samchain/econo-pairs-v1 huggingface dataset:
But there is a clear difference between the path of adjustment desired by the surplus countries, which are faced with the need for a longer-term structural shift away from reliance on exports, and the path of adjustment preferred by the deficit countries, which are under greater near-term pressure to reduce the burden of debt in both private and public sectors. Tensions between the two groups were evident at last week’s IMF meetings in Washington where all the talk was of currency conflicts. Such conflicts are, however, symptoms of a deeper disagreement on the appropriate time path of real adjustment. Since surpluses and deficits must add to zero for the world as a whole, differences between these desired ex ante adjustment paths are reconciled ex post by changes in the level of world output. And the risk is that unless agreement on a common path of adjustment is reached, conflicting policies will result in an undesirably low level of world output, with all countries worse off as a result. The international monetary system today has become distorted. The major surplus and deficit countries are pursuing economic strategies that are in direct conflict. And there are  2  BIS Review 136/2010  some innocent victims. Those emerging market economies which have adopted floating currencies are now suffering from the attempts of other countries to hold down their exchange rates, and are experiencing uncomfortable rates of capital inflows and currency appreciation. So there is more to this issue than a bilateral conflict between China and the United States.

Mervyn King: Changes in the UK economy and the role the Bank of England can play in supporting them Speech by Mr Mervyn King, Governor of the Bank of England, at the Black Country Chamber of Commerce, West Midlands, 19 October 2010. *  *  *  Ladies and Gentlemen, It is good to be back in the heart of Britain – in the Black Country – because the Bank of England has strong connections with the area. Both I and Deputy Governor Paul Tucker hail from Wolverhampton. And I am delighted that all nine members of the Bank’s Monetary Policy Committee are in the West Midlands this week on an MPC road-show to see for themselves the state of business in the region. The Black Country is the home of the original Industrial Revolution. Too often those historic events are painted as just that – past glories of little relevance today. But there is no better place to see evidence of how the British economy can adapt than in the Black Country. Indeed, one example can be found behind this building. Dudley Canal No. 1 was part of a network of canals, central to the Industrial Revolution, along which the products made here – especially iron and steel – were transported throughout the country. At its peak, there were 5,000 miles of canals in Britain. Of course, the importance of canals as the arteries of industry later declined and by the late 1960s only 2,775 miles were navigable.
But, while significant progress has been made since the end of the recession, there remain a number of headwinds that have offset the improvement in the underlying fundamentals. As a result, we have yet to see any meaningful pickup in the economy’s forward momentum. The most notable recent headwind, of course, has been the large amount of fiscal drag this year from the payroll and income tax increases and the budget sequester. Also noteworthy is the tightening of financial market conditions that has occurred since May. As we move into 2014, the fiscal headwinds should abate somewhat. As that occurs, the improving underlying fundamentals of the economy should begin to dominate, pushing up the overall growth rate. But this is just a forecast, it has not been realized yet. That is one reason why I supported the FOMC’s decision last week to maintain the current pace of our Treasury and mortgagebacked security purchases. In my view, the economy still needs the support of a very accommodative monetary policy. Adjustments to that policy need to be anchored in an assessment of how the economy is actually performing, how financial conditions are evolving, and how this affects the longer-term outlook and the risks around it. Our decisions on how to adjust our policy tools – for example, the pace of asset purchases and forward guidance with respect to the level of short-term rates – must be rooted in the ongoing flow of information that informs our judgments about the prospects for a sustainable recovery.

