samchain/econo-pairs-v1 huggingface dataset:
Companies have been unable or unwilling to invest as a result of earlier investment mistakes and poorer prospects for the future. The banks have suffered severe credit losses, which has further intensified the recession, as their capacity to provide new credit has been limited. The situation becomes particularly serious when losses have led to acute bank crises, which has often been due to the banks being greatly exposed to a particular sector. For instance, it was an overheated property market with banks strongly exposed to this sector that was one of the main reasons behind the bank crises afflicting several countries – including Sweden – at the beginning of the 1990s. Adaptations to large financial imbalances have also put a burden on central government finances and increased uncertainty. This has in itself prolonged and intensified the crisis. Japan is a well-known example of what can follow in the tracks of a serious financial crisis if confidence cannot be recreated in economic policy and future growth potential. The consequences of financial imbalances have proved particularly serious in countries with a fixed exchange rate, partly because interest rates need to be kept high when confidence in the fixed exchange rate policy declines, and partly because there has often been a large foreign currency debt. When the fixed exchange rate has to be abandoned and the country's own currency is weakened, the burden of debt increases. Should the central bank then concern itself with asset prices?

Improved from Basel I, Basel II provides guidelines for maintaining capital for more comprehensive types of risks. Under Pillar 1, as you know, banks are required to maintain minimum capital for operational risk in addition to market and credit risks as previously required. And on top of the minimum capital, additional capital may be recommended by national supervisors under Pillar 2 for risks not covered by Pillar 1. Because Basel II will be imposed on a wide range of financial institutions with different sophistications, the framework offers several approaches to calculate minimum capital, ranging from a simple factor multiplication approach to model-based methodology. Obviously, we as supervisors, expect complex financial institutions to adopt the model-based methodology for a better measurement and assessment of risk. One important point I would like to stress here is that Basel II should not be viewed as merely a capital calculation methodology. Rather, it should be seen as a principle-based guideline for sound risk management. This is because Basel II’s advanced approaches are derived from the best banking practice. It is, therefore, a vehicle for better risk management. Banks in emerging markets, including here in Thailand, should, therefore, take advantage of this opportunity to improve their operations. From the perspective of financial information, it is also necessary for banks to produce good quality financial statements so that stakeholders will be well-informed, and a sound judgment on their financial status can be made by the market.
In particular, there is no sign of a potential wage-price loop that could be at play. This imperative to anchor inflation  3/4  BIS - Central bankers' speeches  expectations helps explain why the ECB raised key interest rates by 125 basis points in total over the last two policy meetings. As Christine Lagarde stated, the appropriate pace of future rate increases will be decided on a meeting-by-meeting basis. Indeed, as she has repeatedly emphasised, it will remain data-dependent in all scenarios. As the current drivers of inflation fade over time and the normalisation of monetary policy works its way through to the economy and price-setting, inflation will come down back to 2%. When will that be? Will it be necessary for the Eurosystem to significantly tighten its monetary policy? First, let me just note here that ECB projections released in September have significantly revised up their inflation projections and inflation is now expected to average 8.1% in 2022, 5.5% in 2023 but 2.3% in 2024. Second, market participants are not for the time being pricing in a strong tightening of ECB policy rates, with central expectations for the terminal rate being slightly below 3%. To conclude this rapid overview of the current macroeconomic situation in the euro area and its monetary policy implications, let me stress first that the change of course of monetary policy underway brings with it multiple dimensions that will need to be revisited, including the TLTRO operations, the remuneration mechanisms of banks reserves, and more broadly our operational framework.

