samchain/econo-pairs-v1 huggingface dataset:
Mr. King looks at the UK economy and monetary policy Speech by Mr. Mervyn King, an Executive Director and Chief Economist of the Bank of England, at the Building Societies Association Annual Conference in Bournemouth on 27/5/98. Next Monday - 1 June - sees the start of the statutory basis for Britain’s new monetary policy regime. An independent Bank of England will, through its Monetary Policy Committee (or MPC), set interest rates to achieve an inflation target of 2½%. For over 30 years economic policy in Britain has been bedevilled by inflation and the resulting instability of output and employment. Stability - of both prices and macroeconomic performance more generally - requires a credible commitment to a monetary and fiscal framework embracing low inflation and sustainable public finances. That we now have. But stability of the economy is not the same as stability of interest rates. Short-term interest rates must go up and down according to the state of the economy if the inflation target is to be met. In contrast, if monetary policy is successful in achieving the inflation target then, precisely because short-term interest rates will have moved over the economic cycle, long-term interest rates will be relatively stable. And, from the perspective of your borrowers, whether on fixed or floating rate mortgages, what matters is the predictability of the cost of a loan over the life of the mortgage rather than fluctuations, within reason, of monthly payments.

I thank you. 2  BIS Review 15/2009
Alongside expenditure, it is important to identify and resolve any inefficiencies in the use of the public funds earmarked for education. The AIReF is already doing this in various autonomous regions. Recent reforms in this area (laws governing education, vocational training and the university system) should also be assessed. The third factor limiting productivity is the regulatory environment, which affects activity and the efficient allocation of resources among firms. The evidence points to a significant accumulation of capital in low-productivity firms between 1995 and 2007 in Spain.14 This allocation has barely become any more efficient in the most recent period.15 To a certain extent, this situation has come about because firms’ access to financing seemingly depends less on their productivity and more on the collateral available to them.16 In this respect, in spite of significant improvements in financing in recent years, Spanish firms – in comparison with firms in the euro area – continue to be heavily reliant on bank loans and have relatively limited access to venture capital. This funding structure, which is closely linked to the collateral available, restricts not only firms’ growth possibilities and their capacity to respond to potential shocks, but also negatively affects their ability to carry out innovation projects, which, by their very nature, have a relatively high risk profile. Improvements in this area will also require initiatives at European level, such as completion of the capital markets union, for example.

Constantinos Herodotou: The Significance of being financially literate and national strategies for achieving it Introduction (virtual) by Mr Constantinos Herodotou, Governor of the Central Bank of Cyprus, in the Cyprus Economic Society seminar, 21 October 2021. ***  Introduction I would like to thank the Cyprus Economic Society for offering me the opportunity to introduce today's seminar, which I believe timely addresses an extremely important economic and social theme. The issue of promoting financial literacy and the role of National Strategies to achieve it are of course, relevant not only to Cyprus but also globally. Dr Chiara Monticone, a senior policy analyst of the OECD and a practitioner in the field of financial literacy with global expertise and Professor Dennis Philip, who teaches Finance at Durham University Business School, an acclaimed academic in financial literacy and close collaborator of the Central Bank of Cyprus, will have, I am sure, excellent contributions on the subject. According to a definition associated with the OECD, financial literacy is the ability of an individual to combine appropriate knowledge and skills, rational behaviour and attitudes necessary to make sound economic and financial decisions and ultimately achieve individual financial wellbeing. As more individuals operate prudently and comprehend the workings and functioning of the financial system, including how to use its services and products appropriately and efficiently, the broader economic system and society, as a whole, benefit.
Esteemed Guests, GDP data for the fourth-quarter of 2010 have been in line with the outlook presented in the January Inflation Report. The third-quarter slowdown turned out to be temporary as expected and economic activity expanded at a remarkable pace in the last quarter. Domestic demand became the main determinant of growth in the said period (Chart 10). Thus, the post-crisis divergence between domestic and external demand growth became more pronounced in this period, confirming the adoption of the new policy mix (Chart 11). Chart 10. Contributions Components  Chart 11. to  GDP  Growth  by  Demand  Exports and Imports of Goods and Services (Seasonally Adjusted, 1998 Prices, Billion TL)  (Percentage Points)  Source: TurkStat. * Estimate. Source: TurkStat, CBRT. BIS central bankers’ speeches  5  In line with the robust course of economic activity, non-farm employment also maintained its upward trend; while unemployment rates displayed a notable decline (Chart 12). Leading indicators signal an ongoing recovery in employment conditions. Chart 12. Unemployment Rates (Seasonally Adjusted, Percent)  * As of January. Source: TurkStat, CBRT. Data for the first quarter of 2011 indicate that economic activity, driven by domestic demand, is more robust than expected. Accordingly, our revised forecasts are based on the assumption that aggregate demand conditions would provide less support for disinflation compared to the previous period.

