasonable scenarios for policy a few quarters ahead. And in this particular example an unchanged repo rate was certainly one such reasonable option for a period. Allow me for safety’s sake to emphasise that the conclusions for monetary policy of both the alternative forecasts – the Inflation Report’s usual main scenario and the estimates based on implied forward rates – can generally be expected to be the same. Regardless of whether we reason on the basis of the simple policy rule, which relates the forecast of inflation one to two years ahead – under the assumption that the repo rate is held constant – to the current decision, or whether we study forecasts based on implied forward rates, for example, we can reach the conclusion that it was reasonable to leave the repo rate unchanged in December and that the repo rate sooner or later will need to be raised.