samchain/econo-pairs-v1 huggingface dataset:
It seems likely that any country in a similar debt situation to Puerto Rico would have faced difficulty in continuing to raise money in the bond market and would have faced questions about the sustainability of its debt level. Debt sustainability is generally defined as a condition where government debt is at a reasonable level – one with acceptable risks to market confidence and long-term economic growth – and is not on a path to increase indefinitely relative to some measure of national income. Stabilizing Puerto Rico’s debt as a share of the Island’s income and then reducing its debt to more sustainable levels should be a key goal of the Island’s fiscal and economic policy. While the precise path toward lower debt burden is uncertain, the trend is largely determined by the interaction of three factors: the government’s fiscal policy, the growth rate of the economy and the interest rate on the public debt. Regarding the buildup of new public debt, the Commonwealth government has stated its intention that the general fund budget will be balanced in fiscal year 2015. This intention, together with the stance of not using deficit financing to support public corporations, should greatly limit the issuance of new debt. The measures put in place during this year have already had some success in cutting the projected budget gap for the current fiscal year. But what other steps can be taken to move the Island toward fiscal health?

The measure is designed to prevent banks from having to increase their capital and restrict their lending activities during a downturn, thereby exacerbating cyclical fluctuations. The FSB ranks Credit Suisse Group AG and UBS AG as global systemically important banks (G-SIBs). In Switzerland, the Banking Act gives the SNB the authority to designate banks as being systemically important for the Swiss market, following consultation with FINMA. Banks are deemed to be systemically important if they perform functions in the domestic lending and deposit-taking business, as well as in the payment transactions area, which are essential to the Swiss economy and cannot be substituted at short notice. In addition to Credit Suisse Group AG and UBS AG, the SNB has designated Zürcher Kantonalbank, the Raiffeisen Group and PostFinance Ltd as systemically important. These are referred to as gone-concern requirements. A fundamental distinction is drawn between going-concern and gone-concern requirements. The former address the ongoing business activities of a bank, whereas the latter relate to the event of a bank having to be restructured or wound down. The fact is that banks typically get into difficulty precisely when they no longer have sufficient capital available. The regulations therefore allow for debt to be written off or converted into equity in such instances. Such instruments, which are designed to absorb losses in the event of a resolution, are referred to as bail-in instruments. Page 5/8  Banking regulation in Switzerland  With these two packages of measures, the international bodies have defined global minimum standards.
Work under ABMI has also focused on establishing the Asian Bond Online to provide comprehensive information on sovereign and corporate bonds to both regional and international investors. 10. Second, is on infrastructure financing: We have recently created the ASEAN Infrastructure Fund or AIF with an initial endowment of almost half a billion dollars and will be issuing bonds to finance its operations. It has already begun lending with a $ 25 million loan to finance power links in Indonesia last year and is expected to carry out about six projects each year throughout 2015 totaling $ 1 billion. 11. The AIF should be complementary to the Asian Infrastructure Investment Bank. With initial groundwork laid in Beijing two weeks ago, it aims to give project loans for infrastructure development. Thailand and 20 other countries in the region are founding members of this bank, which will have an initial capital of $ 100 billion. Once it begins operations in 2015, we hope to see a new wave of infrastructure financing that will enhance connectivity in the whole region. How can we unleash prosperity from regional connectivity? Ladies and Gentlemen, 12. What I have just highlighted are some examples of region-wide initiatives by ASEAN governments and central banks along with those of the Plus Three to spur connectivity. Opportunities are already in store for ASEAN as the world’s seventh largest economy. Combined with the Plus Three countries will turn the whole region to be the world’s largest economy and market.

