samchain/econo-pairs-v1 huggingface dataset:
But in such instances, when payment interruptions truly are unavoidable, experience has shown that minimalist approaches, where only certain payments are suspended or delayed, and only where absolutely necessary, generally offer the best prospects for minimizing spillover effects and for rapidly restoring market access. •  We should not forget we are living in a world of private flows. Nor should we forget that a crisis is not over when capital outflows have been halted and prices stop falling. Emerging market economies depend on regular access to international capital market and bank credit, and economic recovery and restoration of growth depend on confidence being reestablished, so that the necessary financing, beyond emergency lending, can be obtained. •  The scope for a minimalist approach hinges crucially on the adoption of strengthened policies--fiscal, monetary, and financial--to address the fundamental concerns that are leading investors to pull back in the first place. In this regard, the IMF has a crucial role to play as a guardian of sound policy and crisis mitigator. IMF support should provide an unambiguous signal of the international community’s confidence in the capacity of crisisaffected countries to take the measures necessary to restore economic health. Concluding remarks Underlying the suggestions that I have made is a firm belief that the success of our approaches to crisis management needs to be viewed and assessed with a wide focus.

The notion that the welfare of a country boils down to the short-run profits of a few foreign exchange dealers is of course narrow minded. The reality offers a completely different picture. Switzerland has always suffered from external monetary turbulences and always wished for a stable monetary order. For example, the various crises of the European Monetary System in the 1990s, with a dramatic drop of the Italian lira, have led to the complete removal of the traditional textile industry from our economic geography. Such structural adjustment could arguably have occurred anyway, but the decisive factor at the time was of monetary origin. The purpose of the creation of the common currency was not only to concentrate the monetary power in the hands of the European Central Bank, but also to promote the conditions for transparency and competitiveness that would in turn foster trade, investment and growth in the single European market. Price comparisons are indeed easier today, and trade and liquidity management are much simplified, although it is still too early to numerically assess the impact of these effects on growth. Simplifying trade and investments benefits all members of the European monetary zone, and it also helps anyone interested in being active in the European market. Switzerland, with its high degree of  BIS Review 70/2004  1  integration in the euro zone, reaps large benefits from this stable situation. Thus, it is clear that on those aspects, the introduction of the euro was very good news for the Swiss economy. 2.
Investment grew by an estimated 12.8%, somewhat less than in 2003. GDP growth in the euro area is estimated at 1.9% in 2004 and growth prospects are lean for the years to come. This shows yet again the difference in the economic challenges faced by Iceland and the rest of Europe, since policies there aim at stimulating the economy, whereas Iceland’s problem is to try to prevent overheating. The widening current account deficit is also a cause for concern. Last year it is estimated at 70 b.kr., the equivalent of 8% of GDP. Exports increased by 12% in 2004 after being virtually stagnant in 2003. The strong value of the króna, robust private consumption and stepped-up investments in  BIS Review 22/2005  1  aluminium-related projects are reflected in substantial import growth during the year. Merchandise imports were up by 23% in real terms, the sharpest increase since 1998. Roughly one-third of the current account deficit may be attributed to investments in the aluminium and power sectors. The current account deficit is forecast to widen even further in 2005, but will also peak this year instead of in 2006, as had been forecast earlier. Unemployment declined slowly last year despite brisk economic activity. It was not until the closing months of the year that labour market statistics indicated mounting pressures. Seasonally adjusted unemployment measured 2.4% in February and vacancies have soared. To some extent, growing labour demand was met with imported labour; issues of new work permits almost doubled in 2004.

Consequently, Switzerland – unlike other countries – was able to avoid introducing state-guaranteed bonds. With the drastic reduction in key rates and the subsequent decline in mortgage rates, the burden on households and companies was eased. In this way, the severity of the recession was somewhat alleviated and the risks of deflation reduced. However, the interest rate is now at a historic low and this means medium-term risks for the Swiss real estate market and financial stability. Experience shows that periods of low interest rates provide scope for excesses on the mortgage and real estate market. Consequently, in the current environment in particular, attention should be given to ensuring that past mistakes are not repeated. Caution must remain the watchword when granting loans. BIS Review 140/2009  1
Heng Swee Keat: The impact of the global financial crisis on Asia Keynote speech by Mr Heng Swee Keat, Managing Director of the Monetary Authority of Singapore, at the International Institute of Finance (IIF) Asia Regional Economic Forum, Singapore, 4 March 2009. *  *  *  Introduction Ladies and Gentlemen, Good afternoon. I welcome the International Institute for Finance (IIF) for holding its Asia Regional Economic Forum in Singapore. It is good to see such a diverse group gathered here for this Forum. An unprecedented crisis The most commonly used adjective to describe the current financial crisis is "unprecedented". Indeed, many aspects have been exceptional – •  the speed at which events unfolded and triggered a series of domino effects;  •  the scale of the impact, which has become global; the range of financial institutions and investors affected;  •  the near-perfect correlations of markets and asset classes that had been uncorrelated when conditions were benign;  •  and the range of unconventional measures taken by financial authorities globally to try and arrest the unfolding crisis. These features of the crisis are exceptional. But perhaps the most crucial aspect that has had a profound effect on the dynamics of this crisis and its impact on emerging economies, is that unlike various past crises, this current crisis originated in the US.

