samchain/econo-pairs-v1 huggingface dataset:
The time is also right for pushing through projects that contribute to the transition to a more sustainable economy. The size of this European fund should be proportionate to the public spending financing needs generated by the pandemic; indeed, the fund’s approval and launch should be expedited. 4. The design of an ambitious structural reform agenda Beyond these short-term measures, we need to define an ambitious structural reform agenda, aimed at increasing the economy’s potential growth. Let me briefly outline what, in my view, the content of this agenda should be. 4.1. Improving productivity dynamics Firstly, the main determinant of the Spanish economy’s low potential growth is lacklustre productivity growth. In the past 20 years, Spanish total factor productivity has grown at an average annual rate of 0.2%, far below Germany and the United States. It is therefore a priority to improve the dynamics of this variable. I shall focus on three aspects which, across the spectrum, determine these productivity gains. Promoting business dynamism and growth, and raising the degree of sectoral competition The Spanish economy is characterised by the small size of its firms. And it is precisely in Spanish SMEs that we see a high, negative productivity gap with their European counterparts. Boosting their growth would not only help increase productivity; it would also enhance the financial soundness of the business sector.

While we have expanded the regulatory scope to address emerging risks in payment developments, regulations are also right-sized to the risks posed. 11. First: As individual e-wallets, how do we keep them safe to use ? When we look at ewallets, we find that they face very similar risks as digital banking products. Firstly, as online services, both are dependent on technology and face cyber risk – so MAS expects them to manage these technology and cyber risks well. Second, they both hold retail customer monies, so they need to safeguard these monies. The differences however, are that an e-wallet is used for day-to-day payments, and so needs to be very liquid to meet customer demands, and ewallet issuers don’t give loans with the float. So it’s important to right-size our regulations to their business model, and not to stifle innovation by loading them with bank-like requirements. Taking these into account, MAS sets out proportionately simple options for e-wallets to safeguard customer monies, for example, holding it as a deposit with a bank. MAS may also prescribe further safeguarding measures in liquid and low-risk assets. Second: Collectively, how do we manage risks that e-wallets pose to the financial system? Our role as central banks is to protect the stability of, and confidence in, the financial 12.  system. To achieve this, we need to develop regulations that, while addressing key risks, do not obstruct the industry developments.
If you wish to operate in our markets, or make use of our market infrastructures, including effecting any payment or settlement arising from relevant transactions, as participants or as intermediaries, you have to follow these disclosure rules and ensure that you deal only with those who follow these rules. The regulation of international finance is even more difficult, but I think the same cooperative spirit can be applied, if indeed regulation in whatever form is considered necessary. But then, looking at the situation facing the key players in a position to influence the direction of this important reform, I doubt whether the political will is there to make changes of this nature. Views of strong domestic lobbies may prevail and urgent domestic issues may divert attention. As you may know, it is not the desirability of reform, nor the technical feasibility of the details, that dictates action or inaction, it is, regrettably, more often than not, the political reality. Meanwhile, international discussions on this subject are moving into a critical stage when we will either see results or see much recent effort jettisoned as momentum is lost. Regional initiatives What recourses, then, are left to small open markets such as our own to enable us to pursue the legitimate goal of ensuring monetary and financial stability? Not a lot, I am afraid.

So perhaps we played a part in turning around the sentiment of international finance last year. BIS Review 120/1999  2  And let me say this also: knowing well my close colleagues who fought this battle together with me, it would, I think, be difficult to find stronger believers in the free market than those of us in the Hong Kong Administration. A few names will, of course, spring to your mind immediately, but my response is that we work in the real world and not in ivory towers. The fact of the matter is that free markets can sometimes fail. Free markets can sometimes behave in a manner very much against the long-term interests of society. When this occurs, if those of us in the Administration hide conveniently behind the banner of free markets and do nothing, we are failing in our duties. And to those who accuse us of betraying the philosophy of positive non-interventionism, let me ask this question: why do you think Sir Philip Haddon-Cave used the word “positive” when he coined the phrase? International finance But perhaps enough has already been said on that subject. Let me now move to the longer-term structural issues of concern to our monetary and financial systems. As I said earlier, we need to ensure that we come out of the crisis stronger rather than weaker. We need to identify structural defects, if any, and address ways of correcting them, not necessarily limiting ourselves to our own systems, given the globalisation of financial markets.
•  Over the past months good progress has been made in the various areas and the momentum needs to be maintained to establish a sound regulatory framework. Work has been completed on a number of issues (e.g. enhancements of Basel II, as mentioned below) while other areas still need more consideration before they will be finalised by the end of 2009 or at the beginning of 2010. •  The Basel Committee on Banking Supervision (BCBS), which is the driving force regarding initiatives in the area of micro-prudential regulation, issued in July 2009 a final package with measures to improve the Basel II framework. •  On accounting the IASB (International Accounting Standards Board) is taking various initiatives and shows openness to collaboration with regulatory authorities. A couple of important projects are under way. •  But significant challenges remain. Again: International bodies and governments must not lose momentum in their efforts to strengthen financial regulation and supervision. All the aforementioned issues equally deserve due consideration and should be addressed as a matter of urgency. BIS Review 102/2009  The world economy after the crisis The crisis is not over yet. However, it is worthwhile discussing some preliminary reflections about the world after the crisis. •  First, beyond these regulatory and supervisory challenges, a successful crisis resolution will also impinge on economic structures world wide. The global growth model of the last 15 years has failed.

