samchain/econo-pairs-v1 huggingface dataset:
The level of GDP in 10 years after the reform would be around 7% higher in the CESEE countries and around 12% after 20 years compared to the "no reform" scenario, and effects on employment are of similar magnitude. The OECD, or the IMF also point to significant benefits of structural reforms in terms of TFP improvements. Even given the uncertainty around these estimates, welfare advances would most probably be substantial. But the billion(s) dollar question is, how to get structural reforms right? There are, in general, two dimensions of structural reforms. First, and in principle the easier one, are the reforms that bring us closer to the efficiency frontier. That said, it is possible that easy productivity gains from sectoral reallocation and imports of foreign technology have been exhausted. The second are the reforms that expand the frontier. But there is so many different policies that are on the table here: Product market reforms, Competition policy, Labour market reforms, Public finance and taxation (including Social security system), Human capital development, Innovation policy, etc. Can we, and should we, act on all, or most of these different fronts simultaneously? Probably yes. Do we as economists and policymakers truly understand all the synergies, complementarities and marginal effects of different reforms? Do we understand political economy of moving individually or in parallel on all these fronts? Probably not. 7  The bottom line is – there are no guarantees.

Muhammad bin Ibrahim: Of perception, sentiment and reality Opening remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Persatuan Pasaran Kewangan (PPKM) Annual Dinner &quot;Of Perception, Sentiment and Reality&quot;, Kuala Lumpur, 17 November 2017. * * * Thank you for the invitation to address the members of the financial market industry at this Financial Market Association of Malaysia’s (FMAM) annual dinner. l always look forward to this event as it provides the central bank with the platform to share our thoughts and expectations for the industry. We are operating in a very dynamic environment. Last year, I stood here and explained in detail why it was a challenging year. This year is no different. As the operating climate changes rapidly around us, we need to adapt. The theme of my speech will be a bit different this year. Titled “Of Perception, Sentiment and Reality”, it will be a bit longer than usual. I shall cover four parts; financial market review, factors that drive the level of the exchange rate, comments on ringgit exchange rate and interventions, and initiatives to build resiliency and liquidity for our market. Part I – Financial market review It has been an eventful year and our financial market industry has gone through significant changes and developments. The ringgit, for one, has seen significant developments. Last November, it was one of the most volatile currencies. A year later, it has not only strengthened but has greatly stabilised.
The capital conservation buffer allows banks to dip into their capital reserves, while at the same time providing disincentives for banks to do so due to the restrictions it imposes on dividend and bonus payments;  •  add a macroprudential element in the form of the countercyclical buffer, which requires banks to hold more capital in good times to prepare for inevitable downturns in the economy;  •  supplement the risk-based regime with a simple backstop in the form of a (non-riskbased) leverage ratio;  •  impose additional capital requirements on systemically important banks – both global and domestic – to take account of the externalities their failure would impose on society; and  •  introduce the first international standards for bank liquidity and funding, designed to promote the resilience of a bank’s liquidity risk profile to both short term liquidity shocks (the Liquidity Coverage Ratio – LCR) and longer-term mismatches in funding (the Net Stable Funding Ratio – NSFR). Of course, there are plenty of other big ideas being floated on how the banking industry should be restructured in the aftermath of the crisis, particularly those related to varying models of structural separation (eg the ideas of Volker, Vickers and Liikanen).

