samchain/econo-pairs-v1 huggingface dataset:
The story was the same with Europe’s cannon, electric lighting, printing, small firearms, and innumerable other innovations: each was first neglected or opposed in some parts of Europe for idiosyncratic reasons, but once adopted in one area, it eventually spread to the rest of Europe.” Europe rose to dominance over the centuries to the extent that the positive effects of competition prevailed over the negative effects associated with the recurrent conflicts between states that stemmed from the inability to resolve the tensions generated by competition. The European Union was created precisely in order to ensure that the spirit of emulation and competition could operate within a framework of peace. There is no doubt that there are currently substantial differences within Europe, with some countries demonstrating a strong capacity to adapt to the new global conditions, while others are finding it hard to implement the changes that are necessary to maintain their level of prosperity and continue to grow. These differences are not confined to Europe. Contrary to what some observers say, I think that the anti-Europe movements that have emerged in some countries are a symptom of a more general dissatisfaction linked to the structural factors of the crisis. In the United States too, society is deeply divided on how to face the challenges of globalisation. Although European institutions provide an easy scapegoat, they represent an element of extraordinary strength in the current circumstances, not only for Europe, but also for the Member States, giving them – I believe – a great advantage.

In the vast majority of cases, sovereign risk is overestimated or underestimated over a long period. This is because sovereign risk does not depend only on debt sustainability, but also on the political will to implement adjustment programmes, including privatisations and structural reforms. Second, at times markets have perverse incentives. In particular, large investors who have bought insurance against sovereign default, often without holding the underlying asset, stand to benefit greatly from the default and lobby in favour of it. They tend to encourage naïve governments to believe that debt restructuring can be done in an “orderly way”, distracting them from implementing the appropriate policy adjustment. Third, default or debt restructuring is a dramatic economic and social event for the country which experiences it – I would call it political “suicide” – which leads many into poverty, as experience has shown. It is thus rather peculiar for policy-makers to design policies mainly with the aim of punishing (or rewarding) certain categories of investors, rather than considering the ultimate consequences for the people. Finally, if the euro area were to go down the path of leaving it entirely up to the markets to decide which countries are solvent and which are not, it would put the euro at a disadvantage compared with all other major currencies.
I would like to take this opportunity to make some remarks on these two issues, but let me start first with some considerations on the developments, outlook and challenges of Asian countries in the context of the present financial turbulence. Notwithstanding the cloudy and uncertain outlook we face now, global economic activity held up extremely well in the course of 2007. World growth reached almost 5%, completing the four-year period of highest growth since the sixties. Industrial economies grew near 3% last year, whereas emerging markets crucially contributed to this extraordinary performance recording an impressive 7.5% annual rate of growth. Taking into account their increasing weight in the global economy, this means that emerging markets explained more than two thirds of the global growth in 2007. Emerging Asia was a key contributor to this buoyant performance of emerging markets with an increase of GDP of almost 9%, driven by the two largest economies in the region: China and India. China's expansion of over 11% explained 25% of total world growth and India close to 9%. As I will develop in a few minutes the growth performance of these two countries is a key factor to assess the global perspectives. Where are we now? This year has started on a rather slow motion and the mood is far from positive. The economic and financial strains in the US and their spillovers to other advanced economies are dragging down global economic forecasts.

Even in Japan, where the direct impact of the turmoil has been relatively contained, the economy remains fragile and prospects have deteriorated. The emerging market economies stand in sharp contrast with this gloomy outlook, as their growth forecasts have been revised down only marginally. In fact, one of the most surprising features of the recent developments in the world economy has been the resilience of most emerging market economies to the unravelling of the global turbulence. This feature is even more remarkable taking into account their recent history of financial and economic instability. If we look at basic financial market indicators of risk – such as the sovereign spreads, exchange rates or equity markets – what we observe is that, overall, they have behaved significantly better than comparative asset classes in the industrial economies over the past  BIS Review 56/2008  1  nine months. In addition, credit has generally continued to be available in these economies – albeit, admittedly, at a somewhat higher cost – and creditworthy emerging market borrowers have not been shut out from international markets, contrary to what used to happen in the past. It is true that issuance abroad has been reduced notably since the beginning of the turbulence, and that those borrowers with relatively low credit ratings may have been shut out completely from international markets.
A very important part of the decisions concerning solutions to a financial crisis in a bank is taken by the guarantee funds. At least five of the board’s seven members must approve such support measures. Five of the board members are appointed by the general meeting of the member banks, while the Banking, Insurance and Securities Commission and Norges Bank each appoints one member. Support measures require the approval of a majority of the members appointed from the member banks. The decision to widen the remit of the guarantee funds was based on the experience of the Norwegian banking crisis. Supplying capital from the guarantee funds proved to be a “cheaper” and more effective means of resolving the crisis than referring the solvency problems directly to the authorities. The government shall provide capital support when financial problems in financial institutions threaten financial stability. How this is to be done must be assessed when such a situation arises. During the banking crisis, the government injected capital through the Government Bank Insurance Fund. It has been announced that the Fund is to be discontinued. Generally, developments since 1992 have reduced the need for government intervention in the event of new crises in the financial system. •  The banks have more equity capital than earlier. •  The banks’ guarantee funds accumulate a higher level of capital. •  The establishment of foreign banks in Norway and increased foreign borrowing by Norwegians in foreign banks has improved the distribution of risk.

