samchain/econo-pairs-v1 huggingface dataset:
That to me argues for the policy strategy that best and carefully nurtures the slow healing that I now believe is increasingly taking hold. In that respect, I think, looking to the medium term, there remains a case for a little ‘stodginess’ yet. 24  As described in Rachel and Smith (2015), global preferences for saving and investment have shifted due to forces such as demographic change, changes to income distribution, increased precautionary saving in emerging markets, the falling relative price of capital and low public investment. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  References Bell, D and Blanchflower, D (2018) ‘The lack of wage growth and the falling NAIRU’ NBER working paper No.

Sudden price adjustments could result in many investors simultaneously wishing to rebalance their portfolios, for example by divesting higher-risk assets in favour of lower-risk ones. In turn, this could create additional turbulence. On the other hand, one risk that we did not foresee was the funding problems that the banks would face during the crisis. We had certainly emphasised that the Swedish banks’ unusually large dependence on market funding was making the banking system vulnerable. But it came as a surprise to find that the financial markets would be affected to such an extent that the banks would have to borrow extensively from the Riksbank to manage their funding needs. The financial crisis The financial crisis hit Europe with full force in September 2008, when the US investment bank Lehman Brothers filed for bankruptcy. The background to the crisis is well-known, so I  2  The Riksbank has carried out stress tests since the start of the last decade. In 2006, we published for the first time stress tests in which we tested credit risk among the Swedish banks and reported the results by bank. As far as I know, at that time, we were alone among the world’s central banks in openly reporting the results of stress tests by bank. The United States carried out stress tests of this kind in 2009, when the crisis was already a fact, and the European Union followed suit in 2010. 2  BIS central bankers’ speeches  will not go into it here.
Repeated US interest rate cuts have allowed a timely easing of monetary conditions in Hong Kong. But, up to a point, further cuts in interest rates are akin to pushing with a string. Given the gloomy mood that now prevails, it may therefore take some time for monetary easing to have an impact on economic activity. Of particular concern now is the unemployment rate. Having declined from a peak of 6.3% at the darkest time of the Asian financial crisis to 4.4% in late 2000, it has been slowly rising, and is likely to edge up further. Part of this is the result of the global slowdown. But unemployment is also complicated, and aggravated, by the structural transformation of our economy, as our manufacturing sector continues to contract and as skill mismatches make it difficult for the growth industries - such as financial services and, until recently, IT - to take up the slack. Behind all the figures are stories of individual pain and hardship - of lost jobs, negative equity, bankruptcies - and a general sense of insecurity and pessimism in the community. These are the conditions for very unfavourable, and potentially destabilising, interactions between the real economy and the financial sector. The Hang Seng Index has dropped by more than 30% since the beginning of the year. Sluggish lending is hurting banks' profits. The delinquency ratio for credit card receivables is on the rise.

Joseph Yam: Building stability in unstable times Speech by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Institute of Bankers Lunch Talk, Hong Kong, 24 October 2001. *  *  *  Thank you for inviting me to speak today. It is a pleasure to see such an excellent attendance - a sure sign of the vitality of the Institute and the relevance of its work to the banking community. It is less of a pleasure to be speaking at a time when the international situation is a grave and unstable one, when our own economy is under immense strain, and when conditions are likely to get worse before they get better. What is the role of our financial community in times like this? And, more specifically, what should the regulator be doing to ensure that monetary and financial systems are conducive to stability and are an aid to recovery? The answers, I believe, are to safeguard the strength of our banking system, to ensure that our financial infrastructure remains sound, even under stress, and to maintain steady policies that are conducive to stable, robust and efficient markets. I shall, in this talk, give some examples of how, thanks to the hard work that has been put in over the years, Hong Kong is well equipped to deliver on these aims. The examples may provide reassurance.
The mandate implies that inflation targeting shall be flexible, so that weight is given to both variability in inflation and variability in output and employment. Monetary policy in Norway is in line with the monetary policy conducted by most central banks in the OECD area. In 2001, a plan was also drawn up for petroleum revenue spending over the central government budget. Government petroleum revenues are transferred to the Government Petroleum Fund, now called the Government Pension Fund - Global. The plan provides for annual petroleum revenue spending equivalent to the expected real return on the Fund, that is to say 4 per cent of the Fund. A measured increase in petroleum revenue spending provides greater stability in the real economy than a rapid withdrawal. After this change in monetary policy orientation, a clear distribution of responsibilities among the different components of economic policy was established: •  Monetary policy steers inflation in the medium and long term and can also contribute to smoothing fluctuations in output and employment. The inflation target ensures a nominal anchor for economic agents’ decisions about saving, investments, budgets and wages. •  The central government budget - growth in public expenditure - influences the krone exchange rate and the size of the internationally exposed business sector in the medium term. Government expenditure and revenues must be in balance in the long term. •  Wage formation and economic structures and incentives determine how well and how efficiently we utilise our labour resources and other economic resources.