Obviously, such principle applies to monetary-policy operations, where central banks have typically increased their level of risk taking during the crisis, but also to some extent to their investment activities. With the markets being shut-down for almost all financial institutions and the economy being strangled by lack of financing, the central banking community had to resort to a number of unconventional measures to support the continued provision of credit to the economy and to sustain the implementation of the monetary policy in an environment where its transmission could be endangered. In the language of risk managers, “unconventional measures” means larger exposures. Asset purchases, long-term operations, full-allotment tender procedures, relaxation of the collateral framework… All these measures have something in common: they raise the bar for risk management in central banking precisely in those times in which our brains are wired to shout “run”. But of course, we must exercise a disciplined and calmed responsibility and accept our role in crisis situations. Indeed, central banks are likely to be more exposed to risks in the event of a crisis. At the same time, they need to remain financially sound to ensure their independence and credibility in the conduct of monetary policy. This is particularly important at times of crisis, when inflationary expectations risk becoming unanchored.
Long periods of strong growth in debt, asset prices and investment may be a source of subsequent instability and problems in the financial system. We have observed this phenomenon both in Norway and in other countries. When optimism turns to pessimism, the financial system can come under pressure. However, it is not possible to determine with any certainty the value of debt, asset prices and investment that may constitute an unacceptable risk in this context. The pace of growth in household borrowing cannot be sustained over time. It would probably be wise for both borrowers and lenders to acknowledge that the root of subsequent problems, and demanding corrections, is often to be found during such periods. Thank you for your attention. 6/6

Furthermore, the exit policy especially of the major economies could spill additional risks to the ongoing global recovery. Their timing and speed will be crucial. The action that is either too early when the economy is not sufficiently robust, or too late when inflationary pressure and/or economic imbalances have already been formed will have important implication on recovery, price and financial stability. Second, emerging economies, Thailand included, face the challenge of sizeable and volatile flows of capital due to their better growth prospect and sooner policy normalization vis-à-vis G3 countries. These flows could lead to volatility in foreign exchange markets and might potentially create financial imbalances. From the data thus far, we have seen sizable inflow  2  BIS Review 41/2010  of capital into some of the Asian countries such as Korea, Taiwan, India, and China since the second half of 2009. And in the last couple weeks, this money started to flow into Thailand. Third on domestic front, as you are well aware, Thailand also faces two major uncertainties: the problem of Map Ta Phut and the on-going political unrest. I believe the “Map Ta Phut” problem is of the most interest to Japanese investors, and therefore I would like to say a few words. At present, the authorities have put all efforts to achieve the resolution of the problem, given its implications on the country’s future investment prospect, industrial practice, and economic recovery.
It is striking that, in the last five years, global standard setting bodies such as the Basel Committee on Banking Supervision have moved to address risk culture, risk appetite setting and risk governance more explicitly in regulatory standards. This was not the case prior to the crisis, when emphasis was predominantly placed on risk management processes and systems, believing that this ought to be sufficient. Organisations largely failed to take into account behavioural biases that play such an important role in senior management decisions which ultimately affect the risks that a company will be willing to take or tolerate. These decisions include how performance targets are set for staff, how incentive structures are designed, and the stature and resources that are provided to risk management functions within the organisation – all of which can create a constant uphill struggle for risk managers to have any meaningful impact on risk outcomes. To illustrate the point, a report published by  BIS central bankers’ speeches  1  the Office of Financial Research in the United States observed that much of the advancements in risk management over the last decade have resulted in a highly analyticalfocused discipline, while largely ignoring the fundamental drivers of risk-taking that are rooted in more subtle behavioural characteristics. Within the financial industry, financial institutions in Malaysia are required to establish a wellresourced independent risk management function that reports directly to a board risk committee, and take active measures to promote a prudent risk culture in the organisation.

