samchain/econo-pairs-v1 huggingface dataset:
In late 2002 and early 2003, the economic outlook and the trend of financial variables in Latin America improved perceptibly, especially following the positive developments in Brazil and Argentina. The recent crises have highlighted deep-seated shortcomings in the legal and institutional workings of these countries. Emphasis has thus been placed not only on the need to pursue policies supportive of monetary, financial and fiscal stability, but also on how important an institutional framework respectful of property rights and private enterprise is for fostering growth in these countries. Factors of a more global nature have also been pivotal in the recent crises. These have been related to greater risk-aversion on international financial markets, which has caused capital flows to some of these emerging economies to shrink. International markets have, however, tended to be more selective, and there have been fewer episodes of crises spreading from one country to another, although contagion cannot be said to have disappeared completely. The recurrence of these crises has led to reflection on the so-called “architecture” of the international financial system. Numerous reforms have been proposed in this connection. And some have been adopted, and are generally in the initial stages of implementation. Much remains to be done in this area, although the acceptance of sovereign bonds incorporating the so-called collective action clauses, issued by Mexico, Brazil and Uruguay, offer grounds for hope.

Nevertheless, uncertainty over the European economy’s capacity promptly to embark on a path of sustained recovery has not been sufficiently dispelled. In particular, the hesitancy of the US economy, the deterioration in its current-account and budget deficits, continuing imponderables in respect of the international political situation and the current volatility of financial and foreign currency markets may affect the European economy’s growth prospects, given its dependence on the external environment. Along with these, there are other factors more specific to the area (such as the sluggishness of business investment, doubts about the scale of the consequences of the stock market crisis for  BIS Review 31/2003  3  demand, and the persistent weakness of some of the major Member State economies) that might delay the expected acceleration in activity in the euro area which, in all likelihood, will grow in 2003 below potential for the third year running. On the institutional front, highly significant events for the process of European construction have taken place in 2003. The signing of the Treaty of Accession to the EU by ten new countries, which took place in April and will be effective in May 2004, marks the start of a phase of far-reaching changes which will pose sizable challenges for the competitiveness and cohesion of the area and for the strengthening of the effectiveness of the European institutions.
That divergence in levels of productivity has, in turn, translated into divergence in levels of GDP per head across countries over the same period. 66  The process of livings standards catch-up has stalled, possibly reversed. And the reason for that appears to be a slowing in rates of technological diffusion. 63  Comin and Mestieri (2013a). Comin and Mestieri (2013b). Baddeley (2006). 66 Comin and Mestieri (2013b). 64 65  18  All speeches are available online at www.bankofengland.co.uk/speeches  18  If there has been a slowing in rates of technological diffusion across countries, is the same potentially true within countries? Evidence using micro-level company data within countries suggests it is. Research by the OECD suggests there has been a slowing in rates of technological diffusion across firms in a number of countries. 67  Put differently, there is a long and lengthening lower tail of companies failing to keep pace with  the technologies used in frontier companies. Their productivity performance has fallen ever-further behind. This widening dispersion in the performance of upper and lower tail companies appears to be a particularly acute in the UK. To a greater extent than elsewhere, it appears that the UK is a tale (or tail) of two companies. At the upper end, the UK seems to have as many high-productivity companies as its main competitors (Chart 8). That fits with the UK’s standing as a global innovation hub, with world-leading companies and universities and high indices of innovation by international standards.

Immediately prior to the Industrial Revolution and running chronologically, these included the th  th  th  windmill in the 12 century, the mechanical clock in the 13 , the cannon in the 14 , the printing press in the th  th  th 17  15 , the postal service in the 16 and the telescope and microscope in the 17 . It will surprise no-one that waves of innovation, big and small, have been lapping the shores of society for the entirety of human civilisation. In other words, while ideas and innovation may well be a necessary condition  14  Van Reenen et al (2010), for example, document the economic impact of ICT. See Bughin et al (2017) and Haldane (2018), for example. Flohr (2016), for example, discusses innovation in Roman society. 17 Clark (2009). 15 16  5  All speeches are available online at www.bankofengland.co.uk/speeches  5  for economic growth, the historical record suggests they may not themselves have been sufficient. Other forces appear to have been at play, translating these ideas into sustained growth in living standards. What might those forces be? I want to provide two different, but complementary, lenses on the growth story. The first focusses on a rather broader set of “capitals” – not just physical capital (plant and machines) but human (skills and expertise), intellectual (ideas and technologies), infrastructural (transport and legal systems), social (co-operation and trust) and institutional (national and civic, private and public) capital.
This time round, the strong credit market from 2003 to 2005 have lulled investors into placing big bets in high-yielding structured credit instruments, on the assumption that such favourable credit conditions will continue unabated. The second point is on proper risk assessment. Back in 1997, lenders were providing funds without executing necessary scrutiny or appropriately balancing the risks against returns. Likewise, the recent credit turmoil has highlighted the importance of assessing risks. The  BIS Review 11/2008  1  distribution of risk through leveraged structured vehicles or conduits, and complexities in the structures have made it extremely difficult for investors to disaggregate the risks in times of stress and volatility. As a result, over-reliance has been placed on financial models and ratings without full comprehension of the risks of the product and misunderstanding the scope of the ratings that measures default risk. Third, excessive leverage in both crises has exacerbated the problems triggered by the mounting default rates. Excess liquidity led to massive domestic lending; at the same time, investors geared up aggressively and bet on continually rising asset prices as collateral. When the crisis broke, the use of leverage accentuated the losses, which led to widespread risk aversion and uncertain market sentiments. The loss of confidence along with the repricing of credit risk have intensified the volatility in the financial markets; and this contagion spread rapidly beyond the structured credit space and across markets. So what does all this mean for Asia?