1/3  BIS central bankers' speeches  All of this was against the backdrop of a strong national economy. At the start of the year, most forecasts anticipated continued moderate growth throughout 2020 and into 2021. According to the data for April, the unemployment rate now stands at a staggering 14.7 percent— a figure I hoped that I would never see in my lifetime, and one that is sure to get worse before it gets better. If I think back to the economic picture of February, nobody could foresee this would be our reality within a few short months. It’s likely that the latest numbers do not reveal the full extent of the financial devastation faced by millions of American families. The data don’t capture those who had to leave their jobs, either for their own health or to take care of loved ones. Many more people have had their hours reduced or have been forced to take a pay cut. It’s going to be some time before we have a detailed understanding of the full economic effects of the public health measures necessary to combat the coronavirus. What we do know is that the pandemic has put a large question mark over the positive trends experienced in our state, as well as the nation as a whole. As social distancing measures are relaxed, we will get a better understanding of how different industries are affected. We know that travel, hospitality, and retail have all been hard hit.
The important thing is to get the message across to businesses and households about what the outlook for monetary policy really is. Concern that interest rates will rise as soon as growth returns may well have been a factor already holding back the recovery. It’s a case of so far, so good, on that front. The early reactions we are getting from individuals or groups of business people generally suggest that they have got the message and that will be adding to confidence. For example, the Bank’s latest public survey shows a marked reduction in the proportion of people expecting a rise in interest rates over the next year – it’s currently the lowest reading since Bank Rate was cut sharply in late 2008 at the height of the financial crisis. So in terms of supporting the real economy, I think the policy is working. BIS central bankers’ speeches  7  Forward guidance is an important part of the broader mixed strategy the Bank is employing, using many of its tools to secure the recovery while not taking risks with inflation or financial stability. For example, the FPC and PRA have been working to ensure UK banks and building societies have sufficient capital to help support and sustain the recovery. And they will remain vigilant to make sure that macroeconomic stimulus does not translate into imprudent lending behaviour. Another strand of policy is the Funding for Lending Scheme, which is where I would like to turn now.

If the Bank of Russia inspection reveals insufficiency of the available capital to cover the risks assumed taking account of stress-testing outcome, or that the low level of riskmanagement procedures does not allow banks to assess the risks assumed correctly and they may face capital shortage in future, the Bank of Russia will establish targeted elevated capital adequacy requirements for such banks. So far, stress tests conducted by banks shall meet basic requirements, but we are adjusting parameters of stress scenarios and stress-test requirements. Their outcomes will be progressively taken into account in supervisory decision-making. The outcomes of banks’ stress-testing are supposed to be taken into account in assessing possibilities of bank mergers, agreeing on a resolution plan, and taking other significant supervisory decisions. Another important line of our activity is improving the system of bank resolution. Our resolution analysis (and over the past three years we took 28 resolution decisions) shows that investors usually do not invest in capital of banks under resolution, do not develop their business and sometimes use the balance sheet of banks under resolution for bad debts while forwarding a sizeable share of funds for resolution purposes to their own projects. That is why we have tightened control over the ongoing financial resolution. Supervision will be focused on all the transactions between the bank designated as a turnaround manager and the bank under resolution. The turnaround manager will be prohibited to deteriorate financial position of the bank under resolution with its bad assets.
Even if the extraordinary context of the crisis might lead to further reflection on some of these established principles, the ECB has made a public commitment to respect these red lines, and for good reasons. Importantly, PEPP purchases are separate from and cannot be consolidated with APP purchases. This means that the PEPP remains a distinct monetary policy measure in comparison to the APP. In keeping with these safeguards the APP will also not inherit the features of the PEPP. The flexibility embedded in the PEPP cannot be unconstrained, and we must ensure that the ECB continues to operate within the limits of its competence. Collateral easing must be strictly temporary and not come at the expense of fragmentation Another aspect of our response to the crisis was the unprecedented set of temporary collateral easing measures that we announced in April 2020. These measures continue to support our liquidity operations and ensure continued collateral availability. For example, we decided to extend national additional credit claim (ACC) frameworks to include loans benefiting from public guarantee schemes related to the COVID-19 crisis even if they lead to increased fragmentation temporarily. We also took the decision to maintain the eligibility of issuers and marketable assets in the event of a deterioration in credit ratings during the crisis. The legality of these measures is ensured through compliance with all the generally applicable principles I mentioned earlier.