Inflation expectations may be sensitive to a large but temporary shock that moved inflation outside the range within which it has remained for some years. With their belief in stability jolted, households’ inflation expectations might move by much more than was justified by the temporary nature of the shock. That would make it more difficult for the central bank to bring inflation back to target. The moral of this particular story is that it may be risky to infer from the observation that inflation expectations are stable that all is well. There will be times when large and persistent shocks occur, and it would be unwise to count on inflation expectations remaining stable when actual inflation starts to deviate substantially from its recent range. So those are the three lessons that I have learnt from Alan: (i) a recognition that economics is not a set of doctrines but a way of thinking; (ii) the importance of using qualitative and quantitative information from a range of sources; (iii) there are a small number of fundamental objectives that are crucial and which we can judge by the Greenspan yardstick of whether we have freed businesses and households from the burden of expending resources to deal with unnecessary policy volatility. Alan’s departure from the central banking scene will deprive us of a source of wisdom, inspiration and leadership. To be sure, Alan’s words, whether spoken or written, will surely still reach us from the sidelines.
And these improvements in the stability of the system and efficiency of the process of financial intermediation have probably contributed to the acceleration in productivity growth in the United States and in the increased stability in growth outcomes experienced over the past two decades. These generally favorable judgments require some qualification, however. These changes appear to have made the financial system able to absorb more easily a broader array of shocks, but they have not eliminated risk. They have not ended the tendency of markets to occasional periods of mania and panic. They have not eliminated the possibility of failure of a major financial intermediary. And they cannot fully insulate the broader financial system from the effects of such a failure. The resilience demonstrated by the financial system in the face of the major macroeconomic and financial shocks of the past two decades owes something to the nature of those shocks and the ability of the monetary authorities to mitigate the effects of those shocks. And there are aspects of the latest changes in financial innovation that could increase systemic risk in some circumstances, by amplifying rather than dampening the movement in asset prices, the reduction in market liquidity and the associated damage to financial institutions. My remarks today focus on the challenges these developments, particularly the growth in the over-thecounter derivatives market, present for risk management professionals.

Alongside the ongoing efforts by firms to get closer to the frontier of best practice in risk management, it is very important to see a substantial and sustained investment in improving the infrastructure that underpins the over-the-counter derivatives market. The major dealers in the credit derivatives market have begun a major effort to close the gap between the level of the business they are undertaking and their operational capacity to manage effectively the legal, operational and settlement risks in that business.
Furthermore, in economic terms, given that these deposits were used to a significant degree to finance illiquid assets in outside Iceland, such a payment, if it had been possible, would have amounted to a net transfer of resources from Iceland to other countries – where the United Kingdom would have been prominent – at a time when Iceland was going through its deepest financial and economic crisis in the post-war period! That made no sense. Finally, it should be noted that the deposit preference introduced before the banks failed is securing full recovery to all deposits if we discount the time value of money, which so far has been low during the postcrisis period. This case clearly highlights the link that must exist between the LOLR function and deposit insurance, which, in the absence of clear prior arrangements for currency swaps or other such mechanisms, must be predominantly in the same currency in order to work. The EU framework for this was therefore deeply flawed, as has been recognised in the discussions about a banking union. You can see from this that the key characteristics of crisis management and bank resolution in Iceland during the crisis were that share-holders lost all their equity, unsecured bond holders were bailed in, vital infrastructure elements of the domestic banking system were preserved and deposit were given preference over other unsecured claims. It seems in many ways a standard approach today, but it was not always well received at the time.

