samchain/econo-pairs-v1 huggingface dataset:
•  The third option is to secure as efficient as possible operation of the education market in the private sector where people themselves pay for their education. One possibility to contribute to this is, for example, through carefully planned implementation of the system of education capital units that has already been under discussion, in the similar way to the pension insurance system that has been successfully launced. When we know which areas will boost Estonia's competitiveness, we should make sure that those who pay for their education themselves would choose the right specialities (they should be motivated by the fact that their anticipated pay is going to be higher - hence they would be willing to bear higher costs). Currently the problem in Estonia is that people choose law and business specialities where the external impact is small, and fewer engineering professions, mathematics, etc. where the external impact is presumably high. •  Probably the main problem here is lack of information. In order to secure improved circulation of information, future students should be systematically informed of the  8  BIS Review 26/2004  differences in pay and the opportunities of finding employment in different areas - however, pay differences today do not always reflect what is to become in the future. For example, the excessive supply in business specialities compared to other areas should lower entry-level salaries. Another area about which students should be systematically informed is the level of schools.

•  In conclusion we can say that Estonia has been quite successful so far. For a successful future, we should first realise how far Estonia has progressed. Then we can decide where Estonia wants to be headed. When we know what we want to achieve in the future, we have to answer another, often an unpleasant question: how, through which measures, and at what price can we achieve the desired result? And then there is nothing more to it but to embark on taking purposeful action... It is as easy as that. Or is it? •  It is a fact that as Estonia is evolving into a ‘boring and stable European country’, our society is supporting change for the sake of itself less and less. Stability, keeping one's word, and honouring contracts concluded either directy or indirectly is becoming an increasingly highly regarded value in the Estonian society. •  As Governor of Eesti Pank I would hereby like to recall that if anyone in Estonia has the right - and obligation - to stress the importance of stability, it is the central bank. Some very successful examples illustrating the fact that stability is held in high regard are the Estonian kroon that has held out splendidly for twelve years and the Estonian monetary system that has not been ‘copied from Europe’ but has been structured bearing in mind our specific situation.
All three layers – national, regional and global – must complement and reinforce one another. Well-designed, they can operate as a package, offering a comprehensive suite of financial options to countries in need. AMRO – The focal point of regional surveillance 20. Let me now turn to AMRO, the emerging focal point for regional surveillance underpinning the CMIM. AMRO was set up to perform three important functions:   to conduct surveillance and contribute to the early detection of risks in the region;    to facilitate the implementation of remedial action; and    to inform the decision making of the CMIM. 21. These functions help to ensure that any activation of the CMIM mechanisms will be predicated on informed and independent judgement. 22. AMRO will give ASEAN+3 authorities a new and vital perspective as it considers the impact of global developments on ASEAN+3 as a region. AMRO’s surveillance toolkit will be based on its own in-house capabilities, access to policymakers in ASEAN+3, and regular dialogue and exchange of information with the IMF and other international financial institutions. We envision AMRO emerging over time as an authoritative interpreter of economic and financial developments in the Asian region. 23. AMRO’s progress since its establishment in May 2010 has been remarkable. It commenced operations just a year later, in May 2011. It has since conducted a number of surveillance visits in the region.

So it was absolutely right to counteract this danger by lowering interest rates and to generally loosen monetary policy in order for us to bring inflation to a level below, but close to, 2%. The ECB has now bought government bonds and other securities amounting to € trillion. Interest rates have been at zero for years. You are offering banks unlimited credit, as long as they can back it with appropriate collateral. The official motivation for taking all these measures was to bring the inflation rate up to just below 2%. That is the ECB’s inflation target. But inflation is currently at 1.5% and the ECB has fallen short of 2% for years. So what is the point of it all? Again, we had to respond to the risk of deflation; and we have come nearer to our aim of maintaining an appropriate level of inflation over the medium term. Our actions have had an effect: lending to households has been boosted just as much as lending to companies. So we have seen an overall rise in the propensity to invest. The negotiated wage agreements also show that our measures are having an impact. Wage growth in the euro area stands at more than 2%, and it is even slightly higher in Germany. That will push up prices. But it is slower than we had thought. Why? The level of economic growth is one factor, but another is the labour market.
The reason is that if people believe – correctly or incorrectly – that the Federal Reserve could have a problem managing a smooth exit from its accommodative policy stance, this belief alone could have the adverse effect of causing inflation expectations to become less well anchored and risk premia on long-dated debt securities and loans to rise. These effects could conceivably make it more difficult to generate a sustainable economic recovery. This risk seems significant. For example, just last week a major bank published a survey of a broad array of 1800 investors. Of those surveyed, 20 percent thought that inflation might average more than 2.5 percentage points per year above their assessment of the Federal Reserve’s target. This outcome presumably reflects two factors – the balance-sheet expansion of the Fed and the large fiscal deficit. With this in mind, let me spend the remainder of my time discussing the sources of growth in the Federal Reserve’s balance sheet over the past year and a half or so, and explain why I am confident that the exit from our accommodative policy stance, as well as from our various lending facilities and purchase programs, can be handled smoothly. As you are aware, the Federal Reserve has been engaged in a wide array of unprecedented activities over the past two years in response to the financial crisis. These include: •  Liquidity facilities designed to improve market function.

