samchain/econo-pairs-v1 huggingface dataset:
It would be fantastic if that caught on. It would align the time horizon of bank employees with that of their customers, reducing the incentives to put short-term sales ahead of long-term relationships. Fourth, credit. The rising tide of inequality either side of the crisis was given impetus by first the boom and then the bust in credit and asset prices. We must in future do a much better job of moderating those credit booms and busts, to prevent them acting like a regressive tax on the poorest in society. That collateral damage is all too evident today in the chronically low levels of credit being extended on the high street – to first-time buyers wanting to put their foot on the first rung of the housing ladder, to business start-ups seeking to invest in assets, human and physical. Lending to UK households and companies has been contracting for 4 years and counting. BIS central bankers’ speeches  5  In preventing a repetition, a first step is to recognise that taming the booms and busts in credit is a key public policy responsibility. Step two is charging someone with this task. And step three is getting on and doing just that. In the UK, we are already three steps along this road, with the introduction of a Financial Policy Committee (or FPC) housed at the Bank of England from last year. Its remit is to keep the system safe and sound while supporting lending and growth.

Such digitalization and innovation of financial services pose new challenges for their statistical monitoring and measurement. At the same time, there is a growing number of initiatives for active use of the socalled “big data” in the statistical world, a new paradigm that changes the profiles of both holders of statistics, statistical processes, and overall economic and financial analysis. Statisticians globally are increasingly experimenting with large structured and unstructured computergenerated data, the sources of which are all of us. The possibility of using this data as an innovative source of official statistics is being increasingly explored. The challenges are surely immense, given the need to assess the accuracy, sustainability and methodological foundations of these data systems, as well as the need to find human resources and appropriate management technologies. Last but not least, there are investments for improving the dissemination and communication of statistics to the public. It is a recurring cycle in which we are constantly striving for better communication by conducting surveys of reporters and user satisfaction, regular publishing of statistical press releases… A new statistical web portal for external users – NBSat will be launched soon. This web portal will be a modern statistical tool designed for interactive communication with users, which will significantly expand their capabilities for data analysis of our central bank statistics.
As the market for a currency becomes more liquid, the costs of carrying wealth denominated in that currency fall, raising investors’ preferences for denominating their portfolios in that currency. These increased preferences in turn lead to a further deepening and broadening of the market for that currency, costs of holdings are reduced further, and the process continues. As in trade transactions, the dollar is the predominant means of exchange in international financial transactions. Its predominance is especially apparent with respect to large issues of international bonds -- a clear reflection of the low cost of covering exchange rate and interest rate risk for long-term dollar instruments. I would suggest, however, that the current role of the dollar should not be taken for granted. Once the euro comes into existence, the simple conversion of the EMU countries’ outstanding securities into euros will contribute to the immediate creation of a major securities market. This development alone will create a critical mass for a market in euro-denominated securities. It will give the market depth and liquidity, and, in so doing, bring down the costs of conducting transactions, issuing loans, and trading securities below those currently seen for European national currencies -- possibly to levels comparable to those for dollars. The development of such a virtuous cycle could well feed upon itself and lead to the continuous growth of the market for euros.

By contrast, American policymakers might have found it helpful to devalue the dollar in Texas when oil prices collapsed in the mid-1980s or the dollar in New England at the end of the defense-led growth of the late 1980s. These options, however, simply were not available. In retrospect, it was the discipline fostered by the absence of the opportunity to alter regional exchange rates that forced our firms, local governments, and workers to reorganize, become more efficient, and grow in what are now some of the most productive areas of the United States. Similarly, if national labor markets in Europe become more flexible and efficient in the presence of a common currency and firms learn to count only on their own resources -- with no help from an occasional exchange rate adjustment -- European capital and labor markets may themselves become more integrated. And if greater integration of labor markets can only proceed slowly -- given persistent and unavoidable cultural and language differences -- this need not be the case for financial markets, where the disappearance of exchange rate risk will cause capital to move in response to interest rate differentials of only a very few percentage points. In this context, I would like to make clear that I do not view as ideal the U.S. model where the burden of recessions tends to fall heavily on the shoulders of workers, who may be obliged to move across regions and industries in response to the business cycle.
Over the short term, moreover, the actual equilibrium interest rate, r*, will fluctuate around the trend level, R*, driven by shorter-term influences from both demand and supply. This is what matters for monetary policy here and now. Why? Because r* is the rate at which demand is in line with supply so that there is no output gap – neither excess demand nor excess supply in the economy. Responding to shifts in r* is what helps keep inflation close to target. This does not mean that monetary policy should always align Bank Rate exactly to r*. Sometimes, monetary policy faces trade-offs between inflation and the balance of supply and demand. But it does mean that supply matters for monetary policy also in the short run. By determining the level of demand the economy can sustain without generating excess  Bank of England  Page 10  inflationary pressures, it affects the appropriate level of interest rates, effectively by setting the speed limit for the economy. And when shocks drive inflation away from target in the way we have seen, monetary policy responds by steering demand to a level – relative to supply – that ensures that inflation returns to target sustainably. Monetary policy cannot affect this level of supply. But the level of supply will affect the appropriate setting of monetary policy. It matters, therefore, that big shocks to the economy have weighed heavily on supply in recent times.