But data through mid-September generally indicate that the rise in rates has cut into the upward momentum of the housing sector. Currently, improving economic fundamentals versus fiscal drag and somewhat tighter financial conditions are pulling the economy in opposite directions, roughly cancelling each other. The economy continues to grow and payrolls are rising, but there is little evidence of a pickup in the economy’s forward momentum. For example, real GDP growth is still stuck close to the 2.2 percent average annualized growth rate that has prevailed since the beginning of the expansion. But, as the degree of fiscal drag and other headwinds lessen, the tug-of-war should begin to shift in favor of higher growth. Absent additional fiscal restraint, a further tightening of financial conditions, or some adverse external shock, I expect the economy to grow a bit faster in 2014. So, how compelling is this narrative? In big picture terms, it certainly seems quite reasonable to me. However, no forecast is inevitable and there are some reasons to remain wary. In particular, although the fiscal drag will likely lessen in 2014, I expect it will still be significant, and the outcome of the current federal budget and debt ceiling debates may affect this assessment. Moreover, when one drills down and looks at the recent performance and outlook for the economy’s major sectors, additional caution seems warranted. Turning first to the outlook for fiscal policy, there are two points worth making. First, the CBO projects that significant fiscal drag will persist into 2014.
House prices, led as usual by London, did not begin to return to their pre-crisis peaks until the end of 2013. Even after the recovery, however, house price growth did not recover to pre- financial crisis rates. From 2014-2019, average house price growth was 5% and the house price to earnings ratio for the UK as a whole did not return to its pre-crisis peak until 2017, despite the slow growth in earnings in the UK recovery. In most areas outside London, the South and East, the ratio is still below its pre-crisis peak. Activity over this period was subdued relative to the period before the financial crisis. Mortgage approvals averaged 61,000 per month. The period between home moves became longer; in 1988, households moved every 10 years on average. 30 years later, in 2017, this extended to every 17 years. 2  See Rachel, L. and Smith, T. (2015) "Secular drivers of the global real interest rate" and Box 6 ("The equilibrium interest rate") in the August 2018 Bank of England Inflation Report for further discussion of this. 3 Real house price growth peaked at over 20% in 2002 to 2003, but prices were still growing at around 9% in 2007 in real terms. Real prices started to contract from 2008, with the largest annual fall being 18% in early 2009. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  In the years immediately following the financial crisis, households paid down debt.

Policy  The FPC introduced its housing measures in 2014 following the evidence from the post-financial crisis recession that aggregate household indebtedness and the prevalence of highly indebted cohorts had amplified the recession and its impact on the financial system. The tools therefore aim to enhance the resilience of the financial system. The measures aim to act as general structural ‘guardrails’ rather than as a countercyclical tool, though the FPC reviews their calibration periodically. Such a review is in train and be completed by the end of this year. As I have set out, since the introduction of the tools the housing market, outside London, has been relatively quiet by UK standards. But, as I have also explained, there are likely to be many factors behind this in addition to the FPC’s housing measures. The Bank has published extensive analysis on the impact of the tools and a forthcoming “Bank Overground” post will examine the extent to which the measures have acted as a constraint on renters entering the housing market. This analysis finds that minimum affordability requirements and lenders’ internal limits on loan-to-values are likely to have been the dominant constraint for most renters. It estimates that only 2% of renters would have 15  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  15  been able to afford the median-priced first-time home in their region had they not been constrained by the affordability test.
For the big banks, in particular, it is crucial that a sufficient capital base be laid down as soon as possible, so that losses can be fully absorbed. The SNB welcomes the fact that, in 2010, both big banks already took important first steps in this regard, and we would like to encourage them to keep up the pace of their capital expansion. The capitalisation of most domestically focused banks is good by historical standards. However, a combination of high interest rate risk exposure and strong mortgage lending growth has been reported by a number of banks. In order for these banks to bear the risks in the medium term, it is important to ensure that their capital base is strong enough. I would now like to take a closer look at the situation of the two big banks, before turning my attention to the situation of the domestically focused banks. Situation of big banks Compared to 2009, the two Swiss big banks saw a marked improvement in their profitability and capital situation last year. In 2010, these institutions reported combined net profits of around CHF 13 billion, as opposed to roughly CHF 4 billion in 2009. This positive development was driven by UBS, whose situation improved further over the course of last year. In addition, both UBS and Credit Suisse continued to increase their regulatory capital ratios (ratio of Tier 1 capital to risk-weighted assets), which were already very high by international standards. Moreover, their financial strength ratings also improved.