This is unlike various financial crises in the past 25 years or so – which tended to have certain recurring themes, and which tended to begin in emerging economies before their knock-on impact was felt internationally. The analytical tools and policy prescriptions for dealing with such crises became more tried and tested over time, even if applied in too dogmatic a fashion at times. Global institutions, whether it was the IMF, developed nations, or a consortium of strong international banks, had the wherewithal to bring sufficient resources to bear on the problem. Crisis resolution was never easy but did not quite look insurmountable. Not so this time. The epicenter of this crisis is the US – it is the world’s largest economy, holder of the international reserve currency, and home to the largest and most sophisticated financial system. So we are talking about the core of the global financial and economic system where severe problems arose and have since spread across borders. In the US, the “shadow” banking system grew rapidly but was quite opaque in the way it operated. Before long, problems built up and spread to engulf the “traditional” banking sector. Within a short time, commercial banking operations were severely impaired. Right now, we are dealing with the bursting of multiple, overlapping bubbles – the housing bubble, the household credit bubble and the consumption bubble. Cutting across all three bubbles was leverage – households overstretched themselves; the financial institutions which were extending this credit to households were themselves taking on excessive leverage.
To continue to strengthen corporate governance, MAS, together with Accounting and Corporate Regulatory Authority (ACRA) and SGX, have established an industry-led Audit Committee Guidance Committee (ACGC). The ACGC will develop guidance to assist audit  BIS Review 94/2008  3  committees better understand and carry out their role and responsibilities. MAS, ACRA and SGX are also working with the Singapore Institute of Directors to review the professional development of directors in Singapore. 22. In the area of insurance, we have set out mandatory requirements to strengthen life insurers’ internal governance practices on the management of their participating funds and enhance disclosure standards to participating stakeholders. To enable policyholders to access a wider and more cost effective range of Investment-Linked Insurance Products (ILPs), MAS revised ILP rules. Singapore’s financial sector 23. Let me now turn to the performance of our financial sector. Notwithstanding the onset of the global financial turmoil towards the end of the year, the domestic financial services sector recorded strong growth in 2007. Growth was broad-based, across all segments of the industry. Domestic non-bank credit registered strong gains while the Asian Dollar Market also strengthened. 24. Singapore’s financial centre continues to grow in diversity. We remain the largest REITs centre in Asia-ex-Japan, and a pipeline of business trusts in sectors such as shipping, aviation and infrastructure is being developed. A broad suite of instruments from FX, fixed income, derivatives to commodities are now traded here, contributing to the growth of Singapore as a trading hub.