Second, the Federal Reserve’s balance-sheet expansion does have a consequence for the balance sheet of the banking system. The increase in the amount of excess reserves has to be held by banks. Excess reserves are a risk-free asset that they may not wish to hold. More important, to the extent that the banks worry about their overall leverage ratios, it is possible that a large increase in excess reserves could conceivably diminish the willingness of banks to lend. At present, these balance-sheet issues do not appear to be having a meaningful effect on bank behavior. In fact, the excess reserves serve as a liquidity buffer that many banks find attractive in the current environment. But that does not mean we can ignore this issue. We need to keep this issue in mind as we contemplate how much balance-sheet expansion might be appropriate. Third, the Federal Reserve is taking on some interest-rate risk in terms of its balance sheet. The excess reserves have an overnight maturity. These liabilities are being used to purchase longer-term assets. In principle, if short-term interest rates were to move up very sharply, the  6  BIS Review 94/2009  cost of funding could eventually exceed the return on the Fed’s assets. The bigger our balance sheet, the greater the amount of interest-rate risk we are assuming. We have examined this issue in detail.
The current account surplus totalled FRF 236 billion in 1998, or 2.8% of GDP, comparable to the level recorded in 1997. With regard to monetary and financial developments, and particularly growth in monetary aggregates—which constitutes the internal intermediate objective of French monetary policy—, the means of payment covered by M1 posted a year-on-year rise of 3.1% in December 1998, after 6.5% in December 1997. Sight deposits paying regulated rates of interest included in M2 –M1 showed a yearon-year increase of 5.7% in December 1998, sharply down on the 9.2% recorded at the end of the previous year. Similarly, M2 progressed by 4.3%, less than the 7.8% rise recorded in 1997. The aggregate M3–M2, which covers liquid investments paying market rates of interest, stabilized in 1998  1  BIS Review 62/1999  with a 0.6% decline after the 8.2% drop recorded in 1997. This was mainly due to growth in money market UCITS, which rose by 4.1% after declining by 11.3% the previous year. The year-on-year increase in M3 was 2.7%, compared with 2.0% in December 1997. Growth in investment in contractual savings products recorded in the P1 investment aggregate maintained a sustained pace in 1998, and in all M3+P1 showed a year-on-year progression of 4.0%, against 5.1% in December 1997. Total domestic debt posted a year-on-year rise of 3.4% at the end of December.

And, finally, in developing early warning indicators for different types of inflationary pressures, and assessing the efficacy of various macroprudential instruments. Partnerships with academia can also play a key role in public insights and understanding of structural issues, challenges and the policy trade-offs. In this regard, I encourage SKBI to be at the forefront of applied financial and economic research that can help shape policy thinking. An American opera soprano and actress turned self-help guru, Dorothy Sarnoff, once said: “Make sure you finished speaking before your audience finished listening”. This morning, I am sure many of you are looking forward to the keynote address by Sir James Mirrlees as much as I am. So allow me now to end my opening address here. Thank you for your kind attention. 4  BIS central bankers’ speeches
If, on the other hand, the banking sector consists of a number of strong players and there also are plenty of alternatives, it is much more conceivable that a large market share or high profitability is a result of a genuinely competitive product range. A European investor perspective So what do we know about Swedish banks' competitiveness – how do they fare in an international perspective? Looking at the European banking sector from an investor’s point of view, we can note that the profitability of Swedish banks is very average. In a selection of the 25-30 biggest listed banks, the Swedish banks come close to the median value for return on equity (see Figure 1).1 The Swedish banks’ net interest margin – net interest income in relation to interest-bearing assets – also appears mediocre at first glance. But if we take into account their very low loan losses, then for three of the four major Swedish banks the “loan-loss-adjusted” net interest margin is actually higher than for the European median bank. Also as regards cost efficiency, measured in terms of the C/I ratio, the Swedish banks are among the best. 1  This and the following comparisons are based on full-year results during the period 2002-2004. 1/4  But if Swedish banks are relatively good at earning money on lending without incurring excessive loan losses and moreover are cost-efficient, it seems a bit strange that this does not result in an even higher return on equity.

