samchain/econo-pairs-v1 huggingface dataset:
Comprehensive capital controls were an important element in the programme, but the rationale behind them was to help stabilise the exchange rate after the currency had fallen more than 50% in 2008, and in addition, the stock of relatively liquid foreign-owned krónur – a legacy of carry trade and other capital inflows – amounted to around 40% of GDP and would have resulted in a further meltdown of the currency if it had begun to flow out through Iceland’s shallow FX market. After the split of the failed banks had been executed towards the end of 2010, it gradually became clear that it had not been a pure domestic/international split. The estates of the old banks held significant domestic assets, while only a small part of their claims were domestic. This posed a significant balance of payments problem for Iceland and, if left unmitigated at the point of resolution and distribution to creditors, could potentially have had a severely detrimental effect on the exchange rate and financial stability. The estates of the old banks were therefore brought under the capital controls in March 2012. In late 2008, the combination of capital controls and exchange rate stability was in several ways a key to stabilising the economy. First, a very significant part of private sector debt was either directly linked to the exchange rate or indirectly linked to it through price indexation.

That strategy, however, did not include a solution to the problem of the old banks. The split between the old and new banks was only finalised towards the end of 2010, and in any case, the old banks were largely exempted from the controls until March 2012. The current strategy is based on a guiding principle and a set of criteria that any proposed solutions would have to fulfil. If I explain these to you now, you will better understand what we have done to date and what is forthcoming. An overall guiding principle in the design of the liberalisation strategy was that it should entail comprehensive, cautious, and clearly communicated solutions, allowing the country to lift capital controls without undue risks to macroeconomic and financial stability. The strategy is comprehensive in the sense of mitigating, in a sufficient manner, the risk that excessive capital outflows would overburden Iceland’s small foreign exchange market and inflict systemic negative externalities on the general public. In particular, it involved reducing the size of capital outflows associated with the resolution of the failed banks’ estates through composition agreements based on explicit stability conditions, with a Pigouvian tax as a necessary backstop mechanism. The strategy is cautious in the sense that liberalisation is planned, timed, and sequenced so that the largest challenges are solved sequentially, in a manner that mitigates the risk of disorderly dynamics in the foreign exchange market.
The Norwegian economic system has undergone substantial changes over the past ten to twenty years. The model based on detailed control of capital, credit and interest rates and centralised coordination has been abandoned. Less emphasis is placed on having discretionary scope for manoeuvre and on using surprise decisions to influence economic developments. It is recognised that the structure of the labour market and of wage formation has a decisive impact on developments in employment. Monetary policy is delegated in Norway and in comparable countries. The monetary policy guidelines provide a foundation for building credibility and creating confidence in economic policy, thereby making it more effective. 8  BIS Review 50/2002

There was a happy feeling that, at last, a perennial monetary regime had been found, well-tailored to the characteristics of a modern market economy. Financial markets were efficient and the zero lower bound and liquidity trap appeared to be no more than historical curiosities. With hindsight, of course, we can see now that this “ideal” economy may never have existed. The Great Moderation was as much a product of “good luck” (brought by disinflationary effects of globalisation) than good policy. Monetary stability is a necessary but not a sufficient condition of financial stability, because capital markets are not always and necessarily efficient. And downward financial spirals may quickly bring our economies to the point where interest rates can no longer be used as effective tools. Therefore, as the crisis unfolded, central banks responded by taking unprecedented measures and, in the process, underwent three major changes A diversification of their interventions. In order to both: Unclog financial markets (both private and public). This involved exceptional liquidity provision to banks as well as temporary purchases of assets, both private and public. Circumvent the zero lower bound and bring down real long-term interest rates through purchases of government bonds, and/ or interest rate guidance. As a consequence, central banks’ balance sheets expanded by a factor of three, dramatically increasing their role in financial intermediation and sometimes raising concerns, at least in some quarters, about the possible inflationary impactTogether, this diversification and the increase in size have created more complex interactions with fiscal policies.
I do think that there is too great a tendency to rely unthinkingly on the rating agencies in this area. 2  BIS Review 15/2001  Regulators have signalled their intent in this area in the new Basel Consultative package. Not only will banks need to demonstrate a clean break to earn a reduction in their capital requirements, but they will also need to consider the operational and reputational risks involved in securitisations and derivative deals. My third question is whether we collectively yet have a proper understanding of the way the credit transfer business is bridging the lending, securities and insurance markets. Contracts in banking, on the one hand, and insurance markets, on the other, are in some respects different animals. In securities markets, timing of payments is of the essence. An insurance contract, by contrast, is not typically a commitment to timely payment. If insurance companies are participating in this market, in part using reinsurance-type agreements and in part using derivative agreements, there may be imperfect hedges or liquidity risks. The relationship a borrower has with its lending banks has also traditionally been different to that with its bondholders. Any problems the borrower may have in servicing the debt are typically addressed in different ways by lenders and bondholders. This problem has surfaced recently with the debate about whether restructuring should be included within the definition of a credit event. ISDA is addressing the question and it is clearly desirable that a market standard agreement and set of defnitions should exist.