As I have already alluded to earlier, this is an area in which the Association and its members can and must do more to put in place mechanisms at the firm and industry level for handling complaints against services provided by financial advisory representatives, well before a dispute is escalated to the Ombudsman. To help consumers navigate and compare financial products more efficiently, we are looking into the establishment of an online product aggregator to provide financial consumers with the ability to gather reliable information on a wide range of insurance products and make comparisons on simple products on a single website. A number of issues will need to be addressed to support such an initiative and ensure that meaningful comparisons can be achieved. Over the coming months we will be meeting with stakeholders to obtain further views on our aggregator proposals and examine options to move this initiative forward. I have spoken at length this morning about our plans for the industry. In the years ahead, this industry will have an important strategic role in the ongoing transformation agenda that is being pursued for the insurance and takaful sectors. The Bank is committed to providing a well-balanced regulatory environment that adequately protects consumers, while encouraging advisers to realise their full potential.
But global institutions would need local guides to venture into new markets. Here there is a role for local or regional banks to partner with global banks. BIS central bankers’ speeches  1  (3)  As to who should be borrowing, given the public goods nature of the long term infrastructural projects, the government should take the lead. Options for financing include direct government borrowing, concessional borrowing from overseas development assistance, or through Public Private Partnership (PPP). (4)  Beyond banking, developments in the capital market and regional cooperation initiatives provide channel to intermediate cross border savings to finance infrastructure investments. These include the ASEAN Infrastructure Fund (AIF), the Credit Guarantee Investment Facility (CGIF), and Asian Bond Market Initiative (ABMI). Going forward, the combination of the above arrangements should provide a division of task that is healthy and balanced for the region. Secondly, on the role of Thai financial intermediaries, I see the following prospects for the Subregion. In addition to our strength in core banking business, the Thai banking sector has been partnering with foreign entities to serve the broad-based demands of the economy. Thus, we can play a meaningful role in bridging between the global financial players and the smaller local intermediaries. We can also contribute in terms of expertise and experiences. •  So what is Thailand’s value proposition? Thai banks can play a role and compete in the business of financing small and medium enterprises.

Today, our communication on the Swiss franc is centred around two key statements: the currency remains highly valued, and the situation on the foreign exchange market is still fragile. By communicating our knowledge of the financial markets in a clear and simple way, we bolster participants’ confidence and contribute to the credibility of our monetary policy implementation. Page 6/9  A changing money market Lastly, I’d like to take a look at another market that has seen profound change since the crisis: the money market. This market is particularly important for the SNB, especially with respect to the implementation and transmission of its monetary policy. The money market has undergone two major changes, largely driven by external factors. First, the structure of the market has evolved, with the inexorable decline of the unsecured segment and concomitant rise of the secured segment; this structural change has meant that repos now take centre stage on the money market. Second – and this change is closely bound up with the first – we observe that the framework conditions within which the money market operates have been recast following the decline of the unsecured segment. I am alluding here to the replacement of the Libor as the reference interest rate for a variety of financial products, both in Switzerland and around the world. Coming back to the first point: the drop in volume for unsecured transactions, particularly on long-dated operations (more than one month), is a global phenomenon.
In my view, it would be surprising if there were significant effects on the real economy or inflation associated with substituting one short-term, liquid, risk-free asset (reverse repos or term deposits with the Fed) for another (reserves), except for the degree to which that substitution affects the Fed’s control of overnight interest rates. BIS Review 39/2010  5  because the FOMC has not specified the path of reserves it intends to achieve before raising interest rates. The second potential concern that some may have is whether the markets have adequately priced in the exit strategy. However, a few considerations should limit this concern. Most important, the current configuration of yields and asset prices incorporates expectations that short-term interest rates will begin to rise around the end of this year. Thus, the markets seem prepared for the risks toward tighter policy. Moreover, looking out to longer maturities, the shape of the Treasury yield curve appears to incorporate not only expectations of policy tightening, but a decent-sized term premium on longer-term securities. Indeed, the term premium is well above the levels observed over most of the past several years, even though inflation is likely to be low and upside inflation risks are limited. This should help to diminish the chances of a sizable upward shift in yields. A related issue is whether the current levels of risky asset prices will prove robust in a rising rate environment.

