samchain/econo-pairs-v1 huggingface dataset:
And in some countries, the process of catching-up in real incomes has been slower than expected at the start of transition. For acceding countries as a whole, per capita income today is less than half of the average of the EU. Given the low starting point for most countries, increasing prosperity and living standards will be a major policy objective for quite some time. In view of that strategic objective, one has to underline that prudent macroeconomic policies are key to support and facilitate progress towards higher GDP-per-capita levels. Accession to the EU is expected to have positive effects on the countries' prospects for convergence. The full integration into the internal market will increase growth prospects and thus foster the catching-up process, mainly through trade and investment (FDI), together with lower interest rates. New Member States will have to implement and enforce the “acquis communautaire” of the European Union, which they have adopted in the course of recent years (excluding, for the time being, those areas where transitional arrangements apply). The EU has also been preparing intensively to make enlargement work. Within the realm of central banking, the Eurosystem has been engaged since 1999 in a constructive and ever more intensive dialogue with the central banks of the new Member States. Already since the signing of the EU Accession Treaty in 2003, the Governors of the national central banks of acceding countries have been taking part as observers in the General Council of the ECB.

A large number of Spanish firms have remained in operation and in profit as a result of having undertaken rapid adjustment, although unfortunately this has almost always been achieved through the only channel permitted by our obsolete and inefficient labour market: staff layoffs. Households, whose saving rate had fallen to 11%, reacted by swiftly raising it, which is enabling them to lower the rate in the present phase of the adjustment. At the same time we saw how non-energy inflation, which had been continuously far above that of our euro area partners since the creation of the single currency in 1999, fell substantially, to the extent that, in 2009 and 2010, its annual rate was under 1%, holding below that of the euro area. Finally,  BIS central bankers’ speeches  1  with regard to the banking sector, the rapid expansion of credit, which had reached a rate of 25% per annum and had been the most important source of excessive household and corporate indebtedness during the years of expansion, fell rapidly to stabilise at slightly negative levels over the past few years. Some might say that all this was inevitable, that ten years of imbalances required a correction, and that is partly true. But if we compare with the adjustment observed in other countries in a similar situation, the reaction of the Spanish private sector has been notably swift.
What is the conceptual framework for the performance of central bank functions today? That is to say, how do they decide on their monetary policy stance given the economic situation? Although there are differences between central banks, I believe it is possible to generalise by saying that the prevailing framework is based on the idea that, as a result of various economic frictions, including notably price and wage rigidities, the economy may deviate from full employment and stable prices. The central bank is capable of influencing the state of the economy through changes in the nominal interest rate. These changes affect in turn the real interest rate, i.e. the interest rate adjusted for inflation, which is the relevant one for the investment and consumption decisions of firms and households. 4/7  Thus, by indirectly affecting the spending of economic agents, the central bank exerts influence over inflation, attempting to stabilise it at moderate levels. With this objective, the central bank attempts to ensure that the real interest rate is as close as possible to the economy’s “natural” interest rate, i.e. the rate that would prevail if the economy did not suffer from the frictions that I mentioned. The natural rate, which in recent years has given rise to endless debate among economists, depends on structural parameters, including most notably demographic developments and technological innovation. If the actual interest rate is above the natural rate, the monetary policy stance is contractionary, leading to an excessive decline in prices and economic activity.