In the context of actions taken to support the financial system, the Federal Reserve and other government agencies have provided considerable support to banking organizations and other large systemically important financial institutions. The employees and executives of those institutions have benefitted from our intervention. In a perfect world we would be able to prevent those individuals and institutions from benefitting; we would have a better way to penalize those who acted recklessly. But once the crisis was underway, one goal took precedence: keeping the financial system from collapsing in order to protect the nation from an even deeper and more protracted downturn that would have been more damaging to everyone. The Great Depression represents an important example of the consequences of inaction. Recall that during the Great Depression the unemployment rate rose to 24 percent. It is generally accepted that the authorities at that time, by not responding sooner and more forcefully, contributed greatly to the severity and duration of the Great Depression. In contrast, during this crisis, the Fed and other agencies acted much more aggressively to ward off a total collapse of our financial system – liquidity was restored to markets and the banking system was recapitalized much more quickly. These aggressive actions helped to prevent the type of deep and protracted crisis that occurred during the 1930s. Going forward, the Federal Reserve and other regulators need to move aggressively to change the system so we don’t ever find ourselves in this position again.
Technology has helped us reduce some risks and better manage others, but it has also introduced new risks and vulnerabilities. The regulator’s job is never done. And while we have gotten better at managing traditional risks such as credit and market risk, 8/9  BIS central bankers' speeches  cyber risk has now moved to the front of the regulatory agenda. But while the landscape has evolved and the nature of threats to financial stability has changed, the core principles of sound regulation remain evergreen. The goal is to keep the financial system stable and maintain public confidence and trust in the financial sector. And to do this in a way that allows the financial sector to innovate and grow, and serve the needs of the economy and society. That means taking a proportionate approach to risk, so that we can achieve resilience with efficiency, stability with growth, safety with innovation. Thank you. Everything said here about the future is pure imagination; it is neither a forecast nor a recommendation, by me or the Monetary Authority of Singapore. My intention is merely to paint a plausible scenario for the future of financial regulation, as food for thought for this Symposium. In all likelihood, the Symposium of 2028 will find my account lacking in imagination or realism or both. The truth will be stranger than fiction. 9/9  BIS central bankers' speeches

***  This action programme is ambitious: in the fight against global warming, the Eurosystem would thus target the direct effects - better conducting its monetary policy and reducing its own risks - as well as the indirect effects - steering the behaviour of companies and financial institutions, through its disclosure policy, as well as its asset purchase and collateral policies. And this programme is demanding: it requires in-depth work on our macroeconomic models as well as on the climate assessment of assets. But we can make this decision quickly by the end of this year - and then implement it in three to five years. Then the Eurosystem, together with the European Central Bank, under the impetus created by Christine Lagarde, and the Banque de France, will be the pioneers in this global fight. We must do so, in the very name of our mandate. Page 8 sur 8 However, the central banks alone will not be able to do enough. Let us transform this fight into an opportunity, that of a combination of fiscal, monetary and structural policies within the framework of a genuine green policy-mix combining carbon prices, public investment, sector-specific rules and monetary action. “The future is not what will happen to us, but what we are going to do. It calls us, or rather it pulls us to it," said Bergson. There is still time to prove him right.
While we continue to believe that the growth in the advanced economies will remain low relative to historical levels, and there are a number of reasons for that, the signs are that these economies are finally able to achieve steady growth. And that is obviously good for the global economy. As for the emerging market economies (EMEs), they have done relatively well in the years since the crisis. Domestic demand had been supported by high commodity prices as well as expansionary fiscal and monetary policies. However, growth in the EMEs now seems to have hit a bump in the road. The commodities boom has tapered off and this has impacted incomes. The fiscal stimulus has increased government debt making further fiscal expansion less sustainable. On top of that, the low interest rate environment has led to an increase in household debt. These developments are now beginning to act as a brake on economic growth. This experience highlights the risks and limits of domestic demand driven by easy monetary policy, cheap credit and fiscal stimulus. Therefore, domestic demand in EMEs will grow at a slower pace. Nevertheless, EMEs will still be contributing a bigger share to global growth than the AEs. The re-emergence of growth in the crisis-affected AEs could be expected to strengthen external demand for the exports of EMEs, thereby mitigating the effect of slower domestic demand. Among the Asian economies, we do expect to see similar trends. Again, sustained domestic demand, while lower than in the past, will continue to support growth.

