samchain/econo-pairs-v1 huggingface dataset:
Since 2000, our share of exports to emerging economies has increased from 53% to 66% in 2008. This represents an important trend towards a more broad-based economic integration with the global economy, through increased trade and investment. Going forward in 2010, to enhance the growth prospects in this more challenging environment is through increasing productivity whereby the same levels of investment generates higher output. Focus also needs to be on high impact investments that will have a higher multiplier impact on the economy. Attracting foreign direct investments through liberalisation and strategic alliances would also contribute to this process. To raise the level of economic performance, it is not only important to invest right, but equally important is to have the enabling environment to maximise the return on investment. The efficiency of financial intermediation is a vital part to the success of this strategy. International regulatory reforms Let me now turn to the international regulatory reforms. This global financial crisis has resulted in the world experiencing the worst recession in modern history. This has prompted the world to come together with wide ranging proposals to strengthen the foundations for financial stability and to address weaknesses in the international financial system. A fundamental issue being deliberated is the determination of the balance between private decision-making, the market system and Government intervention.

Caleb M Fundanga: Corporate social responsibility in Zambia Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Launch of the Mukuyu Tree (Slave Tree), Kabwe, 23 December 2006. *  *  *  • The Provincial Minister of Central Province • Hon. Sydney Chisanga, MP • Hon. Rev. Gladys Nyirongo, MP, Minister of Lands • Hon. Kakusa, MP • Your Worship, the Mayor of Kabwe, Mr Richard Yumbe • The Deputy Mayor of Kabwe, Mr Edward Phiri • The Town Clerk, Mrs Vivian Chikoti • Distinguished Invited Guests • Ladies and Gentlemen A very good afternoon to you all. It gives me immense pleasure to be here this afternoon in the town of Kabwe, which also happens to be the place in which I spent my childhood. As you are aware, we are here to celebrate the occasion of the lighting of the legendary MUKUYU TREE, popularly known as the Slave Tree. For many of you Kabwe residents present here, especially our senior citizens, this tree rekindles many happy memories of joyous occasions such as Christmas, Independence Day and Labour Day, when the TREE would shine brightly after being adorned with beautiful multi-fluorescent lights for all to admire. The MUKUYU TREE is one of Zambia’s national monuments. Its history spans more than a century of being part of the lives of the community in this area. Ladies and Gentlemen, This historic monument invokes memories of a sad but important aspect in our beautiful country’s history.
There has to be a further demand impulse – be it a decline in household saving rates, a rise in business investment relative to profits, a further expansion of fiscal stimulus or an improvement in the net trade balance via an increase in exports relative to imports. Let’s now apply this framework to evaluate what happened over the past decade and what it implies for the economic outlook. 2  BIS Review 41/2010  The last three decades have been marked by a shortage of U.S. domestic saving relative to investment. The United States has almost continuously run a current account deficit since the early 1980s (Chart 1). In 2005 and 2006 that current account deficit averaged around 6 percent of GDP. Yet, the real exchange value of the dollar today is not terribly different from what it was in the early 1990s (Chart 2). A massive flow of saving into the United States from around the world offset forces that otherwise would have driven the exchange value of the dollar lower. In addition to its sheer size, this inflow of saving into the United States is significant in several respects. First, note the direction of the flow. One might expect that capital would flow from the developed world to the developing world, but just the opposite has been the case. In addition, foreign savers have been willing to lend to the United States in the U.S. currency.