A greater degree of cooperation is required from governments in the area of reforms and budgetary policies, to encourage growth and reinforce the monetary stimulus. Conclusions I shall now conclude. Central banks have played a fundamental role in the economic policies launched to combat the crisis, especially in the most developed economies, namely the United States, the European Union, Japan and the United Kingdom. This response has been based on very loose monetary policies, which have led to growth in central bank balance sheets to unprecedented volumes and, although at different tempos, has helped to contain and reverse the negative demand and employment dynamics. In the context of the European Union, the role of the ECB has, of course, been extremely important, and the attention aroused by its measures, initiatives and announcements is therefore entirely understandable. 6/7  I said at the start that central banks are offspring of the Enlightenment. As heirs to this tradition we should all aspire to ensure that pursuit of the common good and reason continue to be the main driving forces guiding these institutions. Thank you very much for your attention, and my congratulations to all this year’s CUNEF graduates  7/7
As we know during the 30 years or so immediately preceding the First World War, major world currencies were based on gold, in the sense that the value of the currency in one way or the other was closely linked to the intrinsic value of the metal itself. However, after the First World War, countries one after another abandoned the gold standard and adopted what is called the fiat money. That is, paper money and the gold had gone through a divorce. Therefore under the prevailing circumstances printing money and managing the financial system had become more important, which created a more compelling need for the establishment of strong institutions to take care of banknote issuing and to safeguard the value of money. In this regard, Turkey did not and could not stay uninvolved in this general tendency. Having won the War of Independence, the founders of the Turkish Republic were aware of the need to establish a central bank. The establishment would have been the economic crowning of the political achievements and was considered to be the most significant symbol of sovereignty as well as economic independence. Thus, the idea of establishing a national central bank was debated intensively at the 1st National Economic Congress held in Izmir in 1923. The ideas discussed and the deliberations made were crystallized in the preparation of “The Draft Law on the Republic Issue Bank” with the contributions from European scholars.

The Central Bank of Turkey aims to fulfill expectations by operating as a sound institution through its independent, transparent and accountable status, by policy implementations focused on its sole mandate of price stability and by practices to increase efficiency in institutional design. 4  BIS Review 57/2007  Hence, it is a great honor for me to be here with all the executives and former governors who have made the Central Bank of Turkey what it is today throughout this period. I would like to extend my thanks to them all again for all their valuable contributions to this important institution. Thank you. BIS Review 57/2007  5
Jean-Pierre Roth: Role of the central banks with respect to the financial market crisis Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Forum Suisse de Politique internationale, Geneva, 23 May 2008. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The central banks have been working extremely hard to respond appropriately to the turmoil that has beset the financial markets in recent months. Aimed at enhancing the resilience of the markets and safeguarding the stability of the financial system, the measures they have taken have been drastic and innovative at times. As this episode has also shown, a policy of preserving financial stability is not always easy to reconcile with monetary policy. The central banks must therefore tread carefully and avoid compromising their price stability objectives when intervening to defend financial stability. While money market conditions deteriorated over the past nine months, the Swiss National Bank put off interest rate hikes so as not to provoke a tightening of credit conditions in Switzerland. Effective action by banking supervisory authorities is key to ensuring long-term financial stability. However, the central banks also have a role to play in reinforcing the markets during times of need.

As you know, many individuals inside our member agencies devoted substantial efforts to the Basel II process. We are indebted particularly to the leadership of Bill McDonough, our prior chairman and the former President of the Federal Reserve Bank of New York, who championed this new approach to capital supervision. We appreciate as well the leadership and excellent work of Danièle Nouy, the former Secretary General of the Committee’s highly professional Secretariat, and that of her successor, Ryozo Himino. Given that the capital framework serves as a cornerstone to the safe and sound operation of the banking system, we sought to conduct our discussions in a highly transparent process. We engaged in extensive discussions with many interested parties on the domestic and international levels, and I would like to thank in particular two groups of external organisations and individuals who supported our efforts. First, I should mention the countless representatives of banking organisations, industry associations, and other private sector bodies who devoted time and energy to sharing their views. They offered hundreds of comment letters, as well as data to test the quality of the rules, and they engaged in exhaustive hours of discussion with the Committee, its working groups and member authorities. Above all, banks and other private sector bodies helped us to ensure that supervision would be more closely aligned to sound industry practices.
In trade in value-added terms (“TiVA”), more than one-third of the exports from the five economies of Northeast Asia and the eight economies of Southeast Asia 1 ends up in the region itself – this is nearly twice their exports to the US. ASEAN in particular is becoming a major economic force in Asia. It is a $ trillion market with over 630 million people. Based on current growth rates, ASEAN is expected to become the fourth largest market by 2030, behind the EU, China, and the US. ASEAN has emerged as a key global manufacturing region, with extensive supply chains linking the individual economies and to China. ASEAN is the world’s fifth largest manufacturing economy in value-added terms. So, in the face of rising trade protectionism, it is important for Asian economies to strengthen trade, investment and infrastructure networks to sustain long term growth. Indeed, the best response to trade restrictions is to further liberalise trade among willing economies. And this is exactly what Asia is doing. The Regional Comprehensive Economic Partnership (“RCEP”) is a good example. It brings together the ten ASEAN economies and China, India, Japan, Korea, Australia and New Zealand. It signals the region’s commitment to freetrade. Negotiations are ongoing, but when successfully concluded, the RCEP will create the world’s largest trading bloc, covering one-third of global GDP. And by the end of next month, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“TPP-11”) will enter into force.