Rather it is in the use of credit derivatives that leave the underlying asset on the balance sheet but transfer some or all of the credit risk. The market in credit default swaps on individual investment-grade corporate and country issuers is becoming more liquid, in some cases, we have been told, more liquid than the underlying bond market. And investment banks pricing new bond issues can increasingly look to credit default swap premia as well as to the spread over the relevant benchmark on any existing debt. Increasingly, also, banks use derivatives to transfer some portion of the credit risk on a loan portfolio rather than selling the portfolio outright, creating so-called 'synthetic' collateralised debt obligations. Data on the size of the market are difficult to come by. But a survey by the British Bankers' Association last year found that outstanding notional principal of all credit derivatives had increased more than three times since 1997 to around $ billion. Some contacts suggest the market may now be even larger than this. But I think it safe to conclude that it is already large and has been growing quickly. In a wider sense, the development of these markets for the transfer of credit risk is highly desirable. The institution best placed to originate a loan is not necessarily best placed to bear the risk. Markets in credit risk allow financial institutions to diversify their exposures across different sectors and geographic regions while maintaining customer relationships.
Figures 8 and 9 show the Riksbank's forecasts for inflation and the output gap since the beginning of 2007 and the sum of squares for the inflation-gap and output-gap forecasts. 9 It is apparent that the initial situation for the forecasts can be very different. If, for example, we compare the forecast in February 2007 with the latest forecast from February 2009, it is obvious that it was much easier to make the earlier forecast "look good". The forecast at that time indicated that the deviations for the inflation target and the output gap were small – the sums of squares were close to origin. This can be contrasted to the situation in early 2009 when the fluctuations in both of the forecasts were considerable and the sums of squares were far up to the right in the figure. Finally, before I move on to discuss the evaluation of monetary policy after the event, I would like to say that ex ante evaluations have the major advantage that they can be carried out on an ongoing basis in real time and that you do not need to wait several years to see the outcomes for inflation and the real economy. I would like to see competent ex ante evaluations become a lasting feature of the ongoing public debate on monetary policy so that they could constantly encourage the central banks to improve their analyses and their policies.

5 Figures 1 and 2 show a comparison of the accuracy of the forecasts in the period 1999-2008 for CPI inflation and GDP growth for a number of analysts. The red bars show the absolute mean error adjusted for differences in publication dates. The blue bars show the mean error with positive or negative sign. The shorter the blue bars, the smaller the systematic over- or underestimation has been – and the less bias the forecasts have had. If the bar is above the zero line the mean error has been positive and the forecasts have on average been too low, and vice versa. In the case of both inflation and GDP growth, the Riksbank's accuracy has been relatively good and its bias relatively small compared to other forecasters. Was monetary policy well-balanced ex ante? Given that it has been determined that the central bank's forecasts are normally satisfactory, the next step is to analyse, ex ante, the monetary policy deliberations the central bank has conducted on the basis of the forecasts. The first question to answer is whether the monetary policy conducted has been efficient. Given the information available at the time the decision was made, would it have been possible, by selecting a different interest rate path, to have stabilised inflation or the real economy better without stabilising the other less well? Would it even have been possible to achieve a better stabilisation of both?
At the same time, the price of ICT equipment has decreased in relation to other goods, paving the way for ever new applications. A more open world economy and technological innovation have an impact on working life. The world of work is changing. Jobs are being taken over by machines or transferred to firms in different locations. At the same time, new jobs are created. Every year roughly one in ten jobs disappears in the Norwegian economy, and about as many are added.4 This is part of the restructuring needed to generate growth. In order to profit from new technology, work must become less labour-intensive. When labour flows into other profitable activities, we get more out of our resources. Restructuring in the Norwegian financial industry has been successful. The banking crisis in the early 1990s became a catalyst for exploiting new technological solutions (Chart 3). Labour-intensive operations were made more efficient. The Norwegian financial industry was also an early adopter of digital payments. Households and enterprises have been quick to use faster and simpler payment solutions. Few of us miss having to run to the bank during our lunch break. We have seen the transition from banking in person to postal giro, online banking and mobile payment applications. Chart 3 Financial sector productivity growth. GDP per hour worked. Index.

