samchain/econo-pairs-v1 huggingface dataset:
As regards the economy and the financial markets in particular, the season has been harsh and often stormy, and now, on March 28th, when the vernal equinox is past and the days are lengthening visibly with every week that passes, there are few signs that spring is near for the economy. And despite the fact that this rather pessimistic statement is anything but an exaggeration, it is surprising to realise how many people are still convinced that things have seldom been better than they are now, and that Icelanders are enjoying boom times in most respects. But is this really as astounding as it might seem at first? Our employment levels are very high, excess demand for labour is considerable, public access to credit institutions has been subject to few limitations until very recently, and though credit has not exactly been cheap, terms have not been as unfavourable as one might expect, thanks to high levels of employment and rising disposable income. The Treasury has been operated with an acceptable surplus and is well able to meet the demands made of it. As a result, there is considerable pressure to increase government expenditure, though neither the labour market nor other economic conditions have yet required such increases. The government must be steadfast in resisting the pressure to increase expenditure at a time when it cannot honestly be said that the money doesn’t exist.

There is also an example from Ireland, which suggests that the same took place there. And it cannot be denied that the attacks that have been made on Iceland’s bank and central government – which was subjected to CDS spreads of up to an absurd 400 basis points – give off an unpleasant odour of unscrupulous dealers who have decided to make a last stab at breaking down the Icelandic financial system. They won’t get away with it. But it must be a logical next step to consider an international investigation on such attempts to bring a healthy economic system to its knees. Ladies and Gentlemen: Just a year ago, at the Bank’s Annual Meeting early in 2007, I warned against tempting people with foreign loans when they didn’t have the income to support the risk. I have done the same on many other occasions. My colleagues here on the Board of Governors have also stressed this point repeatedly. But the thing that we have been most on the defensive  BIS Review 36/2008  3  against got us in the end. People set little store by our words of caution, and now many of them are licking their wounds as a result of recent developments.
I propose to explore four avenues: •  The nature of the financial crisis  •  The policies implemented to address it  •  The macroeconomic outlook  •  The outlook for financial regulation  The nature of the crisis The crisis first emerged as a liquidity crisis. The first symptoms appeared as pressures on liquidity, which we can trace back to the beginning of August 2007 when serious disruptions appeared on the interbank market. More than a year later, these tensions are still present on money markets. This is demonstrated by the abnormal level of spreads, the shortening of maturities, and the contraction, or even closure, of some market segments. Through contagion, these tensions are also affecting non-financial corporations and the financing of the economy: in the United States for example, even more than in Europe, issuing of commercial paper remains very difficult. The crisis also emerged as a crisis of securitisation. Securitisation is a very old technique, which has been successfully used for 30 years for refinancing automobile loans, consumer credit, and (yes!) housing loans. For the past 10 years, however, it has also been used in more debatable circumstances, i.e. in the very short-term financing of complex and structured products that are wholly illiquid and whose value is very uncertain as it is mostly determined by theoretical models. Such structures are intrinsically vulnerable and fragile. This fragility was doubly masked by the abundance of liquidity and the actions of some market intermediaries, particularly rating agencies and monocline insurers.

We should get well prepared or would lose the momentum quickly. 3. Exit by the U.S. Fed from its unconventional monetary policies is one of the most important external challenges that the region will face in the next year or two. A timely and orderly normalisation of monetary policy in the US should help to slow credit growth and contain asset price inflation in the region. However, a disorderly normalisation process could lead to significant outflows of capital, abrupt tightening of financial conditions and a severe re-pricing of assets. This can result in financial instability and even a sharp slowdown of economic growth in the region, particularly in those economies with weaker fundamentals and higher reliance on external financing. Yet, there is a lively debate about the size of the labour market slack in the US, which could complicate the judgment about inflation risks and the conduct of monetary policy. Indeed, the path of exit is not necessarily smooth, and interest rate volatility could be higher than currently anticipated. 4. While monetary policy normalisation may reflect a pick-up in the growth momentum in the US which should help support Asia’s exports, the strength of this support is subject to some uncertainty. We also need to be aware that economic integration has increased within the region. As identified by the IMF in the REO, the increase in trade and financial integration have strengthened the propagation of growth shocks between regional partners. 5. So, what are our major policy challenges?
i) TeSA aims to identify specific ICT skills in demand and work with training providers to meet these demands. ii) For example, the US-based Byte Academy has recently set up in Singapore, and has come on board IMDA’s Tech Immersion and Placement Programme (TIPP). Byte will offer a series of intensive courses on FinTech and data science to ‘convert’ nonICT professionals to meet the software and programming needs of the industry. 18 I encourage all companies, both start-ups and incumbents, and individuals, to tap on these initiatives and invest in the skills of the future. 19 We cannot talk about expertise without talking about learning. And learning, unlearning and re-learning is what the game is about in the economy that we are creating together. 20 We need to learn more about the things we do not know, and to constantly update our knowledge in familiar areas. In every job, from the CEOs to the fresh entrant from school. 21 We never know where our learning journey will take us, but it usually takes us somewhere better. Take for example Vernon Heng, 32. After university, he worked overseas in a variety of fields, including construction, sales and marketing and supply chain. 3/4  BIS central bankers' speeches  When he decided to return home to Singapore and explore new career options, his brother, a user experience (UX) designer, encouraged him to consider the field. He enrolled in a UX course at General Assembly under IMDA’s TIP Programme, and found himself enjoying every step of the process.