4  BIS Review 140/2010  The FDIC has these powers for banks and thrifts as well as a great deal of experience in managing bank failures and has demonstrated the utility and flexibility of its tools. A positive development is that many countries are considering or have adopted legislation giving the financial resolution authority similar powers. The U.S. Dodd-Frank Act passed in the summer broadens the scope of the FDIC’s resolution powers, although in a carefully circumscribed manner. The Dodd-Frank Act allows the FDIC to resolve not only a bank, but a financial holding company of a banking organization or a nonbank financial institution, if the requisite recommendations and conditions are present, among them, that the failure is a threat to financial stability. When the FDIC is appointed receiver, it has available its full set of resolution powers, including the ability to create a bridge company for a nonbank financial institution. The Dodd-Frank Act also strengthens the supervisory regime for systemically important financial firms. It empowers the newly formed Financial Stability Oversight Council (FSOC) to designate bank and nonbank firms as systemically important. The FSOC has just published an advanced notice of proposed rulemaking soliciting comments on the criteria for designating nonbank financial companies systemically important. Companies that are so designated will be subject to consolidated oversight from the Federal Reserve. The U.S. supervisory and resolution authorities have also begun the process of resolution planning, as recommended by the CBRG.
First, during the financial crisis, we observed that the funding cost advantage of the larger banks grew substantially relative to the smaller banks as the crisis became more acute. This is noteworthy because if the funding cost advantage is due to a too big to fail premium, then that premium should rise when the economic environment worsens and the potential risk of failure increases. Of course, the Dodd-Frank Act has changed the landscape. Second, ongoing research by Federal Reserve Bank of New York staff shows that the funding advantage of large versus small banks is higher than the funding advantage for large versus small non-bank financial firms and non-financial firms when other factors are held constant. Third, the major rating agencies add an uplift to their credit ratings for the largest banks due to the prospect of government support. While it is possible that the rating agencies are wrong in their assessment, what matters is perception. If investors share this view or simply follow the ratings, then this should create a too big to fail funding advantage. With respect to the second consequence of the subsidy – the incentive for management to make their firms larger and more complex so as to be perceived as too big to fail and thus able to take advantage of any funding subsidy – this is harder to evaluate. On one hand, this is not the only incentive management may have to get bigger.

