samchain/econo-pairs-v1 huggingface dataset:
Actual benefits depend on a range of other critical factors. These include macroeconomic policy, the business and regulatory environment, the legal and tax regime, labor and product market flexibility, and the quality of infrastructure and public services, such as education. While the gains from a liberalized trade regime are not guaranteed, the alternative of trying to achieve a high standard of living by following a policy of economic isolationism will fail. Trade has played a key role in nearly all of the high-growth success stories since the middle of the last century. The Challenges of Open Trade It is important to recognize that while trade and international integration tend to increase the overall economic pie, the distribution of the larger pie may be very uneven. In fact, slices for some particular groups may even shrink. Some workers—particularly those in industries that are less competitive and whose skills may have become less relevant—can be hurt and can find adjustment difficult. Successful adjustment often requires individuals to change industries and to relocate to different regions. So, while trade is almost always a win for a country’s economy, not everyone within that economy will be a winner. This is especially the case where the policies to cushion the negative consequences of trade and to facilitate adjustment are lacking or inadequate. Effects are country- and industry-specific, and depend on initial endowments and conditions.

Protectionism Is Not the Answer Given these costs of global integration and more liberalized trade, what is the best path forward? Although protectionism can have a siren-like appeal because of its potential to provide short-term benefits to particular segments of the economy, in the longer term it would almost certainly be destructive. Countries need to compete better, not compete less. Trade barriers are a very expensive way to preserve jobs in less competitive or declining industries. They blunt opportunities in export industries and they reduce the affordability of goods and services to households. Indeed, such measures often backfire, resulting in harm to workers and diminished growth. A better course is to learn from our experience. From a U.S. standpoint, we should work to reduce remaining foreign trade restrictions that impair our ability to capitalize on our comparative advantages. For example, market access restrictions can mean that certain U.S. industries cannot realize their full potential. Similarly, weaknesses in the protection of intellectual property rights limit the ability of U.S. producers to realize the full returns from their investments. This lowers profits and diminishes incentives to grow the business and employ more workers. If we are going to enhance the benefits of free trade and better manage its costs, it is critical that we continue to strengthen the global rules-based system. On the positive side, I would point to the World Trade Organization’s Trade Facilitation Agreement, which addresses customs procedures and could reduce global trade costs significantly.
17 One year on, I am proud to share that all SFEMC members, across sell-side and buy-side, have issued Statements to the Code. A significant number of banks operating in Singapore have also already issued the Statements, with many of them publishing these Statements on their websites and public registers. Notwithstanding this commendable outcome thus far, SFEMC will continue to work with the key industry associations in Singapore to further promote and embed the Code. For example, we have recently collaborated with the Association of Banks in Singapore to encourage all banks with FX operations in Singapore to issue Statements by the end of this year. 18 SFEMC will also be establishing a public register in the second half of this year, for market participants in Singapore to post their Statements. This is in response to demand from market participants. 19 SFEMC believes that having such a public register in Singapore would help in our promotion efforts in getting more market participants, particularly buy-side entities, to issue Statements to the Code. 20 Where your firm has issued a Statement, we welcome you to publish your Statement on the SFEMC public register when this is ready. Developing Singapore to be an e-trading hub for FX 21 I am confident that the Code will further strengthen the integrity and vibrancy of our FX market. This will complement our co-creation efforts with industry players, like yourselves, to grow the FX market further.