Over the years, the DFIs in Malaysia have evolved in tandem with the country's economic transformation, especially to support developments in the strategic and new growth areas such as high technology, infrastructure, SME development and micro finance. Bank Pembangunan was entrusted by the Government to support infrastructure development in expediting economic recovery following the financial crisis in 1997. Likewise, in line with the strategy to promote capital-intensive and high technology industries, Bank Industri was entrusted with the task of supporting advanced industrial development, such as engineering activities and computer software development. In the Malaysian financial system, the banking institutions form the largest component of the financial system, constituting about 51% and 78%, respectively, of the total assets and loans of the financial system. In contrast , the total assets and loans of DFIs as a group, respectively accounts for about 5% of the financial system. Nevertheless, these DFIs have been instrumental in providing the complementary financial services needed to support development of the targeted sectors and activities. One particular notable development is the support provided by the DFIs for SMEs. Like many other economies, in Malaysia, the SMEs form the backbone of the economy with high potential in fostering the forward and backward linkages of activities along the value chain. While SMEs constitute about 90% of total establishments in the manufacturing sector, at the  3/5  moment they only provide about 30% of employment in the sector and contribute about 6% to Malaysia's GDP.
In addition, there was already uncertainty before the war with regard to the development of the US economy, which was connected with the large saving deficit, including a very large current account deficit. In my opinion, therefore, one cannot rule out the possibility of more interest rate reductions than that decided at the last Executive Board meeting, because of the present uncertain situation for the global economy. Labour supply, productivity and growth in the long term As I mentioned earlier, the economy’s long-term production capacity is very important for monetary policy. It affects the rate at which the economy can grow and thereby how rapidly our prosperity can increase. Deciding factors for the speed at which the economy can grow are investment, labour supply and technology developments - e.g. machines becoming more modern or utilised more efficiently. Labour supply, in particular, will affect the growth of the economy in future. If we use Statistics Sweden’s population forecast as a starting point, we can see that the population will increase up to 2009 by an average of 0.5 per cent a year, which is slightly lower than the increase during the 1990s. Thereafter the population will decline by an average of 0.3 per cent a year. This forecast is relatively certain, compared with forecasts of economic activity. This means that population growth in the long term will undermine welfare. Most other European countries share this problem - in most of the larger EU countries the population growth is expected to be even poorer than in Sweden.

However, this is no consolation - on the contrary, a poor development among our trading partners could cause further  2  BIS Review 17/2003  difficulties for our own economy. Moreover, it is our own ambitions in welfare policy that should be put in relation to our growth capacity. The future age structure has great significance for labour supply and production. This is because labour force participation varies in different age groups. It is higher in the age group 25-54 years (87 per cent) than in younger and older age groups. The age group 16-24 years studies more today than at the beginning of the 1990s. Labour force participation for the oldest age group has also fallen over the past decade. One reason is that the retirement age from the labour market has been lowered and now the actual pension age amounts to 62 years. The only group that has increased its participation in the labour force in recent years is older women. This could be because those who are reaching a more advanced age today have a higher level of education than their predecessors. The age structure accentuates the problems. According to Statistics Sweden’s forecasts, the age group 20-64 years will need to support an increasing percentage of younger and older age groups. While the number of elderly people increases, the number of those between the ages of 20 and 64 will become an ever smaller percentage of the population.
There have been volte-face, for example, on bank bailouts and the necessity for them, on the need to relax monetary policy in Europe, on the state of the EU financial sector, on the no-state-bailout clause, and on the sufficiency of the current Greek package. In addition, several false myths have been propagated, for example on the consequences of Greek bankruptcy for the German and French banking sectors and on the need for the ECB and central banks to have positive equity. In fact, numerous central banks have negative equity yet have no problems operating if they are credible enough. The real capital of a central bank is its credibility and reputation, not a figure on its balance-sheet. Credibility and reputation are virtues that thrive on consistent and credible policies and communication. Another myth is that the eurozone cannot survive a Greek default. Why not? Is it insolvent? Are there significant trade dimensions between Greece and the eurozone? According to available DTCC data – which is incomplete but very probably covers the majority of cross-border transactions – even CDS that are now so often mentioned should not present a systemic problem for the European financial system. Note that CDS on Greek debt are higher than a year ago, but the euro is stronger than at the peak of last summer’s Greek crisis. The markets do not appear to think that Greece is that fundamental to the survival of the eurozone. Finally, it is implied that if we solve the debt problem, Greece and Portugal are saved.

In the meantime, the authorities should at least avoid communication that increases the risk of a run on banks and of angering the voters of fiscally sounder eurozone states. Last but not the least, a plan B would be highly desirable. Let me end by stressing that any disorderly outcome clearly goes against all the interests of the Czech Republic and its economy. There is now no possibility of a happy (i.e. relatively costless) end. But we should end the uncertainty. After all, muddling through the current crisis is clearly occupying European decision-makers to an extent that is preventing them from solving the issues important for the core and crucial parts of the eurozone and EU – for example, how to change this part of the world, which is currently sliding down the global relative benchmarks quite fast, in a way that will enable Europe to regain its past ability to compete globally. 4  BIS central bankers’ speeches