Finally, I am not yet convinced that breaking up large, complex firms is the right approach. In particular, these firms presumably exist, in large part, because there are scale or network effects that allow these firms to offer certain types of services that have value to their global clients. These benefits might be lost or diminished if such firms were broken up. In addition, the costs incurred in breaking up such firms need to be considered. Finally, the breakup of such firms would not necessarily result in a significant reduction in overall systemic risk if the resulting component firms were still, collectively, systemic. As always, what I have to say reflects my own views and not necessarily those of the Federal Reserve System. Defining the too big to fail problem The root cause of the too big to fail problem is the fact that the failure of a large, complex financial firm is likely to generate significant, undesirable externalities. These include disruption to the ability of the financial system to provide credit and other essential financial  BIS central bankers’ speeches  1  services to households and businesses. When this happens, not only is the financial sector adversely affected, but its troubles spill over and harm the real economy. Although there are negative externalities associated with the failure of any financial firm, these externalities are disproportionately more damaging in the case of large, complex and interconnected firms.
In subsequent years, costs have varied around this level. After a period, we will be able to cover a smaller share of our imports using current petroleum revenues and drawings on the Petroleum Fund. Competitiveness must then have to be improved. It may have to be brought back to around the level prevailing at the end of the 1960s prior to Norway’s emergence as an oil nation.4  The labour market In the long run, wage growth must be consistent with labour productivity. When real wage growth is higher than productivity growth, profitability in the business sector deteriorates and the business sector will then recruit fewer employees and reduce their workforces. Likewise, employment in public entities  3  See Kydland, F.E. and E.C. Prescott (1977):”Rules rather than discretion: The inconsistency of optimal plan”, Journal of Political Economy85, pages 473-490. 4  See Akram, Farooq Q. (2003): “Reell likevektsvalutakurs for Norge” (Real equilibrium exchange rate for Norway), Norsk Økonomisk Tidskrift 118, pages 89-112. BIS Review 10/2005  7  will decline if labour costs rise more than revenues. When the social partners engage in centralised and local negotiations, they will therefore weigh employment against the usefulness of taking out higher pay. Compared with other European countries, income formation in Norway has been fairly flexible. Wage growth has rapidly declined when unemployment has risen. This is why unemployment has not taken hold at a high level. The favourable results partly reflect the considerations underlying the wage settlements at a centralised level.

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Lee Hsien Loong: ASEAN post-crisis - rebuilding confidence and prosperity  Speech by Mr Lee Hsien Loong, Deputy Prime Minister of Singapore and Chairman of the Monetary Authority of Singapore, at the Bank of Thailand, Bangkok, 30 November 2000. *  *  *  Distinguished Guests, Ladies and Gentlemen, Introduction I am honoured to be here today to deliver this lecture organised by the Bank of Thailand in conjunction with the 72nd birthday celebrations of His Majesty the King. On this joyous occasion, on behalf of Singapore and its citizens, I wish His Majesty good health and many happy returns of the day. The topic of my talk today is, “ASEAN post-crisis: rebuilding confidence and prosperity”. The Asian crisis is past, but its consequences are still with us. I propose to review the post-crisis environment which ASEAN faces today, and discuss some of the lessons to be drawn from the crisis. Then I will focus on what ASEAN and its member countries should do to restore confidence, long-term growth and prosperity in the region. Passing of the crisis The financial crisis swept through ASEAN economies like a tidal wave. Between 1997-99, the combined GDP of the original five ASEAN members fell about one-fifth, in $ terms. Unemployment rose, businesses folded, and governments and societies came under stress. Three years after the crisis struck, the region is stabilising. The worst passed much sooner than many expected. The recovery initially depended on expansionary fiscal policies, and strong exports especially of electronics products.

In this trajectory, the maturation of the mining investment cycle discussed in previous Reports has played a major role. In addition, the extraordinary imports of transport materials of the last quarter of 2012 did not continue into this year, and imports of other capital goods were weak in the past few months. Consumption has also slowed down, although its adjustment has proceeded gradually, because of still tight labor market conditions, real wages growing strongly and consumer expectations still optimistic, although less so than in the first half of the year. The deceleration of private consumption is expected to continue over the coming months coupled with a not so strong labor market, a vision that is grounded on our business perception report Informe de Percepciones de Negocios. CPI inflation has been below expectations, mainly reflecting the drop in international fuel prices, which more than offset the seasonal price increases of some perishable foods and the peso depreciation. Thus, in October the CPI rose 1.5% y-o-y, which again placed it temporarily below the tolerance range. In contrast, the core measure CPIEFE brought no major surprises and continued to increase up to 1.6% annually in the same month. Two years ahead inflation expectations remain around 3% (figure 3). In the international financial markets, movements in the last few months have been largely determined by news about the future course of monetary and fiscal policies in the United States.