The monetary pillar provides for discipline not to ignore risks to price stability stemming from imbalances in money and credit developments. •  Initiatives are now being taken to close the gap in the area of cross-border supervision and between micro- and macro prudential supervision. The envisaged establishment of the European Systemic Risk Board (ESRB) which the ECB will support analytically and logistically marks an important step in this direction. The ESRB will monitor systemic risk and provide risk warnings and recommendations. Effective cooperation and leadership at the European level will be crucial to make the ESRB successful in the pursuit of its mandate. •  Is the current improvement in some financial market segments genuine or driven by governments and central banks? When the crisis took hold and risk aversion spread, leading to de-leveraging and a sharp decline in securitisation public attention focused on executive pay as an area for regulation. In fact improving corporate governance remains a key area for regulation. Bonus systems need to be changed so as to make managers liable for their decisions and provide them with the right incentives to focus on longer-term sustainability of their business models rather than short-term profit. •  But corporate governance is just one area where regulation needs to be improved.
On this front, a study conducted by the Hong Kong Government in conjunction with TMA earlier concluded that there are no major legal or regulatory obstacles to transactions involving wholesale Islamic financial instruments in Hong Kong. 13. However, there is a need to refine the tax regime in Hong Kong in order to provide a level playing field between sukuk and conventional bonds. Owing to Shariah requirements, structuring sukuk often involves the originator setting up a special purpose vehicle for the purposes of issuing sukuk to sukuk holders, and multiple transfers of underlying assets between the originator and the sukuk issuer in order to generate profits. These complex structures, which are not required for conventional bonds, may incur additional tax and stamp duty expenses for the sukuk issuers. 14. I am pleased to see that an amendment bill to address this issue has been introduced into Hong Kong’s Legislative Council and is now in the final stages of enactment. 3  2  Source: Institute for International Finance. BIS central bankers’ speeches  The bill, once passed, will enable sukuk to enjoy tax treatments similar to those currently afforded to conventional bonds. This would be a significant milestone in the development of a sukuk market in Hong Kong. 15. Apart from providing a level playing field, equally important is the active participation of market players, including non-Islamic arrangers, issuers and investors in the Islamic capital markets, as they will be the ones who lead market development in the future.