Thomas J Jordan: Financial Stability Report – potential risks and actions Introductory remarks by Mr Thomas J Jordan, Vice Chairman of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Berne, 16 June 2011. *  *  *  In my introductory remarks today, I would like to present the most important points from our recently published Financial Stability Report, in which we consider potential risks to financial stability and identify where action may be needed. General economic and financial conditions for the Swiss banking sector improved further in 2010. Overall, global economic growth was stronger than expected last year, despite the expiry of fiscal stimuli. In Switzerland, too, economic development was robust and growth was high in an international comparison. Against this background, the profitability and capital situation of both big banks improved further, and remained good for banks with a domestic focus. However, the economic environment remains fragile, and a renewed, sharp deterioration over the next twelve months cannot be ruled out. In the short term, the prevailing uncertainty primarily affects the two big banks, which are still exposed to considerable credit and market risk relative to their loss-absorbing capital. For domestically focused banks, by contrast, the risks are largely of a medium-term nature, and are related to potential adverse developments on the Swiss real estate and mortgage markets. In view of these risks, all Swiss banks should ensure that they have a broad and high-quality base of loss-absorbing capital.
A crisis of the depth we have now passed through leaves behind feelings of uncertainty regarding the future. Previously-observed relationships have not been able to provide us with the same guidance as before, and moreover it is difficult to know what these deviations from historical patterns will lead to further ahead. The way this situation develops in the future will depend on many different things. If the world economy returns after the recovery to a situation similar to that before the crisis, then countries which have conducted a policy that has helped companies to retain their labour force through the recession will be in a very good position. Companies in these countries will then easily be able to increase production. However, if it turns out that the world demand is for other goods and services than those prior to the crisis, these countries may instead find themselves in a situation where they need to undergo a necessary structural transformation. This could lead to a more protracted period of high unemployment and lower production. In the future, countries like China may account for an increasingly large share of world consumption. If consumption patterns differ in different countries, this could mean that different types of product will be in demand in the future. A deep recession may also affect the internal demand picture within a country permanently, for instance, by individuals changing to more energy-saving and cheaper alternatives.

In order to detect financial tensions as early as possible, we have sought to make our dialogue with member countries more continuous and probing and put more emphasis on the continuous and timely provision of accurate data. We are also concentrating more on policies decided at a regional level, on the regional implications of national economic policies, on banking and financial sector soundness, and on the policies and institutions that sound financial systems require. BIS Review 111/1997  Second, we are doing what we can to help markets function more smoothly. Considerable progress has been made in liberalising current account transactions worldwide so that countries can take advantage of the opportunities offered by the expansion of world trade. Now, we must turn our attention to fostering an orderly liberalization of capital account transactions, so that countries can also reap the benefits of global capital markets, while minimizing their risks. To this end, IMF members have agreed that the Fund’s charter should be amended to make the liberalization of capital movements one of the purposes of the Fund and to extend the Fund’s jurisdiction to capital movements, with appropriate safeguards, including transitional arrangements, to ensure that liberalization is neither premature nor unduly delayed. At the same time, the IMF is actively encouraging all countries to be transparent about their economic performance by improving the dissemination of economic and financial data to the public. Greater transparency will help strengthen market discipline and avoid market surprises that can lead to disruptive market reactions.
A broad spectrum of activities could possibly constitute “dealing in securities”: broking in securities, referring customers to open accounts with licensed dealers for the purpose of trading in securities, or providing prospectuses and application forms to prospective customers. As for “investment advice”, our current interpretation accepts that the provision of factual information does not constitute investment advice. What constituted dealing or investment advice used to be fairly clear-cut and well-established. But the breakdown of the securities value chain has blurred the distinctions between fact and investment advice, and between dealing in securities and merely providing information. We therefore need to refine our interpretation of these terms, institute basic safeguards and spell out how to treat new entities. Licensing approach In licensing investment advisers and dealers, our approach is to require persons conducting securities activities in Singapore to possess suitable qualifications, relevant professional experience and good character. This would give comfort to investors that they can expect competent advice and reliable execution from investment advisers and dealers. Our licensing requirements for the new electronic market intermediaries should not be unduly onerous. They will not impose heavy prudential capital requirements. The main focus will be on website disclosure of credentials, physical addresses and other relevant information. In lieu of a corporate track record, licensees need only demonstrate individual qualifications and experience. Bona fide intermediaries who subscribe to the objective of providing financial services of high standard should be pleased to come under our licensing ambit.