Durmuş Yılmaz: Role and responsibilities of emerging economies in the global monetary system Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the conference on "Where Is Global Finance Heading? ", Istanbul, 2 October 2009. *  *  *  Dear Guests, I would like to welcome you all to Istanbul. It is a great pleasure for us to host this conference and such a distinguished group of central bankers, academics and experts. I hope this meeting, together with the upcoming events, will be helpful in shedding light on the future of the global financial system. It has been almost two years since the surfacing of global financial crisis of epic proportions and we are still dealing with its repercussions. One can easily identify a variety of reasons for its occurrence: Global macroeconomic imbalances certainly played a key role. Deficiencies in financial regulations and lack of coordination among monetary authorities and regulatory institutions played even a bigger role. Policy makers were quite complacent during the build up in asset bubbles. Accommodative monetary policies enabled access to cheap money. High leveraged transactions magnified the amount of liquidity created through financial system. Search for high yields led to excessive risk taking and use of complex instruments. Compensation scheme in the financial sector encouraged short-term bias. Above all, believed that with the use of complex financial instruments, one can wipe out the risk from balance sheets.
This finding is consistent with other past and ongoing research here at the New York Fed that points to the potential longer-term negative implications of student debt on homeownership and other types of consumer spending. Of course, homeownership is more than just consumption—it has historically been an important form of wealth accumulation. For a large share of households, housing equity is the principal form of wealth. Thus, changes in the way we finance post-secondary education could also have important implications for the distribution of wealth. Before turning it over to my colleagues, I would like to comment briefly on the importance of college costs, financing and access to higher education. It is well known that the average earnings premium from having a college education is high and has risen over the past few decades, in part because of a decline in real average earnings for those without a college degree. In addition to higher earnings, a college education is associated with increased homeownership, as I just discussed. The economic and social returns to having a well-educated and skilled labor force are also well documented. However, I would like to highlight another important role of higher education: it is a pathway to and engine of upward income mobility. I believe that income mobility—the degree to which individuals or families can move up or down in the income distribution over time—is a foundational element for a well-functioning society and indicates the ability of an economy to provide opportunities for all.

The global climate crisis – a challenge that requires cooperation To be able to answer the question of whether the Riksbank can and should have an active role in combatting climate change, we must first answer two other questions. First, what is effective climate policy? And second, what lies within the Riksbank’s mandate? One of the fundamental causes of the climate crisis is the fact that, in the absence of climate policy, greenhouse gases can be released free of charge, despite the damage such emissions cause. Economists tend to call the negative effects for which the individual emitter does not need to pay negative “external” effects. Neither does it matter where on Earth the greenhouse gases are emitted. Emissions have the same effect on global warming regardless of whether they occur in China, the United States or Sweden. Climate change is, in other words, a global challenge that is best met through global cooperation. 13  See Lagerwall (2019). 8 [18]  A price on carbon is the highest priority To tackle the negative external effect of greenhouse gas emissions, a price on carbon is required.14 The most effective solution would be a uniform price on carbon emissions all over the world. This can be arranged through carbon taxes or through trading in emission rights.
V.  Conclusion  This morning, I have shared some of my views on the need for risk management and supervision to evolve together and to reinforce each other. All of us recognise that both areas must keep pace with changes in accounting practices, and I think you would agree that the work we have to undertake in all three areas - risk management, supervision, and accounting - is quite demanding. To develop new ways of thinking about risk and about the techniques for measuring it, we will require hard research and significant resources. We must gather and pour over large amounts of data to sharpen our understanding of various risks and their relationships to each other. We must dedicate our talent, staff, and indeed funds to undertake this work. I would argue that is equally demanding to develop a supervisory structure that capitalises on and further encourages those advances, especially when we are trying to implement a shared framework across many jurisdictions. But the benefits are many. On a microeconomic level, the virtuous circle I have described should help individual firms to improve the quality of their controls in the short run and strengthen their competitiveness in the long run. Yet supervisors are especially motivated by the benefits we expect at the macro level. We believe that, when all financial institutions have the right incentives to pursue profits responsibly, the financial services sector becomes better managed, more resilient, and better able to serve as a source for sustainable growth for the economy.