In this case, we found that it is useful to be a member of the Alliance for Financial Inclusion (AFI) – a network of policymakers from developing countries working together to advance financial inclusion globally – where we can collaborate to develop more innovative, contextualised and effective financial inclusion solutions, and this is one area which I believe has the potential to grow. OIC members, who are not a member of AFI, may wish to consider becoming one. Second, commitment from the top drives the financial inclusion policy implementation on the ground Leadership and clear vision on outcomes are important elements in driving the financial inclusion agenda. In Malaysia’s experience, the New Economic Model (NEM) emphasised the goal of inclusiveness to enable all communities to fully benefit from the economic development. In line with the Government’s vision for an inclusive economy and to promote accountability, Bank Negara Malaysia legislated financial inclusion as one of the primary functions of the Bank. This is to ensure that the pursuit of financial inclusion as a policy priority will be passed down to the future generations of central bankers. It would help if there is a clear mandate and accountability so that resources can be allocated and mobilised. BIS central bankers’ speeches  3  Setting a national target has shown to galvanise real tangible policy changes on the ground.
The reason for this quite simply is that the effect of one or a number of participants failing would not be as big if the system was supported at European level by a large number of participants, as opposed to being dependent on a small number of participants, as the Swedish system is today. A more advanced securities market would also serve as a buffer, both for borrowers and savers. This would make the banks less systemically important. All in all, I believe that the Swedish banks are well equipped to face stiffer competition and that the effects of monetary union on stability in the financial system would primarily be positive. The securities markets, both stock exchanges and systems for the clearing and settlement of transactions, are presently undergoing rapid development in Europe. It is likely that the principal force driving this development is technological advances that enable cost savings, and Sweden will be able to take part in this whether we use kronor or euro. However, as with trade in other markets, trade on stock exchanges is of course facilitated by a single currency. As regards the system for large-value interbank payments - the real-time system for gross payments known as RIX in Sweden and managed by the Riksbank - monetary union would involve major changes. It is likely that we would not have a separate system for such payments after membership, but in some way would connect to the new European system (TARGET2). There would be considerable efficiency gains to be made here.

And that, of course, is exactly what we do in fact do - using the vast array of official economic statistics and financial market data, all the publicly available and some private surveys and commentaries, as well as a wealth of anecdotal and structured survey evidence that we collect BIS Review 71/1998  -3-  ourselves, through our 16 non-executive directors, through the frequent visits which MPC members make around the country, and through meetings in London, and through our network of 12 regional, information-gathering and disseminating, agencies with their 7000 industrial contacts throughout the United Kingdom. And we openly display the facts as they are available to us, as well as our analysis and our conclusions, regularly through the publication of the minutes of our monthly meeting and in the quarterly Inflation Report. So when people say to me that the economy is headed for recession, I’m interested in comparing the evidence on which they base their views with our own evidence, and I want to know whether or not they are also saying that they expect us to undershoot the Government’s inflation target. Let’s just for a moment turn down the noise and look at some of the relevant facts as they relate to the economy as a whole. Since the economy started to recover from recession in the spring of 1992 - some 6½ years ago - overall output has grown at an average rate of about 3%.
In less than half a year, we have raised the ECB interest rates by 250 basis points, the fastest increase in our history. And we have made it clear that ECB interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive, and stay at those levels for as long as necessary. In other words, we will stay the course to ensure the timely return of inflation to our target. Conclusion Let me conclude. The transition from one year to the next is traditionally associated with quiet reflection, when we take stock of things that have come to pass. But as the poet Rainer Maria Rilke once wrote: a new year is “full of things that have never been”. As we head into 2023, a changing world brings with it new challenges, but also opportunities. And let there be no doubt: with more self-confidence, more assertiveness and the right policies in place fuelling green and digital growth, Europe can adapt and thrive. But some things never change: namely, the ECB’s commitment to price stability. We will play our part in Europe’s next chapter by bringing inflation back to our 2% target. Thank you. 1. See Lagarde, C. (2022), “A new global map: European resilience in a changing world”, keynote speech at the Peterson Institute for International Economics, 22 April. 2. Lagarde, C. (2021), “Globalisation after the pandemic”, Per Jacobsson Lecture at the IMF Annual Meetings, 16 October. 3.

That is because the rise of international free trade – and the stability that comes with it – has historically depended on the backing of a global hegemon. This was evident during the British Empire in the 19th century, as it was with American support in the wake of the Cold War. [3] However, major economies – led by the United States and China – are now increasingly using trade to limit the ambitions of geopolitical rivals. That could fragment world trade with potentially huge costs. The IMF estimates that severe trade fragmentation may cost global output roughly 7% in the long term – an amount similar to the annual output of Japan and Germany combined. [4] These geopolitical winds are reshaping the second feature of this new map: supply. We are seeing strategic considerations becoming increasingly important in where suppliers are located. The US Inflation Reduction Act, for example, is deliberately aimed at “reshoring” production and reducing the country’s reliance on strategic imports like batteries. [5] China is also seeking to reduce its own dependence on the rest of the world. And some surveys suggest that even firms in “non-strategic” sectors are increasingly likely to regionalise their supply chains. [6] This in turn is leading to the third key feature: the growing importance of security. With the security of supply for critical inputs no longer guaranteed, we are likely to see a new “scramble for resources”.
Indeed, taken at face value, it would suggest there have been virtually no costs of achieving higher levels of capital across the global banking system, at least among most global banks. While credit conditions have clearly improved since the crisis, it is possible that the recovery in lending might have been stronger still had capital requirements risen by less. To begin to analyse that question, Chart 16 compares the change in bank capital since Basel III was introduced with subsequent lending growth among a panel of large international banks. On average, lending growth has been positive over this period, consistent with Cecchetti (2014). But credit growth has also tended to be statistically significantly lower among banks that have seen the largest increase in their capital ratios. On average, banks that have increased their capital ratios by an extra one percentage point have provided 4% less in cumulative credit since Basel III was introduced (3.5% less if we exclude European banks). This is very similar to the estimates used by the FSB’s Macroeconomic Assessment Group (2010), which reported a range of estimates from -0.7% to -3.6%. There are of course different possible interpretations of this negative relationship. Banks facing weak macroeconomic conditions may simply have seen a reduction in loan demand and responded by maintaining higher capital buffers on a voluntary basis. To parse these conflicting interpretations, we turn to recent econometric evidence on the impact of higher capital requirements.