It is well known that the cause of Turkey’s inflation is fiscal in nature. The last year in which Turkey had a budget surplus was 1970. The budget deficit increased steadily throughout the last decade, finally reaching double-digits in 1999. The fiscal imbalances have also caused difficulties in financing the deficit. Over the last couple of years the amount of external financing available for the budget deficit has declined, causing increased pressure on the domestic financial sector and an increase in the domestic debt. The ratio of cash domestic debt to GNP grew rapidly during the 1990s, finally reaching 24% of GNP in 1999. The increases in the deficit and in the level of domestic debt during recent years are mirrored in the levels of domestic interest rates. The increasing pressure on domestic borrowing has kept real interest rates at high levels, hovering around the mid-20s during the 1990s and rising to over 50% at frequent intervals. I think this brief recital of facts should be more than sufficient to explain why it is high time to face the predicament of the Turkish economy. A radical program is urgently needed to address Turkey’s deep-rooted problems, and it is my wish today to convince you that the program we have delivered to deal with them is well prepared and comprehensive. Let me summarise our goals and the overall strategy by which this program aims to achieve them.
A situation whereby we shift from fiscal policy guidelines that aim at neutrality to a long-term, gradual phasing in of petroleum revenues, while maintaining nominal stability, will entail some adjustment mechanisms that will be controversial. This applies not least to the effects on Norway’s industry structure. Increased spending over government budgets and/or reductions in direct and indirect taxes will result in an increase in total domestic demand. A substantial portion of this increase in demand will be focused on private and public services. The sheltered sector will have to lay claim to a higher share of available labour. In an economy with full capacity utilisation, this can in practice only take place if resources are transferred from the exposed to the sheltered sector. Independent of the phasing in of petroleum revenues, employment in the sheltered sector is expected to rise in the period ahead. It is not difficult to imagine that the phasing in of petroleum revenues will amplify this trend. The expected reduction in manufacturing employment will be amplified with an increased use of petroleum revenues. Adjustments may come about through deteriorating competitiveness and profitability in internationally exposed industries. Monetary policy cannot influence these adjustments in the long term. In the short and medium term, however, a monetary policy reaction may still have temporary effects on developments in the real economy. The phasing in of petroleum revenues may swiftly translate into pressures on economic resources, which in turn may generate pressures that lead to higher domestic wage and price inflation.

They have again been at the centre of public debate in recent months, partly as a result of the performance of the euro area economies over the past few quarters, and partly as a result of uncertainties and concerns deriving from the ratification process for the Constitutional Treaty. In this context, doubts have even been raised about the sustainability of the single currency. There are four key questions that should be addressed regarding this matter: •  Are growth and inflation divergences a real problem in a monetary union? •  And, if so, how serious is the problem for the euro area? •  Are these divergences likely to get worse or likely to be self-correcting? •  What can be done to reduce these divergences and at the same time foster higher growth for the euro area as a whole? It is worth recalling that growth and inflation divergences between member countries are a natural, inevitable phenomenon in any large monetary union, as evidenced by the experience of a long-established one, the United States. And, in general, they may reflect both structural and conjunctural factors that affect differently the monetary union’s countries or regions. Differences in economic structures and/or in market adjustment mechanisms across member countries imply that common or global shocks and common policies will have different effects on their economies. Moreover, growth and inflation differentials may also reflect the impact of asymmetric shocks, fiscal policies and diverging productivity and wage developments.
At the same time, politicians and the authorities have the task of creating the business conditions which will support the banks in fulfilling these prerequisites. With the business conditions in mind, I will comment today on four factors which I regard as essential: First, relevant and effective regulations; second, maintenance of Switzerland’s economic and political stability; third, protection of the privacy of honest tax-paying bank customers; fourth, ensuring access to foreign markets. I would like to begin, however, by talking about the economic importance of the banking industry for Switzerland, as well as the fundamental challenges faced by this industry at present. Economic importance of the banking centre in Switzerland The banking system is often described as the life blood of the economy. With good reason. General economic prosperity and the development of the banking industry are closely related. When intermediation between capital supply and demand works well, a significant contribution is made to the prosperity of a country.1 It works the other way round, too. The banking centre benefits from a prospering economy, because the demand for financial services from companies and private households increases, not least in the area of management and investment of assets. Switzerland is a prime example of the positive interdependency between financial developments, on the one hand, and overall economic prosperity, on the other.

Politicians and authorities should therefore concentrate on creating an appropriate combination of business conditions. These should be designed in a way that provides the best possible support to the banking industry, so that it can fulfil the prerequisites for a successful future which I mentioned before. Key factors: regulation, stability, privacy, market access What does an appropriate combination of business conditions for the banking industry look like? I would like to highlight four factors. First, relevant and effective bank regulations must be implemented and enforced. Allow me to elaborate on this point. Regulations are relevant if they are targeted at a specific market failure which constitutes the reason for the intervention. At the same time, the regulations must be compatible with international standards. If necessary, a “Swiss finish” must be added. The “Swiss finish” is not because we want to be a model pupil. It is needed in cases where the global minimum requirements do not guarantee the desired level of stability for Switzerland, because of our particular circumstances. Effective regulations mean that the goal which the measures aim to achieve can actually be achieved, and that compliance with the rules can be efficiently enforced and monitored. Finally, it is obvious that regulations are always associated with costs for the entities being regulated. These private costs are justified from an overall economic point of view as long as the regulations are in line with the principles I have already mentioned and thereby help to make the banking industry much more stable.
Conclusion Allow me to conclude. The pandemic has led to an unprecedented economic crisis, followed by a recovery that is still partial and uneven and subject to a great deal of uncertainty, especially against the backdrop of the second wave of the pandemic that we are currently living through. In this case, there has been a forceful European economic policy response. A common response that encompasses not only monetary and macro and microprudential policy, but  10  See speech by the Governor of the Banco de España “Banking resolution: firm foundations for stability”, October 2020. 10  also new fiscal instruments, such as the recovery fund. A response that must be adapted to the course of the pandemic and its effects. In the case of monetary policy, we have already stressed our willingness to recalibrate in December the tools to deal with the new economic challenges, ensure favourable financial conditions and counter the impact of the pandemic on the inflation outlook. Europe’s reaction has meant unprecedented support for domestic economic policies and, in particular, fiscal policy, enabling them to act forcefully. The latter is particularly important since fiscal policy has the most appropriate instruments for tackling the effects of a crisis which has had a very uneven impact across countries, sectors, firms and population groups, and for adapting to a shock whose duration is uncertain.

