samchain/econo-pairs-v1 huggingface dataset:
Hence, if a given European country fails to reach an adequate ability to drive innovation despite having sound public finances, liberal labour market and low taxes, it cannot stand the competition on the part of countries with low manufacturing costs. This may lead to lost markets, falling output and growing unemployment, and in consequence public finance deterioration. It was as early as in late 1980s that a well-known economist, Paul Romer 8 , wrote that a country’s success would be determined by knowledge and ability to drive innovation. When set against labour and capital, knowledge and innovation are infinite, with a number of people able to simultaneously use the same knowledge or innovation. Labour and capital are in turn ascribed to a specific place. By saying that I do not only mean such great innovations as the light bulb, mobile phone or Wal Mart’s business model, which have improved the living standard of millions or billions of people. What I have in mind are also thousands or even millions of small innovations, for instance those aimed to improve the efficiency of a given business process. Today, we can add yet another factor to Romer’s model, namely the relationship capital. Now, it is common knowledge that innovation is fostered by cooperation between experts in various countries, cooperation between manufacturers and customers, local market expertise, cooperation between higher education establishments and businesses. In the long term, successful countries and businesses will be those that knowingly invest in the relationship capital.

Secondly, ICT development leads to innovation growth in public services worldwide, which means that changes in public administration’s activities increasingly rarer show features of reproduction, and the public administration becomes ever more often a leader in the field of innovative services. In consequence, methods of a country’s actions and fulfilment of its functions are irrevocably directed at using such technologies, and adopt the form of e-strategy, e-policy, eregulations and e-services. With just a few exceptions, public administration in Poland has not contributed to increasing innovativeness and effectiveness of the private sector, but has been rather ball and chain. Communication between citizens, entrepreneurs and an authority takes place mainly on paper, and it is necessary to come in person, bring a form, sign a document, while in other countries, e-government bodies are available via a mobile phone. For example, would it not be easier and more cost-efficient for an entrepreneur, if such sufficed, to participate in a tender by submitting only a factual offer, and other documents would be automatically collected through communication between various public and private registers (such as the National Court Register, Social Insurance Institution, Central Statistical Office, the revenue or credit database etc.). There are countless examples where public administration’s activities might sizably increase the economy’s efficiency.
We also noted that the United States needed to reduce the large deficits in its federal budget, which would entail fiscal policy tightening over the coming years. GDP growth in the euro area was expected to be around 2 per cent a year during the forecast period. But there were substantial differences between countries. Germany, which is the largest economy in the euro area, showed relatively rapid growth, driven by exports and the upswing in world trade. At the same time, developments in southern Europe were  BIS central bankers’ speeches  1  hampered by the sovereign debt problems. We also noted that inflation was still high in the euro area and above the ECB’s inflation target, partly because energy and food prices had risen (see Figure 4). Strong but declining growth and rising inflation in Sweden GDP growth in Sweden was expected to be high this year, around 4.5 per cent, but then to slow down to more normal rates of increase of around 2.5 per cent a year in the coming years (see Figure 5). All components of demand contributed to the positive development. Household consumption was expected to increase by between 2 and 2.5 per cent a year over the coming years. Exports benefitted from the upswing in world trade, but we assessed that export growth would slow down in the coming period and approach more normal levels. A strong economic situation, combined with historically-low investment levels, meant that investments in Sweden were expected to increase substantially over the coming years.