U.S. inflation by most measures fell in half to an average for the CPI of about 2.5 percent. This positive inflation performance was more generalized across the major economies, with Europe and most all major economies experiencing a similar slowdown, and Japan, more famously, slipping into sustained deflation. •  Third, U.S. economic performance during this period was characterized by lower overall volatility in growth and inflation. This moderation, economists call it the “great moderation,” was reflected in a reduction in quarter to quarter volatility in output by about half. This more even pattern of growth was evident across most components of GDP. Some of the other major economies also saw some moderation in the variability of macroeconomic outcomes, but the trend is not as pronounced or well established. •  Fourth, productivity growth in the United States accelerated significantly with productivity growth in the non-farm business sector doubling from about 1.5 percent per year in the two decades up to the mid-nineties, to more than three percent on average over the decade since. This acceleration in productivity was not completely unique to the United States, but it has not yet been matched by the other major economies, though that may be in prospect. What accounted for these achievements? This is important to try to understand, because it is important to assessing whether these trends are enduring or temporary, and what types of policies are likely to sustain them.
In the area of monetary and banking policies, SAMA followed monetary policy aimed at achieving stability in the financial sector and providing the necessary liquidity to meet domestic demand for credit, by taking a package of proactive measures to enhance the liquidity position and reduce the cost of lending in order to ensure that banks continue their financing role in the development process in the Kingdom. The most prominent measures were: reducing the Statutory Reserve requirements ratio, the Repo and the Reverse Repo Rates several times, enhancing the liquidity position in the banking system by placing long term deposits in local currency and US Dollar with local banks on behalf of government institutions and organizations, reducing the pricing of treasury bills, facilitating foreign exchange swaps in order to provide the necessary liquidity in US Dollar for the local banking system. As for fiscal policy, the government continued the expansion in public expenditure and increasing the pumping of funds to specialized lending institutions by an estimated amount of Rls 40 billion during 2009. Custodian of the Two Holy Mosques, In spite of the adverse impacts of the successive financial crises, they clearly resulted in combining international efforts to review the global financial system and commence taking reforming measures to perform its role effectively and positively in the global economic activity and international external trade.

It is hoped that this will lead, with Allah’s grace and guidance, to the preparation of the coming generations armed with science and knowledge that will complement the development process witnessed by our beloved country. Custodian of the Two Holy Mosques, The Council of Ministers approved on 28th, Sha’aban, 1431H (9th, August, 2010) the Ninth Development Plan of the Kingdom, which covers the period from 1431/1432H to 1435/1436H (2010–2014). You, may Allah bless you, instructed all organs of the State to be very keen on the implementation of their programs and projects and achieving their goals within their set time limit, giving a high priority to those which have direct impact on raising the standard of living of citizens and improving their life quality, especially in light of what have been allocated as an ambitious development expenditure which amounted to Rls 1,444 billion, 67 percent more than the allocations of the Eighth Development Plan. This plan is complementary to the achievements of previous development plans that led to a quantum leap in living standards of citizens and laid solid foundations for the Saudi economy to assume an important position in the global economy. The plan focuses on five main points, namely, continued efforts to improve the standard of living and life quality of citizens, the development and employment of the national manpower, structural development of the Saudi economy, balanced development of the Kingdom’s regions and enhancing the competitiveness of the national economy and Saudi products in domestic and overseas markets.
Under Basel  BIS Review 81/2005  1  II, standardized approach, it is possible that sovereign debt is assigned a risk weight between 0% to 150%, most likely 100% since it falls under unrated category. This means that banking system in Albania may have to increase capital allocation to comply with the minimum level of the capital adequacy ratio. An important intention of Basel II is to strengthen market discipline by developing a set of information disclosure requirements. In our countries there is plenty of room for improvement in this respect to allow market participants to assess key information on risk exposure, risk assessment process, and hence capital adequacy. This is important since it increases public pressure on banks to have a better performance in assessing and monitoring risk. However, in short run information disclosure might also have some adverse implication, say in Albania. Let me explain myself better on this issue. Public is usually more sensitive to bad news than positive developments. In countries like Albania, reactions between good or bad news are even more asymmetric than in mature market economies. Public in Albania is particularly over-reactive toward grim news on banking sector or on a certain bank while tend to ignore what falls in the positive side. This could be due to both historical factors, e.g. the crisis of financial system in 1997, and culture factors e.g. low level of bank business understanding, e.g. the overreaction of public to the introduction of the Deposit Insurance Law in 2002.