The strict regulation of the rental market also means, for instance, that households may feel forced to buy a home even at stages of their lives when ownership and a mortgage may entail taking a major risk. Although a mortgage is a longterm undertaking for both the borrower and the lender, the households mainly choose variable-rate mortgages; only around one percent choose fixed rates at maturities longer than five years. In addition, the banks largely fund their lending using mortgage bonds with maturities that are significantly shorter than the maturities of the loans.1 I see the specific aspects I have just listed as risk factors, even though arguments can easily be found for each aspect to explain why this particular one does not actually constitute a risk. For example, one can point out that the high level of household debt is offset by the high level of household saving and households having assets that are substantially larger than their debts, or that the low level of construction over several decades limits the scope for a fall in housing prices.2  1  In many countries, mortgages are amortised over periods of 20 to 40 years. This was also the case in Sweden a few decades ago, but it subsequently became increasingly common with interest-only loans. Over the past few years, a larger proportion of new mortgage borrowers have chosen to amortise their loans, but still at a slow rate.
2  BIS Review 104/2006  The second strategic objective is activities generation - that is, to promote Malaysia as the preferred choice as the centre for the offering of Islamic financial services. Associated with this objective is building the pool of talent and expertise, and to ensure that the environment is cost competitive and conducive for product innovation and product offering. The measures to address this include: •  first, setting up the International Centre for Education in Islamic Finance (INCEIF). This represents the Malaysia 's investment in human capital to support the global development of the Islamic financial services industry;  •  second, establishing a Shariah Endowment Fund for scholarships, research and international Shariah dialogues for the regional and international Shariah communities to enhance the harmonisation of Shariah interpretation and practices;  •  third, an additional 20 percent exemption in stamp duty on Islamic financial instruments on top of the stamp duty exemption that is currently available to ensure tax neutrality;  •  fourth, encouraging Malaysian-owned banks including Islamic financial institutions to expand their operations abroad by allowing the profits of the newly established branches overseas or remittances of new overseas subsidiaries to be given income tax exemption for 5 years.

Working level committees have also been formed to undertake the task of considering new proposals and monitoring the implementation of the MIFC recommendations. To take into consideration global trends and to provide insights on the strategic direction, an International Advisory Panel (IAP) comprising industry leaders and experts from the global community is also being established. Conducive environment for business In continuously creating an enabling environment for the efficient functioning of the MIFC, the Government has identified several key strategic objectives. T he Government has also granted an attractive tax package to promote Malaysia as a competitive international Islamic financial centre. The objective is to build the base - that is, to create the necessary critical mass of participating financial players and to increase the scale of activity. Malaysia aims to attract global players as well as to enhance the capacity and capabilities of the existing financial institutions.
This implies that we need to further build our analytical toolkit to identify risks and devise a coherent policy response. It calls for intensifying both our outreach to state-of-the-art research from academia and our analytical work in-house. As mentioned earlier, deepening our understanding on the interplay between monetary and macroprudential policies is a key priority in a low-for-longer interest rate environment. Furthermore, we aim at better capturing interactions between banks, other market participants and the real economy in a fully integrated macroprudential stress-testing framework combining macro and micro building blocks. This requires estimating and modelling behaviour of financial and non-financial agents to realistically capture their balance sheet adjustments also in times of stress. On the policy side, our key priority is to become more agile in fulfilling our countercyclical macroprudential policy mandate. We need to ensure that releasable buffers are available to enable the banking system to support the real economy in a downturn. At present, the best option is to set the CCyB in a capital-neutral manner to be able to withstand current headwinds. I wish us all an insightful conference. [1] See, for instance, van der Ghote, A. (2018), “Coordinating monetary and financial regulatory policies”, Working Paper Series, No 2155, ECB, June. [2] See Cozzi, G., Darracq Pariès, M., Karadi, P., Koerner, J., Kok, C., Mazelis, F., Nikolov, K., Rancoita, E., Van der Ghote, A. and Weber, J. (2019), “Macroprudential policy measures: macroeconomic impact and interaction with monetary policy”, Working Paper Series, ECB, forthcoming.