Admati and Hellwig (2013) provide a comprehensive and lucid account of the case for higher capital standards. Their argument centres on the fact that the impact of higher capital standards on banks’ overall cost of capital needs to take account of the lower risk that arises from this shift - the Modigliani-Miller offset (Modigliani and Miller (1958)). It needs also to distinguish between any private costs to banks from tighter regulation and the social benefits this confers, with the latter the key public policy yardstick. When it came to re-calibrating regulatory standards for capital and liquidity after the crisis, international regulators engaged in a detailed, quantitative exercise which sought to weigh these social costs and benefits of tighter regulation, drawing on existing empirical evidence. The Long-Term Economic Impact (LEI) study, published by the Basel Committee in 2010, is a useful starting point for discussion of the appropriate calibration of regulatory standards (BCBS (2010b)). The main conclusion from this work was that, under conservative assumptions about likely economic costs, there were positive economic benefits to society from a sizeable increase in the capital banks were required to maintain. The study did not settle on an optimal level of bank capital. But the results presented were consistent with societal benefits peaking at a Tier 1 risk-weighted capital ratio of between 16-19%.11 This is north of most global banks’ current capital ratios.
The Federal Reserve even assessed the situation to be a possible threat to the overall stability of large financial markets. How could this happen with two Nobel prize-winners responsible for the strategy and risk models, which should guarantee that they were designed according to the latest research? The weakness lay in the fact that these models, like all others, were based on a given probability of history repeating itself. However, in autumn 1998, reality in the form of various simultaneous political and financial events took a different turn than was usual. It should also be added, for accuracy, that LTCM also suffered because its risk strategy was not very transparent. Investors were unable to assess to what extent the fall in value was temporary or permanent and therefore preferred to recall their investment. The main conclusion is nevertheless evident. Don’t rely too heavily on historically-based models. A further potential problem is that risk models are standardised. The demands from the supervisory authorities that the models should meet a number of minimum criteria could lead to the management and assessment of the risks becoming more and more similar. There is a fear of a destabilising lemming effect, with all financial agents running in the same direction when new data is received. In addition, there are fears that the standardisation leads to certain categories of borrower experiencing more difficulty in obtaining loans in future.

