samchain/econo-pairs-v1 huggingface dataset:
To enhance risk management of banks, the HKMA has just issued a set of guidelines to banks, requiring them to tighten the underwriting criteria for mortgages where borrowers already have one or more properties under mortgage. 4. Under these new measures, when handling new applications for mortgage loans for residential, industrial or commercial properties from borrowers who already have one or more properties under mortgage, banks must adopt the following three requirements: First: for mortgage loans assessed based on the debt servicing ability of a mortgage applicant, the maximum debt servicing ratio (DSR) shall be lowered from the current 50% by 10 percentage points to 40%. Accordingly, the maximum stressed DSR shall also be lowered correspondingly from the current 60% by 10 percentage points to 50%. However, an applicant with just one property with outstanding mortgage loan will not be affected by this new measure if the new mortgage loan is for self-occupied purpose, or for the replacement of an existing property. Second: for mortgage loans assessed based on the net worth of a mortgage applicant, the maximum loan-to-value (LTV) ratio shall be lowered from the current 40% by 10 percentage points to 30%. Third: for mortgage applicants whose principal income is derived from outside Hong Kong, the applicable maximum LTV ratio shall be lowered by 20 percentage points, instead of the current 10 percentage points. 5. Based on the experience in Hong Kong, borrowers with multiple outstanding mortgage loans have higher level of indebtedness and leverage.

He found, for instance, that the US economy needed to grow by at least 3 per cent to avoid an increase in unemployment. Okun’s law can thus be interpreted as a short-term relationship that expresses the link between changes in economic activity and changes in activity in the labour market. As the relationship between growth and employment is dependent on factors such as labour market policy, productivity, social norms and demography, the relationship varies between different countries and different periods in time. 1  Okun, A. M. (1962), “Potential GNP: its measurement and significance”, American Statistical Association, Proceedings of the Business and Economics Statistics Section, pp. 98–104. BIS Review 58/2010  1  A recently-published Economic Commentary on the Riksbank’s website 2 estimates this relationship using Swedish data. 3 The study shows that there is a relatively strong link between GDP growth and unemployment, a link that has also varied over time. The connection has increased over time and between 2004 and 2008 it was relatively high, which indicates that unemployment was more sensitive to changes in GDP during this time. However the relationship has weakened over the past year, when GDP fell heavily without unemployment rising as much as one would have expected, given the historical relationship. According to the study, a GDP growth of more than 2.8 per cent is now needed for unemployment to decline, which can be compared with the historical average of 2.3 per cent.
The Bank has reviewed 6,000 pages of Binding Technical Standards and over 6,500 rules, and published 473 pages of amendments in 15 EU Exit Instruments. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  We have also put in place temporary permission and recognition regimes so that EU firms providing financial services into the UK will be able to do so without disruption even in the event of a ‘no deal, no transition’ Brexit. Some risks have required action on both sides of the Channel. We have worked with the ECB and other EU authorities to identify and mitigate these. We have not, to be frank, agreed on everything and there remain areas of potential disruption that, as of the last FPC assessment, need to be addressed.1 But, action, at EU and member state level, has been taken on most of the main financial stability risks. The other financial stability risk is the general economic impact of a disorderly Brexit upon the financial system. The Bank of England tests the core UK banking system annually against a stress scenario to ensure it has the resilience to absorb the losses that would arise from a very severe but plausible set of domestic, global and market shocks.2  To address resilience to Brexit risks, we developed a worst case Brexit scenario, and compared its impact to the impact of the Bank’s 2018 annual stress test that the core banks had passed.