This is understandable because, under the prolonged period of quantitative easing by the major central banks in the advanced economies, bank deposits and bonds offer rather low and unattractive interest income. As for the stock market, the volatility in share prices will expose the retirees to significant market risks. As a result, there can be a fairly large group of retirees who find them not having enough cash flows to support a decent retirement life, despite the fact that the properties they own and occupy are worth quite a lot. 1/4  BIS central bankers' speeches  At the same time, their cash savings are basically left idle, yielding very little, if any, cash flow income. Many old folks would feel apprehensive to dip into the principals of their bank savings to meet daily expenses, as this would expose them to the uncertain but rather scary longevity risk. This situation is not unique in Hong Kong as there are many places that have similar problems. So it may be useful if I share with you the Hong Kong experiment in helping this group of retirees through some market based and financially sustainable solutions. HKMC and Market-based Financial Solutions for Retirees 4. These market based retirement protection solutions are developed and operated by the Hong Kong Mortgage Corporation (HKMC), which was set up in 1997 and is fully owned by the Government through the Exchange Fund managed by the Hong Kong Monetary Authority (HKMA).
In short: before the crisis, the practical relevance of the ‘too big to fail’ issue was underestimated. At the same time, the belief that the risks in the banking system could be precisely quantified and monitored by means of sophisticated statistical models led to a false sense of security. These are key explanations for the inadequacies in banking regulation worldwide before the crisis. b) ... in Switzerland too  These aspects also played a key role in Swiss regulatory practice before the crisis. Like a lot of big banks in other countries, UBS and Credit Suisse also pursued a growth and globalisation strategy that focused heavily on investment banking in the decade leading up to the crisis. UBS, in particular, had set itself the goal of becoming one of the global leaders in investment banking. 13 Such global business activities enabled the big banks to achieve impressive returns for many years (cf. slide 4). Their financial soundness and strategic direction were thus rarely questioned. 14 The risks taken on by the big banks as part of this development were widely underestimated. In the years before the crisis, supervisory authorities and regulators had warned of potential risks associated with rapidly expanding balance sheets and shrinking capitalisation (cf. slide 5). For instance, the Swiss Federal Banking Commission (SFBC), the predecessor of today’s Financial Market Supervisory Authority (FINMA), had already stepped up its supervision of Switzerland’s two big banks by the end of the 1990s.

Its assessment of the Swiss approach was positive, considering it appropriate in an international comparison. 21 At the same time, the Federal Council concluded that further action was needed in relation to certain parameters. In particular, it stressed that, due to the special significance of ‘too big to fail’ in our country, Switzerland should be at the forefront when it comes to setting resilience requirements. Consequently, it prescribed an increase in capital requirements. These changes have been criticised in some quarters. Concerns were voiced that some of the adjustments were unreasonable and would put banks at a competitive disadvantage internationally. 22 How justified is this criticism? c) … and are designed to be cost-effective  All regulations inevitably meet with resistance because they create added costs for the regulated institutions. But it is often the only way to bring about the desired change in conduct. In any discussion of the costs of regulation, it is important to weigh the private costs incurred by those subject to the regulations against the costs to the economy as a whole. As long as the private costs are less than the macroeconomic benefit, then the regulations make economic sense. Yet such a cost/benefit analysis is complex and fraught with uncertainty. The literature is unambiguous on the macroeconomic costs and benefits of the post-crisis increase in capital requirements. 23 The benefits far exceed the costs involved. The benefits of the higher capital requirements are that they reduce the likelihood and the severity of a banking crisis.
Yet the level of European wholesale gas prices has fallen substantially further towards its prepandemic level in recent weeks, perhaps suggesting that the intensity of attempts to avoid the costs implied by a terms of trade deterioration are likely to abate, with the strength of intrinsic inflation persistence set to fall in parallel. Judgements along these dimensions will shape my assessment of how persistent the current elevated level of inflation will prove, and thus what the appropriate monetary policy choices will be. This discussion can be placed into a bargaining framework. Imperfect market competition leads to the creation of some ‘economic surplus’ that has to be distributed across various competing actors. [25] Given the deterioration in the terms of trade, more of that surplus has to be given to foreign suppliers of energy. That leaves less to be shared among domestic residents. A bargaining process will determine how the remaining smaller economic surplus is distributed, as each group or actor seeks to preserve their own real spending power. There is a tendency to view this bargaining process as a confrontation between ‘workers’ and ‘firms’, and some of the media coverage likes to interpret central bank statements in that light. But any economic transaction involves distribution of some ‘economic surplus’ between a buyer and a seller. In a market transaction, the more effective the seller is in extracting that economic surplus, the higher the resulting market price will be.