And, even for domestic imbalances, short-term interest rates would probably need to be held substantially higher for a persistent period in order to suppress rapid rises in asset prices or growing imbalances. Such policy actions could generate significant economic costs. The practical difficulty of implementing a policy of “leaning against the wind”, where the main policy instrument is short-term interest rates, should not be underestimated. If, as  BIS Review 86/2009  3  policymakers, we were successful in preventing a bubble from inflating, it might appear as if we were responding to phantom concerns. The bubble or imbalance would be nowhere to be seen, but interest rates would be higher, inflation would undershoot the inflation target and we would appear to have inflicted unnecessary economic hardship. That could undermine public faith and support in both the inflation target and the MPC. For me, the single most important lesson from the financial crisis is the need to expand the range of instruments available to policymakers. The inflation targeting framework provides the scope to respond to asset price bubbles and to imbalances that threaten future economic stability. But short-term interest rates are not well suited to managing such risks. The precise design of such new instruments is now the focus of much work and analysis. It is likely that a range of instruments and initiatives will be required. These may extend beyond new regulatory instruments and should embrace the need for greater international policy coordination.
The rising expenditures, especially the investment spending increase the demand for machinery and equipment; and this demand can be met by imports due to the structural peculiarities of the Turkish economy. This process leads to the enlargement of the difference between the domestic savings and investments, which is an indicator of the current account deficit and causes the need for foreign resources to arise. With the help of the macroeconomic stability and the inflow of foreign capital, Turkish currency is appreciated and the process is reiterated giving way to an increase in the current account deficit in the environments where this resource can be provided and foreign borrowing becomes an option. A similar process was experienced due to the improvements recorded in the macroeconomic stability in the last five years and remarkable increases were observed in the current account deficit owing to the effect of high speed of growth. The current account deficit reached 34.4 billion USD in October per annum and the ratio of the current account deficit to national income in the third quarter of 2006 became 8.5 percent. However, the reasons besides the financing method should be examined in order to determine the extent of the risk that the current account deficit poses with regard to the macroeconomic balances. Current account deficit today basically originates from the faster increase of investments in comparison with the savings. Additionally, high increases observed in energy prices and especially crude oil prices influenced the increase in current account deficit in a vast amount.

The calculations point that in the case that energy prices remain fixed at their level of the year 2002, the ratio of the current account deficit to national income will be 3.6 points lower in the third quarter of 2006 compared to its current level. As a result of the process of the structural change and the progress obtained in the macroeconomic conditions in recent years, the quality of financing for the current account deficit improved. Long-term capital has been the prevalent resource of capital inflows as of October 2006 with an annual level of 25.3 billion USD. This figure alone meets 3.4 percent of the current account deficit. Foreign direct investment inflow to our country for the same period was in record levels with 21.4 billion USD per annum. What is worth paying attention here is the lack of an interruption in the foreign direct investments flowing in our country even during the fluctuations experienced in the May-June period. This is an indicator of the improvements recorded in the macroeconomic stability and also the confidence for the future of our economy by the foreign investors. Long-term capital inflows and foreign direct investments finance a vast amount of our current account deficit currently. This financing structure is expected to continue parallel to the implementation of the current program decisively. While analyzing the sustainability of the high current account deficits in our country, it should be noted that the structure of our economy is different from the past.
As a central banker I feel some empathy with those who find themselves sandwiched between pressure on one side from their masters to achieve ever lower funding costs or ever better returns from financial investments, and persistent enticements on the other side from bankers claiming that you could be freed of all that pressure if you simply subcontracted everything into their capable hands. Treasury has come to be regarded in many instances as a separate profit centre. The treasurers of some major corporates are nowadays acknowledged as being at least as significant players in the financial markets as are the banks themselves. There are some well-known examples where the profitability of an enterprise in the manufacturing or services sector has been sustained by deft treasury and financial management for considerable periods when the mainstream business has itself been floundering. And there are also examples, alas, where reputable companies have been brought to their knees by flawed financial management. You probably don’t have an easy life, but you won’t need me to tell you that. I find myself wondering whether or for how long the financial scene will continue to be one of such rapid change as we have been witnessing in recent years; and what the implications are, for any or all of us here, of recent and prospective developments in financial products and infrastructure.