The MPC published analysis last August suggesting that the trend real rate in the UK has fallen by more than 2pp since 1990. Slower population growth, increased life expectancy and slower productivity growth have all contributed to this fall.9 Looking forward, many of the structural factors currently weighing on the trend real rate – in particular, changes in demographics – are likely to persist for many years to come, though other factors could push in the opposite direction.10  The trend real rate of interest, however, cannot be observed directly. It can only be estimated and while most estimates suggest it has reduced materially, estimates do vary widely. See August 2018 Inflation Report. See also ‘Secular drivers of the global real interest rate’ by Lukasz Rachel and Thomas D Smith (Bank of England Staff Working Paper No. 571). 10 For example, increasing financial integration of lower-income countries, a pickup in overall global productivity growth and increasing automation. 9  7  All speeches are available online at www.bankofengland.co.uk/speeches  7  As to income growth, to the extent that expected low real rates reflect expected lower productivity and hence expected lower income growth, they would not make debt more sustainable. Over the economic cycle, of course, the short-term real rate of interest will be moved around its longer-term trend by more temporary factors. But the persistence of the fall in the trend real rate means interest rates are likely to need to remain low by historical standards for some time to come.
Trichet: It is not an issue, taking into account the decisions taken by the Greek government to reduce the public deficit and the statement by the euro area Heads of State or Government. Il Sole 24 Ore: Will the current crisis suggests a slowdown of the EMU enlargement process? Trichet: Participating in the euro zone requires from all member governments sound fiscal policies, a sound monitoring of production costs and structural reforms. Today’s difficulties have shown that a bad management influences negatively all participants, while a good one is positive to all, given how our economies are closely intertwined because of the single currency. As I said before, peer pressure is a crucial aspect of the euro zone functioning and it has a profound economic rational and legitimacy. Therefore it is also true that to enter the euro zone there must be an overwhelming sentiment within society that the country is  BIS Review 45/2010  1  preparing to share a common destiny with the other members. This calls, in my opinion, on newcomers to have a clear bipartisan agreement on the desire to join EMU. Il Sole 24 Ore: In a certain sense participation in the euro area must have both a multinational and a multipartisan framework. Trichet: That’s correct. We are participating in an endeavour of great historical importance. One cannot jump in and jump out of the euro area as one hops on and off from a bus. Participation in EMU commits the destiny of a country.

Thirdly, the Federal Republic is a major world competitor in sectors such as machine tools and industrial equipment. Its global competitiveness is a major asset for the euro area given how closely intertwined EMU countries are. Therefore, I would point out to all those who argue in a similar fashion that what looks as a disadvantage for the euro area as a whole from a specific angle is in reality an advantage when seen from the right perspective. Il Sole 24 Ore: But in a more general way Ms Lagarde did point out that the euro area is experiencing large economic imbalances. Is there a Europe-wide agenda to solve this problem? Trichet: The aim must be to elevate significantly growth potential in all countries through the structural reforms that are overdue in Europe. This will remain strategically important in the  2  BIS Review 45/2010  next decade. The 2020 Agenda will have to be implemented in a more effective way than the 2010 Lisbon Agenda, as President Van Rompuy has recommended. More generally let me say that given the nature of monetary union, some countries, because of a rapidly aging population for example, will have to run current account surpluses, while other countries with very significantly fewer pension liabilities will not be called to run such surpluses. Similarly, some countries, to regain competitiveness, will have to keep inflation below the EU average.
When designing policy conduct, there are no mechanisms conducive to countries internalising the benefits of achieving a suitable economic policy mix for the area as a whole; and this especially at a time, such as the present, when the existence of a very accommodative monetary policy means that both the national effects and the impact on other countries associated with a specific fiscal impulse are greater. Against this backdrop, and as highlighted in the recent discussion paper on the deepening of EMU published by the European Commission, it would be necessary in the medium term to develop a fiscal capacity for the euro area as a whole that contributed to supporting monetary policy. 6/7  The estimates detailed in this year’s Annual Report of the Banco de España suggest that a study could be conducted of a common fiscal instrument, managed at the supranational level, but which does not entail permanent transfers between countries and which, without committing a high volume of funds (around 1% of GDP), provides the euro area with a fiscal stabilisation capacity similar to that other federal states have. It also appears necessary to seize the opportunity afforded by the favourable economic juncture and the overcoming of some of the political risks to complete the reform of European governance, along the lines considered by the Five Presidents’ Report published in 2015 and the recent discussion paper by the European Commission.

