samchain/econo-pairs-v1 huggingface dataset:
When China became a member of the World Trade Organization in 2001, its foreign trade was 30 percent of that of the US. The Chinese economy has since grown at an unprecedented pace. In 2013, China overtook the US as the world’s largest trading nation. Ample labour supply and low cost levels have given China and the other emerging economies of Asia strong competitive advantages in international markets. BIS central bankers’ speeches  1  The global flow of credit over the past 15 years has taken an untraditional direction – from relatively poor countries with strong economic growth to more prosperous, mature economies experiencing lower growth. For a long period, this shift contributed to substantial imbalances in the global economy. Ample supply of credit in western economies pushed down borrowing rates. Facing competition from Asia, it became relatively less profitable for firms in the west to invest in new productive capacity in their home countries. Instead, cheap credit was widely used to finance consumption and housing, particularly in the US and Europe. Banks and financial institutions were, in practice, free to fuel credit growth. In retrospect, it is clear that a vast amount of capital was squandered. Many businesses and a number of countries are struggling with high debt levels. Governments that ran economies on cheap credit are now paying a high price in the form of austerity measures and unemployment. In parts of Europe, unfinished infrastructure and empty buildings are not uncommon sights.

In the discussion at Eidsvoll, Christian Magnus Falsen, a key member of the Constituent Assembly, said that no state can exist without a well-functioning monetary system. Another prominent member of the Assembly, Count Wedel Jarlsberg, insisted that the nation must have its own bank. The people’s elected representatives took responsibility for the monetary system, as stated in Article 75 of the Constitution: «It devolves upon the Storting to supervise the monetary affairs of the Realm». The Storting delegated the task of supervising the monetary system to Norges Bank, which was established in 1816. The king would no longer have the authority to print money at his own will. At its inception, Norges Bank’s head office was located in Trondheim, a twelve-day journey from the government in Christiania, and even farther from Stockholm, giving the central bank a geographical – and not just formal – distance from the government authorities. Much has happened since 1814. Norway no longer lags behind other western economies. Inflation is low and stable. We have established a clear division of responsibility for economic policy and well developed institutions founded on the Constitution written at Eidsvoll 200 years ago. Chart: Shift in the world’s economic centre of gravity In 1814, the great powers of Europe dominated world trade. The world’s economic centre of gravity has since then shifted westward. Today, in the 21st century, the centre of gravity is moving across the Pacific to Asia.
The disturbances caused by the COVID-19 pandemic will inevitably delay many streamlining and integration measures, however. Nevertheless, merging the tasks of the Central Bank and the Financial Supervisory Authority into a single institution better enables us to face shocks like the current one and rise quickly and decisively from the downturn that lies ahead. I am convinced that, under these circumstances, the incontrovertible mathematical formula – that 1+1=2 – does not apply. The strength of the two institutions unified will be much greater than the sum of its parts. The new Central Bank is an institution that dares to act, can act, and will act. Although a number of policy actions have been taken in recent weeks, we have not emptied our toolbox – far from it. We have a number of other economic policy measures available and will use them if and when the need arises. We will do what is needed to face down the deep but brief economic shock currently threatening our country. Honoured guests: We thank you for listening. 4/4  BIS central bankers' speeches