2/3  BIS central bankers' speeches  I am also very happy to note the Association’s launch of the MSB App this evening —- which will provide consumers with convenient access to price comparisons, locations of MSB companies, customer reviews, and avenues to lodge complaints and report illegal MSB activities. This App reflects an increasingly digitalised society and business environment where demands for greater transparency, convenience and consumer engagement have become the norm. The MSB App is a great example of how financial technology, or fintech, is changing how customers experience financial services. The possibilities are almost boundless as we are discovering through Bank Negara Malaysia’s recently launched “fintech hacks”. This is a project where we are inviting the public to submit ideas to improve financial services. Let me mention some of the suggestions we have received in the area of money services. Allow tourists to exchange their unused foreign currencies for e-money that can be used to make purchases at any airport merchant worldwide. Develop a peer-to-peer currency exchange app that will allow travellers to meet up and exchange currencies. Provide an app that will allow individuals to book and pay for foreign currencies using their mobile phones, and have the currencies delivered directly to them. And enable e-KYC for remittances. These represent opportunities for MSB companies to innovate and continuously improve on products and services that are meeting the needs of today’s consumer.
Fixed, or managed, exchange rate regimes may help to limit the real economic costs of “excessive” volatility that reflects short-lived shifts in market sentiment, but if they impede desirable adjustments of real exchange rates, they contribute to unsustainable patterns of spending. There are other reasons why emerging economies, in particular, have managed their exchange rates. Perhaps the most important is that pushing down on the exchange rate is a means to pursue a strategy of export-led growth. Another motive, important in the wake of the Asian financial crisis, was to build up large precautionary balances of foreign exchange reserves as a way of insuring against sudden reversals in capital flows, especially of shortterm bank lending, that proved so damaging in the 1990s. 2  BIS central bankers’ speeches  Such policies distorted saving and exchange rates, and created large capital flows unrelated to the distribution of profitable real investment opportunities. Given imperfections in financial markets in both borrowing and lending countries, such capital flows can lead to a degree of fragility, such that, when adjustment comes, there is a high probability that it will be abrupt. For example, the distortion from a “too important to fail” implicit subsidy to the funding costs of banks in the industrialised world led to excessive leverage in these countries. Creditors were prepared to lend at lower rates and on a greater scale than they would have without the implicit subsidy. In other countries, financial repression artificially raised saving rates by making borrowing too costly.

At present, the plethora of international meetings offers many chances to see the world, if not actually to save it. Ultimately, only the Bretton Woods institutions themselves – the IMF and the World Bank – have the legitimacy to represent all of their 187 member countries. But their governance is outdated. At the height of the crisis, the G20 and the G7 provided strong leadership. But legitimacy and leadership should go together. One without the other does not offer a sustainable vehicle for international cooperation. So allowing the G20 to metamorphose into the governing body of the IMF makes a good deal of sense. Such an evolution would, with a little commitment and imagination, create a single effective framework for international economic cooperation. And in the long run a more powerful and legitimate international body might be able to use its clout to deal with the imperfections and frictions that I have discussed. It might even be the vehicle for a more rules-based framework for the IMFS, based on a judgement about the sustainability of the pattern of world demand. Although that seems a distant prospect today, there is a precedent for a system of internalising cross-border externalities: the WTO already plays a similar role in international trade. So far, these rules have stood the test of time. Indeed, it is now more likely that protectionism would result from high unemployment, which the rules were not designed to prevent, than the pressures from producers which have been resisted. There is much to do.