ASEAN Disaster Risk Financing and Insurance Programme Today, I am pleased to announce the official launch of Phase 2 of the ASEAN Disaster Risk Financing and Insurance Programme. ADRFI Phase 2 will be impact-focused, 11.  and targeted at strengthening ASEAN’s capabilities in ex-ante risk financing and risk transfer strategies. ADRFI Phase 2 was approved by the ASEAN Finance Ministers at the ASEAN Finance Ministers Meeting in April 2018 and the 3-year detailed Plan of Action was subsequently endorsed in April this year. 12. To drive ADRFI Phase 2 forward, the Plan of Action will be implemented by a dual programme office, to be led by the ASEAN Secretariat and the NTU-ICRM. The dual programme office will adopt an open architecture structure to support global collaboration with stakeholders including policy makers, governments, multilateral development banks, international organisations and the private sector. 13. Allow me to provide an overview of ADRFI’s 3 focus areas over the next 3 years. These are: (i) Risk Assessment, as I mentioned earlier (ii) Risk Advisory; and (iii) Capacity Building. Leveraging on their respective strengths, ICRM will lead the Risk Assessment and Risk Advisory pillars, while ASEAN Secretariat will lead the Capacity Building pillar. 14. These are upstream activities which will strengthen ASEAN’s disaster risk management capabilities, and complement the downstream public and private disaster risk financing solutions, such as the SEADRIF. Let me elaborate further on the 3 key focus areas. 1 5 . First, Risk Assessment.
Over the past year, the PCE deflator has risen only 0.2 percent – held down by lower import prices and falling energy prices – and the core PCE deflator, which excludes the more volatile food and energy components, has risen 1.3 percent. There is also some evidence that suggests that inflation expectations are under downward pressure. In particular, some survey measures of long-term inflation expectations are at the low end of the ranges that have prevailed in recent years. For example, the University of Michigan median measure of inflation expectations at a five-to-ten year horizon fell last month to 2.5 percent, the lowest level since September 2002. Similarly, the New York Fed’s three-year median inflation expectations measure from our Survey of Consumer Expectations is currently at 2.8 percent, down from 3 percent a year ago. The good news, however, is that these declines are very modest in magnitude. Thus, I would still judge that inflation expectations remain well-anchored based upon these survey measures. Similarly, measures of inflation compensation based on the interest rate spread between nominal Treasury securities and Treasury Inflation Protected Securities (TIPS) have fallen sharply over the past year. For example, the Board of Governors’ 5-year, 5-year forward measure – in other words, what inflation compensation would be for the period five-to-ten years from now – currently stands at around 1.8 percent, down about 40 basis points from a year ago. However, I put even less weight on this development than on the survey evidence for two reasons.

As the financial stability authority we are also responsible for monitoring stability at the level of the sector as a whole. While we have multiple policy hats the common denominator in this space is ensuring that the sector has adequate operational resilience – that is that firms can continue to provide critical services that are important for their own integrity and the functioning of the sector. If a firm’s operations are interrupted, we want to be sure that they can be recovered quickly and reliably especially where they are systemically important. Three observations at this point: a)  First to stress our accent on financial stability. Our efforts target first those firms where operational failures may result in disruption to the provision of vital financial services to the real economy or in dislocation to the rest of the sector. That does not mean the failures in customer facing applications do not matter. It is just that, where no immediate systemic dislocation results from such an outage, any consumer detriment will be a concern for our colleagues at the Financial Conduct Authority (FCA) more than it is for us. b)  Second, operational resilience is different from operational risk. In operational resilience we are describing a policy outcome we want to deliver in terms of the system functioning. This may be a by-product of effective operational risk management.
I would therefore like to clarify that under a flexible exchange rate regime, movements in the ringgit exchange rate reflects both external and domestic factors, including the strength of the domestic economy and the flow of foreign capital in the financial market. Our economy remains resilient with a respectable growth performance within the range of 4 – 5%, relative to the performance of regional and emerging market countries. The ringgit depreciation is not a unique and isolated event. It is a global phenomenon. The strong appreciation of the US dollar has led to similar depreciation pressures in all global and regional currencies. This is due to several factors including the uncertainties surrounding monetary policy in the US as well as global economic and political developments. These global developments have affected sentiments in global financial markets that led to capital outflows from emerging markets. The currencies of many countries have underperformed and the ringgit was also not spared. The ringgit was affected given the structure of our economy and financial market that is one of the most open among emerging market countries. Our market was exposed to global financial market uncertainties that led to the reversal of portfolio investments. There were also other specific factors that affected the ringgit. First, some investors had taken advantage amid the market turmoil and uncertainty to gain profit through speculative activities in the offshore ringgit non-deliverable forward (NDF) market.