Further, it is necessary to equip the European regulatory framework10 to deal with a hypothetical systemic crisis, to address the problem of the liquidity of institutions under resolution, and to analyse the possible role of asset management companies in the event of severe impairment of European financial institutions’ balance sheets. EU Member States should also move swiftly to reach an agreement on creating a common European procedure for the administrative winding-up of credit institutions. Lastly, we should not overlook the importance of making headway on the agenda of measures for the capital markets union project. In October, the European Commission launched a new action plan, identifying 16 areas for action to drive the project forward. I would like to highlight some of the most significant ones: supervisory convergence; sustainable finance to consolidate European leadership worldwide; changing the regulatory treatment of securitisations to strengthen banks’ lending capacity; or promoting market financing to SMEs and the development of venture capital markets. In general, progress on these and other key matters, such as the creation of a European safe asset, is a complex task that requires the adoption of measures and regulatory changes in a wide variety of areas, and entails the full implication not only of EU authorities, but also of the Member States. It is crucial that the authorities concerned have the firm political will to implement the required measures and do away with barriers and red lines. In short, to avoid a piecemeal approach and the loss of momentum, the utmost political ambition must be mobilised.
1973, P. 208  BIS Review 2/2001  1  against the yen. It took place in an environment where neither current nor expected inflation differentials have changed to any noticeable extent. Second, the volatility of floating exchange rates by far exceeds the volatility of the fundamentals. It is impossible to explain short- and medium-term exchange rate fluctuations with the aid of traditional fundamental factors such as inflation and productivity differentials. Against the background of such experiences, it is hardly surprising that two considerations characterise the ongoing discussion on currency regimes. First: Floating versus pegging is not a question of right or wrong. What seems appropriate for one country may be a bad choice for another economy. Structural differences in trade flows, productive capacities, features of the financial sector and the credibility of the political process may result in different choices. Second: Even among ardent protagonists of floating the dogmatic position that central banks should take an attitude of benign neglect towards exchange rate movements is out of favour. The exchange rate is generally regarded as a core determinant of monetary conditions to be carefully taken into account when money market interest rates are set. This aspect of policy making is of particular importance in small and medium-sized, open economies. Short- and medium-term adjustments – Muddling through in ignorance Taking the Forex environment into account, however, does not mean actively steering exchange rates by fine-tuning. Such an endeavour would not only jeopardise stability goals.

It would be bound to fail due to our poor understanding of the process of short-term exchange rate determination. Given this state of ignorance, ongoing Forex dicussions inevitably suffer from a lack of analytical and systematic rigour. Reasons given for exchange rate movements remind us of a self-service shop offering all kinds of goodies that always fit the need of the moment: ice cream when the sun burns and hot coffee when it gets cold. The shopping list includes: -  trade imbalances  -  cyclical leads and lags  -  asset price bubbles  -  events and announcements in politics  -  a broad range of differentials, preferably in interest rates, productivity and inflation  and all this both effective and expected. One chooses the story that best fits a specific situation in the hope that something is better than nothing. This opportunistic selection, reinforced by communicative herding, gives the Forex discussion the character of a sequence of scenes with different key subjects that influence expectations to a varying extent, thus also possibly causing exchange rate distortions. Exchange rate developments between the USD and the euro in the past two years once again are a good example in this respect. I am not cynical, but humble. Day-to-day or month-to-month exchange rate movements seem to be a marvellously complex process, a highly unstable interaction of facts and expectations. The globalisation of capital markets has, if anything, added to this complexity by amplifying the impact of expectations.