Flavours of inflation persistence For data series that exhibit ‘mean reversion’ – in other words series that return to some average level after being shocked away from it – persistence is typically understood in terms of how long it takes to get back to that average level. [7] Given the MPC’s mandate, CPI inflation will revert to 2% over time. But it is taking longer to return to target than was originally expected, and longer than is desirable. From a policy perspective, we want to understand why this persistence in inflation has emerged. In thinking about that, it is helpful to distinguish between different sources of persistence. [8] One reason for inflation to have risen above target is that there have been a series of inflationary shocks to the economy, each of which was transitory in itself but – by dint of coming one after the other and operating in the same direction – led to greater persistence in headline inflation overall. Page 5  I label this a form of extrinsic inflation persistence. Such an account resonates with the way the MPC has described the inflation process over the past couple of years. [9] Inflation first rose on account of bottlenecks in international goods markets that emerged from the interaction of disruption to global supply chains and changes in the pattern of consumer demand, both stemming from the lockdowns triggered by the onset of the Covid pandemic.
Some of the targeted mitigation measures undertaken by the authorities include: •  Intensified joint investigation efforts by the LEAs to effectively combat money laundering and terrorist financing. This is reflected in the increased number of raids, arrests and prosecutions related to money laundering and terrorist financing and predicate offences;  BIS central bankers’ speeches  5  •  Another effort is the enhancement of the structure of the individual LEAs, which includes the formation of dedicated AML/CFT unit within the LEAs and increase in manpower focusing on money laundering and terrorist financing investigations;  •  Another response by the government is the amendment to the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA) which is aimed at strengthening Malaysia’s AML/CFT framework against criminal activities. The amendments would provide clarity on reporting obligations so that preventive measures can be implemented more effectively, such as requirements to submit STRs related to terrorism financing, tipping off provision and CDD requirement;  •  The intensity of enforcement actions against financial institutions that failed to comply and implement AML/CFT programs is also increased. In 2013 and 2014, BNM has compounded banks for various failures to implement effective compliance programs. With the coming into force of the amendments to the AMLATFA on 1 September 2014, the maximum penalty for various provisions was increased. For instance, maximum penalties under general offence have been increased from RM250,000 to RM1 million.

The growth in international trade, inter-linkages of the global financial system and advancement in technology have presented both the risks and opportunity to the private sectors. From the business perspective, this development provides for greater access to the wider global market. From the money laundering perspective, this also means that criminals have greater means and tools to launder their illegal proceeds into a form which appears to be legal. Using the tools provided via the advancement in technology such as the internet banking and wire transfers, these proceeds could subsequently be transferred out and layered into another transactions either in Malaysia or abroad. Changes in the business and economic landscape present a challenge to law enforcement agencies, financial regulators and supervisors. To ensure that we are effective in protecting the financial system and the broader economy from the threats of money laundering and terrorist financing, cooperation and collaboration is not an option but a vital requirement. In this regard, there must be strong working partnerships between all the law enforcement authorities, regulators, supervisors and the private sectors. Without that, our efforts will be futile. In terms of the legal framework, concerted efforts have been taken to ensure that our AML/CFT law and policies are comprehensive. On this note, I am happy to inform that the main law governing the AML/CFT has been passed by the Parliament and gazetted into a law on 29 August this year.
To help keep track of conditions in Puerto Rico, we can now look at the Institute of Statistics’ new Manufacturing Purchasing Managers Index (PR-PMI), which is conducted in conjunction with the Puerto Rico Manufacturers Association and Scotiabank. The survey shows that business conditions on the island were steady in January, following improvement at the end of 2010. The PR-PMI has signaled growth for seven of the past nine months. It will take some time before this new index has a clear track record, but we welcome this source of timely information on economic activity in Puerto Rico. Now, what about credit conditions in Puerto Rico: how much debt do families have and how have they been doing in terms of meeting their obligations? I needn’t tell you how important it has been to monitor these trends over the course of the Great Recession. Using a new source of information – the New York Fed’s Consumer Credit Panel – we can now track how families in the mainland and Puerto Rico have managed their credit in recent years. Overall, compared with the mainland, Puerto Ricans avoided much of the recent boom and bust in the use of household credit. Yet, signs of distress are readily apparent, owing to the long and deep recession here. Unlike the mainland, households on the island did not raise their borrowing much in the run-up to the recession.