The possibility of going to a different bank to get a loan could be reduced if all banks apply largely the same credit assessment system. I believe that these worries are exaggerated, on the basis of studies made by the Riksbank and others that have indicated that different banks tend to assess individual customers differently, even when they use similar risk models. This could be because they have unique knowledge of the customers, or because their present loan portfolio favours accepting a particular customer. Although I am not excessively worried on this account, it is important to ensure that international and Swedish regulations do not lead to unnecessary standardisation. Operational risks have come to the fore in recent years, partly through a number of events, September 11, of course, as well as others such as large-scale power failures, IT and telecommunications breakdowns and the Basel Committee’s capital adequacy requirements. The development of methods to manage operational risks has not come very far. Attempts are currently being made to rectify this. An increasing number of bank managers - both in Sweden and abroad - are showing a positive attitude to the focus on operational risk management, as they see these risks as potentially large ones. From the Riksbank’s stability perspective, I can only agree - events affecting practical operations in the financial system could threaten stability. I therefore consider it important that the banks continue to build up their risk analysis and their protection against risks in this field.
Evidence of these effects can clearly be seen from recent events: The Thai floods in 2011 cost USD45 billion in damages and affected 240,000 small businesses. Carmakers in Malaysia, Japan and the US had to slow down production due to the interrupted supply of parts from Thai factories. Prolonged supply chain disruptions, which took months to recover, had direct financial and economic implications – Thai exports fell, its budget deficit widened and the economy shrank by around 2%. The total cost to the Thai economy was much higher if we account for the cost of repairs, rebuilding and mitigation measures to prevent a repeat of the disaster. 1/5  BIS central bankers' speeches  Closer to home, the floods that hit Kelantan and Terengganu in 2014 were among Malaysia’s worst ever. More than 200,000 people were affected and displaced. Businesses and financial institutions had to temporarily shut their operations. Economic activities and financial intermediation were disrupted. The Government spent over RM2 billion to rebuild basic infrastructure, such as roads and schools. The average cost to individual households was estimated to be more than two years of income for their breadwinners. In 2017, massive floods in Penang and Kedah saw similar effects. Banks also bore the costs of moratoriums on loan repayments that were provided to those affected by such disasters. As climate-related events intensify, these costs will escalate. As a result of the severe and prolonged El Niño drought in 2016, the agriculture sector in Malaysia shrank by 5.2%.

Moreover, because a small number of individuals have dogmatically equated markets with the unbounded pursuit of short-term profits, faith in the benefits of a marketbased economic system has been undermined. Finally, the extraordinary public policy response to the crisis has potentially prepared the ground for even more moral hazard in the future. The third reason is that this financial crisis will not be the last one. Between 1973 and 1997 alone, there were 139 documented financial crises in various parts of the world. 2 Some suggest that we should redesign the global financial system in such a way that there will never be a financial crisis again. This is neither desirable nor realistic. As long as we want a financial system that performs a meaningful and useful function for the real economy, we will have to live with financial cycles. Moreover, the current crisis has clearly demonstrated the limitations of complex regulations and models. Even the most complex models will never be infallible. What we can and should do is to limit the likelihood of and the fallout from future crises. It would be an inexcusable mistake to miss this opportunity to see through fundamental regulatory reform. We have to address the vulnerabilities that were at the root of this crisis and are likely to be at the root of those in the future. For this purpose, we need simple, effective measures that can be implemented rapidly once the crisis is over. There are intensive efforts under way to increase the resilience of the financial system.
As in parts of Europe, the United States is experiencing a major budget deficit and a growing national debt. In May this year, the US national debt reached the so-called debt ceiling, which limits how much the United States is allowed to borrow. This meant there was a risk that government grants and everything from salaries for government employees to interest payments on the national debt could not be paid. As the United States is the largest borrower in the world this led to a lot of unease on the financial markets. Reaching agreement on how to deal with this was made more difficult due to the political divisions between the Republicans and the Democrats. An agreement to raise the debt ceiling and reduce the federal deficit was actually reached at the end of June, but the strongly politicised process prior to the agreement and the fact that it was reached so late has created doubt about the United States’ ability to handle its national debt. The increasing concern about economic problems around the world is dampening the prospects for global growth. At the same time, the pressure that that is being put on the euro countries with weak public finances means that more countries in the euro area can be expected to tighten fiscal policy even further than was previously assumed. This applies not only to relatively small economies like Greece, Portugal and Ireland but also to larger economies such as Spain and Italy, and perhaps France too.

We can expect the tightening measures to have a restraining effect on growth over the next few years.1 In a situation where it seems that growth is anyway slowing down this is of course unfortunate. Nevertheless, tightening measures are necessary to reduce concern and increase confidence on the financial markets. However, not everything is gloomy in the global economy. It is expected that growth in Asia and Latin America will remain high, even though it may be dampened by the slowdown in the United States and Europe. It is difficult to assess exactly how much the emerging economies in Asia and Latin America will be affected by the slowdown in the western world. This depends in part on to what extent they manage to reduce their dependence on exports to maintain a high rate of growth. A major challenge for many of these countries is to move from primarily export-driven growth to growth driven more by domestic consumption. How does this affect the Swedish economy? How do these economic developments affect resource utilisation and inflation in a small open economy like Sweden? Their impact will be through two main channels: through trade links with the rest of the world, that is via imports and exports of goods and services, and through the globally-integrated financial markets. Let me begin by discussing the role of the trade channel. 1  According to the theory of expansionary fiscal contractions, an extensive budget consolidation programme can have a positive effect on growth.