I also want to thank the distinguished participants for their valuable contributions. I hope you enjoy both the conference and your stay in Istanbul. Thank you. BIS Review 124/2009  3
I am confident that we will continue, with the same intensity, our joint efforts to integrate this very important factor into the Albanian economy at the fastest and broadest extent possible. 2/3  BIS central bankers' speeches  Thank you! 3/3  BIS central bankers' speeches

Our focus as the supervisor of the banking sector will remain in having institutions that are well capitalized and liquid, and that continuously improve their standards of risk management. In our forthcoming communication with banks, we shall pay special attention to how they assess and monitor credit, market and liquidity risks; and how they include the results of this process in the management decisions. Finally, I want to stress again the importance of economic reforms that would ensure stronger economic growth in the medium term, and will provide for more effective banking activity. The objective of such reforms must be to improve the productivity and competitiveness of our economy through: reducing uncertainties over the direction of future developments by identifying the right policies and reforms; creating a favorable fiscal, legal, business and political climate that will promote investments in the economy; improving the workforce education and specialization; generating the benefits of economies of scale through integration of businesses in the regional or European market; and increasing the efficiency of the public and private sector through the improvement of governance. In the financial system, the reforms must focus on deepening and broadening the financial market, with the objective of improving access to finance, improve efficiency and reduce risks. I hope that this forum will bring up new ideas on how to overcome current challenges that the real economy and the financial sector is facing.
This is partly because uncertainty increases in the longer term, and partly because I myself will no longer be a member of the Executive Board and nor, by the way, will Lars Nyberg. Other members of the Executive Board may make different assessments of the direction of monetary policy. However, if inflation turns out to be higher than we estimated in the Monetary Policy Report, the Riksbank may need to increase the repo rate faster than indicated in the repo-rate path. It is then quite possible that it will be raised to 4 per cent already next year. Conclusion My overall assessment is that monetary policy has worked well during the more than five years I have been a member of the Riksbank’s Executive Board. The average for CPI inflation in the period 2006–2011 is 1.8 per cent with the current forecast for inflation this year. It is estimated that the repo rate will on average be somewhat lower in 2011 than it was  10  BIS central bankers’ speeches  in 2006, which contributes to reducing the average for CPI inflation somewhat during this period. The average for CPIF inflation during these six years is 2.0 per cent, that is equal to the inflation target. The Riksbank has also helped to keep up the level of production and employment during these years. On the other hand, it is my view, with hindsight, that monetary policy was too expansionary in the years preceding the financial crisis.

