samchain/econo-pairs-v1 huggingface dataset:
On top of these, there are the restrictions in the mobility of factors of production, notably labour and capital, with the asymmetry in capital mobility between the Mainland and Hong Kong presenting the most obvious obstacle. These restrictions may well be there for good reasons, but they do not mean that the development of a working relationship that is beneficial to both financial systems and to the country as a whole can just be left to market forces. There is a clear case for the involvement of the authorities responsible for these policy areas. To be sure, there have been notable co-operative efforts between the two financial systems, both between the authorities and between the private sectors of the two financial systems, and these have been quite obvious since the resumption of the exercise of sovereignty. These efforts have arisen simply out of need, particularly where the free play of market forces has been possible, and through the initiatives of the authorities concerned, where a common understanding can be arrived at concerning the common benefits that could flow from the removal of restrictions. But I think it is fair to say that the process has not always been a smooth one. Neither has the outcome been as productive as it could be, at least when assessed, narrowly some say, against the fundamental objective of making the two financial systems work together for their mutual benefits and in the best interests of the one country.

Although the trend in Medicare expenditures has flattened out in recent years as healthcare inflation has moderated and utilization growth has slowed, the CBO nevertheless projects that such expenditures will rise from 3.2 percent of GDP in 2016 to about 4.0 percent of GDP in 2026. Consequently, significant pressures on the federal budget are still very much in train. It will be important that fiscal policy be managed so it retains the capacity to be used for macroeconomic stabilization. Structural challenges While we have made steady progress over the past year toward our twin goals of maximum sustainable employment and price stability, significant challenges remain for the economy that lay largely beyond the scope of monetary policy. The three I would highlight are the sharp slowdown in labor productivity growth, the increase in income inequality and the low rate of income mobility. I draw attention to the slowdown in productivity growth for two reasons. First, productivity ultimately drives living standards and how people assess their economic well-being. Second, beyond ensuring a stable macroeconomic and financial environment, monetary policy can do little to improve productivity growth. 4/6  BIS central bankers' speeches  Annual productivity growth has averaged only 0.7 percent during the past five years, near the lowest 5-year pace since the early 1980s. There are a number of competing explanations for the slowdown. These include weak capital investment, a flattening out of educational attainment by new labor market entrants, less new business formation, understatement of quality improvements and, hence, output, and fewer ground-breaking innovations.
As in the case of sub-prime markets, risk awareness was not adequate by suppliers and demanders of financial instruments and no preemptive action was taken despite some very risky characteristics. The responses by crisis countries to prevent the next crisis were no different from what Asian economies did more than ten years ago. The calls made by the G-20 Leaders include putting more focus on financial stability, strengthening financial sector regulations and supervision, enhancing surveillance mechanism at both individual and international levels, especially more effective surveillance role and liquidity support by the IFIs, particularly the IMF, just to mention a few important initiatives. Please allow me a few comments on a few issues that I’d like to highlight. What has been done and what more needs to be done Effective surveillance: being good global citizen One of the immediate responses to the crisis has been to strengthen effective surveillance capacity at national and international levels. We are of course on the right track in this effort to create a more robust and effective surveillance system with a view to ensuring timely policy actions. Tackling the problem at an early stage not only helps lessen the chance that micro shocks can adversely affect the macroeconomy, but also safeguards against spillovers from one country to the rest of the world. In today’s globalized world, this spirit of good global citizenship is essential.

