samchain/econo-pairs-v1 huggingface dataset:
•  The expansionary policy that the Riksbank has had to conduct in order to bring inflation back to the target has, like for many others, involved active use of the balance sheet and major communicative challenges. My impression is that the debate over monetary policy has been slightly more lively in Sweden than in many other inflation-targeting countries. •  A development of a slightly different kind, but that is important enough to warrant discussion here, is that the use of cash is declining more rapidly and today is lower in Sweden than in any other country. How have we reasoned on this so far? I will go through each of these points, but let me first add that I am expressing my personal reflections here, well aware of the fact that it can be difficult from a distance to reflect over events when you are right in the middle of them. It is possible that my colleagues in the Executive Board of the Riksbank agree with much of what I say, but it may also be the case that they have a different opinion in some issues.

Joseph Yam, JP: The Hong Kong Monetary Authority’s main initiatives in the area of banking supervision Speech by Mr Joseph Yam, JP, Chief Executive of the Hong Kong Monetary Authority (HKMA), at a lunch with representatives of the Finance Constituency organised by Dr David Li, held in Hong Kong on 15 January 2001. The speech outlines the latest state of play on the HKMA’s current initiatives in the area of banking supervision, as well as responding to some points raised by Dr Li on behalf of the Finance Constituency. *  *  *  1. I would like to thank David Li for arranging today’s lunch with representatives of the Finance Constituency. The number of live issues in the realm of bank supervision, some of which have been set down in David’s letter in advance of this lunch, is currently quite considerable, so it is useful to have this opportunity to get together to exchange views. As you will know, it is very much our style to work in close collaboration with the banking industry on developing our policies rather than to adopt a confrontational approach, and long may this continue. 2. Let me run through what I see as the HKMA’s main initiatives in the bank supervision area in the next twelve months, in the course of which I will try to pick up some of the points made in David’s letter.
This is a great challenge for our trade, even more so amid the current deconstruction of overarching paradigms and a slow, if any, emergence of new central banking principles. Such principles need fundamental research as a foundation to help redesign the policy frameworks of central banks and to guide our corrective actions. This is an exceptional opportunity to address the challenges of shaping policy responses in an increasingly integrated and changing world, particularly from a perspective of countries that are or aspire to become members of the European Union and the euro area. I hope I can raise a few relevant issues with the potential to provoke a constructive discussion and obtain much needed research insights. Allow me to briefly summarize the main points for my discussion, structured here in three interrelated topics. First, real and financial cycles exhibit some regular patterns relevant for designing policy responses in open economies exposed to frequent shocks. Second, it is of major importance for the future of the euro area to advance the institutional design in order to make all of the envisaged protective mechanisms operational and enhance setting the right policy mix, which encompasses both EU and national policies. Finally, such a policy mix should pay a particular attention to careful coordination, given the interdependences among different national and supranational policies and immense potential for cross border policy leakages. I will elaborate briefly on each of the mentioned topics. 1.

8  François Villeroy de Galhau, Letter to the President of the Republic, « How France and Europe will defeat inflation », April 2023.
In this connection, it is worth offering some figures illustrating the scale of this change. Specifically, the Spanish economy’s current account balance has improved by more than 11 percentage points (pp) of GDP since the start of the crisis, turning from a deficit of 9.4% of GDP in 2007 to a surplus of around 2% in 2019. In terms of components, while all captions have contributed positively to this adjustment, of most note has been the correction of the net balance of non-energy goods and of the primary and secondary income balance. The contributions of the latter to the improvement in the total balance in this period were almost 6 pp and 3 pp, respectively. But the energy goods, tourism and non-tourist services balances have also each contributed about 1 pp. As suggested, among the key factors behind this correction of the external balance are the gains in competitiveness achieved in these past ten years. These are estimated to have contributed both to the increase in the structural level of exports and to their geographical diversification towards markets with greater growth potential, thereby resulting in a favourable market-share performance. At the same time, imports have been seen to be flatter in relation to the rise in final demand, despite the momentum of exports in firms and sectors with a high import content. That likewise points to an improvement in the competitiveness of the resident productive sector compared with foreign competitors.

