samchain/econo-pairs-v1 huggingface dataset:
Overall, the war in Ukraine has a strong effect on economic sentiment and increased considerably the risks to the economic growth outlook which are now skewed to the downside. According to the April IMF forecasts, euro area GDP growth in 2022 is revised down to 2,8 per cent, from the previous projection for growth of 3,9%. A 1.1 percentage points reduction in expected GDP growth. However, there are still factors supporting economic activity and recovery, such as the reopening of the economies after the crisis phase of the pandemic, strong labour market underpinning incomes, and households' accumulated savings from the pandemic period which support consumption. The labour market in particular, has sustained its recovery momentum, with unemployment falling to a historical low of 6,8 per cent in February 2022. Job postings across many sectors still reflect strong labour demand. Whereas the war caused GDP growth to be revised downwards, a parallel impact is that it has also intensified the upside risks surrounding the inflation outlook, especially in the near term. Based on the same IMF forecasts, euro area inflation in 2022 is expected to reach 5,3 per cent, compared to 1,7 per cent projected by the IMF back in October 2021. Core euro area inflation, as measured by HICP excluding energy and  1/5  BIS - Central bankers' speeches  food rose from 2,7 per cent in February to 3 per cent in March 2022 with an increase in the sectoral inflation rates for both non energy industrial goods and services.

Specifically, they are expected to reduce the level of GDP growth in 2022, as currently estimated, by around 1,3 percentage points, from 3,6 per cent as per the Central Bank of Cyprus December projections, to around 2,3 per cent. Inflation is currently expected to hover around 6,8 per cent in 2022, compared to the December projection of 2,5 per cent. This impact is associated with the rise in oil and other commodity prices, as well as the disruption in exports of goods and services to Russia,  2/5  BIS - Central bankers' speeches  which on average constitute about 16 per cent of overall exports of goods and services. Important such services exports to Russia include tourism, transportation, financial, professional and computer services. In addition, indirect consequences are expected via the impact on consumer and business confidence. Nevertheless, the medium-term economic outlook remains positive, supported by disbursements from the European Recovery and Resilience Fund. The allocation for Cyprus for the period 2021-2026 is € of which € in grants and € million in loans. The total grants allocation for the EU is € which implies 0,3 per cent of the total grants package is allocated to Cyprus. In terms of the banking sector of Cyprus, it faces the effects of the Russian invasion in Ukraine from a financially sound position. The Liquidity Coverage Ratio amounts to 344 per cent as at February 2022 which is almost double than the respective EU average of 175 per cent.
In Zambia, with the growing emphasis on trade within the regional economic groupings like SADC and COMESA, plastic money in the form of credit cards, is a very practical way of facilitating settlement of cross border transactions. Another benefit which may be associated, with the more extensive use of e-money is the potential increase in tax compliance among the retail and wholesale sectors. The use of credit cards generates accurate records of purchases which currently may not be captured by the Zambia Revenue Authority because business houses may declare false figures. With the use of a credit card there is no provision to cheat the taxman by refraining from issuing a receipt as the record of the transaction will speak for itself. Whilst on the subject of greater tax compliance, I would want to see some form of requirement for most businesses to use points of sale terminals and other non-cash forms of payment in our shopping malls and central business district businesses where we see a resistance from businesses to embrace this technology in favour of cash. But let me end my remarks this evening by pointing out a number of problems and challenges that might be associated with the use of credit cards. The biggest disadvantage of credit cards is that they encourage the holders to spend money they don’t have. If the credit card does not require that you pay off your balance each month, this balance will accumulate.