Peter Pang: Diverging monetary policies, global capital flows and financial stability Opening remarks by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority, at the conference on “Diverging Monetary Policies, Global Capital Flows and Financial Stability”, jointly organised by the Federal Reserve Bank of New York/European Central Bank/Federal Reserve Bank of Dallas/Hong Kong Monetary Authority, hosted by the Hong Kong Monetary Authority, Hong Kong, 15 October 2015. *  *  *  1. It is my great pleasure to welcome all of you to this Conference jointly organised by the Board of Governors of the Federal Reserve System, the European Central Bank (ECB), the Federal Reserve Bank of Dallas and the Hong Kong Institute for Monetary Research. 2. Today’s Conference is very timely. With the US Fed contemplating an imminent liftoff in policy rates, while the ECB and the Bank of Japan (BoJ) are still preoccupied with quantitative easing (QE), central banks around the world are carefully weighing the potential impact of the expected divergence in monetary policies on global capital flows and financial stability. Financial markets often move ahead of the real economy. We have seen global financial markets tumbled and emerging market economies (EMEs) experienced quite intense capital outflow pressures during this summer. Many would be interested to know whether such gyrations of capital flows and asset prices have already captured a good part of the adjustment process or are just a curtain raiser for even stronger threats to financial stability of the EMEs. 3.
Mr. George gives an assessment of where the UK economy has come from and where it is headed Speech by the Governor of the Bank of England, Mr. E.A.J. George, given at the Institute of Directors Annual Dinner in London on 19/11/98. My Lord and President, Deputy Lord Mayor, Your Excellency, My Lords, Ladies and Gentlemen. Let me put some of the recent newspaper headlines alongside the facts, in order to put things in perspective. First, on the world economy, the headlines read: • • •  Meltdown warning in the wake of economic slowdown. G7 nations try to halt slide to depression. Last ditch bid to avert global crisis. And these are just the supposedly serious newspapers! The facts are that world output growth is expected by the IMF to be 2% this year and 21/2% next - compared with 4% in 1997. And the OECD expects growth in the OECD area of 21/4% this year, 13/4% in 1999, recovering to 21/4% in the year 2000 - compared with 3% in 1997. That certainly is a very marked slowdown, but it is hardly meltdown or recession. And on our own economy - the headlines read: • •  Recession looms. The economy is hurtling headlong towards recession. And even: •  It’s official - the economy is shrinking.

And that would have meant eventually having to tighten policy more abruptly, which would much more certainly have plunged the economy into serious recession, a bit further down the road. The harsh reality is that monetary policy can only target the economy as a whole - it cannot realistically seek to shelter particular businesses or particular sectors or particular regions, however much we might all wish it were otherwise. And, in relation to the economy as a whole, the effective choice in the situation we faced was not whether or not to tighten, but whether to tighten sooner, and by less, or later, by more. So we raised interest rates through the second half of last year - and again in June - trying, as best we could through our tactics, to minimise any further unwanted upward pressure on sterling. But things have now clearly moved on. The outlook for the world economy deteriorated further through the summer under the impact of a series of new shocks. Japan, the world’s second largest economy, slipped further into recession. Russia - which had only weeks earlier embarked on an IMF program - saw the collapse of the rouble and default on its debt. And acute nervousness spread through many of the world’s financial markets. Although there has been some improvement in sentiment over the past month or two, and although the US and European economies continue to expand, the likelihood remains that world economic growth will be significantly slower than had been expected earlier in the summer.
The crisis probability equation is estimated directly on a cross-country historical dataset, similar to the one described in appendix 1, giving estimates of ℎ0 = −1.7, ℎ𝐵 = 5.2, ℎ𝑘 = −27.8. The intercept is then adjusted to ℎ0 = −1.7 + 0.11ℎ𝑘 , to incorporate a steady state capital to risk-weighted asset ratio of 11%. The leakage 𝜙𝑀 (1−𝑏)  1  𝜙𝑠 𝑏  3  of credit into the market-based finance sector, given by ( 𝑠 𝐵  ) is equal to − in the red line in Chart 8, to  make it the same size as the leakage to foreign banks in the alternative model discussed below. Therefore 𝑏 = 0.75 implies that 𝜙𝑠𝑀 = 1. Finally, the policymaker’s preference parameter is set to 𝜆 = 0.05, broadly consistent with the literature where loss is derived from the welfare of agents in the economy, 𝛽=0.99 and 𝜁 is varied to derive each curve in Chart 8, where each point represents optimal policy for a different 𝜁. The policymaker’s period 2 loss if there is a crisis, relative to when there is not, is set to just over 4% of GDP lost for 3 years. This is broadly consistent with Chart 6 in Brooke et al (2015), which assumes that the cost of crises will be lower under a credible resolution regime. 3.