During this time the debate on financial reregulation has raged from public outcry over bonus compensation of bank CEOs to reregulation of financial services in the form of Basle III, Dodd Frank and similar regulations across the Atlantic. Under the current course, the trend towards tightened financial regulation is not likely to be reversed and we would all have to live to more regulation, though much of the new regulations were cure for diseases that were contracted elsewhere. 10. When speaking about financial regulation, I am reminded of the issue of transparency and governance. The investigation into the LIBOR scandal in major global financial centres and the consequent pursuit of similar investigation in regional financial centres point to the need for greater attention to market conducts. As market confidence is critical to the development of financial markets, any scandals may derail and set us back in the development process. We therefore have a duty to oversee that our markets function in a fair and transparent manner, to safeguard the reputation and trust of the users of financial services. In the past few years, the Bank of Thailand, with the help of key market participants, have put a great effort to promote our own reference rate – the BIBOR, so we have an interest to see that the market is transparent and inspire confidence among the users. 11. To enhance market conduct, the BoT in collaboration with the ACI are considering a code of conduct for FX dealers and brokers.
According to a recent report of the United Nations Conference on Trade and Development (UNCTAD), Saudi Arabia emerged as the largest recipient of foreign direct investment (FDI) in the Arab world in 2006, attracting $ billion in FDI, an increase of 51 percent over 2005. The global rating agencies Standards & Poors and Fitch have also raised the sovereign credit ratings of the Kingdom to A+. Also, Saudi Arabia has been upgraded according to the World Bank’s Ease of Doing Business Index from 38th place to 23rd place in 2007. The Government has encouraged the establishment and growth of value-added industries in areas where the Kingdom has competitive advantages, namely, cheaper energy, strategic locations and availability of raw materials. King Abdullah has recently launched four megaeconomic cities in Rabigh, Hail, Al-Madinah and Jazan, which are expected to draw almost  BIS Review 150/2007  1  SR 300 billion in investment and create more than a million jobs. It is worthy to note that these economic zones are located in the less developed cities and in areas away from the existing economically developed regions and are specifically selected to ensure that development and employment opportunities are spread around the Kingdom. An important indicator of progress made in diversifying the economy is provided by the trend in our non-oil exports. Such exports were insignificant in early eighties, but they have been rising sharply in recent years. Since 2000, they have risen continuously.

The Saudi economy is an integral part of the global economy and is thus susceptible to systemic risks, although Saudi Arabia did not feel the financial turmoil and liquidity crisis experienced by the rest of the world as a result of the recent sub-prime crisis, we are, nonetheless, vigilant in our efforts to continually monitor the domestic market and to ensure continuation and stability of policies and regulations. I wish all success to your forum and a good stay in the Kingdom. Thank you for your attention. 4  BIS Review 150/2007
We should also reassess the scope of  13  See National Audit Office (NAO), Annual Audit Report by the Auditor General: Public Accounts 2008, December 2009. Examples of inefficiencies and improper practices range from 28,810 cases of social security contributions worth EUR 4.5 million being in arrears, to the number of hospital meals charged in one hospital consistently exceeding the number of in-house patients, to cases of payments to government suppliers not supported by VAT receipts. 14  The welfare gap, i.e. the difference between all items of expenditure and contributions made in terms of the Social Security Act, 1987 has more than doubled in the last five years to EUR381.2million in 2010. The cost of pensions and related benefits is estimated at EUR 564 million and that of free hospitalisation and community care EUR 306.5 million. See, Ministry of Finance, the Economy and Investment Financial Estimates 2010, p. 294. 6  BIS Review 156/2010  social benefits, to distinguish between those that truly help to combat poverty and social ills and others that are not so effective in achieving the desired outcomes. Finally, I believe the time has also come to consider how to strengthen the budget process, drawing on models tested successfully abroad. These typically involve fiscal rules providing for limits on supplementary budgets, multi-annual expenditure ceilings and more transparency in fiscal policy making, as well as an independent monitoring agency. The pursuit of fiscal sustainability along such lines requires a broad political consensus.

Michael C Bonello: Time for a reality check Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the annual dinner of the Institute of Financial Services, Saint Julian’s, Malta, 20 November 2010. *  *  *  I would first of all like to thank the President and his Council for inviting me once again to address their annual dinner. Before I do so, I would like to commend IFS Malta for its unstinting efforts to promote higher levels of expertise in our financial community. The success of the foundation degree programme at MCAST and the new training programmes in Funds Administration, Anti-Money Laundering and Financial Crime Prevention are but two examples. I would also like to congratulate the Institute’s nominee, Mr Peter Calleya, for his election to the EBTN Executive Committee. The economic rebound should not give rise to complacency Last year I said that an improving external environment could benefit the Maltese economy. And indeed it has. The recession proved short and shallow, with a peak-to-trough decline in GDP of 3.4%, as against 5.3% in the euro area, and the GDP contracted by just 2.1% in 2009. In the first half of 2010 the economy grew by 4%, which suggests that the outturn for the full year could top 3%. This encouraging performance has prompted manifestations of the “Malta is different” syndrome, with suggestions that belt-tightening and structural reforms are for others, but not for us.
It would be helpful if actual conversions happened reasonably frequently and not only in a rare crisis, demystifying the whole process. One  16  Admati, DeMarzo, Hellwig and Pfleiderer, 2010, “Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity is Not Expensive,” Stanford GSB research Paper 2065. 17  Duffie, 2010, “Contractual Methods for Out-of-Court Restructuring of Systemically Important Financial Institutions”, in Ending Government Bailouts as We Know Them, Scott and Taylor (eds). Hoover Press. 10  BIS central bankers’ speeches  would also need to make sure that the maturity profile was such that no dominant amount of contingent capital was rolled at any one point in time. There could be an on-going process of monitoring, rather than particular trigger dates that may cause a focus for a “run” during times of stress. Stress tests could also be one of the tools to force conversion of contingent capital securities by bank regulators. In addition to the accounting based capital trigger, capital requirements could be expressed in terms of what scenarios a bank has to be able to withstand, with capital securities triggered when the existing common equity is not sufficient. One argument that has been raised against contingent capital, has been the lack of a natural investor base, reflecting market segmentation between “credit”, “rates” and “equity” investors. We believe strongly that market segmentation is an inefficiency which should not be taken as a given; there are already regular convertible debt securities with an investor base.