Experience in developed economies show that financial services, notably stock trading, can take rapidly to the internet. This should be no surprise. As an Economist online finance survey recently described, financial institutions deal in a product - money - that has long been accepted as “virtual”. Unlike a piece of clothing, account-holders are happy to accept their money represented as figures on an ATM screen, or by a credit or smart card.13 The new financial landscape calls for a tripartite, complementary response from regulators, industry and investors. The MAS as regulator will foster healthy market practices, while maintaining a sound overall investment environment. At the same time, in a democratised environment, investors need to recognise that there is little substitute for self-education, and thereby exercise greater caution in making individual investment decisions. Finally, industry participants need to set high professional standards and observe an exemplary code of conduct, in order to retain their customers and build their reputations which, in the long term, are their most precious assets. 13  “Online finance: a virtual threat”, The Economist, 20-26 May 2000. 7  BIS Review 69/2000
Inflationary expectations of economic agents continue to be within the target range, which is essential under the conditions of the simultaneous presence of the negative output gap and high foreign prices. The Bank of Albania is fully committed for anchored inflationary expectations in compliance with its inflation target and stands ready to accomplish its mandate, by preventing materialisation of constant pressures on inflation. Following discussions, the Supervisory Council concluded that the monetary conditions remain appropriate for meeting the medium-term inflation target and decided to leave the key interest rate unchanged at 5.25%. BIS central bankers’ speeches  3

On this front, we have seen increased diversity, both in terms of product offerings as well as in the issuers. In the area of product offerings, for example, we have seen an increase in the offering of commodity-related financial products. The Singapore Commodity Exchange launched a Robusta coffee futures contract in April last year. The Singapore Mercantile Exchange launched in August last year also provides a platform for trading a diversified basket of commodities including futures and options contracts on precious metals, agriculture commodities and energy. We have also replicated the success of the real estate investment trusts model for the infrastructure sector, further adding to the diversity of our capital markets. 14. On top of the increased diversity in product offerings, we are also encouraged by the increased diversity of issuers coming to tap into the depth and liquidity of our capital markets. Last year, we saw the first Russian debt issue in the Singapore market when VTB Bank launched its Sing Dollar Eurobond here. This paves the way for other highly rated Russian issuers to access our markets. In the area of Islamic finance, a number of international players have also tapped our markets for their shariah-compliant instruments. They include Saudi Arabia’s Al Rajhi Group1 and Malaysia’s Khazanah Nasional2. In November last year, Sabana also launched the first shariah-compliant Real Estate Investment Trust in Singapore, which is also the world’s largest shariah-compliant REIT. 15. Singapore plays a key role as a gateway to Asia, facilitating capital and investment flows.
Ladies and Gentlemen, There is little disagreement about the pertinence of capital flows for macroeconomic outlook and stability. Where my view may depart from that of some critics, is in regards to appropriate policy response, and what objectives the Bank of Thailand can and should pursue. The MPC’s core objective, as instituted by law and in agreement with the government, is to achieve maximum sustainable growth, in the context of stable prices and sound financial system. Under this mandate, capital flows and exchange rate fluctuations are not the targets in and of themselves, but enter the policy calculations through their effects on the overall macroeconomic outlook. The MPC’s recent decisions to keep the policy interest rate unchanged can be rationalized in this light. While all members of the MPC may recognize the risks posed by volatile capital flows, the majority believed that the overall macroeconomic conditions are consistent with the mandate, and no change in policy was warranted. Thus, the current policy framework is sufficiently flexible to allow the Bank of Thailand to address the issue of capital flows. By contrast, if policy interest rate were employed to target capital flows and exchange rate per se, the outcome would likely prove counter-productive in my view. Uncertainty about the effectiveness of such policy use aside, the central bank’s commitment to safeguard the overall macroeconomic stability may also be called into question by the public, with potentially serious consequences.

Ladies and Gentlemen, I believe that a balanced and judicious use of monetary policy tool has and will continue to play a critical role for ensuring long-term macroeconomic and financial stability. As always, the Bank of Thailand will strive to create a stable economic environment in which businesses can prosper on a sustainable basis, so that Thailand will continue to be the destination of choice by long-term investors. Let me close my remark by thanking the Netherlands business community for the substantial contribution to the Thai economy. I hope that the relationship between our two nations will continue to flourish. Thank you. BIS central bankers’ speeches  3