Together with falling energy and food prices, it explains the bulk of the imported downside pressure on euro area consumer prices. Of course, the euro appreciation may also have reflected other factors, for example changes in attitudes towards risk. Such factors can be expected to produce only temporary effects on inflation, and would therefore not normally require a monetary policy response. Unwarranted fluctuations in markets’ perceptions over the future stance of monetary policy, however, could be a more persistent source of low-inflation risk. In this case, a monetary policy reaction would be necessary to steer perceptions away from unlikely future outcomes. How will our recent policy decisions make a difference? From this standpoint, I believe that there are three clear channels through which the decisions adopted by the Governing Council in June is effective. The first channel is standard and has to do with the expansionary impact of the measures on the real economy and inflation. To gauge the extent of such an impact, it is useful to refer again to the ECB macroeconomic projections and recall that they are conditioned on a number of technical assumptions. These assumptions relate to the evolution of macroeconomic and financial variables, which specifically include market expectations of short-term interest rates and of exchange rate developments over the projection horizon. The conditioning assumptions for the June 2014 projections were computed based on information available on 14 May 2014. Over the past month, financial market prices have adjusted to reflect the ECB decisions in early June.
They are also all 2/9  BIS central bankers' speeches  necessary to ensure a proper balance between markets and regulations, and liability and control at European and national level. The SSM ensures that banks are subject to the same set of rules and supervised on the basis of common standards. This reduces the risks of spillovers from bank failures to sovereigns and provides a common framework conducive to further integration in the banking markets, a process which has been lagging. Since bank failures cannot always be avoided – and indeed this may not be desirable either, as it may undermine market discipline – we need a credible and well-functioning crisis management and resolution mechanism. This is ensured by the second pillar of the banking union. With the setting-up of the BRRD5, the Single Resolution Mechanism and the Single Resolution Fund (SRF), we have made a quantum leap in the institutional organisation of the EMU. However, the framework is still incomplete. Most notably, it requires a common public backstop to the SRF, which is essential to inspire full confidence in the resolution regime. In addition, it would be desirable to eliminate national divergences in the insolvency and liquidation of credit institutions, and in the implementation of the BRRD through national resolution laws. Allowing these divergences to persist ultimately implies that the geographical location of a failing bank may still influence the outcome of the resolution, which is inconsistent with the idea at the heart of a banking union.

In fact, it is necessary for the creation of an integrated, deep and liquid European bond market as a central piece of CMU. A single term structure of risk-free interest rates could serve as a euro area pricing benchmark for the valuation of bonds, equities and other assets. The safe asset could also be used as collateral, for example for repo and derivatives transactions across the euro area. 4/9  BIS central bankers' speeches  In principle, several options are available for creating a safe asset. Some options are not politically viable, while others may not be economically sound. I am not referring to the type of eurobonds that would replace national sovereign debt as a joint liability of Member States, as these would require a deep political union. Various proposals have been put forward, but I will concentrate on just two: a variant of the European safe bonds (ESBies) or sovereign bond-backed securities (SBBS)11 and the e-bonds as proposed in the Monti Report.12 The current proposal of the SBBSs refers to a tranched, synthetic bond backed by national sovereign bonds. The senior tranche would have very low risk levels, presumably below German debt, as a result of the diversification gains based on historical correlations and of the protection granted by lower-grade tranches. Market practitioners and rating agencies have been skeptical about the instrument.
The International Financial Corporation (IFC) – an institution member of the World Bank Group that Romania joined in 1991 – has supported the Romanian banking sector by investing in various Romanian banks, especially during the privatization process. I welcome the current involvement of the World Bank in projects that aim to improve the health and education sectors, to reduce poverty, as well as projects focused on climate issues. Lastly, I thank you for the invitation to take part in this event. I am honored to be here, celebrating 30 years of renewed partnership and cooperation between Romania and the World Bank. To the team in Bucharest Office of the World Bank – which I considered, during these 30 years, as being competent and dedicated, aligned with our endeavors – I extend my warmest congratulations. Happy anniversary! At the same time, I would like to take the opportunity to express my appreciation for the management and staff of the World Bank in Washington for their work in pursuing the Bank's mission to foster sustainable development and promote social prosperity around the world. Thank you for your attention! 2/2  BIS - Central bankers' speeches