Mervin King noted in the aftermath of the global financial crisis that international banks were global in life but national in death. I believe that, in a real EU banking union, financial institutions should be an EU matter, both in life and in death. Apart from completing the BU, other elements are necessary to continue making progress towards a more complete financial union. From a regulatory perspective, the lack of a sufficiently homogeneous legal basis across the Eurozone is evident. While full harmonisation may not be possible in the foreseeable future, there are some critical areas, such as anti-money-laundering, fit and proper standards and insolvency rules at credit institutions, where a common set of rules across the Eurozone would foster the integration of the market, improving also the efficiency of supervision and resolution. As regards the institutional side, and looking beyond the BU, I want to highlight a second priority which, in my view, is essential to enhance the capacity of the euro area to cushion macro-financial shocks. This capacity is linked to the development of deep and integrated capital markets. The completion of the Capital Markets Union (CMU) would complement the BU and would foster a truly cross-border financial sector, allowing economic agents to smooth asymmetric, national shocks. Last, but possibly not least, it may also be time to tackle the absence of a pan-European safe asset.
Thus, enlargement has become an important aspect of the EU policy. Distinguished guests, Almost in every meeting on the EU and the Turkish economy, I am faced with questions such as "What can Turkey contribute to the EU, in other words, what will be the advantages of the EU from Turkey's membership?" or "What does Turkey expect from being a full member of the Union?". But, there are no easy and quick answers to these questions. Therefore, my answer will rather be a long one. Apparently, there are very strong arguments in favour of Turkish membership such that Turkey will bring the Islamic world and the Western world together or a larger EU with Turkey will certainly be a much bigger power playing an important role in the world. Apart from political aspects, it is clear that the debate on the Turkish membership is very much related to the economic structure of Turkey. Hence, I want to make one thing clear: although membership is a political decision in essence, my answers to the questions I mentioned will focus mainly on economic aspects. Having this in mind, now I’d like to start with the notion of competitiveness on a global level and its implications for both Turkey and the EU. The 20th century has been a new era in terms of diminishing borders in trade and means of production and led to increasing competition all around the world.

7  Dependency ratio is described as the ratio of total population to working population i.e. aged between 15 and 64. 8  Gerald, J.F. (23 April 2004). "Lessons from 20 Years of Cohesion". The Economic and Social Institute, paper presented at the Brussels Economic Forum. 7  4/8  use this basic equation as a tool to highlight the areas to be improved in Turkey and Turkey s possible contributions to the EU in terms of productivity, demographic developments and the repercussions of all these in the labour market. First of all, as Ben Bernanke indicated, "Productivity growth is the principal source of improvements in living standards ".9 And then, we observe that during the last decades, the EU has lagged behind in productivity growth compared with other industrialized economies. In particular, labour productivity growth has been weak since the mid-1990 s.10 Thus, while growth in hourly productivity in the 1980s stood at 2.4 percent on average in the Euro area and at 1.3 percent in the US, that trend has been reversed between 1996 and 2004, with an annual average in the Euro area and in the US of 1.3 percent and of 2.5 percent respectively. In the US, productivity growth has even picked up to 4 percent per annum since 2001, despite adverse factors such as September 11 terrorist attacks, the 2001 recession and the recent rise in energy prices.11 Of course, there are several reasons of the EU s lagging behind in the productivity growth.
Despite such progress, we are faced with daunting challenges. These include harmful effects of environmental degradation and climate change that threaten global prosperity, stability and sustainable living. Socioeconomic challenges such as rising inequality and lack of affordable housing are affecting the well-being of many communities. At around 225% of global GDP, global debt is at a record high level and may leave a heavy burden for future generations to bear. It is increasingly clear that economic prosperity in the long run cannot exist without social equity and environmental responsibility. While the governments of 150 countries are committed to realising the United Nation’s 17 Sustainable Development Goals (SDGs) by 2030, this must be a shared responsibility. The private sector has a key role to play – a role, with finance at its centre, that has yet to live up to its full potential. With much at stake, the call to action for sustainable finance is one that the financial sector, perhaps more particularly Islamic finance, cannot afford to ignore. Encouragingly, more, though not nearly enough, Islamic financial institutions are moving beyond Shariah compliance to performance and risk management practices that reflect social and environmental impacts. A key question for us present today, and for those beyond this forum, is how the value propositions of Islamic finance can be further developed, to bring us closer to the reality of “finance beyond profit”.