If Singapore did not have political stability, good infrastructure, and a conducive business environment, MAS’ strategies to grow the financial centre also would not have worked as well. In a world where central banks typically keep a distance from the rest of government, it is amazing how closely MAS works with other government agencies in Singapore – macroeconomic surveillance and national economic policies and strategies combating money laundering risks and investigating financial crimes promoting jobs, skills development, and labour market policies advancing technology initiatives ranging from e-payments to digital identity These partnerships have made a decisive difference to the outcomes for MAS, the financial industry and the Singapore economy. MAS has achieved what it has also because of the close partnership it has enjoyed with the financial industry. In a world, where many regulators are aloof at best and hostile at worst when dealing with the industry, the relationship MAS has with the industry is special. To be sure, we are a no-nonsense supervisor, not averse to setting high prudential standards, imposing tough remedial measures, and occasionally shutting down a bank or two. But MAS has always believed that working with the industry, rather than against it, is the best way to achieve our shared objectives: keeping the system safe and growing the business. In this, MAS has been fortunate to have an industry – banking, insurance, asset management, and capital markets – that has actively supported us through thick and thin.
Other measures such as so-called moral suasion, whereby the problems are pointed out to the banks and the financial sector, could then also come into question. It is also reasonable for central banks to take some responsibility for real economic developments in addition to those that are judged to affect inflation in the medium term, even if financial stability is not under immediate threat. As I mentioned, the Riksbank has decided to take account of this by disregarding temporary effects on inflation. We also discuss developments beyond the target horizon that normally governs monetary policy. A successful, flexible policy of inflation targeting leads to lower fluctuations in output without giving rise for that reason to higher average inflation. And that is the essential aim of the price stability target. The second question, however, is considerably more difficult to answer. Forecasts of resource utilisation and inflation can be systematically inaccurate because the models and assessments used do not take account of the independent role that asset prices and debt can play. Also, as a result of structural changes, historical relationships may have changed, thus causing the central bank, for example, to come to incorrect conclusions about the output gap and potential growth. This could, for instance, result in a monetary policy that pushes up asset prices and debt too high. For example, the traditional models, which are grounded in an analysis of the real economy, are based on assumptions of rationally behaving households and firms, efficient capital markets and linear relationships.

As a result, at the beginning of the 1990s Sweden and other Scandinavian countries were hit by both a banking and currency crisis. As before the depression in 1930, the crises were preceded by steep rises in asset prices and a very sharp expansion in credit. Reform of a tax system that had fuelled debt and that was changed in such a way that caused a rise in post-tax interest costs, contributed to deepening the crisis. The lack of experience at banks and supervisory authorities of acting in a deregulated environment, in combination with excessively expansionary fiscal policy, were other significant causes of the negative developments. But large financial imbalances had already accumulated before the crisis was triggered. This occurred without the anchor for inflation, that is the nominal exchange rate, giving sufficient indications in time. In spite of the fact that the overheating resulted in a real appreciation of the krona against other currencies due to inflation, confidence in the fixed exchange rate regime appeared to be fairly stable for a long period. This led to substantial, partly short-term, capital inflows increasing demand for the krona at the same time as a growing current account deficit reduced krona demand. The demand for the krona was partly due to Swedish firms demanding loans in foreign currency. Consequently, monetary policy, which targeted the exchange rate, was not tight enough to prevent the build-up of the imbalances.
As in the past, we shall present our June and December inflation forecasts at our media conferences. In March and September, the inflation forecast will be published within the context of the press release on the quarterly assessment of the situation. Gold sales On 22 September this year, the Swiss people and the cantons rejected both the gold initiative and the counter-proposal. The National Bank, however, continues to implement its programme for the sale of half of its gold reserves. For the time being, the surplus gold reserves will still figure in our balance sheet. To date, approximately 660 tonnes of a total of 1,300 tonnes of gold have been sold. We see no reason to change our strategy: these assets are surplus reserves which are no longer needed for monetary policy and which may be put to another use. In order to use the reserves for other purposes, the gold is sold and the proceeds are invested in securities. We invest the proceeds from the gold sales in Swiss and foreign securities. The portfolio from the surplus reserves is thus less exposed to exchange rate fluctuations than the foreign exchange reserves. The earnings deriving from invested gold proceeds flow into the SNB's income statement and thus become available for profit distribution in favour of the Confederation and the cantons. As from 2003, annual profit distribution will amount to Sfr 2.5 billion. The profit distribution agreement concluded with the Confederation last April need not be revised.