17 Second, as part of our broader SkillsFuture national initiative, MAS is partnering various other players to enhance continuous learning. We must in particular equip financial professionals with stronger digital skillsets: The Financial IT Academy (FITA) is delivering a digital transformation programme for midcareers that includes topics such as data analytics and agile development, to deliver software faster and with high quality. The Institute of Banking and Finance (IBF) will be offering new learning modules on a set of core capabilities covering data science, human-centric design, agile thinking, and cyber-risk awareness. To develop the cyber security talent pool in Singapore, the Info-comm & Media Development Authority (IMDA) and the Cyber Security Agency (CSA) have introduced the Cyber Security Associates and Technologists (CSAT) Programme1. The University of Pennsylvania’s Wharton School will also be launching a new executive education programme in Singapore focused on financial innovation. i) Called the Wharton FinTech Innovation Program for Financial Institutions, it is expected to launch in the second quarter of next year. ii) The Program aims to expose senior managers in incumbent financial institutions to current topics in FinTech. iii) Participants will learn to how to grapple with disruptive trends, and drive change and innovation across their organisations to compete in the FinTech space. We also want to ensure that professionals trained in ICT skills have good placement outcomes in the financial sector. We are doing this through the recently-formed Finance Committee of the Technology Skills Accelerator, or TeSA, programme.
Swedish investment in foreign countries amounted to approximately SEK 200 billion in 2005, while Swedish industrial companies’ investment in foreign debt securities increased by almost SEK 70 billion. The capital inflow during the same period was approximately SEK 100 billion. 8 According to Swedish companies, one of the main reasons why their export flows remain abroad is that expansion in new markets and new production capacity occur mainly abroad and not in Sweden. 9 The fact that an increasing share of direct investment is aimed towards emerging economies in South East Asia is part of an international trend that can be seen in most OECD countries. It can be assumed that the effects on the world economy of the integration of, for instance, China and India, will continue for some time to come. There is a long way to go before the whole of China is included in the global market economy. However, it has recently been possible to see some inward movement within the country as wages have risen in the coastal regions. Nevertheless, there still remain many hundreds of millions of poor people in China who are prepared to take jobs with very low remuneration compared with the wages paid in Sweden, for example. One effect that is of significant importance to the Riksbank is lower prices in international trading. The low inflation in Sweden over the past years can be explained by low import prices and high productivity.

The Chinese authorities conduct an active trade and industry policy to build up the domestic industrial and technological capacity, for instance in the fields of telecommunications, energy, motor vehicles and pharmaceuticals. Their goal is to have 30-50 Chinese countries among the world's 500 largest within 5-10 years. In addition to investments in research and development, China’s human capital has also been reinforced by an increasing return flow of highly-educated Chinese who have now begun to return home after studies abroad. The rapid developments in China have so far mainly occurred in economic free zones along the coasts and in adjoining areas. In rural areas, where the majority still live, poverty is widespread. The uneven distribution of growth has given rise to social tensions, which risk slowing down developments in future. The Chinese authorities are facing major challenges in terms of increasing private consumption and dealing with the growing income gaps. Environmental pollution is another major problem, as is the lack of human rights. The financial system in China is also under-developed. 2  GDP increased on average by around 5 per cent during 2004 and 2005. 3  All of the figures and comparisons here are made in PPP terms, that is, taking into account purchasing power differences and differences in price levels. 4  However, a large part of China’s foreign trade consists of input goods that are imported from neighbouring countries, assembled in China and then exported elsewhere. 5  The Economist 2004-10-02.
Finally, special attention will have to be paid to the incoming data from the financial sector in order to closely monitor the impact of recent events and tensions. The implications of recent financial sector tensions have been contained so far. But, if these tensions persist or intensify, a scenario could materialise of significantly tighter credit and financial conditions and worsening confidence, with downward effects on economic activity and prices. In this respect, special attention will have to be paid to data on the supply of bank credit, as measured for instance by the BLS. Conclusions Let me conclude by highlighting two main takeaways from my words today. First, at the ECB Governing Council we stand ready and have the instruments available to respond as and when necessary to maintain price and financial stability in the euro area. Second, in March we took a further step in the process of adjusting the monetary policy stance to the euro area inflation outlook, but uncertainty is high and future decisions will continue to be data-dependent. Inflation in the euro area is slowing and will continue to do so markedly in the coming months. But there are factors affecting underlying inflation that may delay its return to the 2% target in the medium run and that we will therefore monitor closely going forward.