Here I am referring to those facilities that provided funding at maturities of up to three months to particular sets of firms, such as the primary dealers, money market mutual funds, commercial paper issuers, and depository institutions. 2 Just today, we conducted the last operation associated with those facilities,  1  The views expressed here are not necessarily shared by the Federal Open Market Committee or by other members of the staff of the Federal Reserve Bank of New York. 2  In discussing these facilities, I am not including any provision of credit intended to support specific institutions, including those associated with the Maiden Lane LLCs. I include the Term Securities Lending Facility in with short-term lending facilities, even though it provided the market with Treasury securities rather than reserves, because it was often used to find funding for positions in less liquid securities. BIS Review 39/2010  1  meaning that all of the short-term liquidity facilities that were introduced during the crisis have now effectively been retired. The only special liquidity program that remains active is the Term Asset-Backed Securities Loan Facility, which I consider to differ from the short-term liquidity programs because it provides funding for up to five years. With the wind-down of these short-term liquidity facilities, it is a good time to look back and assess their performance. The bottom line here is simple: these programs were an unquestionable success.
We at the Riksbank has also used one such model to better understand the interplay between the two policy areas – mainly because macroprudential policy could have effects on economic activity that monetary policy may need to take into account.10 The conclusion from this exercise so far is that there are no easy answers and that the benefits of coordination may vary, depending on which shocks are driving the economy and making the authorities take action. How have the roles been allocated in reality? So how have different countries in reality chosen to organise monetary policy and macroprudential policy? As usual, it is difficult to draw straight lines between theory and reality. One country that comes fairly close to model A with regard to coordination is the United Kingdom, where the Bank of England has been given responsibility for macroprudential policy. The decisions on monetary policy and macroprudential policy are taken by two different committees in the bank, the Monetary Policy Committee and the Financial Policy Committee, which is more in line with model B, but there is nevertheless an explicit aim to coordinate, for instance, in the way the committees are composed.11 In Sweden we have chosen a solution that in institutional terms is closer to B, in the sense that Finansinspektionen has been given the main responsibility for macroprudential policy tools. Now, I do not believe that the differences in the practical solutions chosen in different countries should be exaggerated.

Let me re-iterate that sustainable economic development is not possible without adequate investment in the knowledge industry. It is precisely for this reason that the nations that have attained great economic progress are also those that have invested heavily in education. Ladies and Gentlemen; in the recent years, the Bank of Zambia has been striving to strengthen its focus on economic research in order to improve the formulation and implementation of monetary policy in this dynamic economic environment. The Bank has in this regard been publishing the BoZ Reader where members of staff and external researchers are encouraged to publish articles which have a bearing to the economy in general and monetary policy in particular. The Bank in collaboration with the Centre for the Study of African Economies at Oxford University is also in the process of publishing a book on the economic prosperity in Zambia. I wish to take this opportunity to encourage all students and academic staff at UNZA to contribute to some of the forthcoming publications of the BoZ Reader. In conclusion, I wish to re-iterate that the Bank of Zambia commits to continue supporting the Economics Department and Research programmes at UNZA and hopes that the University will live up to its obligations under the framework of cooperation to be signed today. We challenge the Economics Department at UNZA through the Vice Chancellor to scale up its research activities in issues of interest to the Bank and the Zambian economy in general. For this is what this MoU entails.
In Chart 7, the greater the number of years spent in school, the darker the green in which the country is colored. In Asia, there are a number of dark green areas, such as Japan, Korea, Malaysia and Sri Lanka. As you would expect, Hong Kong and Singapore also belong to this group, although it is not shown clearly on this map. One may get the impression that Asia as a whole is not as green as North America or Europe, and is more or less similar to South America. This would seem to indicate that there remains significant potential for further accumulation of human capital in the region. At the same time, there are some interesting figures relating to U.S. universities, which are generally acknowledged as providing the highest standard of education, attracting talented people from all over the world. If you look at the data for U.S. university students by their country of origin, you can see that students from Asian countries dominate, as shown in Chart 8. Those students returning to their home countries will no doubt have a profound impact on the human capital there. It is well known that Bangalore, the IT hub of India, benefited from returnees from Silicon Valley. Moretti’s study shows that innovative, highly skilled workers contribute not only directly to the higher quality of human capital, but they also have a positive effect on the skills of those around them – a sort of positive externality.