These include the FXCs in Mexico, South Africa, Scandinavia and Switzerland. Through the membership expansion, the Code will become more global as these FXCs promote the adoption of the Code within their jurisdictions. 7 Second, on embedding the Code and integrating it into the FX market. If done well, we should see market behaviours reflect the good practices set out in the Code. We have seen that the process of issuing the Statements has prompted internal reviews within many firms, where market participants considered how the Code could apply to their business. In issuing our Statement, we have done the same in MAS. It has been a helpful and meaningful exercise to benchmark our internal processes against these good practices. We have also seen a number of training tools being developed by market participants to support learning, and these have enhanced the ecosystem of good practices within the FX market. Another key area where we think the Code has enhanced market behaviour is that a number of market participants have updated client disclosures to provide greater transparency, and to incorporate the principles within the Code. 8 Third, on evolution of the Code. When the Code was launched, the GFXC has stated that the Code will need to evolve over time to promote a robust, liquid and transparent FX market. The Code has become the platform or reference point for discussing issues relating to the FX market. This is a good outcome where emerging issues are identified, debated and addressed within the Code.
This means  BIS Review 44/2006  3  that we do not set interest rates merely to ensure inflation is on target as quickly as possible in all situations. It is very important to emphasise that the possibility to formulate monetary policy based not only on inflation prospects but also on how production and employment will develop has come about because the inflation target is currently firmly anchored in the economy. Everyone knows that we will adapt our monetary policy to attain the inflation target. During the years when the inflation target was new, confidence in the target was too shaky for the Riksbank to dare to give consideration to anything other than attaining the inflation target. However, flexible application of inflation targeting is nothing new if one looks at the monetary policy we have conducted in recent years, once confidence in our inflation target had been established. In practice, as I said, we do not aim to bring inflation back on target as quickly as possible in every situation. The Riksbank follows the principle of normally aiming to bring inflation back on target within two years after a deviation has occurred. It is primarily in situations where inflation goes in one direction and the real economy, i.e. growth, employment, etc. goes in the opposite direction that there may be reason to bring inflation back on target at a more gradual rate. Economists usually describe these situations as the economy suffering a supply shock.

Thank you. President Dudley: Well, first thing I would say is the level of interest rates are still pretty darn low. The federal fund rate, that’s the rate we target, is three-quarters of a percent to 1%. And we’ve only raised interest rates twice since the end of the Recession eight years ago. It’s important to recognize that the trajectory has been very, very shallow because we are aware of some of the issues that you’re raising and we’re trying to get the balance right. End of the day, what are we trying to accomplish? We want to have an economy that can grow for a long time. So, we want to keep the economy in balance growing at a rate that is sustainable over the medium- to longer-run. What we’re trying to do is find that level of interest rates that’s just right. Now we recognize that anytime that we change interest rates, it’s going to help some people, and it’s going to hurt other people. So, on the other side of the story are all the people, like my mom, who are savers and they’re unhappy. They’ve been unhappy for the last eight years because interest rates have been so low. So, we’re trying to get that balance right. I think we’ve been pretty cautious in terms of how we’ve been raising interest rates because of some of the concerns that you raise.
A good illustration of this is the industrial worker’s wage in 1975 and 1994. In 1975, an industrial worker earned 27 kronor per hour on average while in 1994 the hourly wage was SEK 95. However, if 1975’s hourly wage is recalculated at the 1994 price level, the 1975 wage was worth SEK 107 in 1994. Thus, twenty years of trade union struggle when nominal wages rose by an average of 6.9 per cent per year, resulted in a decline in real wages of 12 kronor per hour in 1994’s prices. However, it was not just trade union policy that failed. It was just as much a failure for the Government’s stabilisation policy. How could it have been so bad? Stabilisation policy activism The large devaluation of 16 per cent that the newly-appointed Palme Government carried out in October 1982 was what could be called an offensive (aggressive) devaluation, on top of that that had taken place in 1981. Through the 10 per cent devaluation in 1981, the real cost situation had been somewhat normalised and the competitiveness of Swedish industry restored. Now Sweden was to get off to a flying start. This was also the case as there was an upswing in the USA at that time and an exceptional long boom.