Timothy F Geithner: Key challenges in risk management Keynote address by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the RMA/Risk Business KRI’s Global Operational Risk Forum, New York, 13 January 2005. *  *  *  Thank you for giving me the opportunity to speak to you today. I want to talk about the mix of forces at work on the broader macroeconomic front and what that may imply for risk and for financial stability. By many measures, the economic landscape looks reasonably good. The qualified optimism that now seems to prevail about the global expansion is reflected in low risk premia, unusually low credit spreads, low and quite stable inflation expectations, and low actual and implied volatility. But the global economy faces a set of pressing macroeconomic policy challenges. How should we think about the risks presented by these broader macroeconomic forces, and their implications for the sustainability of this recent period of stable economic performance, and low volatility and risk premia? The U.S. expansion has proven quite resilient. We enter the new year with what appears to be a pretty solid underlying pace of growth. Core inflation is moderate, and various measures of inflation expectations suggest confidence in the outlook for price stability. Estimates of structural productivity growth remain high, although there has been some moderation recently. The pace of global growth has moderated a bit, but most forecasts anticipate a quite strong and broad based expansion.
Another important question is whether the Riksbank should issue e-krona directly to the general public or go via the banks, as we do now with banknotes and coins. If we were to use the tried and tested model, the banks would buy e-krona from the Riksbank and then give their customers access to them. If we were instead to turn directly to the general public, it would mean in practice that households and companies could open accounts, or something similar to accounts, in the Riksbank. It would in this case be something entirely new for the Riksbank, which would need to take a stance on how this could affect the banks’ operations and how the Riksbank could best manage all of the new customer relations that arise. Should e-krona generate interest? Other examples of strategic questions are whether the Riksbank should issue unlimited amounts of e-krona if there was a high demand on the market, and whether ekrona should generate interest. These two questions concern both monetary policy and the financial stability of the banking sector. From a monetary policy perspective, an unlimited issue could be expected to increase the Riksbank's possibilities to steer the money supply, that is, issuing could in some situation function as a monetary policy tool. Some economists advocate that the central bank should replace cash with a digital currency that can be given a negative interest rate, for instance by reducing the balances on e-krona accounts or not redeeming e-krona at their full value.

Firstly, it is a means of payment, which means that a monetary value is transferred to the recipient when money is handed over. Secondly, it forms a unit of account, in Sweden this unit is krona and öre and in the United Kingdom it is pounds and pence, and so on. With a common unit of account, we all measure the value of goods in the same way, which makes it easier to compare the price or value of different goods. Thirdly, money is a store of value, which means that we can save by holding cash or money in bank accounts and thereby redistribute consumption from one day to another date in the future. Money is something we take for granted, but for money to work in practice, we first have to deal with a very complicated problem. This problem concerns trust, and trust in turn depends on many different things. However, the basic idea is that we must be able to trust that the money will retain its value over time - that we can still use it to pay with tomorrow. Otherwise we will not want to accept cash, for instance, as payment and we will try to get rid of that we have as quickly as possible. This is exactly what happens with hyperinflation. Money is exchanged as quickly as possible for bread, sanitary items, gold or something else that can in turn be exchanged for other goods or saved.
But we also have to consider what happens if our expectations are not met. In the first instance; where significant gaps exists we will work with home state supervisors and firms to address this as a priority. However, where this information is not able to be provided on a systematic basis, and/or where the PRA does not have sufficient influence on outcomes, the PRA may ultimately expect either a branch or a subsidiary to operate on a more standalone basis. Governance  It is not breaking news that we place great supervisory emphasis on the quality of governance at firms. Our requirements in this area remain stable and consistent. However, I do want to emphasise two points:  1. For subsidiaries, we expect the local board to play an active role. This means it should be joined up with its parent board in terms of information flows and it should ensure the PRA is sighted on relevant group developments. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  2. We also recognise explicitly that for some small subsidiaries it may be appropriate for a group executive to play a role in the local board (e.g. a small UK subsidiary of a large overseas bank) that we would not consider appropriate in a larger firm. So we can be open to having group executives, as say Chair, but the firm will still need appropriate independent challenge on the board. On branches.

The mainstay of our economic growth, the other 77%, came from growth in productivity. Since 2013 only 9% of our annual economic growth has come from productivity improvement. The remaining 91% has come from the increase in the total hours worked As a result, employment in the UK is now around its highest rate since comparable records began in 1971. Over 73% of people aged 16–64 are working. There are now over 31 million people in work in the UK. 1  2  See Jones C I (2015) ‘The Facts of Economic Growth’, NBER Working Paper No.21142. BIS central bankers’ speeches  Unemployment has fallen at among its fastest rate for 40 years and is now very close to its pre-crisis level – over the past two years over 1 million jobs have been created. The benefits of this are clear. Perhaps only a proponent of the ‘dismal science’, only an economist would find something here to worry about. But the fact is that we can only go so far down this route. Since 2013, the economy’s output has grown by some 5%. But though we have increased by 5% the amount we have produced, we have increased even more the hours worked to produce it. And as a result the simple arithmetic means our productivity growth has been broadly flat. And the low of productivity that has resulted is one of the main reasons why pay growth has remained so low.
Jaime Caruana: What’s next for Basel? Remarks by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the “Basel II: Reality Check” Conference, sponsored by Financial Times Business and the Banker Magazine, London, 10 November 2004. * * * 1. Introduction and overview  I would like to thank the Banker magazine and the Financial Times Business for inviting me to join this important discussion today on the practical implications of the new capital framework for banking organisations. It is an honour to represent the Basel Committee on Banking Supervision at this event. The organisers have selected a provocative and highly appropriate title for this conference. As I will discuss this morning, the “real” reality checks for Basel II lie just ahead. Basel II’s effectiveness in encouraging improvements in risk management, and in motivating banks to hold adequate levels of capital, will depend principally on the degree to which it reflects the true risks and rewards facing banks. That is the focus for banks and supervisors now as we work toward the implementation of the new framework. Will Basel II be effective in promoting sound risk management? I am confident that the answer is yes on at least two levels. On the microeconomic level, I believe that Basel II will help to increase the rigour and comprehensiveness of an individual bank’s decision-making.