The relative size of the programme, representing just 1.6% of the euro area GDP against 13.7% of GDP that has been bought by the Bank of England or the 11.4% purchased by the Federal Reserve, makes it easier to implement. The ECB continues to comply strictly to its mandate to ensure price stability and does not allow inflation to increase as a way of easing the burden of the debt. On this point we disagree with from some of the suggestions made recently by Professor Rogoff. The inflation tax is a blunt tool whose accidental effects would reflect mainly ex-ante institutional features (such as the degree of indexation or the maturity structure of liabilities) rather than the actual necessity to adjust. More importantly, Professor Rogoff has said himself, inflating the debt away would unduly jeopardise the most precious capital of the ECB and of any independent central bank, namely its credibility. The ECB will never debase the currency, as our record shows: we have remarkably preserved both internal and external value of the euro by keeping inflation low and inflation expectations well-anchored. As we have learnt and repeatedly experienced, credibility and in particular the ability to anchor inflation expectations are crucial for the smooth functioning of monetary policy. Their key role has been highlighted again and again during the financial crisis, particularly in preventing the danger of an entrenchment of deflationary expectations. The euro area is a highly integrated economic and financial area which needs to be managed through common decisions.
The Federal Reserve is actively working with homeowners and communities to identify solutions to avoid foreclosures and their negative effects, support appropriate consumer protection and responsible lending practices, and apply our expertise in research and evaluation to provide  2  BIS Review 39/20086  community groups, counseling agencies, regulators, and others with detailed analysis to support efforts to help troubled borrowers and communities. I believe that the Federal Reserve System’s response has helped reduce the risk of systemic damage to the financial system, and thereby helped mitigate a potential source of downside risk to growth. This in turn has helped mitigate the risks to the broader economy. It is important to recognize that a substantial adjustment, recognition of losses, and reduction in risk has already taken place. And a range of different prices of financial assets now reflect a very cautious view of the future. The severity of the pressures in markets evident over the last few months are in part a reflection of the speed and force with which markets and institutions in our financial system adapt to fundamental changes in the outlook. This capacity to adjust and adapt is one of the great strengths of our system. Nevertheless, we still face a number of challenges ahead. The seeds of this crisis took a long time to build up, and they will take some time to work through.

Timothy F Geithner: Actions by the New York Fed in response to liquidity pressures in financial markets Testimony of Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, before the US Senate Committee on Banking, Housing and Urban Affairs, Washington DC, 3 April 2008. The original speech, which contains three Annexes, can be found on the Federal Reserve Bank of New York’s website. *  *  *  Good morning, Chairman Dodd, Ranking Member Shelby, and other members of the Committee. Thank you for giving me the opportunity to appear before you today. I am here to outline the actions by the Federal Reserve Bank of New York in response to present challenges in financial markets, including those in relation to the proposed merger of Bear Stearns and JPMorgan Chase. On the evening of Thursday, March 13, 2008, I took part in a conference call with representatives from the Securities and Exchange Commission, the Board of Governors of the Federal Reserve and the Treasury Department. On that call, the SEC staff informed us that Bear Stearns’ funding resources were inadequate to meet its obligations and that the firm had concluded that it would have to file for bankruptcy protection the next morning. The SEC said it concurred in that judgment, and it would spend the evening discussing with Bear what kind of bankruptcy filing was appropriate. The conference call that evening took place against the backdrop of an extraordinarily challenging period in the U.S. financial system.
On the contrary, inflation has now been so low for so long that I am concerned that it risks becoming a problem in itself, as inflation expectations are adjusted to a lower level. For these reasons, I have considered a further cut in the repo rate to be justified. But a majority of Executive Board members have assessed that this is not justified, because an even lower repo rate is thought to increase household debt, which is in turn assumed to increase their vulnerability and thus the risk of shocks leading to a deep recession. It is, of course, important to consider how concerned one should be over household indebtedness, not just the Executive Board of the Riksbank, but the Government and the Riksdag (the Swedish parliament), as well as the banks that lend money to Swedish households and Finansinspektionen (the Swedish Financial Supervisory Authority), which supervises these banks. My own opinion is that the high housing prices probably mainly reflect a shortage of housing and are thus not to be regarded as a price bubble. However, if the supply and demand situation changes, this could very well lead to falls in house prices in some situations. And even if such price falls are justified, they can entail problems for macroeconomic developments.

Lending to households and companies Annual percentage change  Note. Lending to households and companies according to financial market statistics. Source: Statistics Sweden. Figure 4. Annual change in the major banks’ lending Per cent and contributions in percentage points 25  25 Swedish mortgages Other lending to Swedish customers  20  20  Lending abroad  15  15  10  10  5  5  0  0  -5  -5  -10  -10 05  06  07  08  09  10  11  12  13 kv 3  Note. The coloured fields show how the different types of lending have changed in relation to the major banks’ total lending to the general public. No consideration is given to change in exchange rates. Sources: Bank reports, Statistics Sweden and the Riksbank. 12  BIS central bankers’ speeches  Figure 5. Inflation expectations one, two and five years ahead, all participants Per cent  Sources: TNS SIFO Prospera and Statistics Sweden. BIS central bankers’ speeches  13