10.04.2023  Latest monetary policy developments in the euro area The Brookings Institution The Hutchins Center on Fiscal and Monetary Policy Washington, DC. Pablo Hernández de Cos Governor  Good morning, it is a pleasure to visit the Hutchins Center on Fiscal and Monetary Policy and share with you my reflections on euro area monetary policy at a still very challenging time for central banks globally. I will start by briefly describing the decisions that we adopted at our European Central Bank (ECB) Governing Council meeting in March. Then, I will lay out a number of factors that will determine our future decisions and will require close monitoring going forward. Our March meeting took place in the context of the financial tensions related to the banking sector in the US and in Switzerland. These tensions increased investor risk aversion and financial market volatility and led to a global drop in bank share prices. While the European banking sector is resilient, with strong capital and liquidity positions, the main message from our meeting was that we are closely monitoring these financial tensions and we stand ready to respond as and when necessary to maintain price and financial stability in the euro area.
More-aggressive-than-usual policy responses may be appropriate to avoid the negative implications of an encounter with the zero bound. Paradoxically, though, once the lower bound on interest rates is binding, a less-than-usuallyaggressive monetary policy response may be appropriate. I have tried to articulate this in FOMC meetings ever since we started down the path of quantitative easing, drawing on anecdotal reports from my CEO contacts and what I thought was common sense. But my arguments fell on deaf ears until my more learned counterpart at the San Francisco Fed, John Williams, produced a formal study that posited that the aggressive use of unfamiliar policy tools like quantitative easing and Operation Twist add to aggregate economic uncertainty and, if applied at all, should be deployed more cautiously than our more familiar tools.7 Large margins of error In general, the objective of monetary policy is to provide households and firms with an economic environment that makes it attractive to use money as medium of exchange and store of value. Since many private contracts, including labor and debt contracts as well as capital expenditure commitments, extend out several years, a multiyear policy perspective is needed. A multiyear perspective is especially important when the economy may encounter the zero bound. The explanation is that by interfering with the normal conduct of monetary policy, the zero bound increases the likelihood that policy will miss its objectives year after year in the same direction, so that the errors accumulate over time.

Under the strategy plan for 2020-2022, the Executive Board will continue to use external managers in markets and market segments where local knowledge is particularly relevant. After the Storting had discussed the white paper on the GPFG in 2019, the Ministry gave Norges Bank permission to invest in unlisted infrastructure for renewable energy. This is reflected in the strategy for the next three years adopted by the Executive Board. The Bank will assess each investment in relation to risk and return. The management of the GPFG is required to be cost-effective. Norges Bank aims to keep total 1/2  BIS central bankers' speeches  internal management costs in the period 2020-2022 below 0.05 percent of assets under management. In recent years, the number of Norges Bank Investment Management (NBIM) employees has been reduced and administrative support functions across the Bank are being streamlined. The Executive Board will continue to monitor costs closely. In the course of 2020, the Executive Board has strengthened the Bank's work as advisor to the Ministry, in accordance with our new mandate. In this year's white paper, the Ministry proposes changes in the composition of the equity benchmark index. The equity allocation to Europe will be reduced somewhat over time, and the allocation to North America will be correspondingly increased. This is in line with Norges Bank's advice. Norges Bank works systematically to set principles, exercise ownership rights and invest responsibly. Our work on responsible investment underpins the objective of the highest possible return.
At the same time as banks sold mortgages to special purpose vehicles, they established credit lines to these same vehicles. When the special purpose vehicles encountered funding difficulties, they had to draw on their credit lines. This put credit risk back on banks’ balance sheets. Second, there were shortcomings in the regulatory system. Through high credit lines to special purpose vehicles, some banks had large exposures to a single counterparty. Banks may have used a loophole in the old capital adequacy rules, Basel I, where the risk weight for unutilised credit lines was zero in banks’ capital requirements. If national regulations for large exposures were based on Basel I, this may explain why some of the beleaguered German banks had extended credit lines that were many times larger than their capital. Under the new capital adequacy rules, Basel II, banks are required to set aside capital against all of these credit lines. Third, there were shortcomings in the US subprime mortgage market. A substantial share of these mortgages was sold through agents, such as estate agents and mortgage brokers. The agents’ earnings were based on high lending volumes, and they did not have to bear any risk for losses on these mortgages. Negative incentives are created when the responsibility for credit assessment and the responsibility for bearing risk are separated. As a result, agents  BIS Review 115/2007  5  have extended loans to many borrowers who do not have the capacity to service these loans.

