samchain/econo-pairs-v1 huggingface dataset:
Low oil prices amplified the fall in investment in the petroleum sector. At the beginning of 1999, the outlook for the Norwegian economy seemed fairly bleak. In this situation, the possibility that Norway would enter a recession of a type that would further reduce confidence in the krone was considered a definite risk. This is why Norges Bank decided at the beginning of 1999 to reduce interest rates. Owing to the uncertainty associated with economic developments and the effects of interest rate changes, Norges Bank adopts a gradual approach to the setting of interest rates. Interest rates were therefore reduced in five steps by a total of 2.50 percentage points in the period from 28 January to 23 September 1999. The lowering of interest rates contributed to strengthening the krone. 6  BIS Review 7/2001  In mid-1999, Norges Bank considered the risk of a recession of a type that would reduce confidence in the krone to be substantially reduced. In addition to the reduction in interest rates, this was partly due to brighter prospects for international growth and higher commodity prices. However, we still envisaged a growth pause in the Norwegian economy. The projections for price and cost inflation in the next few years were then in accord with the corresponding aim for inflation for the ECB.

But one thing is clear – in order to remain as a leading Islamic financial hub, Malaysia must uphold legal certainty for effective dispute resolution. As I mentioned earlier, Shariah certainty entails two unique challenges – Shariah prescriptions must both be infused into law, as well as applied to contemporary settings. These challenges are augmented by the fast-changing times in which we live. Business is constantly evolving, and finance is likewise far from static. The expectation now for our legal 2/4  BIS central bankers' speeches  system is to apply the principles of Shariah to novel products and approaches in a timely manner – while remaining clear, sufficiently flexible to innovation and yet faithful to the tenets of the religious sources. This is a tall order, and the jurisdiction which succeeds in doing this most reliably, will stand in good position, to ride the wave of the Islamic finance boom. Certainty around the Shariah rules applicable to a particular Islamic finance facility is crucial. Equally important is certainly on the legal enforceability of obligations in the event that there is non-compliance to the relevant Shariah requirements. Uncertainty in any of these areas may lead investors to view such facilities as high risk instruments, and in extreme cases even destabilise the Islamic finance market more generally. An interesting case in point is the one involving Dana Gas, which is now being considered by the High Court in London.
Our first priority must be to maintain low and stable inflation. Of late there have been those who doubt our ability or willingness to meet the inflation target. In May, CPI inflation was 3.4%, and for much of the past three years has been above the 2% target. Over that period the rise in prices in excess of that implied by the target was around 3%. That can be accounted for by the direct impact on the price level of the fall in sterling’s effective exchange rate, of about 25%, which is supporting the rebalancing of the UK economy. Inflation has not only been higher than in the previous decade; it has also been more volatile. Our ability to keep measured inflation close to the target has been hindered by movements in world oil and commodity prices, as well as the temporary reduction in VAT. Oil prices, for example, have gyrated between $ and $ a barrel. Although such price changes clearly lead to higher or lower CPI inflation for a period, by themselves they do not generate the continuous rise in prices to which monetary policy should respond. A continuous rise in prices would ordinarily be associated with strong money growth, wage inflation, rapid increases in money spending and an excess of demand over the supply capacity of the economy.