The short-term real interest rate, that is the short-term nominal interest rate minus inflation, is commonly used to describe how expansionary monetary policy is. This can be assumed to average approximately 2 per cent in the longer term. In the United States, the real interest rate was negative in the period 2003–2005, while in the euro area it was approximately 0 per cent in the same period (see Figure 1). At the same time, China and other countries had their currencies tied to the US dollar, which resulted in expansionary monetary conditions in these countries too. Large current account surpluses in China and in oil-producing countries led to capital flows to the United States and the euro area and this also kept down long-term interest rates. The consequences of the expansionary monetary policy became apparent in the development of the economy. Inflation in the United States was over 2 per cent measured using various measures of core inflation, Resource utilisation was higher than normal and there was a rapid expansion of credit. From the mid-1990s to 2006, real housing prices increased unusually rapidly, by approximately 80 per cent, after having been relatively stable from the early 1950s to the mid-1990s (see Figure 2). Housing prices increased dramatically in some parts of Europe too, for example in Ireland and Spain, while they remained largely stable in other countries, for example Germany. However, for the euro area as a whole the increase in prices was not as large as in the United States.
Over the past twelve months, wages have not increased by more than around 2 per cent. Inflation is also still at a low level, which reflects earlier downswings in energy prices and falling prices on non-energy-related imports. 4  BIS central bankers’ speeches  Relatively calm on the financial markets Despite the fears one might have had prior to the summer with regard to developments on the financial markets, there have not on the whole been any major fluctuations in interest rates and exchange rates. The krona weakened roughly as expected in connection with the repo-rate decision in early July. Since then it has weakened further, and then strengthened, but it is still in line with our forecast, see Figure 8. However, one should not draw any major conclusions regarding the krona, given the weak trade in the summer months. Nor have there been any major fluctuations on the stock markets in Sweden, the euro area (with the exception of Greece) and the United States. The stock market values are approximately as they were in the beginning of July, see Figure 9. Stock market developments in China, on the other hand, have been more dramatic with heavy stock market falls since the middle of July. The downturn should nevertheless be regarded in the light of equity prices rising by around 100 per cent during the first half of this year. Despite the heavy fall, equity prices are still much higher than at the beginning of the year.

Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the pandemic emergency purchase programme (PEPP) than in the previous two quarters. We also confirmed our other measures, namely the level of the key ECB interest rates, our forward guidance on their likely future evolution, our purchases under the asset purchase programme (APP), our reinvestment policies and our longer-term refinancing operations, as detailed in the press release published at 13:45 today. We stand ready to adjust all of our instruments, as appropriate, to ensure that inflation stabilises at our two per cent target over the medium term. I will now outline in more detail how we see the economy and inflation developing, and then talk about our assessment of financial and monetary conditions. Economic activity The economy rebounded by 2.2 per cent in the second quarter of the year, which was more than expected. It is on track for strong growth in the third quarter. The recovery builds on the success of the vaccination campaigns in Europe, which have allowed a significant reopening of the economy. With the lifting of restrictions, the services sector is benefiting from people returning to shops and restaurants and from the rebound in travel and tourism. Manufacturing is performing strongly, even though production continues to be held back by shortages of materials and equipment.
Regional Developments: ASEAN – Grounds for Optimism 7 Đ Đ Within ASEAN, the picture is rosier. According to the IMF, the major ASEAN economies are expected to continue outperforming emerging markets and developing economies as a whole, with projected GDP growth of about 5.0% annually for 2019-2020 [2] . ASEAN has become one of the fast-growing regions in the world in the last few decades, and is home to eight of the world’s best performing developing economies [3] . Looking ahead to 2050, it is projected that ASEAN – with a population of close to 800 million people by then - could become the fourth largest single market, behind China, India, and the US [4] .Đ • In the next few years, growth in ASEAN will continue to be driven by intra and extra-regional trade as well as strong investment flows, even as domestic demand will play a more important role.Đ • ASEAN also has demographics on its side: we are for the most part a young region, with a rapidly growing middle class who is increasingly consuming higher value-added goods and services. • Asian wealth accumulation is also growing quickly. Assets under management in the Asia Pacific is expected to increase faster than any other region globally, almost doubling from 2017 to about $ trillion in 2025. This will result in increased demand for investment opportunities across a wide range of products like equities, fixed-income, and risk management tools.