Industry representatives had expressed the view that while many important advances had been achieved in the management and measurement of various risks arising from trading activities, neither the existing market risk capital rules nor Basel II went far enough in recognising them. We are now evaluating these views. Because the treatment of the trading book is of great interest to banks and to securities firms, we are collaborating with the International Organization of Securities Commissions (IOSCO) to clarify the Basel II rules and to find risk-sensitive capital treatments for certain trading book exposures that are compatible with Basel II. Just last month, for example, the joint working groups completed a survey of trading book exposures in banks and securities firms, focusing on three main topics. The first concerns the criteria that firms use to determine whether an exposure qualifies for inclusion in the trading book versus the banking book. The second deals with the practices banks and securities firms use to value and measure the risk of trading positions. The third part sheds light on the treatment of counterparty credit risk issues  4  BIS Review 66/2004  related to repo-style transactions, securities financings and unsettled trades and credit derivatives. Our working groups are currently evaluating responses to the surveys and will draw on the surveys to help inform their discussions on clarifications and guidance that the Basel Committee can offer to banks and supervisors regarding the treatment of the trading book.
Cross-border problems in resolving different subsidiaries or branches can also be sidestepped.6 Any reorganistion of the operating companies to address the underlying causes of the group’s failure can be made in an orderly fashion after the solvency position has been stabilised via the bailin. Multiple-Point-of-Entry Resolution Multiple-point-of-entry resolution is what it says on the tin. Rather than resolving the group as a single whole, it would be split up into its parts. That is quite probably appealing for those global groups comprising a bundle of regional, on-the-ground commercial and retail banks, operated as separate businesses financially in distinct legal structures but with shared operational and central services. 6  4  See FDIC and Bank of England (2012), Resolving Globally Active, Systemically Important Financial Institutions. BIS central bankers’ speeches  Of course, just saying ‘break up the group along regional lines’ does not amount to a resolution strategy. What happens to those regional parts? Healthy parts might be sold or be maintained as a residual group shorn of their distressed sister companies. Those distressed parts would need to be resolved, either via P&A or via bailin of the local subsidiary (if it had issued bonds to the market). I want to stress that last point because ‘bailin’ as a resolution tool should not become synonymous with top-down SPE resolutions: an MPE resolution could involve the bailin resolution-tool being applied to some parts of the group.