And yet, our unity may appear threatened today: euroscepticism is on the rise, driven by populism throughout Europe; Brexit triumphed in the United Kingdom last June; and the new American government freely expresses its reservations about the European Union. In these times of turmoil, we mustn’t lower the European flag. Let us remember the formidable progress that we have made since our two countries decided to share their destinies by signing the Treaty of Rome, along with Belgium, Italy, Luxembourg and the Netherlands. Today, in Europe, we share three major economic assets: the single currency, the single market and our common social model. We have built them together and we can be proud of them. This will be my first point. For the future, European unity continues to be, in my view, the best answer to all the questions. And for that, the remarkable friendship between our two countries must continue to inspire us. As Chancellor Konrad Adenauer already stated in 1963: “Imagine, if this friendship [between France and Germany] didn’t exist, any attempt to create Europe would be doomed to fail from the outset.”1 This will be my second point. I. What we currently share in Europe: our three economic strengths. Let me start by our shared successes. Today, in Europe, we have three major economic assets: the single currency, the single market and our common social model. First asset: the euro. It is a solid currency that is recognised worldwide.
Our ignorance of how people behave under uncertainty, together with the presence of feedbacks between behaviour, outturns and beliefs, highlights some of the difficulties and pitfalls of economic policy making. Second, the recognition that beliefs and behaviour play an important role in the dynamics of the system affects the type of policy actions that are desirable. Ensuring that panic did not spread is one reason why guaranteeing all bank deposits following the run on Northern Rock in September 2007 was necessary. Third, communication is part of the policy response to uncertainty. In this respect, economic and financial systems differ from physical systems. In the latter, there is no-one listening. The control strategy in a physical system is defined by a scheme that relates the settings of policy instruments to certain features of the environment (e.g. fire left booster rocket if rocket veers to left of target). But in an economic system – because people’s beliefs about future policy actions affect their behaviour today – the control strategy has to comprise not only a plan for setting the instruments (e.g. raise Bank Rate if expected inflation rises) but also a plan to condition beliefs about how policy makers would respond in future. That involves communication. 6. Communication  A communication strategy involves deciding how much information to communicate, and in what form. Revealing information entails costs and benefits. An optimal communication strategy balances those costs and benefits. Consider first the benefits. Information is valuable and can improve the quality of decisions.

It will be equally  2  BIS Review 110/2007  important, in both the private and public sectors, for wage growth to be compatible with productivity growth, labour market conditions and cost developments in competitor countries. The further strengthening of competition in both product and resource markets and the creation of more incentives to work are also necessary in order to raise the participation rate. It also needs to be realized that these reforms are essential for safeguarding our social model. In recent decades we have been successful in reducing income inequality and in securing universal access to all levels of education, to health care and to pensions. These benefits, however, can only continue to be enjoyed by future generations if today’s generation implements the necessary reforms. The next phase in Malta’s economic history, therefore, promises to be a challenging one, but it should also be an exciting time. For a country with a population of 400,000 and a GDP of just four-and-a-half billion euro, having a major reserve unit as its domestic currency is indeed a significant advantage. We thus have good reason to feel encouraged and, as a people that has suffered repeatedly as a consequence of divisions on the European mainland, also reassured that we are about to reinforce our integration in Europe with full economic and monetary union.
This year, we are going to make such a review as well. We have been targeting inflation for five years by now. Over this period, we were able to maintain inflation close to the target for quite a long time. By the moment, the financial sector and, largely, the society and businesses have a better understanding how this works. Professional market participants have their inflation expectations anchored at the long-term target, and, importantly, this influences long-term interest rates. Some parameters of our policy were associated with the fact that we were launching inflation targeting at the stage of disinflation when we were lowering inflation from high levels. For instance, we set our target as a point in order to anchor inflation expectations at it. We avoided setting a range fearing that inflation expectations might get stuck at the upper bound. In our opinion, the target rate conformed to the level of the market maturity. However, it has changed somewhat over this period. The operational procedure we selected was also in line with the market structure. Today, we need to find out whether this structure has changed so that we now need certain adjustments in our procedure. We are going to analyse the above issues and some other aspects within our review. We will carry out comprehensive work in this regard. At first, we will perform research and analysis engaging our research divisions who will test particular hypotheses.