My assessment is, nevertheless, that they will decline as economic activity weakens and the actual rate of inflation falls. To sum up it can be said that the Executive Board agreed on a great deal – that economic activity is weakening, that inflation is declining and that it will be possible to reduce the interest rate in the period ahead. Our disagreements related primarily to our different assessments of the strength of the processes and of how much monetary policy would need to help to reduce inflation. My final assessment was that inflation in the period ahead will move towards the target, in roughly the same way as illustrated in the Monetary Policy Update, without the need to increase the interest rate. I thus voted to leave the repo rate unchanged. Nor did I support the repo rate path presented in the Monetary Policy Update. The path had been lowered compared to the assessment made in July. But I felt that the force of the economic downswing may easily make it necessary to reduce the interest rate more than is indicated in the new path. 4  BIS Review 113/2008  New statistics and developments on the financial markets Some important statistics have been published since we made our decision on the interest rate. These include the inflation figures for August which showed that the CPI increased by 4.3 per cent over the last 12 months. This was 0.2 percentage points lower than our forecast in the Monetary Policy Update.
Tonight, I want to discuss how FinTech could affect the Bank of England’s policy objectives and our role in enabling FinTech to meet its promise for the people we serve. I will begin with the former. 3. The Potential impact of FinTech on financial and monetary stability  FinTech has the potential to affect monetary policy transmission, the safety and soundness of the firms we supervise, the resilience of the financial system, and the nature of shocks that it might face. It could also have profound implications for the Bank’s secondary objective, as supervisors, to facilitate effective competition between the firms we regulate. The impact on firms’ safety and soundness depends on several factors. By making wholesale and retail settlement faster and capital allocation more efficient, FinTech could boost banks’ returns and therefore viability. Already, FinTech is spurring new entrants including payments providers, peer-to-peer lenders, robo advisors, innovative trading platforms, and foreign exchange agents. This could, with time, unbundle traditional banking models and deny banks their traditional economies of scale and scope. The systemic consequences of FinTech are even more complex. More diverse business models and alternative providers are positives for financial stability. By allowing better credit screening and less adverse selection, FinTech could improve risk assessment, credit allocation, and capital efficiency. But if it encourages herding on common information, trading positions could become more correlated. And if switching costs in funding markets fall, liquidity risk could rise and systemic risks grow.

We are fortunate that - as I told the Treasury Committee of the House of Commons last week – we and the FCA are able to work closely together on these issues. And we are fortunate that the Bank of England’s wider programme of intelligence gathering allows us to explore these issues alongside market participants. For while only policymakers may end up going the final step to assess what all this could mean for the real economy, everyone has an interest in continuing to think about what collateral management means for the resilience of markets. The second possible iceberg is the liquidity mismatch in investment funds. The 2008 variant of this was egregious. Many of you will recall looking on in horror as $ of redemptions by their investors forced money market mutual funds into fire sales of their assets, including commercial paper. These funds had offered redemption of each $ share at par. They walked like a bank and quacked like a bank. They were shadow banks. So when the Reserve Primary Fund, which held $ of Lehman Brothers’ commercial paper, announced it would no longer be able to meet its offer and ‘broke the buck’, a run developed on these funds (slide 12). Corporate funding markets, particularly for banks, went into meltdown. The United States government stepped in to guarantee redemption at par from money market funds– effectively a form of deposit insurance. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  That iceberg has now melted.