Inflation forecast I shall now turn to the course of inflation and our new inflation forecast. Our inflation forecast of June 2002 (the green dash-dotted curve in the graph) shows that at that time we assumed, based on a stable three-month Libor rate of 1.25%, that inflation would gradually rise to 1.9% in the first quarter 2005. Year-on-year inflation, as measured by the national consumer price index, dropped to 0.3% in the third quarter 2002 from 0.7% in the second quarter. In October and November it rose to approximately 1%. These fluctuations are due mainly to changes in the exact points in time when data on clearance sales prices are collected. This is also the main reason why our forecast of June 2002 over-estimated the development of inflation in the third quarter 2002. Our new inflation forecast (red dashed curve) is based on the assumption that growth in the US will pick up again from the second quarter 2003 onward. The US economy is likely to achieve its growth potential stepwise until the beginning of 2004. In the EU, the upswing will take a little longer. We are not expecting a significant acceleration of growth before the end of 2003. We assume that the  BIS Review 73/2002  1  dollar/euro rate will remain at about the current level and that the oil price will be around $ per barrel.
I therefore really appreciate the opportunity to participate in today's discussion on assessing monetary policy. I have today chosen to highlight a very fundamental question with regard to assessing monetary policy; is it really necessary to interpret inflation that deviates from target as a failure for monetary policy? It is clear that short-term deviations do not necessarily imply failure. But how should we regard a deviation from target that persists for a longer period of time, perhaps several years? Here I take as a point of departure the changes in the supply side of the economy that have occurred in recent years in a number of countries, including Sweden and Norway, where inflation has for a period of time been below target. I will, however, begin with a more general description of my views on the assessment of monetary policy and how we in Sweden work to create the conditions for a good and fair assessment of monetary policy. Assessing monetary policy When discussing and assessing central banks’ target fulfilment, it is important to base the assessment on a realistic picture of what monetary policy actually can and should achieve. To make the most correct assessment possible, it is therefore necessary for central banks to have a clear analytical framework to produce the material on which decisions are made. Similarly, it must be quite clear which principles have been used as a basis for monetary policy decisions and on what information the conclusions were based.

The strained economic situation among a number of municipalities and county councils meant that we assessed it to be difficult for the Swedish Municipal Workers' Union to achieve any further far-reaching wage increases for its members. It was estimated that, all in all, the demand situation would have a subduing effect on wage demands and we thus did not expect to see any major contagion effects in the 2004 wage bargaining rounds from the early termination of the Municipal Workers' Union's wage agreement. We did not find reason to make any fundamental changes to these assessments at the beginning of February, when we had our most recent monetary policy meeting. Wages comprise only part of the total costs for labour among companies; on top of these come costs for negotiated and legislated employer contributions, various types of fringe benefits and shorter working hours. As it is the total wage cost that is important to inflationary pressure, it is also necessary to make an estimate of all of these factors. The assessment in the Inflation Report was that the wage costs for the economy as a whole would increase by just under 5 per cent this year and just over 4 per cent next year. It was also assumed in the forecast that productivity growth would recover after a decline in 2001 and approach the more normal, trend level.
On the fiscal front, investment in effective water management systems is urgently needed on top of reconstruction and assistance for flood victims and affected firms. This will not only restore foreign investors’ confidence, but will also enhance the economy’s productivity and its potential growth by avoiding future disruptions and making more efficient use of the country’s abundant water resources. BIS central bankers’ speeches  3  Nevertheless, the expected massive spending for such purposes will unavoidably stretch the government’s fiscal resources. At the same time, the government will have to spare some fiscal policy “bullets” in the event that the situations in the U.S. and the Eurozone worsen more than expected and lead to another global recession. Against this backdrop, mediumterm fiscal discipline is needed to ensure long-term sustainability of the country’s public finance. This means the government will have to rethink or reprioritize certain policies that may not contribute to productivity enhancement. Meanwhile, the Monetary Policy Committee (MPC) had been raising the policy interest rate over the past year, until the last meeting in October where the MPC hold the policy rate unchanged. Personally, I view the current level of our policy rate to be accommodative enough to support domestic recovery, with some room available for further easing if needed. While upside risks to inflation are not very serious at the moment, we still need to keep our eyes on inflation pressures that are likely to build up with the pick-up in public and private spending after the flood is over.

And at this point, I would like to stress more on why we cannot afford to be complacent with the situation. Most importantly, there always seems to be an unbridgeable gap between what market anticipates and what governments and central banks can really offer at the end of the day. And if history is any guide, it is precisely this gap that creates ripples of disappointment and risk aversion that propagate throughout the global financial market almost instantly. When we look back, not so far in the past, all of us have just witnessed a panic sell-off in global stock markets starting from late July to September. In addition to stocks, almost every type of risky assets was also under tremendous selling pressure across the board, and some  2  BIS central bankers’ speeches  market commentators even went so far as comparing this event with the onset of the 2008 global financial crisis. And when we look forward, the future is not very promising either due to two major reasons. First is the fact that so-called “milestone” developments toward the resolution of the crises in the U.S. and the Eurozone so far do not seem to address problems at their root causes; rather, issues have been dealt with merely temporarily, one after another. A recent example of this would be the eleventh-hour negotiation in the U.S. in raising debt ceiling limits only to meet the August-second deadline, which did nothing but leave the big elephant standing in the room.