From an investor protection standpoint, one may have drawn a sigh of relief, as any potential issues about misrepresented risk profile disappeared, but from a financial stability perspective, it was obviously disturbing. In a short space of time, billions of assets showed up on already over-extended bank balance sheets. One may think it somewhat surprising that (almost) all the banks decided to absorb their SIVs, especially since it must have seemed likely that the SIV structure would not come back any time quickly as a viable funding structure. We believe that the main reason for doing this was that not doing so would have sent a distress signal to the market. In other words, if a bank chose not to absorb this problem, the perception would be that they simply could not afford to do it, thus telling the market that they were in even worse shape than previously feared. There may also have been an element of “repeat game”. If one lets one’s investors take the pain, then they may not return for future transactions. It seems plausible that if the SIV crisis had transpired during a time when most other markets had remained functioning, the decision making process might have been very different. “Signalling” is at its most powerful when the level of uncertainty in the system is highest.11  10  The one notable exception was Standard Chartered, which let its “Whistlejacket” SIV unwind. 11  The issues arising from ABCP conduits were similar, although the structures were slightly different.
The institutional arrangements that seem most relevant to monetary policy credibility and competence involve the degree of independence afforded the central bank, the design of the mandate or objectives given the central bank, the regime or instruments adopted by the central bank to pursue that mandate, the structure of the decision making process, and the degree of communications and transparency. I want to talk about this broad complement of the institutional foundations of a credible central bank, and I’ll do so in part by talking about the history of the central bank of the United States. For reasons that are simple and compelling, independence is a critical part of the foundation for a credible central bank. Independence comes in many forms, and some of the most important dimensions of independence are hard to discern from the legal underpinnings or the formal structure of the institution. Central banks with many of the formal or legal attributes of independence can make bad policy choices. Central banks without formal independence can make good policy choices and achieve sustained improvements in macroeconomic outcomes. What does independence mean and how do we know it when we see it? Why is it important and how does it affect the quality of monetary policy choices and outcomes? In its most basic sense, independence is the freedom to pursue a defined monetary policy objective without consideration of political or private interests, and without fear of subordination to other economic policy objectives.

It was not until 1935 that Congress removed the representatives of the government from the seven-member Board of Governors and allowed the Federal Open Market Committee to take the form in which it functions today, which allows all seven governors and the president of the Federal Reserve Bank of New York a permanent vote with four of the remaining eleven district bank presidents voting on a rotational basis. Even after that important change in institutional independence, for significant parts of the succeeding decades, the Treasury played a major role in monetary policy, and monetary policy was often directed at accommodating the desire of successive Administrations for low interest rates and higher employment. It was only in 1951 that the Federal Reserve and the Administration took the next major step toward more independence. In what became know as the “Treasury/Fed Accord,” the Treasury agreed to step back and give the Fed more freedom to conduct policy, and the years of relatively low inflation and strong growth performance that followed for a time seemed to have vindicated the wisdom of that choice. But even after the Accord, monetary policy was characterized by periods of what was effectively a form of fiscal dominance. And even when fiscal policy was better, the Fed was at times under pressure to accommodate the objectives of the Administration with lower interest rates than might otherwise be appropriate for sustaining low inflation.
William C Dudley: Still more lessons from the crisis Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Columbia University World Leaders’ Forum, New York, 7 December 2009. *  *  *  It is a pleasure to have the opportunity to speak here this evening. I was a freshman here at Columbia nearly 40 years ago. I’m certainly glad to be back, but I must admit that there is a downside: It does make me feel a bit old in the process. Tonight, I want to talk about two broad sets of issues: First, the Federal Reserve’s role in responding to the crisis and the steps we must take to reduce, as much as possible, the risks of this type of costly and painful episode in the future and, second, the economic outlook for 2010 and some of the challenges that the Federal Open Market Committee (FOMC) faces in the conduct of monetary policy. The actions undertaken by the Federal Reserve over the past two and a half years have been critical to stabilizing the financial system and preventing the extraordinary distress in markets from causing a deeper and more protracted economic downturn.