Nevertheless, to ensure visibility of the implementation of reforms, the Basel Committee has been regularly publishing information about members’ adoption of Basel III. We will continue to do this so as to keep all stakeholders and the markets informed, and to maintain peer pressure where necessary. It is especially important that jurisdictions that are home to global systemically important banks (G-SIBs) make every effort to issue final regulations at the earliest possible opportunity. But simply issuing domestic rules is not enough to achieve what the G20 Leaders asked for: full, timely and consistent implementation of Basel III. In response to this call, in 2012 the Committee initiated what has become known as the Regulatory Consistency Assessment Programme (RCAP). The regular progress reports are simply one part of this programme, which assesses domestic regulations’ compliance with the Basel standards, and examines the outcomes at individual banks. The RCAP process will be fundamental to ensuring confidence in regulatory ratios and promoting a level playing field for internationally-operating banks. It is inevitable that, as the Committee begins to review aspects of the regulatory framework in far more detail than it (or anyone else) has ever done in the past, we will find aspects of implementation that do not meet the G20’s aspiration: full, timely and consistent. We are going to find parts of the framework that have been implemented only in part, or late, or inconsistently. The financial crisis identified that, like the standards themselves, implementation of global standards was not as robust as it should have been.
One complication is the lack of clear signs stating the speed limit - in other words; there is always uncertainty over where the capacity ceiling lies - or how high the Swedish economy's potential growth rate is. At the Riksbank we have previously estimated this to be approximately 2-2.5 per cent. Today, when we conclude that the inflation tendencies in the Swedish economy appear to have been higher than we had previously realised, one of the possible explanations is that we may have over-estimated the Swedish economy's production capacity. The Inflation Report to be published in March, which will form the basis for our decision on the interest rate  2  BIS Review 14/2002  at our next monetary policy meeting, will provide an overall assessment of resource utilisation and inflation. Economic progress in the 1990s In the seam between the 1980s and 1990s, we had a clear overheating of the Swedish economy, despite the fact that growth had been a modest 2 per cent a year during the 1980s. Over the past five years, the economy has grown by 3 per cent a year without the corresponding worries. Something has evidently changed for the better. My opinion is that the reason is positive changes particularly in four areas important for growth: the macroeconomy, increased competition, trade and developments in technology. I shall briefly discuss these and then, in conclusion, say a few words about the challenges I see for the Swedish economy at present. Economic policy has changed in different stages during the 1990s.

Allow me to conclude on an optimistic note. In mid-2020, the CEAPI and the Ibero-American General Secretariat published a joint report on the role that entrepreneurs, such as yourselves, need to play in helping to overcome the economic and social crisis impacting the region as a result of COVID-19.15 Strong leadership is needed both in the private and public sectors, capable of building long-term consensus and driving the changes that I mentioned earlier. This would open up new opportunities for cooperation between Spanish and Latin American firms, in a setting where Spain should also fulfil – and reinforce – its traditional role as a bridge between Latin America and Europe. Thank you very much for your attention. 12  See, for example, T. Serebrisky and A. Suárez Alemán (2019), La provisión de servicios de infraestructura en América Latina y el Caribe, Inter-American Development Bank. 13 See Inter-American Development Bank (2018), “Making spending count in education”, in A. Izquierdo, C. Pessino and G. Vuletin (eds. ), Better spending for better lives. How Latin America and the Caribbean do more with less. 14 See J. Timini and F. Viani (2020), “The EU-MERCOSUR free trade agreement: main features and economic impact”, Analytical Articles, Economic Bulletin, 1/2020. 15 See https://ceapi.com/wp-content/uploads/2014/03/Informe-El-papel-del-sector-privado-en-tiempos-de-Pandemia-Ideas-para-eldebate_Julio-2020.pdf. 7
Fifth, the high level of liquidity may be a result of structural factors, or in some cases, policy factors, making savings in emerging markets persistently higher than in developed markets, given the lack of social welfare, healthcare, etc. This has resulted in a higher marginal propensity to save for consumers in emerging markets and contributes to a persistent global savings glut. Sixth, greater diversification in international reserves management, as well as sovereign wealth funds, may have led to increased investment by authorities in more diverse assets as well. On the other hand, numerous transitory factors may also have been responsible for this change in risk appetite and risk premia. A reversal in any of these factors could result in risk aversion away from emerging markets and destabilizing capital flows, and a rise in risk premia. Let me name a few factors. Firstly, the situation of global imbalances and slide of the USD has led to preference for investment in emerging markets, particularly given ongoing – but by no means sustainable – expectations of appreciating currencies in emerging market economies. Secondly, low interest rates worldwide and the high level of global liquidity have led to search for yield in riskier investments. This may be a temporary phenomenon if we believe that the extended period of accommodative monetary policy worldwide is unsustainable, and eventually monetary would need to tighten to compensate for this era of profligacy.