Mr Nyberg comments on how EMU may affect the Swedish housing loan market and its financing  Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at Föreningssparbanken in Warsaw on 14 October 1999. *  *  *  Thank you for giving me the opportunity to come here and give some points of view on how EMU may affect the Swedish housing loan market and its financing. This is undeniably an issue which we have every reason to take an interest in whether we take part in the monetary union or not. One of the ideas with EMU is to create a more efficient market for goods and services where competition is increasing and consumers obtain better products at lower prices. In the housing loan market, this should mean that borrowers expect a greater range of products, more suppliers and lower interest rates. How should the Swedish housing loan institutions handle this challenge? Competition for customers As we know, the national housing loan markets in Europe look rather different, which is illustrated by the following diagram (figure 1). In countries such as Germany, Denmark, Sweden, the Netherlands and the United Kingdom, the total outstanding stock of loans with mortgages in property totalled over 50% of GDP. In other countries, including Greece and Italy, the equivalent figure is under 10%. The differences depend on factors such as the systems of rules, tax legislation and market structure which vary from country to country.
Henceforth, the real return on the Government Petroleum Fund shall be used over the central government budget. Central government petroleum revenues shall continue to be transferred to the Government Petroleum Fund and invested abroad. Monetary policy in Norway is oriented towards low and stable inflation. Since March 2001 the inflation target is set at 2½ per cent. When monetary policy is oriented towards stabilising inflation, it also contributes to stabilising aggregate demand and output. The inflation target is the nominal anchor for the Norwegian economy. Low inflation is the objective and the interest rate is the instrument. If it appears that inflation with unchanged interest rates will be higher than 2½ per cent, the interest rate will be increased. If it appears that inflation with unchanged interest rates will be lower than 2½ per cent, the interest rate will be lowered. Low and stable inflation will be a fixed feature of economic developments. This is something that the social partners, businesses, borrowers and investors in property and securities can take as a given. From 1986, changes in the exchange rate or the prospect of changes in the exchange rate had implications for interest rates. A stable krone exchange rate was the nominal anchor. In Norway, this has been reflected in wage determination because labour cost developments among trading partner countries have been an important reference. Exchange rates between major international currencies fluctuate widely. The US dollar has appreciated by more than 30 per cent since 1995.

In Norway, credit and capital markets nevertheless feature some weaknesses, with thin securities markets and a narrow investor and ownership base compared with other countries. The reasons, and hence the solutions, can probably be found in the structure of the taxation of dwellings, property and financial assets, in a high level of state ownership of enterprises and in the organisation of pension saving in Norway. Investing even more government capital in Norway would reduce the return on investments in the Norwegian business sector and prompt other investors to invest elsewhere. Allocating even more capital to the Norwegian economy would probably lead to a rapid relocation of jobs to other countries, as the krone would tend to appreciate. Effects on industry structure The planned use of petroleum revenues will increase demand for public and private services. The guidelines imply an increase in the use of petroleum revenues over the central government budget of around 3½ per cent of mainland GDP by 2010. This may add 2½ -3 per cent of total employment in the service sector. As long as there are labour shortages in Norway, a comparable decline in manufacturing employment is likely to occur. Although the phasing in of petroleum revenues is a gradual process, the contest for labour resources will intensify. As a result, monetary policy is likely to remain fairly tight in the years ahead. A high interest rate level may in periods result in a strong krone. This may accelerate the scaling back of manufacturing industry.
At the other extreme, where financial markets are very large relative to international capital, sudden movements of the latter will only lead to ripples, which are not big enough to cause any financial-stability concerns. The most vulnerable financial markets, other things being equal, are the medium-sized ones, which have adequate liquidity to attract international capital but which are, unfortunately, small enough for shortterm trends to be dictated by large operators looking for short-term gains. There is also the temptation, for some, to engage in manipulative behaviour, amplifying volatility and vulnerability to financial instability. 13. I do not want to give the impression that the size of a financial market can substitute for sound macroeconomic policies as a guard against volatile capital flows. Indeed, I take it for granted that the authorities in the region are committed to prudent monetary, exchange-rate, and fiscal policies. But I am convinced that expanding the effective size of Asian financial markets through greater integration across jurisdictions, can increase the ability of our economies to absorb the volatility of international capital, as effectively as the US and European markets. It is therefore heartening to observe that several official initiatives towards greater financial linkages in the region are bearing fruit, notably the Chiang Mai and the Asian Bond Fund initiatives. I note that my colleague Julia Leung will describe the latter in some detail in the afternoon session. 14.