Inflation is well above that target for a multitude of reasons, which will not be itemised here. These contributing factors have been discussed numerous times by the Central Bank, in verbal and written form. Suffice it to say that enormous investments, radical changes in the domestic financial markets, ready access to inexpensive credit from abroad, and – last but not least – the substantial increase in disposable household income, especially in the past year, have played their part. Critics maintain sedulously that the Central Bank’s tools are weak, that its policy of restraint is ineffective, and even that its inflation target is a failed experiment. The Bank rejects this. It can be considered established that, were it not for the Central Bank’s tight monetary policy, inflation would have been much higher than it has indeed been – with the concomitant strain on households and businesses. It is not the Central Bank’s objective as such to keep interest rates high – indeed, the Bank is of the opinion that it is disadvantageous if the policy rate is high for a sustained period of time. Inflationary pressure has been greater than forecasts indicated – and more than was easily dealt with – and as a result, it has proven difficult to contain inflation. It took a while before the impact of the Central Bank’s restraining measures was sufficiently felt, but considerable changes took place over the past year, when policy rate decisions made themselves felt more strongly in all areas of the credit market.
Chart 6: Major UK banks’ regulatory capital, MREL resources and requirements, % RWA (2011-2022) End-state requirement  2014: UK bail-in power introduced T1 + other total capital resources (~T2)  MREL resources  Interim requirement  35% 30% 25% 20% 15% 10% 5% 0%  2011 2012 2013  2016  2020  2022  Sources: FSA regulatory returns, MREL+ returns, Bank calculations  43  All speeches are available online at www.bankofengland.co.uk/speeches  43  Chart 7: G-SIB and D-SIB high-quality liquid assets (liquid asset ratio) Per cent  14 12 10 8 6 4 2 0  2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total GSIBs DSIBs Sources: S&P Capital IQ and Bank calculations Notes: Weighted average based on a sample of 189 banks which are systematically important as of 2016. Yearly is defined as the fiscal year of reporting of the individual banks. Liquid Asset Ratio = (Cash equivalents + government securities)/Total assets  Chart 8: G-SIB and D-SIB loan-to-deposit ratio Per cent  3 2.5 2 1.5 1 0.5 0  2006  2007  2008  2009  2010  2011  Total  2012 GSIBs  2013  2014  2015  2016  DSIBs  Sources: S&P Capital IQ and Bank calculations Notes: Weighted average based on a sample of 189 banks which are systematically important as of 2016. Yearly is defined as the fiscal year of reporting of the individual banks. Loan to Deposit Ratio = Loans granted by a bank/Stable deposits received.

Second, we have close trade relations, even if there were setbacks during the interwar period and the two World Wars. Third, both countries participated in various fixed exchange rate systems for long periods. After World War II, we adhered to the international fixed exchange rate system Bretton Woods. During the period 1900 to 1970, the Norwegian and Swedish economy grew at an average annual rate of 3.2 and 3.3 per cent respectively. With Norway’s emergence as an oil nation, a change occurred. The Norwegian economy continued to grow at about the same pace. From 1970 to date, the Norwegian economy has expanded by an  1  Report no. 39 (1983): Act on Norges Bank and the Monetary System  BIS Review 15/2005  1  annual average of 3.4 per cent. The development of the petroleum sector and the use of petroleum revenues contributed to relatively high growth also in the mainland economy. In Sweden, however, growth fell to an annual average of 2 per cent. Business sector competitiveness in Norway After Norway became an oil nation, competitiveness in the business sector in Norway deteriorated in relation to Sweden. First, wage growth in Norway has been somewhat higher than in Sweden. Second, the value of the Norwegian krone against the Swedish krona has appreciated sharply. The rise in labour costs in local and common currency was particularly high in the mid-1980s and after 1997.