Banks’ exposure to reputation risk also changes since problems in another, non-banking part of the conglomerate may influence and damage the bank’s reputation. In terms of financial stability, it may nonetheless be an advantage that bank conglomerates spread their revenue base. This is particularly true if earnings from new activities do not fluctuate in step with earnings from traditional banking activities. However, this is not entirely certain since most sources of bank revenues failed during the banking crisis at the beginning of the 1990s. Risk diversification through the securities market Credit that is channelled directly through the securities market diversifies risk and thereby eases the burden on the banking system. Developments in the securities market have made it easier for banks to vary their financing. In addition, the emergence of a number of new credit sources and new instruments has made it possible for banks to engage in risk trading. Therefore, it has also become easier for banks to diversify risk. The structure of the financial system varies considerably across countries. This is illustrated by the different ways enterprises finance their activities. Norwegian enterprises have a fairly low level of borrowing in the bond and short-term paper market, representing as little as 8 per cent of total financing. Different financing structures mean that the risk associated with extending credit and providing other financial services varies across countries. It is an advantage for enterprises and other operators in the financial market to have several financing sources to draw on.
Although card frauds are relatively less frequent in Sweden than in many other countries, the need for enhanced security features at the international level will make Swedish card issuers follow the global trend. If we do not, we take the risk of becoming a secure haven, attracting large numbers of card fraudsters. Whether Sweden should have been even quicker to adopt the new technology is a matter for discussion. Currently we are facing the transition from magnetic stripe cards to chip cards. The migration to the global EMV standard (EMV= Europay, MasterCard & Visa) is on its way. The first pilot will start this spring; the national roll out will follow in the autumn. It is not easy to forecast how long the technology migration will take. All cards have to be replaced with the new EMV compatible chip and payment terminals need to be upgraded. This process may take some time. Market players expect that the change of rules announced by Visa and MasterCard regarding the distribution of credit risks, to be implemented from January 2005, may considerably speed up the migration process (Currently card issuers bear full credit risk, but from that date, credit risk will fall on the party, card issuer or bank not implementing the EMV technology). I trust that the introduction of the EMV cards will be thoroughly covered by the afternoon speakers, so I will leave the subject here. Central Bank Involvement Why should a central bank care about the card market?

Indeed, remittance flows are increasingly important relative to other foreign exchange-earning activities, representing around 14 percent of GDP, 70 percent of exports, and 33 percent of imports. Italy is the major migration destination country for Albanians. On the other hand, Albania is the number one recipient country in terms of remittance flows from Italy to other countries. Therefore, remittance services from Italy to Albania have become a topic of great interest. The Italian-Albanian remittance corridor is a relevant case to examine the effects of remittances on local communities and to discuss the ways of making these flows more efficient and less costly. A recent survey of the Bank of Albania shows that remittances have had positive impact across all Albanian regions. The influence is slightly higher in less developed regions alleviating to some extent income disparities. Remittances have become a critical source of income for households, reaching 33 percent of disposable income of an average family recipient and almost 40 percent in rural areas. The recipients of remittances are from all social groups, including middle income class (60 percent) as well as the low income class (27 percent). Our estimates show that the level and severity of poverty are significantly reduced among those households receiving remittances, with greater influence on severity rather than the level of poverty. Remittances are mostly used for imported consumer goods, services, and for the purchase or construction of houses. A small share is saved or invested in businesses, mainly in agricultural sector.