As a consequence, the Basel Committee has come up with a new proposal known as Basel II. This proposal is intended to be more risk sensitive than the 1988 Accord, in order to provide a better alignment and calibration of regulatory capital and capital adequacy with the underlying economic risks that banks face. Categorizing debtors into a fewer risk ‘buckets’ was certainly a progress in 1988, but it open the gap between the regulatory risk measurement of any given transaction and its actual economic risk. This favours high risk loans over the low risk ones, given the 100% risk weight charged, irrespective of the risk profile of firms receiving the loan. Consequently, it adversely affects the accuracy of assessing capital requirements and allocation. The most concerning side-effect has been the distortion of financial decision-making which is, loans and investments made on basis of regulatory constraints rather than genuine economic opportunities. The new Basle II accord tries to improve on these issues by encouraging banks to become more sophisticated in their risk assessment and aligning more rigorously regulatory requirements with internal risk measurement methodologies. It is important to recognize that the application of the New Accord is principally intended for large international banks, which are complex institutions usually operating in developed countries. Therefore, Basel II has often been questioned about its implications and appropriateness for banking in emerging market economies, and it is on this point that I would like to focus my remarks.
The second option is to use the foreign currency reserve. This is somewhat more complicated and takes more time. This is because the Riksbank’s foreign currency reserve is normally invested in interest-bearing securities, for example US government bonds. These must first be sold or borrowed against, and then the payment received must be deposited in a suitable bank account, preferably the Federal Reserve itself, before they can become available for lending to Swedish banks. During the crisis, the Riksbank used both methods. We borrowed from the Federal Reserve and used our foreign currency reserve. Looking back, we can say that the liquidity problems were solved quite well. The Riksbank was able to satisfy the Swedish banks’ demand for dollars when they were needed. However, at the same time, our experiences from dollar lending have brought into focus a number of issues to which we have reason to devote further consideration. What would happen if the Riksbank had been unable to borrow dollars from the Federal Reserve as easily as we could during the crisis? How large a foreign currency reserve do we need to have to ensure that the Swedish banks will not face a shortage of liquidity in a crisis situation? And who is to pay the costs of this preparedness? Having a large foreign currency reserve costs money. At present, these costs are carried by the Riksbank, meaning that, in the end, it is the taxpayers who pay. However, with a certain amount of justification, we can ask whether this is actually reasonable.

For all these reasons, as economic agents we all have a significant "to do" list ahead of us. I shall begin by referring to credit institutions, since it is up to them to continue managing properly the risks they assume, developing adequate risk measurement, control and management systems and, in short, determining what level of solvency is appropriate to their risk profile. In the present circumstances of the international financial markets, there are certain considerations that I believe to be particularly significant. First, Spanish banks must respond appropriately to the change in cycle under way in our economy. This entails not only properly managing defaults as they occur, but also tempering the slowdown in the rate of credit expansion. It would be counter-productive for the Spanish economy if an excessive reduction in credit growth were to limit its capacity to grow. Second, as I have pointed out already, Spanish banks’ income statements have escaped the effects of the US sub-prime mortgage crisis. However, unquestionably the environment in which Spanish banks will have to operate, and indeed in which they already do operate, has become very difficult. Insofar as higher financing costs may affect their operating margins, alternative mechanisms for keeping their income statements sound must be strengthened. An initial consideration in this respect is that a high percentage of the financing granted in Spain is variable rate, so banks have a greater, almost automatic, ability to pass cost increases through to borrowers.
Following these developments we are now entering a new phase in the development of Islamic financial system in Malaysia with the new initiatives to promote Malaysia as an International Islamic Financial Centre. This aims at strengthening our economic and financial inter-linkages and thus promoting greater trade and investment across borders. We are therefore entering a new phase of development for Islamic finance in Malaysia as it becomes more integrated with the international financial system. Given the surge in demand for Islamic financial products and services, several countries and financial centres are increasingly participating in the industry. The global front-runners will be those with combined strengths of having the capabilities and resources, as well as the ability to secure the confidence of the international Islamic financial community. It is against this backdrop of rising competitive environment that the potential of cumulative bilateral and multilateral strengths will become important in managing the complexities and constraints found in the Islamic financial services industry. This increasing interest by several financial centres together with their international linkages will contribute towards creating a more integrated international Islamic financial system. Such centres, such as Hong Kong, have the potential infrastructure and the ability to facilitate product offerings that will bridge the regional and international financial linkages. Strategic alliances among Islamic finance players would be a catalyst unleashing the regional and global potential of Islamic finance. BIS Review 6/2008  3  In South East Asia alone there is an immense potential market to be tapped.