The law that created the Federal Reserve made the central bank independent so that policymakers could make decisions about monetary policy – such as whether to adjust interest rates – in the national interest, somewhat insulated from political pressure. However, the Fed is accountable to Congress. Congress has set an explicit objective for monetary policy: To pursue the highest level of employment consistent with price stability. This objective is often referred to as our “dual mandate,” because it combines two goals: high employment, and low and stable inflation. In order to promote these objectives, we also pay close attention to financial stability, because without financial stability, it is very hard to achieve our goals for jobs and inflation. The FOMC consists of the Board of Governors plus the presidents of each of the 12 district Banks. It meets in Washington, D.C., eight times per year to deliberate and vote on monetary  BIS central bankers’ speeches  1  policy. As the current New York Fed president, I am vice chairman at these meetings. At these meetings, each committee member presents his or her current outlook for the economy. For these assessments, we augment input from our research departments with critical information about local economic conditions supplied by our boards of directors, regional advisory councils and conversations with local stakeholders. My visit to Puerto Rico today is a part of these regional activities, in which I learn first-hand about the economic and financial conditions important to Puerto Ricans.
and Global Imbalances: Can Dark Matter Prevent A Big Bang”, Working Paper, Kennedy School of Government, Harvard University, November. Hofmann, B. and Kuijs, L. 2006. “Profits Drive China’s Boom”, Far Eastern Economic Review, 169(8): 39–43. National Institute of Economic Research 2011. “Sparsamma hushåll har skapat ett stort överskott i den svenska bytesbalansen” (“Thrifty households have created a large surplus in Sweden’s current account”). The Swedish Economy, article. King, M. 2009. Speech given to the CBI Dinner, Nottingham, January 20. Krugman, P. R. 2007. ”Will there be a dollar crisis?”, Economic Policy July pp. 435–467. Krugman, P. R. and Obstfeld, M. 2009. International Economics: Theory and Practice, eighth edition. Addison-Wesley, Boston. Lagerwall, B. and Nessén, M. 2009. ”The long-term development of the krona”. Economic Commentary no. 6, 2009, Sveriges Riksbank. Lane, P.R. 2006. “The Swedish external position and the krona”. Sveriges Riksbank Working Paper Series 200. Lane, P. R. 2010. “A European perspective on external imbalances”. SIEPS 2010:5. Lane, P.R. and Milesi-Ferretti, G.M. 2002. ”External wealth, the trade balance, and the real exchange rate”. European Economic Review 46. Llaudes, R. Salman, F. and Chivakul, M. 2010. ”The impact of the great recession on emerging markets”. IMF WP 10/237. Obstfeld, M. and Rogoff, K. 2005. “Global Current Account Imbalances and Exchange Rate Adjustments.” Brookings Papers on Economic Activity 1: 67–146. White, W. R. 2008.

The fact that some had to go through a difficult period of adjustment was first and foremost a consequence of their past decisions. Nevertheless, standing on one’s own feet is not the same thing as standing alone. Renationalising our economies is also not the answer. It would not change the basic economic realities that European countries confront – that we are ageing societies which have to grow primarily through raising productivity. And it would not offer citizens any more economic security. There is no country in the world that is both prosperous and insulated from globalisation. In fact, the Single Market process was introduced precisely because European economies, acting alone, could not create enough jobs in an increasingly open world. And that process led in turn to monetary union because – as the ERM crisis in the early 1990s showed – countries realised they could not integrate in part and benefit in full. The financial and sovereign debt crises since 2008 have only reaffirmed that truth. So the answer is not to unwind integration. Nor is it to hold out an unattainable vision of where integration should lead. It is to complete our monetary union in the areas where it can and needs to be completed. We need ambition in our ends and pragmatism in our means. We have already shown how this can be done with the solidarity and stabilisation mechanisms that were set up during the crisis. Banking Union is also a remarkable achievement.