This successful launch, to the benefit of 305 million Europeans, represents the crowning achievement of the euro changeover, after the launch of the euro on the financial markets, on 1 January 1999. Both operations were a technical success because they had been meticulously well-prepared by the full body of the Eurosystem, the European Central Bank, and all the euro area national central banks, including Banque de France in France. However, aside from the technical success in itself, the warmth and enthusiasm with which French citizens and other Europeans welcomed the euro, their new currency, was proof that European construction enjoys real popular support that has all too often been underestimated. Let me now turn to the core of my subject today: first, the process for economic reform, second, the perspective of enlargement. *  1. *  *  Economic reforms  Before reviewing the priority topics which require a new impulse, I would like to make a remark on the also often underestimated link between reform and the changeover to the euro : indeed, the introduction of banknotes and coins in euro is a major structural reform in itself, as it constitutes a powerful drive towards restructuring the European economy, and a strong lever to facilitate the comparison of prices, taxes and incomes between the Member states.
While there was some evidence of a pickup in the general public’s inflation expectations at the beginning of the year, probably in response to higher gas prices, they have fallen back a little since then and do not yet appear to have had any effect on actual wages or prices. Conclusion To sum up, by delivering the inflation target the MPC seeks to produce a platform of stability. That doesn’t produce a quiet life for businesses – on the contrary it can make the pace of change quicker because it makes the underlying business imperatives clearer. In recent years, we have been helped in keeping inflation low and stable by the integration of new economies into the world market and the disinflationary pressure that has produced. As a result of that stability, the market and the public now expect inflation to remain around target and that appears to have helped to damp the impact of the recent oil price hikes on the overall inflation rate; the total impact has been modest and there are no signs yet of spillovers into wages and prices. We do not know yet whether the benign international context will continue or what other shocks may occur. We are seeing renewed rises in energy prices this year which have helped push inflation back above target. Our role is to continue to assess the situation as it develops, monitoring economic data, financial markets, and listening to our regional agents and their business contacts.

The MPC’s current view, as expressed in the latest Inflation Report, is that import price inflation will moderate over the coming period, but that it will not prove as much of a downward force on inflation as in the late 1990s and early 2000s. We have, for example, seen signs of costs rising in China and the Far East. Looking further ahead, there must be a risk that this begins to spillover into higher import price inflation. And while globalisation has helped to hold down prices of most goods, the demand for energy and other raw materials coming from the newly emerging economies has contributed to higher prices of energy and some commodities. The direct effect on the CPI of higher petrol prices has been much more limited here than in the US for example because so much of the price of our petrol is accounted for by duty. Nonetheless since the beginning of 2004, petrol prices have gone up by over 25% and gas prices by more still. The prices of petrol, utilities and transport services added about 1 percentage point to CPI inflation in May. And this does not include the effect on other goods and services where oil or gas is a component cost. In the past we have seen wages pick up in response to hikes in the oil price and all central banks have been – and remain – watchful for those “second round effects” now. So far we have seen few signs of them.
Overall, tax revenues, before the transfer to local and regional government, are projected to increase by 7.8% in 2017, while social contributions are projected to increase by 6.3%, which, given the macroeconomic forecasts and the impact of the tax reforms mentioned above, would entail a greater response by revenues to growth in activity than in the past, especially in the case of social contributions, which are projected to grow by more than their bases (employment and wages), even taking into account the effect on revenues of the legal changes mentioned above. If the uncertainties surrounding the estimates of the impact of the legislative changes on taxation are also taken into account, it is clear that revenue growth needs to be monitored constantly over the course of the year, so that a timely adjustment can be made to spending or revenue in the event that the risks to the deficit target materialise. Moreover, in such a decentralised country as Spain, where more than 40% of public spending is made at the local and regional level, the State and Social Security budgets give merely a partial view of the budgetary policy of the public sector as a whole for next year. From this perspective, the Updated Stability Programme to be published in the next few days is particularly important, since it consolidates the budgets of central government agencies with those of regional government and local government.

As in the euro area as a whole, inflation rose notably at the beginning of the year to levels of 3% in January and February, according to the year-on-year rate of change in the CPI, and declined to rates of close to 2% in March. Its quickening in January and February responded, in particular, to the strong increase in electricity prices and the base effects of oil prices. Consequently, this increase is expected to be temporary and will begin to fade as the impact of the acceleration of the energy component dissipates. Thus, after an average 4/9  increase of 2.2% in 2017, the CPI will foreseeably slow to 1.4% and 1.6%, in 2018 and 2019, respectively. The risks The scenario which I have just outlined is not without both external and internal risks. Noteworthy on the external front is the higher degree of uncertainty concerning global economic policies and their possible impact on world trade and the capital markets. In particular, the current buoyancy on financial markets reflects, at least partly, the expectation that the new US Administration will apply economic policies favouring higher growth and inflation in the short term – such as a possible fiscal expansion – perhaps underestimating the effect of such policies on the pace of the monetary normalisation in the United States, as well as other less favourable aspects, such as the shift towards the lower international mobility of goods and people. A trend towards consideration of the introduction of protectionist barriers in certain developed economies has been observed recently.