Even if it is the case, we cannot entirely count on one single rising star. The growth rate of relatively high-income Asian economies needs also to be sustained at a reasonably high level if the prosperity of the regional economy as a whole is to be maintained. I believe there are three traps which we must avoid falling into if we are to sustain economic growth in Asia. Despite the heterogeneity which we have observed, these three traps are relevant to many countries in the region, albeit to varying degrees, depending on the circumstances. The first trap is the “middle-income trap.” 6 History shows that many economies have faced difficulties in advancing beyond the status of a middle-income economy once they have  4  See http://data.worldbank.org/about/country-and-lending-groups. In my presentation, I loosely follow their definitions by using thresholds of 12,000 U.S. dollars and 1,000 U.S. dollars of per capita GDP. 5  David N. Weil, Economic Growth, Third Edition, Pearson Education Limited, 2013. The darkness of North Korea is noteworthy, as is often pointed out in the literature, including Charles I. Jones, “The Facts of Economic Growth,” NBER Working Paper 21142, 2015. 6  The middle-income trap is discussed extensively in Asian Development Bank, Asia 2050: Realizing the Asian Century, 2011. 2  BIS central bankers’ speeches  exploited the growth opportunities provided by imported technology and abundant labor force from rural areas. Such an inflection point is known as the Lewisian Turning Point.
-  Persons filling key roles should be expected to have the necessary skills and experience to carry out their tasks appropriately. The supervisor has a role in assessing the qualifications and integrity of these key personnel through fit and proper tests. 2  BIS Review 38/2005  -  Depending on the size and complexity of the bank, appropriate structures and control mechanisms such as strong internal audit, external audit and the oversight function of the board (directly or through supporting committees such as audit committees, risk committees, compensation committees etc) support the effective operation of a supervised bank. -  Other elements, such as the appointment of independent board members who can exercise objective judgement, are usually recognised as good practice. Basel II and corporate governance Let me turn now to the Basel II capital framework. I am asked to speak about Basel II quite frequently, but while I am often requested to talk about the mechanics and the impact of the new framework, I am seldom asked about its corporate governance aspects. This is unfortunate because, in my view, Basel II is fundamentally about better risk management anchored in sound corporate governance. With that in mind, I would like to focus now on three areas where I believe Basel II will contribute to more effective corporate governance. I will refer to these as the three C’s: controls, culture and clarity. Controls The first “C” is controls.

However, I do think that we share some important broader perspectives, particularly in relation to the two issues I will address today. More rigorous risk management anchored in strong corporate governance, enhanced transparency and sound minimum capital requirements that reflect the risks that banks face are vital elements for any financial system to promote confidence and foster financial stability. On top of that, common standards in these areas can help to improve the integration of the international financial system. It is certainly true that the special features of Islamic banking may not be fully addressed by the traditionally broad international standards developed by organisations such as the one I chair – the Basel Committee on Banking Supervision. I believe that it would be neither appropriate nor possible for the Basel Committee to seek to fill such gaps. That is why I am very pleased to see organisations such as the IFSB addressing issues related to the soundness and stability of the rapidly growing market for Islamic financial services worldwide. The exposure drafts that you have issued with regard to risk management and capital adequacy for institutions offering Islamic financial services help to fill a very important niche, as will your forthcoming exposure draft on corporate governance, and your work on the supervisory review process and on transparency and market discipline. The Basel Committee is an outward-looking committee, with a key interest in relevant matters that reach beyond its own technical and geographical borders.
As these countries have adopted the euro, weakening the currency is not a possible escape route for them, providing that they wish to remain within the monetary union. The best way for these countries to increase their competitiveness is instead to employ what is usually called internal devaluation. This means that wages and prices must increase at a slower rate than abroad for a while. Another important measure in this context is to implement reforms that increase long-term growth and productivity. There are also various political problems that have to be resolved. Difficult dilemmas arise when economic cuts lead to discontent on the part of the public, whose support is needed. In this context the politicians also have to meet a number of pedagogical challenges. They have to be able to explain the choices the country is facing and the consequences of various courses of action. There is a great difference between what you want to achieve and what you can achieve. For example, the desired standard of living is a value judgement, while the possible standard of living is a result of how well the economy works in terms of the potential for long-term growth, how sound public finances are and so on. Another problem is that interest rates rocket when there is a lack of faith in the ability of the political sphere to take action, which further aggravates the problems. So, how can one overcome these difficulties?

The Riksbank is monitoring developments closely, but our assessment is that at the moment there are no funding problems for the Swedish banks on the international capital markets. To sum up we can say that the turbulence around the world will have a dampening effect on Swedish growth in the period immediately ahead. The clearest signs of this so far are the weak stock market in Sweden and the dramatic decline in the confidence of the households and companies, which is reducing demand. How can we ourselves facilitate developments in Sweden? We have laid stable foundations – which we must build on Although we are dependent on what happens abroad, we must do what we can to keep the economy on an even keel in Sweden. We can compare the situation to our own personal finances. Various external circumstances that we have no control over can undermine our financial situation. However, if we have had a firm grip on our personal finances before this happens, we will be better prepared and have a better chance of managing the situation. But how can we relate this to the Swedish economy as a whole? If we return to Figure 7 we can see that labour costs over the last 10 years or so have increased more slowly in Sweden than in the euro area. We can also go back to Figure 9.