An example of such a change is the wave of worldwide mergers and acquisitions, resulting from globalization, and improvements in efficiency through economies of scale and integration. While this has exerted upward pressure on equity prices, this may not be a great concern for stability. On the other hand, some changes drive prices away from fundamentals. This includes asset price moves caused by excessive investment in developed financial markets, or short term capital inflows into emerging markets in search of yield, or through carry trades, etc., which may result in asset price misalignments. In this regard, the question arises whether the central bank’s price stability objective is enough for financial stability, given destabilizing asset price movements, coupled with movements in the exchange rate, which may not be in line with fundamentals. BIS Review 74/2007  3
In fact, respectable growth is all we have gotten—even with exceptionally low long-term yields and unexpectedly rapid gains in house prices. This growth has had to rest on the backs of just a few interest-sensitive sectors—business investment, consumer durables, and housing. From this perspective, it’s not all that surprising that housing markets have been hot. My point is that to offset the “drags” we’ve needed to give the economy a strong dose of stimulus—which inevitably boosted the housing sector. As I’ve discussed, if a sizable reversal in house prices were to occur, it probably would affect the economy mainly through the lagged effects of declines in wealth and increases in interest rates, rather than through widespread financial disruptions. This would give monetary policy time to react to any resulting economic weakness by lowering interest rates. In addition, the magnitude of the potential house price overvaluation may be only around half that of the earlier stock market overvaluation. In conclusion, policy still appears to be somewhat accommodative, and given the recent inflation performance and the dwindling of slack, it makes sense to continue the process of removing that accommodation. I hope I’ve provided you with some insight on the issues that I think are important to focus on as the Fed goes through this process. I look forward to taking your questions. This BIS Review is available on the BIS website at www.bis.org.

A flatter curve on the other hand, not only affects the timing of the build-up of pay pressure as unemployment falls and hence the timing of policy action. It affects also the sensitivity of pay pressure to unemployment and hence the degree of policy action necessary to bring inflation to target. If the curve is pretty close to flat, monetary policy will have to work very hard to affect domestically generated inflation. As Borio, and other, have noted this may bring into question the very ability of central banks to meet their inflation targets. There is no curve  The Phillips curve framework has been a central part of our thinking about the economy for over 50 years. But it has not always been that way. Keynes, after the Great Depression, posited a world where absent government intervention labour markets did not clear even with lags. In this world unemployment could get stuck at high levels even though wages fell and fiscal policy was therefore required to bring unemployment down. And it is true also that the Phillips curve framework has had to be adapted and extended substantially over the past 50 years to maintain its explanatory power in the face of the actual evolution of pay growth and unemployment over the period in a range of countries. 22  Carney (2017b) 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  We cannot exclude other possibilities.
Changes also create difficulties It is positive that the market for payments is developing and can meet the new payment requirements that arise. Payments are increasingly based on technology and this trend will probably continue and expand. However, at the same time this development leads to new problems and tensions that need to be overcome. The problems we have identified include the following: Households and companies need even better access to different payment services. The capacity in the mobile network is not always adequate to manage temporary peaks and it may then be difficult, for instance, to make a card payment for a hot dog and soft drink at a sports event attended by several thousand people. Some groups in society, such as the visually impaired and very short people, can face problems as card terminals and ATMs are not always adapted to their specific needs. Other problems concern to a greater extent the tensions that may arise in relation to new payment services. Households may also have access to the technology needed to use a new payment service, but nevertheless prefer to use the old technology. As the latter technology becomes less accessible, tension may arise when the individual feels that his or her needs are not met. For instance, an elderly person may want to continue depositing and withdrawing cash over the counter in a bank or to pay payments there, but as fewer bank branches handle cash manually; this is becoming more difficult in practice.