According to the data for 2020, the level of payments (the ratio of payments to accrued premiums) is extremely low: 10% in life and health insurance for mortgage borrowers, and no more than 5% for car and consumer loan borrowers. The level of payments in bank card insurance and mobile device insurance is also ultra-low — 4% and 1%, respectively. We have analysed cases in other countries — their payment levels are several-fold higher. This raises the following question: what are the benefits of these insurance policies and why should people pay for them? Of course, we comprehend that the level of payments is not the only criterion of the customer value. Nonetheless, it is an indicator that there are issues here to be addressed. What are we going to do? In the first place, we would tighten the requirements for disclosing information, specifically, the terms for receiving insurance compensation and the conditions for receiving returns on hybrid deposits and structured products, etc. Our regulation will set the benchmarks. First of all, the real terms of a product should conform to a customer’s expectations. For instance, insurance compensation should cover insured events that might actually occur in practice. Secondly, the execution of documents should not be excessively complicated for customers. Thirdly, the procedure to receiving insurance compensations and returns should be simple and convenient. We hope that the financial sector will itself seek to develop long-term trust-based relations with consumers and become customer-focused. The financial market requires trust.
Andrew Bailey: Meeting varied people Speech by Mr Andrew Bailey, Governor of the Bank of England, at Diversity in Market Intelligence: Launching our Meeting Varied People Initiative, 21 April 2021. * * * Thank you Andrea for that introduction, and thank you to everyone for joining us today. People often talk about diversity in terms of the makeup of their own workforces – and for a public institution like the Bank, it is vital we reflect the whole society we serve. This includes both identity and cognitive diversity, which are equally important. 1 I often say I don’t want to work in a place that is full of people like me.2 I want the Bank to have an inclusive and open culture where people speak up, ensuring we make better decisions by mitigating the risks of groupthink and myopia. Over recent years, a number of my colleagues at the Bank have also emphasised the importance of diversity and inclusion, both for us as an employer, and as a wider public good for the financial sector. 3 We have made significant progress internally: for example, launched our Out & Proud Action Plan in September 2020, and continue to sponsor the ‘Women in Finance’ Charter. 4 But there is always more to be done, which is why for example we recently initiated a review, led by our Court of Directors, on ethnic diversity and inclusion. I know that many of you are doing similar work within your firms.

Similarly, our market intelligence helped ensure that the other elements of the policy response last year were also rapid, decisive and well calibrated to the underlying risks. Of course, diversity has affected our other outreach activity too. When I first started working at the Bank of England in the mid-1980s, the Bank’s only public statements came mainly from the Governor for instance at the annual Mansion House speech. We have moved a long way since then, and we see outreach as core to how we operate. In an important sense this change naturally accompanied the decisive shift to the Bank having clear and independent responsibility for monetary policy and the stability of the financial system. With those responsibilities went a duty to reach out and communicate much more broadly. Our network of regional Agents help us with ensuring we speak to companies and organisations from across the country. We created Citizens Panels – held regularly all over the country in person and, for the time being, virtually – to understand how the public view the economy. 7 Our Community Forum programme enables us to meet with those who run third-sector organisations, as well as the people they support, across the UK. Our work in diversity and inclusion extends to our role in creating an inclusive financial sector and I am pleased that with the input of many in the Islamic finance community, we are launching the Alternative Liquidity Facility (ALF) during the course of 2021.8 So diversity matters to us.
* * * These questions aside, one thing is clear in the case of France – and 2016’s too-feeble growth of 1.1%, as published yesterday, confirms it: estimates from national and international institutions all point to low levels of potential growth, at around 1.2%, and relatively high levels of structural unemployment (the equivalent of the NAIRU in English-speaking countries), at around 9%. Clearly, we cannot be content with these levels. All of which brings us back, overwhelmingly, to our four key focuses for reform: Enterprise, Education, Employment and Expenditure reduction (public sector). Our northern European neighbours have shown by example that these reforms 2/3  BIS central bankers' speeches  are not incompatible with our shared European social model. Studies by the Banque de France show in particular that reforms to the goods and services market could boost the productivity of the French economy by between 3% and 5% in the long-term. Without further ado then, let me pass the floor to Fabrice Lenglart, and I wish you all a fruitful and enjoyable conference. 1 www.banque-france.fr/en/secular-stagnation-and-growth-measurement-conference-organised-banque-de-  france-and-college-de  3/3  BIS central bankers' speeches