Nor Shamsiah Mohd Yunus: Value based intermediation - beyond profit Keynote address by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Islamic Finance Forum 2018 (GIFF) "Value Based Intermediation - Beyond Profit", Kuala Lumpur, 3 October 2018. * * * Henry Ford, credited with revolutionising the American transportation industry in the 20th century, once remarked that “Business must be run at a profit, else it will die. But when anyone attempts to run a business solely for profit and thinks not at all of the service to the community, then also the business must die, for it no longer has a reason for existence”. Nearly a hundred years since, these words of wisdom remain true. Perhaps, even more so now than ever. Indeed, we have witnessed time and again, episodes of excessiveness, and the sole and unchecked pursuit of profits, that have led to global financial crises. The theme of this conference, “Value Based Intermediation – Beyond Profit”, is therefore a fitting reminder of the role of finance, and Islamic finance in particular, in helping build a more resilient and sustainable future. In the past half century, the world economy expanded sixfold, despite experiencing the worst and most expensive financial crisis. Average per capita income more than doubled to about USD11,000, compared to only about USD5,000 in 1967. People are living longer, with better quality of life, greater access to basic necessities, improved health and medical care, and better education.
We acted swiftly to defeat the manipulators at their own game with a series of measures that threw them off their guard, drove them out of the market, and raised the defences against future attacks. First, drawing on the official reserves, we went into the stock and futures markets. In the second half of August we accumulated $ billion worth of shares: I am happy to say they are now worth $ billion, but our aim was not to make money; it was simply to deter manipulation by making sure that it did not pay off. That objective was achieved. The manipulators were forced to close out their short positions, in many cases with heavy losses. And we followed through with a package of technical measures to strengthen our currency board arrangement to make our money market less susceptible to manipulation. These measures are working well. Further reforms are being introduced in the securities and futures markets to reduce the possibility of market dislocation. Our actions served their purpose of deterring market manipulation. We could not passively sit through the speculative attack and see our markets overshoot to produce profits for the manipulators, and our entire financial system brought to the brink of collapse. We do not pretend that our intervention in the markets was not a controversial act. This was not a decision that we enjoyed taking. It involved many risks, not least among them the risk of being misunderstood.

Our reserves currently amount to $ billion, the third largest in the world, after Japan and the Mainland of China. They are equivalent to more than seven times the currency in circulation, one of the highest levels in the world. Secondly, we pursue a prudent fiscal policy, with small government and no external debt. We have a simple tax structure, a low tax rate, and a public sector expenditure that accounts for only 18% of GDP. Thirdly, our financial system is sound. The banking system is strong and solvent, and well able to cope with the interest rate movements necessary under the currency board system. Capital adequacy ratios among locally incorporated banks average around 18%, and their problem debt ratio is about 3.7%. Our standards of prudential supervision are among the highest in the world. Fourthly, Hong Kong’s economy is flexible and responsive. Because they are governed by free market principles, the markets respond quickly to interest rate changes and other variables, making the economy resilient in absorbing external shocks and capable of adjusting efficiently to validate the linked exchange rate. These are Hong Kong’s economic strengths. Not all economies have them, or would necessarily wish to have them, but they have enabled us to maintain a monetary system appropriate to Hong Kong’s unique needs and capable of withstanding the storms that any open and externally oriented economy must necessarily expose itself to.
Today, it has evolved to become a truly global meeting place for thought leadership and collaboration, with the presence of several international organisations in the building and the regional and international meetings that are held here. Being a Central Bank, our goal is to ultimately enhance our knowledge and capability to enable us to better serve society. This is not unlike Joseph Wharton’s vision for the Wharton School to produce graduates who would become, what he referred to as, “pillars of the state, whether in private or in public life”. The Collective Strength of the ASEAN Region Turning to the theme of the Global Forum – “Mobilising ASEAN: Building the Future through Partnership”. Founded almost half a century ago, ASEAN is currently one of the fastestgrowing and most dynamic regions in the world. While at different stages of economic development, the ten economies of ASEAN all share immense growth potential. The region has experienced a long-term average annual growth of more than 5%, much higher than the global average, and this is expected to be sustained going forward. Collectively, ASEAN is now the sixth-largest economy in the world, with a population of 630 million and a combined GDP of USD2.5 trillion. ASEAN is also one of the centres of global trade, after the European Union, North America and China, and it is home to more than 220 global companies with annual revenues of above USD1 billion. This strong growth and economic dynamism of ASEAN are supported by its favourable demographic structure.