I believe that economic integration, brought about by market forces, having regard to comparative advantages in production, can best be served by financial integration of a similar degree. BIS Review 14/2006  1  8. I should emphasize, however, that this is as yet merely a belief on my part. I have so far found it difficult to provide empirical evidence to support my hypothesis that the optimal degree of financial integration is the same as, or close to, the degree of economic integration within a region. To start with, there are theoretical difficulties in identifying measures of optimality. In addition, there is no established measure of the actual degree of financial integration, let alone the actual degree of economic integration. 9. Lack of empirical evidence notwithstanding, one intuitively thinks that the synergy driving economic integration can best be harnessed financially by the stakeholders themselves, who know better what they are doing and take a longer term view, rather than by those, motivated largely by relatively shortterm financial rates of return, and acting in accordance with credit assessments, conducted many miles away from where the action is. 10. Regrettably, for a variety of reasons, financial integration in Asia lags considerably behind economic integration. Currently, a sizable portion of gross savings in Asia finds its way into debt instruments of governmental and quasi-governmental issuers in industrialized economies, while investment in Asia is financed, to a significant degree, by capital from those same countries.
After all, each bank fails in its own way, so each case is different, and each decision needs to account for these differences. We need to take all facts into account and assess them case by case, and not against a single yardstick. In short, we must be proportionate. Imagine a bank breaches capital requirements. Then we have to ask how severe that breach is and whether it might just be temporary. If it’s just a marginal breach which could be healed within a reasonable period of time, it might not be proportionate to declare the bank “failing or likely to fail”. We also need to take into account that a bank depends on the markets. So how do they react? A bank in trouble might quickly lose the trust of the markets. This could lead to a bank run, which requires supervisors to act differently. 4/9  BIS central bankers' speeches  So, to sum up: “failing or likely to fail” decisions are not taken automatically but are based on expert judgement. At the same time, they have to be taken case by case and in a proportionate manner. All in all, they are the most difficult decisions a supervisor has to take. And I can assure you that we do not take them lightly. How to resolve a bank Imagine that we have declared a bank failing or likely to fail. What happens next? Well, at that point the resolution authority takes over.

6/9  BIS central bankers' speeches  First, it is only available to solvent banks. Second, it can only be used to cover capital shortfalls which were identified in the adverse scenario of a stress test. And third, it can only be of a precautionary and temporary nature. In other words, it must not be used to cover losses which the bank has already incurred or is likely to incur. I will highlight just one issue here which relates to the role of the ECB. With regard to the first condition, it is up to the ECB to confirm whether the bank in question is solvent. It has some discretion here, as the European legal framework does not offer a specific definition of solvency. So it is crucial that we have a consistent definition of solvency – a definition that not just covers a point in time but takes a forward-looking perspective. Even if a bank is solvent today, it might not be so in the near future. In the end, it is the European Commission that grants or denies permission for precautionary recapitalisation, as state aid rules apply. Among other things, this entails burden-sharing. Shareholders, as well as holders of hybrid and subordinated debt, must contribute to reducing the capital shortfall. This ensures that the burden of failure is still borne by those who took the risk and reaped the return.
For instance, Komgo – started by a consortium of banks – seeks to improve the operational processing of international trade and make it easier for buyers and sellers to trade. There are also initiatives aimed to streamline settlement across products and currencies. Fnality – another industry consortium – are seeking to build a network of 24/7 high-value payment systems in multiple currencies. There is also exploratory work led by the central banks. Some of you here today have collaborated with market participants to build prototypes of new platforms for wholesale settlement – so-called ‘wholesale CBDCs’. Many of these prototypes used Distributed Ledger Technology to enable interoperability between platforms and offer enhanced functionality. These experiments bring together a diverse range of stakeholders to build end-to-end solutions for use cases such as bond issuance or settling equity trades, extending beyond the pure payments market. I do wonder though whether the term “wholesale CBDC” is a misnomer. Electronic central bank money has been available to financial institutions for decades via RTGS systems. In the provision of central bank infrastructure the key is not the label, but who can access it and what functionality is provided. Here at the Bank of England we are in the process of renewing our RTGS infrastructure to offer a more accessible, functional and resilient platform for digital settlement in central bank money.