Cash changeover positive but entails practical challenges It is not only the banks’ services that need to become more user-friendly, cost-effective and certain over time, our banknotes and coins also need to develop in the same way. When the new banknotes and coins are introduced, starting next year, the size and weight of the banknotes and some of the coins will decline and two new denominations will be introduced; the 2-krona coin and the 200-krona banknote. The banknotes and coins will thus become much more user-friendly and will be cheaper to handle. Safety is also increased through the new security features. I believe that we all agree these improvements are positive for all parties concerned. However, as with electronic payments, the introduction of the new banknotes and coins will give rise to some practical problems and friction during a transitional period. 4  BIS central bankers’ speeches  Firstly, there is a huge amount of banknotes that are to be replaced; 300 million banknotes are to be withdrawn and around as many are to be put into circulation. For coins the figure is 500 million to be distributed in both directions. Secondly, Sweden has one of the world’s most automated cash systems. This means that all appropriate equipment in Sweden must be adapted to be able to handle the new banknotes and coins.
A review phase of the standard formula and the long-term guarantee package is  Page 6 sur 7  scheduled at the European level for 2018-2020. This step provides an opportunity for improvement in at least three areas: -  Firstly, the simplification of the regulatory framework. The complexity of the standard formula is neither desirable for the industry which has to produce these new calculations, nor for supervisors, nor for financial markets. -  Secondly, insurers should remain a genuine lever for financing the economy. The insurance sector is the largest institutional investor in the European Union, with almost EUR 9,800 billion invested in the economy in 2015. You have often brought this issue up with me... and it has now been clearly identified at the European level. There are already plans for improvements in two areas, upstream of the review phase: infrastructure corporates on the one hand – EIOPA has proposed a revision; highquality securitisation products on the other. More generally, it is essential to consider the potential deterrent effect of Solvency 2 on more “risky” investments, which are necessary to ensure the proper functioning of our economy: equities, whether listed or unlisted, loans to SMEs and MTEs but also green assets or investments in innovative companies. -  Finally, we know that Solvency II is more volatile than the previous regime. Measures have already been integrated to limit the procyclical effects of a market value-based balance sheet.

They make use of technology at many different levels: from traditional cross-harbour ferry and metallic coins to advanced transcontinental passenger planes and real-time electronic clearing. And usually both transport systems and financial infrastructure receive attention only when something goes wrong. Financial infrastructure suffers the further handicap that it is largely invisible – a matter of wires and electronic pulses – with none of the glamour or nostalgia that physical transport can sometimes evoke. So, quite understandably, the general public take it for granted – indeed may not even be aware – that Hong Kong has for some time had some of the most advanced, efficient and secure payment, clearing and settlement systems of any financial centre in the world. One of the responsibilities of the HKMA is to promote the development of these systems in collaboration with dedicated service-providers and the financial industry generally. In addition to its responsibility for Hong Kong's domestic systems, the HKMA also has a specific responsibility for promoting the development of systems in Hong Kong that facilitate the safe and efficient conduct of international and cross-border financial activities. We have been paying special attention to this aspect of our work in recent years in a way that has a very direct bearing on the development of financial markets in the region.
In banking, one of the most important challenges for accounting standard setters is to achieve consistency with sound risk-management practices. Incentives built in to the accounting rules should be compatible with and encourage good risk management. In this connection, the areas of financial instrument accounting and transparency rules require special attention. This idea of market friendly incentive-oriented rules leads me to my last remark on the role of prudential regulation. Third: Efficient risk management One key question that we prudential regulators should ask ourselves is whether regulations provide the right incentives to assess and to manage risks properly. This question is directed at the very essence of financial regulation, whose basic aim is to ensure the stability of the financial system without being too intrusive or undermining its efficiency. Providing market friendly incentives for efficient risk management is probably the best contribution we can make to foster financial resilience. As you know this is one of the key objectives of the new Basel Capital Accord, the so-called Basel II. Let me just mention that in designing the new standards we have been and will continue to be sensitive to the possible implications for financial markets in terms of liquidity and potential development. This is especially so in areas such us securitisation and collateralised transactions. The implementation of Basel II will contribute to enhanced risk management by banking institutions.

BIS Review 31/2003  1  As mentioned before, forecasts generally point to a firming of the recovery in the second half of 2003 and an additional improvement in 2004. Despite the rapid conclusion of the war in Iraq and the improvement in financial markets sentiment in recent weeks, the economic data and indicators do not yet show an unambiguous improvement, partly because some of them are still contaminated by geopolitical uncertainties, and partly because other imbalances and factors of uncertainty still persist. The fifth element I would like to stress today is the resilience of the global banking system in most developed countries. This capacity of the banking system to withstand diverse shocks was pivotal in maintaining a certain degree of dynamism in the world economy. One of the lessons of the past few years is the importance of financial markets in the functioning of the world economy, and the complexity of the channels of interaction between such markets and the real economy. This simple idea has fostered quite a number of initiatives, at the national and international level, to reinforce the resilience and efficiency of financial markets. Topics that used to be too technical and tedious, such as accounting and corporate governance, have become exciting and the centrepiece of many reform agendas. Let me mention just three issues in this regard: First: Financial market integration I believe that one factor which can and should prove fundamental to strengthening the world economy is the integration of international financial markets.