This again suggests that there is a role for supervision and regulation in the bubble prevention process. For example, it might be appropriate for the Federal Reserve – working with functional regulators such as the SEC (Securities Exchange Commission) – to monitor and limit the buildup in leverage at the major securities firms and the leverage extended from these firms to their clients and counterparties. Whether there is a role for monetary policy to limit asset bubbles is a more difficult question. On the one hand, monetary policy is a blunt tool for use in preventing bubbles because monetary policy actions also have important consequences for real economic activity, employment and inflation. On the other hand, however, there is evidence that monetary policy does have an impact on desired leverage through its impact on the shape of the yield curve. A tighter monetary policy, by flattening the yield curve, may limit the buildup in leverage. 1 Whether it would be more effective to limit leverage directly by regulatory and supervisory means or via monetary policy is still an open question. But it is becoming increasingly clear that a totally hands off approach is problematic. I also believe we could have done better in our supervision of the large complex commercial banking organizations.
Øystein Olsen: Monetary policy and interrelationships in the Norwegian economy Address by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the Centre for Monetary Economics (CME)/BI Norwegian School of Management, Oslo, 5 September 2011. Please note that the text below may differ slightly from the actual presentation. *  *  *  When Trygve Haavelmo was awarded the Nobel Prize in Economic Sciences in 1989 for his pathbreaking work to quantify economic interrelationships, the Nobel Committee summarised his contributions1. First, empirical science must be based on theories which reflect reality. Second, data and observations must conform to theoretical concepts. Third, a methodology is needed which can be used to quantify and test theoretical relationships on the basis of empirical observations. The interrelationships in the Norwegian economy serve as a backdrop for my address. The purpose of the Centre for Monetary Economics (CME) is to be a venue where researchers and economists in banking and finance can exchange views and gather knowledge about the Norwegian economy, perhaps with particular emphasis on monetary policy. My contribution today will be an analysis of relationships between some key economic variables and how Norges Bank utilises that insight when setting the key policy rate. As Haavelmo described, theories regarding economic interrelationships can never conform fully with empirical observations. Nor can economists carry out controlled experiments in the same way as in the natural sciences. Nevertheless, Haavelmo was an optimist.

The ultimate assessment is, as mentioned, a result of Norges Bank’s professional  9  The estimation is based on a one percentage point increase in the interest rate, followed by a gradual reduction in line with the response pattern in the model. The analysis shows the impact of the interest rate increase on mainland GDP for Norway and inflation adjusted for tax changes and excluding energy products (CPI-ATE). 6  BIS central bankers’ speeches  judgement and will also capture considerations that are not sufficiently safeguarded by our models. As such, the models are only a tool. But, a model such as NEMO is a very useful tool for analysing developments and in interest rate setting. It helps us interpret and understand the dynamics of the Norwegian economy. The model apparatus is continually being developed. Among other things, we are exploring how financial markets and the linkage to the real estate market can be incorporated into such a model. Norges Bank’s response pattern expresses the assessments we make and how we set the interest rate to attain our objectives. We must use professional judgement and our experience of how the Norwegian economy functions. We attempt to incorporate our response pattern into NEMO by setting the interest rate in the model so as to stabilise inflation at target while reducing fluctuations in output and employment. The model can in this respect be a tool for ensuring consistency over time when we set the interest rate.