In a more general view, the first effects of our reaction are notable in curbing the increase of inflation. The latter, after increasing progressively up to October 2022, declined to 7.4% at the end of 2022, and stood at 4.6% in March 2023. In parallel, expectations of economic agents on inflation in the future has been declining, standing close to our target. Our assessments show that in the absence of our actions, inflation would have averaged 4.5 percentage points higher throughout the 2022-2024 horizon, having a considerable impact on the purchasing power of households and on the nonperforming loans ratio. On the other hand, despite the presence of external shocks coupled with tighter financing conditions, the Albanian economy maintained a growing trend, in terms of production, employment and wages. Thus, economic growth in 2022 was relatively high, around 4.8%, continuing recovery after the pandemic. Economic growth continued to have good allocation by sector, and was underpinned by expansion in consumption, investments and Albanian exports. In addition, the labour market has improved notably. Employment grew by 4.2%, the unemployment rate declined to 10.8%. In addition, the increase in labour force participation showed an ever higher number of employed Albanian citizens. Our confidence surveys show that enterprises have a high demand for employment, while a lack of labour force continues to restrain increases in their  3/8  BIS - Central bankers' speeches  businesses. All these components of the labour market have been reflected in the dynamic growth of wages.
In this regard, we have recently announced the regulatory regime using a “Sandbox” approach. The Regulatory Sandbox will allow FinTech firms and financial institutions to test the viability of their products and services in a well-defined space and duration, without being fully subject to all regulatory requirements that are normally applicable. This approach helps us assess risks arising from the proposed products and services, and provide sufficient consumer protection. The Bank of Thailand also recognizes that regulatory reform is crucial for competitiveness of firms operating in Thailand. To this end, we are in the process of streamlining regulations using the Regulatory Guillotine concept to review and simplify many sets of regulations, starting with those governing capital flows and foreign exchange transactions. This reform is currently in the process of public consultation. Lastly, in addition to upgrading our physical, financial, and legal infrastructure through structural reforms, the ability to reach out to regional economies given Thailand’s strategic position will be important. For our part, the Bank of Thailand promotes greater ‘financial’ connectivity, for example through promoting local currency usage in the region and regulatory harmonization, particularly with CLMV, our neighboring countries with high growth potential. Such initiatives will lower financial transaction costs, spur more trade and investment and deepen regional financial integration. Ladies and Gentlemen, I hope my talk tonight has provided you with an overview of where Thailand is heading in both the near future and the longer term.

In the world of volatility and uncertainty, you can be assured that the Bank of Thailand will do our best to minimize adverse impacts from unexpected shocks that may prevent us from reaching our goal of sustainable and inclusive economic growth. Again, it is my great honor to be here with our partners who have supported Thailand’s economic and financial advancement. Going forward, we are confident that Japan, Thailand, and the region will collectively benefit from broader and deeper linkages both economically and financially. Thank you very much for your friendship, commitment, and contribution to the Thai economy. I look forward to our enhanced collaboration for many years to come. 6
1  BIS Review 45/1999  It is important to note that workouts should not be seen as a soft option for the debtor or an act of charity on the part of the creditors. Banks will generally only be prepared to embark on a workout if the prospect of eventual recovery is greater than it would be in a liquidation. Bearing in mind the generally low recovery rate that unsecured creditors obtain from liquidations, workouts will usually be the better option. But the threat of liquidation must always be there as a last resort to provide an incentive for the debtor to face up to its problems and to agree to cooperate with the banks. Workouts have a long history in Hong Kong but the principles that govern them were only recently codified in the form of the Guidelines on Corporate Difficulties issued by the Hong Kong Association of Banks in April 1998. These are generally known as the “HKAB Guidelines”. The Guidelines are non-statutory, but they are supported by both HKAB and the HKMA and all banks are expected to use their best endeavours to comply. In my view, this represents one of the most important initiatives of HKAB in recent years, taken as it was at a time when the economy was in the early stages of recession and when the need for workouts would inevitably rise.

The 1998 fall in domestic lending amounted to $ billion in absolute terms, of which over 60% was accounted for by the Japanese and Continental European banks combined. This withdrawal of credit drastically reduced the funding available to Hong Kong corporates and increased their financial difficulties. This in turn has fed through to increased bad debts for the banks. Hopefully, the economy has now bottomed out and economic growth will resume this year as forecast by the Government. The stock and property markets certainly seem to be indicating an improvement in confidence and if sustained this will reverse the negative wealth effect of 1997/98 and encourage a revival in consumer spending that is necessary to take Hong Kong out of recession. However, in the initial stages of the recovery the financial position of many companies will remain under pressure, particularly as the upturn in the economy will increase their need for working capital. In the meantime, an increasing number of companies are going into liquidation. The number of compulsory winding-up orders jumped to 763 in the financial year 1998/99. This is an all-time high that compares with the average of 480 in the previous five years. It is certain that without the alternative of workouts the number of liquidations would have been much higher. The role of the workout is to provide an alternative to insolvency and receivership which will allow commercially viable companies to survive as going concerns, thus preserving employment and productive capacity.