However, despite the considerable progress in financial integration in Asia, it is still low compared to the European Union-16 (2007: 56% as a share of total portfolio investment). Asia going forward The current global crisis, considered to be the most severe in the post-World War II period, has revealed weaknesses to the current global system. In the aftermath of the crisis, the global economic and financial landscapes are expected to change significantly. While signs of stabilisation are now emerging, prospects for recovery in the advanced economies are expected to be gradual. The general consensus is that the emerging economies in Asia, in particular China and India, will lead the global recovery moving forward. Several structural factors will support growth in Asia, including the growth-enhancing reforms and greater regional integration that have been undertaken in the recent decade. In addition, Asia's relatively strong and resilient financial systems, which have remained relatively unaffected in this current global financial crisis, are in a sound position to provide financing to support domestic economic activity. Indeed, this trend will accelerate the formation of more multipolar global landscape in the future. For continued progress and development, the strategies for Asia are adapting to the changing landscape; leveraging on regional strengths and addressing current weaknesses and future risks. Two key principles have contributed to Asia's earlier success, namely the regional and global integration of the economy and inclusive development. Asia has always embraced openness. While greater integration beyond national borders will likely continue, the pattern of integration will change.
This deceleration will clearly have some dampening effects on euro area net exports. The euro area is a large economy where exports of goods and services amount to around 17% of GDP only. Economic activity in the euro area is therefore determined mainly by domestic factors. Overall, the fundamentals of the euro area remain broadly favourable. While, as recently published data show, real GDP growth slowed somewhat in the second half of last year, the level of business and household confidence has remained high, supported by, inter alia, high degrees of capacity utilisation and ongoing unemployment declines. Moreover, real income in the private sector will benefit from lower oil prices and from the reductions in direct taxes in 2001. Hence, while downside risks to real GDP growth exist, growth is very likely to continue at a reasonably robust pace. Developments in the euro area bond markets are in line with this outlook for economic activity. Moreover, inflationary expectations implied by bond yields confirm that the financial markets expect current levels of consumer price inflation to be temporary, and price stability to be maintained in the medium term. This assessment may also have been reinforced by the recent moderation in oil prices and the movement of the euro exchange rate in the period since the end of October 2000. BIS Review 8/2001  1  Lower oil prices and the appreciation of the euro have already produced some effects on price developments.