Ex post transparency of aggregate amounts lent is provided immediately for market-wide liquidity provision, and with a lag for any usage of the bilateral Discount Window. The Bank also publishes an annual report on the operation of its published facilities 3. The Bank’s published facilities now provide a rich toolkit for responding to a wide range of sterling liquidity needs. But not every eventuality can be predicted in advance – and UK institutions might on occasion require assistance in larger size, against alternative collateral, or in currencies other than sterling. The terms and conditions for any bilateral lending done outside of the Bank’s published facilities – so-called “Emergency Liquidity Assistance (ELA)” – would use as a starting point those in the SMF, including pricing and collateral eligibility and haircuts. But, recognising the potential for discretionary deviation from these terms, and the large sums of money that such lending can involve, ELA is also subject to enhanced governance and accountability arrangements, published in a Memorandum of Understanding (MoU) 4 between the Bank and HM Treasury. These arrangements are somewhat shaped by history. In his autobiography 5, the then Chancellor of the Exchequer Nigel Lawson records his deep annoyance at being given only half an hour’s notice by the Bank in October 1984 to decide whether to provide a government guarantee to back a large loan to Johnson Matthey Bankers, “a bank of no great consequence”, which the Bank had been working for some time to save.
Rather I want to discuss how the MPC is working towards achieving the 2% target. The institutional framework for monetary policy Just as no man is an island, no economic policymaker works completely in isolation. Let me start with a few comments on this observation, starting with the interactions between monetary and fiscal policies. Monetary policy is a potentially very powerful tool, central to achieving stability in the overall price level by steering inflation back to target. But monetary policy is also a pretty blunt tool, ill-designed to deal with the distributional consequences of relative price changes – changes in the price of one good compared with another. Recent experience in the face of dramatic increases in energy prices illustrates this point. 2/8  BIS - Central bankers' speeches  Monetary policy has been tightened to ensure that the impulse to headline inflation coming from higher utility bills does not become embedded in broader inflationary developments. It has weighed against the incorporation of so-called second-round effects in price, wage and cost setting behaviour. In other words, monetary policy has addressed the danger that self-fulfilling dynamics lead to overall price inflation remaining persistently above target, even as the original impetus to inflation from energy prices recedes. By contrast, the fiscal response to energy price developments has been more targeted.

In taking this action, the Bank has sought to prevent the emergence of a self-sustaining vicious spiral of collateral calls, forced sales and disappearing liquidity from emerging in a core segment of the financial markets. Restoring market functioning helps reduce any risks from contagion to credit conditions for UK households and businesses. Such actions preserve the effective transmission of monetary policy. But crucially they are not monetary policy actions in themselves. Were monetary policy to be re-oriented towards serving financial stability ends, not only would it be less effective in addressing dysfunction than more temporary and targeted interventions in specific dis-orderly market segments, but it would also be distracted from its central task of maintaining price stability and returning inflation to the 2% target. At the time of writing, this distinction between monetary policy actions and actions taken by the Bank to support financial stability has been recognised and priced by market participants. 4/8  BIS - Central bankers' speeches  In the face of a substantial re-pricing of financial assets a few weeks ago, markets originally anticipated that Bank Rate – the active instrument of monetary policy in the eyes of the MPC – might be changed at an ad hoc meeting outside the regular schedule of MPC decisions.
There are two facts which illustrate this trend: the number of monetary financial institutions (which has already been decreasing steadily for several years) fell by 5% in one year in 1999 (up to the end of November); and the total value of mergers and acquisitions involving banks in the euro area clearly exceeded (by around 35%, according to certain private databases) the already high level recorded in 1998. In 1999 it was also above the level of similar transactions reported in the United States. Conclusion Price stability and the creation of a large integrated financial market are therefore beneficial to the development of savings in the euro area and to their optimal allocation. It would certainly be wise to ensure that certain financial imbalances are not allowed to jeopardise this favourable environment. Thus, insufficient fiscal consolidation leads to a continuous eviction by the states of a significant part of the available private savings. In the same way, excessive taxation and wage increases out of line with growth in productivity sap the dynamism from investment and consequently also from savings. 3  BIS Review 6/2000  Its development also requires a certain convergence in tax systems. Ultimately, the health of the financial sector is essential to the protection of savings. Although the Eurosystem has no direct authority in the field of prudential supervision, it monitors risk developments in the banking sector, as it does more generally with regard to developments in assets prices, where these could potentially affect overall monetary and financial stability.

One motivation may be to pass on wealth to children, who otherwise may not inherit until well past the most expensive child-rearing years. Other motivations can include supplementing pension income, repaying debt and making home improvements. The risks in this market though are very different to those on insurer’s other assets. It is a retail product bringing conduct risks that fall under the FCA’s responsibilities. From a prudential perspective, the main risk is long-term stagnation in UK house prices. Economically, the no-negative-equity guarantee is a written option on house prices. Where insurers have recently entered the market and/or are growing their loanbooks rapidly, the average expected maturity of these options is likely to be some decades in the future. Low loan-to-value ratios mean the short-run risks to insurers are limited. They can ride out a property market crash as long as the market subsequently recovers. But loan-to-value ratios increase over time unless house price growth keeps pace with the rate at which interest is accruing. So what you have is a sort of race to the value of the property illustrated by Chart 3. The time it takes for the value of the loan to exceed the value of the property will be governed by: the interest rate charged (higher is more risky), the loan-to-value ratio (higher is more risky), house price inflation (lower is more risky) and the age of the borrowers (younger is more risky). Underwriting standards do appear to have weakened a little over recent years.