And it can also be relevant from our monetary policy perspective, since the transmission of our monetary policy actions to economic activity and inflation operates mainly through the financial system. Indeed, a sound financial sector is a prerequisite for a smooth transmission of monetary policy measures to the financing conditions faced by economic agents and, ultimately, to economic activity and inflation. In particular, climate change poses two types of risks for the financial sector: physical risks and transition risks. Physical risks are those that would materialise as permanent alterations of the climate, if we do not act to prevent global warming. Natural disasters would then become more frequent and their economic damage probably greater. In fact, there is evidence that such risks are already materialising to some extent: according to the FSB1, global economic losses associated with weather-related catastrophes have doubled since the 1990s, up to USD1.6 trillion over the last ten years. The financial sector is exposed to these physical risks through several channels. Physical risks are of course relevant for the valuation of real estate assets, the main collateral for bank loans. Physical risks also matter when assessing the ability to pay of borrowers in sectors that could be particularly affected, such as agriculture or tourism. Capital destruction could also be very important. Furthermore, since not all geographies would be equally affected, the migration of activities and of the population in some areas might increase, generating an impact on the financial sector as well.
The country may, therefore, be better off announcing some form of renegotiation or restructuring of its debts with private creditors. Of course, such a step should not be taken lightly, since it may be tantamount to a sovereign default, and the economic literature suggests that the costs of defaults can be both multiple (reputational loss, exclusion from financial markets, trade sanctions, and so on) and substantial. However, some empirical studies focusing on emerging economies have fortunately found that the  6  BIS central bankers’ speeches  impact that an inevitable – rather than a strategic – default has on the defaulting country’s economy is typically smaller and less persistent than is commonly believed. 2 ” Let me stress that I am rather surprised to see the flippancy with which some commentators recommend that the government of an advanced economy should infringe its legal and contractual obligations, as though breaching the trust of investors and citizens were the simplest and least costly solution to the deeply-rooted structural problems in Greece. Far from being a convenient means of minimising economic losses and dissipating uncertainty, a default would have extreme adverse consequences, many of an irreversible nature, for the Greek economy – particularly for its banking sector and for the welfare of its citizens.

I would also add that this discussion represents a dangerous and unwelcome distraction from more important debates on issues such as how to enhance the euro area’s economic governance, make our economies more dynamic, ensure the sustainability of public finances and strengthen the banking sector, which deserve our full attention and to which we must devote our energies. 2  A recent study covering more than 200 cases of debt restructuring since 1970 finds that the impact of defaults on the ability of defaulting countries to access credit subsequently is larger and more protracted that previously believed. See Cruces, J. and Trebesch, C., “Sovereign defaults: The price of haircuts”, unpublished mimeo, 2010. 3  Cottarelli, C., Forni, L., Gottschalk, J. and Mauro, P., “Default in Today’s Advanced Economies: Unnecessary, Undesirable, and Unlikely”, IMF Staff Position Notes, No 10/12, IMF, Washington, DC, 2010. BIS central bankers’ speeches  7
Exchange rate policies are expected to be designed to support rebalancing of global demand, while structural reforms to enhance access to finance by small and medium scale enterprises (SMEs), should help boost growth and reduce unemployment. Finally, better policy coordination among all stakeholders should help alleviate liquidity constraints and rebuild confidence. Regional financial trends Your Excellency, distinguished guests, Africa has been reasonably unaffected by the crisis due to the low level of exposure of its economies to international trade and financial flows. The continent experienced encouraging growth in 2010 not only on account of a recovery in exports and commodity prices, but also due to implementation of prudent policies by some of our economies prior to the global down turn. In addition, the effect of reduced foreign inflows from aid, foreign direct investments and remittances was far less than originally anticipated. The increase in global demand and hike in oil prices benefitted oil-producing African countries with Nigeria and Angola, the two largest oil producers experiencing strong growth of around 6 percent. In spite of the encouraging trends, risks to Africa’s economic prospects remain, particularly given the faltering global economy. It was recognized that the crisis originated from the financial systems and this has underscored the need for a more robust and effective financial sector supervision framework in African countries that can withstand potential future shocks.

We measure the costs associated with the overall deviation of actual outcomes from the ideal with the quadratic loss function L. Note that for each policy goal, this loss function equally weights same-sized misses above and below target. The coefficient λ determines the relative weight policymakers give to their misses on real output versus those on inflation. If λ is equal to 1, then a 1 percentage point deviation of inflation from its target gets the same weight in computing the overall costs of being away from the optimum as a 1 percentage point deviation of output from its potential. However, Ken Rogoff (1985) and others have argued that, in order to avoid inflationary biases that might creep into policy, a good, conservative central banker ought to conduct policy as if λ were less than one.5 It’s reasonably conservative to set λ equal to ¼. That means the costs of a 1 percentage point output gap are judged to be only one-quarter as high as the costs of a 1 percentage point deviation of inflation from its goal. So a λ of ¼ puts a good deal of weight on keeping inflation near its goal. Given that the Fed’s mandate is expressed in terms of employment, it is helpful to recall Okun’s Law, which says that a 1 percentage point gap between actual and potential output corresponds to a one half percentage point gap between unemployment and its natural rate.