I expect we’ll see the value of cognitive diversity as firms tackle complex problems like a digital transformation from multiple perspectives. I expect we’ll see the value of agility that facilitates product innovation, reprioritization, constructive partnerships, or the successful integration of financial market specialists and technologists. Finally, I expect we’ll see the value of well-crafted incentives where employees are rewarded based on both “what” they do and “how” they do it. More broadly, I think firms with high levels of “cultural capital” will be more likely to successfully implement a digital transformation in a sustainable, prudent and responsible manner. 6 This is a central question for risk managers and supervisors because the evidence suggests that most large-scale transformations fail.7 Just like firms, investors and supervisors consider execution risk when assessing bank mergers, I expect more attention will focus on culture and the change management risks associated with innovation and digital transformation. In my view, the official sector can facilitate this transition. The 2018 guidance on responsible innovation related to anti-money laundering and terrorist financing is a good example.8 Supervisors can also press on the governance and change management framework to promote effective internal oversight. From our perspective, supervisors also need to be nimble and develop the necessary skills to assess innovation as firms transform. While a firm’s culture is not directly observable, I believe this will prove to be a critical part of any change initiative.
In banking, we have increased competition by introducing Qualifying Full Bank privileges, issuing more restricted banking licences and providing greater flexibility for offshore banks. Local banks have greater strategic autonomy and operational flexibility now that the limit on foreign shareholdings has been removed and several regulations revised. We have also opened up the stock market. The Singapore Exchange was the first in the Asia-Pacific to both demutualise and merge the cash and derivatives activities. SGX has made its listing requirements more flexible to cater to growth enterprises. We have loosened up rules on foreign listings in Singapore dollars, reduced capital requirements for securities firms, and eased other onerous restrictions. By 1 January 2001, commissions will be completely freed up. Access to trade on SGX, which is already being opened, will be fully liberalised a year later. In the debt market, we relaxed restrictions on borrowing $ to enable foreign players to issue $ bonds. We set up the Approved Bond Intermediary scheme to encourage the origination, placement and management of debt issues in Singapore. We also increased the issuance of Singapore Government Securities and extended the maturity profile to ten years so as to create a more liquid government bond market. The fund management industry now has access to a larger pool of CPF funds as well as government funds farmed out by MAS and GIC. New tax incentives and more flexible licensing requirements should also attract more fund managers here.

These include moving to risk-based capital requirements and allowing brokerages to enter new businesses such as fund management and corporate finance. This will encourage them to go into higher value-added activities such as product origination. Debt We have made significant headway in developing the $ debt market. Last year saw $ bn worth of non-government $ issues, more than double the amount raised in 1998. To promote the bond market further, MAS will address both the government as well as statutory board issues. We will improve the efficiency and liquidity of the SGS market, and do more to encourage institutional investors to participate in the market. We have worked out a package of measures for this purpose, which we will announce soon. We will encourage more GLCs and statutory boards to tap the bond market for their funding needs. To broaden and deepen the debt market, we are studying ways to promote asset-backed securitisation, in particular mortgage-backed securities (MBS). We will also look at the feasibility of establishing a mortgage corporation. This would pool mortgages from financial institutions so as to jump-start the development of the MBS market. Sustaining a flow of foreign issuers remains the fundamental challenge. Global issuers will seek to diversify their funding currencies, and we have to offer Singapore as an efficient and credible marketplace, with the Singapore Dollar a stable and reliable currency of funding. Asian borrowers will also turn increasingly to the bond markets to reduce their reliance on bank funding.
This will provide an incentive for insurers to strengthen their risk management practices in order to benefit from lower contributions to the insurance compensation scheme. It is hoped that discussions at this dialogue will contribute towards providing greater clarity in the thinking on the future direction of corporate strategies as well as the regulatory responses to ensure the sound development of the insurance and takaful industry. On this note, I wish you a successful and productive dialogue. Thank you. BIS Review 76/2006  5

And second, there were no people with well-founded experience on how to run and lecture these programs. There was a generation problem - one generation was - and still is - missing. Where we stand today and how we have coped with those drawbacks? There was no magic solution but I dare say that today we have almost overcome the problem of missing generation in economic education and that we have been closing the gap between us and the developed world fast. I see three important factors which contributed to this development. On the first place I would put the new generation of young and strongly motivated people. They created enormous pressure on those who with their limited know-how - started to prepare new economic courses. This is my second point in this respect that there was a learning-by-doing process of creating new courses, mostly designed along the recent trends in economics and business education. Despite the fact we did not have any experience with these courses, we roughly knew which direction to go. Last but not least, the Czech education system received a strong support from abroad, both in terms of visiting lecturers and money. In some cases, these two aspects were interconnected, and completely new programs were gradually built up. Among all, let me name Center for Economic Research and Graduate Education, US Business School Prague and CMC Graduate School of Business. I can offer another illustration of how far we have gone. I have been with the Czech National Bank for six years.