François Villeroy de Galhau: The euro area - staying the course through uncertainties Introductory remarks by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Bank of France Symposium & 34th SUERF Colloquium on the occasion of the 20th anniversary of the euro, Paris, 28 March 2019. * * * Good afternoon everyone and welcome to Paris. This is not only the 34th SUERF Colloquium but also the 10th Banque de France International Symposium. It is also Marc-Olivier’s last symposium and I would like to warmly thank him and the teams at SUERF and the Banque de France for their hard work. I also wish to express my gratitude to the speakers and moderators as key players in “staying the course through uncertainties”. In my opening remarks I will modestly describe different types of uncertainty before discussing their possible implications for policy. ** 1 – There are actually four different types of uncertainty We often talk about uncertainty as if it is a single phenomenon. There are, however, multiple sources and forms of uncertainty that have different implications for how policy makers can and should respond. To introduce your discussions over the next two days, I will mention four of them. First, “Current state” uncertainty One form of uncertainty that we grapple with all the time is not being completely sure where we are economically.
Above data suggests that in the long run low ability to generate innovation combined with low value added FDI may harm the CEE ability to improve productivity. Summing up, with the inflation headwind expected in the coming few years CEE central banks will face a possibly steep sacrifice ratio when controlling inflation. Keeping inflation at the target consistent with EMU accession may require sizeable reduction of the output gap, which in turn may make fiscal targets difficult to achieve. Tail wind of globalization appears to be fading in the coming few years and if agflation or surge in other commodity prices materializes, joining EMU may become “mission impossible” for many CEE countries in the next few years. The window of opportunity created by global inflation “tail wind” might have closed in 2007. References Freeman R. (2005) “The Great Doubling: America in the New Global Economy”, Usery Lecture, April 8, 2005. Georgia State University; What Really Ails Europe (and America): The Doubling of the Global Workforce, The Globalist, June 3, 2005 IMF (2000) “Globalization: Threat or Opportunity?” IMF Staff, April 12, 2000 (Corrected January 2002) McKinsey Global Institute (2005) “The Emerging Global Labour Market”, June 2005. Rogoff K.S. (2006) “Impact of Globalization on Monetary Policy”, Federal Reserve Bank of Kansas City Rybinski K. (2007) “Three faces of globalisation. Offshoring – global imbalances – monetary policy”, Difin, Warsaw 2007 (in Polish) Spiegel online (2007), “Rethinking Renewables: Biofuels Emit More Greenhouse Gases than Fossil Fuels”, http://www.spiegel.de/international/europe/0,1518,508089,00.html  4  BIS Review 137/2007

BIS central bankers’ speeches  1  What are we doing? There is still a great deal of work being done to finish the Basel III framework. The capital standards are now largely settled, with the exception of some technical work on issues like exposures to central counterparties (CCPs). As I noted earlier, the LCR has also been finalised – albeit again with some final technical details to be resolved. But there are other parts of the Basel framework which we are currently working to flesh out and make operational. Major projects currently under way include: •  finalising the specification of the leverage ratio, and associated disclosure requirements;  •  reviewing the Net Stable Funding Ratio (NSFR), which addresses the longer-term structure of bank debt and complements the short-term focus of the LCR;  •  completing the review of the trading book capital requirements. This entails an evaluation of the design of the market risk regulatory regime as well as weaknesses in risk measurement under the framework’s internal models-based and standardised approaches;  •  enhancing the treatment of securitisations to make capital requirements more prudent and risk-sensitive. We are also reviewing ways to reduce mechanistic reliance on external credit ratings and to reduce current cliff effects in capital requirements;  •  strengthening standards to limit excessive and opaque risk-taking through over-thecounter (OTC) derivatives and to reduce systemic risk posed by OTC derivatives transactions, markets and practices.