Maturity mismatches are the bread and butter of modern banking, of course, and we know how to deal with the risk in a domestic setting: with central bank LOLR operations and deposit insurance, complemented by regulation and supervision, partly to deal with the moral hazard issues created by this safety net. Of course, central banks can lend out their foreign exchange reserves, but there is a well-known limit on that process. Some form of global liquidity provision is therefore called for. The swap lines granted during this crisis were precisely that, and most studies seem to support the conclusion that they made the crucial difference in relieving the strain in banks’ foreign exchange funding. To a significant degree, this was the domestic LOLR process replicated at the international level. We have a solution, then, at least at the conceptual level. But it is not clear that it is a reliable, practicable solution. At present, the swap lines are not a permanent and reliable feature of the international monetary system; for instance, they have been challenged vehemently in political discussion in the US. Furthermore, there are important unresolved governance issues, such as who should decide which countries get a swap line and which do not. It is thus an important item on the reform agenda to clarify the extent to which standing foreign currency LOLR facilities for solvent cross-border banks can be set up without going through national governments. This is one of the key issues currently under review in the case of the Spanish banking crisis.
The mean squared gap for inflation is calculated as   [ (t   , t )   *] / (T  1) , where π(t+τ,t) denotes the forecast in quarter t of inflation in quarter t +  and T  2  0  *  denotes  the  inflation  target.  0 [ y(t   , t )  y *(t   , t )]2 / (T  1)  The  mean  squared  gap  for  output  is  calculated  as  T  , where y(t+τ,t) denotes the forecast in quarter t of output in quarter t + τ and y*(t+τ,t) denotes the forecast in quarter t of potential output in quarter t + τ, and T is the forecast horizon (normally 12 quarters). 4  BIS central bankers’ speeches  inflation target of 2.5 percent but resource utilization worse (better). The Qvigstad (2005) necessary (but not sufficient) condition for optimal policy is satisfied, namely that the inflation gap and the output gap should be of opposite signs. The bottom left panel, with the mean squared gap for inflation plotted along the horizontal axis and the mean squared gap for output plotted along the vertical axis, has been added by me. The closer the mean squared gap for inflation and output is to zero, the better inflation or the output gap is stabilized.

1 The argument blaming monetary policy for the current crisis claims that low interest rates combined with large current account surpluses in emerging economies, particularly Asian and oil-exporting countries, created an abundance of liquidity that triggered excessive increases in asset prices (that is, a bubble). This was particularly acute in the housing market. When the bubble burst, the crisis erupted. This argument contends that monetary policy failed to act in a timely fashion and allowed severe imbalances to accumulate. Nonetheless, soaring asset prices do not necessarily result in a crisis like this one. Moreover, the financial systems of most emerging markets proved to be resilient despite significant monetary loosening before the crisis. A financial crisis requires the combination of two factors: a surge in the value of a set of assets that will  1  For further discussion on this issue, see De Gregorio (2010). BIS Review 76/2010  1  eventually collapse, and vulnerability of the financial system to the collapse in these assets prices. In the recent crisis the key assets where houses and structured credit products. The key vulnerabilities arose from the exposure of highly leveraged institutions – many of which had a substantial maturity mismatch – to these assets. These factors combined led to a degree of vulnerability that neither markets nor regulators anticipated.
3/4  BIS central bankers' speeches  After all, as moving forward requires the economy to consider not just cutting edge, but also bleeding edge ideas and technologies, we need to start thinking about novel and unconventional approaches. Several questions spring to mind. First, how should the government take calculated policy risks, while managing policy failures? In building pathways to high income, ambitious industrial policies, or “moonshot strategies”, will play a key role. With any policy however, there would be uncertainty and possibility of failure. Development economist, Dani Rodrick, called for effective industrial policy to be less on the ability to pick winners, but on knowing when to cut losses. Too low a failure rate could also mean that we are playing it too safe. The objective, hence, should not be to avoid mistakes, but to minimise the cost of mistakes. This will require the Government to build its capacity to account for and quantify the associated risk within the decision framework. Only then can we make smarter, more intelligent bets to get the most bang for the buck. Second, how can the Government learn and execute better? Focus should be as much on process and governance, as it is on the outcomes. While we have achieved leaps and bounds in economic development since our Independence, past reforms also provide important lessons in areas where we must strive to do better. We have had roughly 60-70 blueprints and masterplans over the years; not all have been executed to their maximum potential.

Nor Shamsiah Mohd Yunus: Aiming high - navigating the next stage of Malaysia's development Keynote address by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the world Bank's Aiming High Webinar Series, 27 May 2021. * * * The Economist magazine recently published an article comparing the welfare of citizens across countries, based on a survey of various aspects of well-being. The title of the article was “Money really can buy happiness and recessions can take it away.” It maintained that citizens in highincome countries felt better off about their current life situation, have money for food, and access to good and affordable housing nearby. Quality of life is also better due to less tangible factors such as corruption not being widespread, feeling safe when walking alone at night, feeling well rested and having helped a stranger in the past month. Implicit in these findings is the idea that economic growth should go hand in hand with greater welfare. More than the dollars and cents of becoming wealthier, it is the improvements in the quality of life that countries aspire to achieve. And so, I was heartened to read in the World Bank’s Aiming High report that Malaysia is likely to transition to a high-income economy between 2024 and 2028. This panel discussion is thus very relevant to our situation, now more than ever. For Malaysia, the journey to become a high-income economy will not be easy.