The report will provide a helpful basis for each individual jurisdiction to analyse whether and how to extend domestic operating hours. It will indeed feed into the Bank’s own analysis of extended operating hours. I would encourage central banks to undertake self-assessments against both frameworks. If more firms can use payment systems and for longer, it could simplify payment processing, expand the global settlement window and increase opportunities for new entrants to stimulate innovation for the benefit of consumers and businesses around the world. The Road Ahead There are three key ingredients that if mixed together could help the global payments ecosystem move the dial on payments. First, an innovative and forward-looking fintech and financial sector. Second, resilient, accessible and functional public infrastructure creating a platform for coordinated innovation. Finally, international collaboration across the public and the private sectors to promote harmonisation and interoperability. The combination of the three can speed up our journey to a world where any customer wherever they are and whatever the size of 5/6  BIS central bankers' speeches  payment can transact quickly, cheaply and securely. I would like to thank Andrei Pustelnikov for his help in preparing these remarks. I would like to thank John Jackson, Andrew Bailey, Dave Ramsden, Megan Solomon, Paige Benattar, Jurin Ohyama, Sam Leighton, Anna Koch, Michaela Costello, Paul Bedford and Dovile Naktinyte for their helpful contributions and comments.
In-principle support has been received from the Asian Infrastructure Investment Bank, the Asian Development Bank, and the International Finance Corporation under the World Bank Group. And others have also indicated an interest. IFFO will be launched in July and we look forward to sharing with you more information about its work. Corporate Treasury Management 10. I would now like to turn to issues of more immediate concern to you in your treasury management roles, and to share a few factors which I believe are shaping your business:  11. First, the continuing liberalisation of the Mainland’s capital account. As I mentioned earlier, the Mainland authorities have continued to implement measures to liberalise cross-border fund flows. I am sure many of you are familiar with the progress, but let me just quickly name a few key measures introduced in recent years:  2  BIS central bankers’ speeches  •  The Shanghai-Hong Kong Stock Connect has been in place and operating smoothly since November 2014, allowing international investors access to the A-shares listed in Shanghai through the stock exchange in Hong Kong, and vice versa. •  The Mainland-Hong Kong Mutual Recognition of Funds scheme was implemented in July 2015, allowing Mainland and Hong Kong funds to be distributed in each other’s markets through a streamlined approval process. •  The QFII arrangement was refined in February this year by relaxing individual quotas and shortening the investment lock-up period, among other improvements.

The first challenge is what we might think of as data innovation, and the second is data stewardship. With data innovation, the big challenge is to use our imagination and to think hard about what data may be able to say about a particular problem. This includes both novel uses of existing  BIS central bankers’ speeches  1  data as well as the collection of new data. To illustrate what I mean by this, let me describe one effort, among many, here at the New York Fed. Consumer Credit Panel I’ll describe our Consumer Credit Panel, which we created in 2010. At the onset of the financial crisis, it became apparent that our knowledge of the liability side of household balance sheets was inadequate. At that time, the main data sources on consumer debt consisted of loan-level data sets on specific categories of loans, such as mortgages, as well as aggregated data on household sector debt from the Board of Governors’ Flow of Funds statistical release. While providing a useful aggregate overview of household debt, the Flow of Funds release defines the household sector as a residual sector that also includes nonprofit organizations, such as schools, hospitals and churches, as well as hedge funds and private equity funds. Furthermore, the overview it provides is limited to outstanding balances and lacks important information on the origination, repayment, and delinquency status of household debt.
I thank Euromoney once again for organizing this conference. I wish you productive and engaging sessions today. Thank you. 5

I believe that, whilst liberalisation is important, the RMB becoming an international currency to a large extent is not a matter of policy alone – it is also subject to market forces. In other words, it would come from non-resident corporations and financial institutions deciding that the RMB served them well as a unit of account, means of payment and store of value for their international transactions. I’m not sure any of us are in a position to predict if and when this will happen. However, I feel that we can say with some confidence that the landscape of the offshore RMB market will change in two respects. First, we are likely to see the increasing maturity of the offshore RMB market, both in terms of the depth and breadth of the market and the efficiency of price-setting and allocation of RMB funds. In more granular terms, this means we will see an expansion and greater diversity of RMB financial activities:   Up till now, the intermediation of RMB funds has been primarily about placement of bank deposits by personal and corporate customers. In future, it will move more towards issuance and investment of bonds and a wider range of other financial instrument and products.   At the same time, I would expect that in future there will be more active borrowing and lending of RMB funds among banks. If so, this would lead to the emergence of a RMB interbank funding market.