It was an important signal to the foreign exchange market that the change, which was expected, took place without a depreciation of the krona. On the contrary, the krona was linked to the ECU at a rate somewhat above the central exchange rate. A number of measures had preceded a formal change of the stabilisation policy. The most important document that marks a new direction is the Government’s budget statement in January 1991. The Minister of Finance and the Government wrote there that combating inflation was to be given precedence over other political goals. This decision was reflected in the budget by a 40 per cent reduction of appropriations for relief work. In spring 1993, unemployment rose month by month and it was clear that the Government was not giving priority to full employment in the same way as before. This was the first major change of course in stabilisation policy. Now it was combating inflation that was important by means of a fixed exchange rate. The change was well prepared by experiences of previous failures and by the intellectual debate on stabilisation policy that had begun in the USA during the 1970s. From the beginning of 1991, a price stability goal was applied. This was given priority over full employment. The means was a fixed exchange rate. Employers and trade unions would be forced to bear the consequences of excesses in wage formation. The exchange rate was to be maintained.
This limit ensures that banks still have to borrow from the Eurosystem at the monetary policy rate set by the Governing Council. Here is where the ANFA comes in. Its purpose is to limit the size of the NCBs’ non-monetary policy portfolios, net of the related liabilities, and thus to ensure that the Eurosystem can effectively implement the single monetary policy. Of course, when performing national tasks, the NCBs must comply with the Treaty including the prohibition of monetary financing. Moreover, if these tasks were to interfere with monetary policy in any other way, they can be prohibited, limited or have conditions placed on them by the Governing Council. The publication of the previously confidential ANFA text was a unanimous decision of the ECB and the NCBs in the Eurosystem to live up to our commitment to be transparent. This publication should resolve misunderstandings about ANFA. In particular, it clarifies that the sole purpose of ANFA is to set limits for non-monetary policy operations related to national tasks of the NCBs, which they are allowed to conduct according to the Treaty. Nothing more and nothing less. These limits ensure that the NCBs’ operations do not interfere with the objectives and tasks of the Eurosystem and, in particular, with the single monetary policy. BIS central bankers’ speeches  3  Finally, complementing the information on ANFA, the ECB also published data on the Eurosystem’s aggregate net financial assets. The NCBs will follow suit and disclose their respective net financial assets when publishing their annual financial accounts.

In my view, the large gap between the current unemployment rate and the long-run NAIRU suggests there is little payoff from investing much energy to more precisely estimate the NAIRU. As the economy expands and the unemployment rate falls, we will have plenty of time to be able to refine our estimates of NAIRU in light of what happens to labor cost trends such as the employment cost index, and to unit labor costs. Currently, all these measures are quiescent and consistent with a large amount of labor market slack (Chart 24). The second question is whether the economy could grow so fast that inflation pressures could rise even with an unemployment rate still well above the NAIRU. The notion is that at very fast growth rates wages and prices might have to rise in order to funnel labor and capital to those areas where demand and output were rising particularly rapidly. Although this possibility shouldn’t be ruled out, we should not be too worried about this, particularly if growth is broadly based. In particular, the economy is not growing quickly right now relative to past recoveries. For example, in the rebound from the comparably deep early 1980s recession, the annualized growth rate exceeded 7 percent for five consecutive quarters. Moreover, empirically there is little historical evidence that discontinuous “speed limit” effects play a significant role in influencing inflation in the United States.
Monetary policy in the euro area is maintaining short-term nominal interest rates at very low levels, and through our forward guidance, rates are also very low up to medium-term maturities. But, as the economy is recovering and we are progressing towards our inflation target, the Governing Council clearly decided on 26 October to pursue the gradual normalisation of our monetary policy. We will continue along this road, but financial stability concerns could be increasing. It has recently been argued that this could result in unwanted side effects in terms of asset price misalignments or spur a search for yield that would entail excessive risk taking. The issue of the side-effects of monetary policy is not entirely new. Monetary policy is never neutral since it works its way through to the real economy via its effects on financial conditions, that is to say the current and expected cost of borrowing liquidity, and in turn on asset prices and risk premia, even in normal circumstances. Let me first say some words on bank profitability – which is not the only element of financial stability (1). I will then discuss the price of assets and the financial cycle (2), before turning to the relation for policy makers between monetary policy and macroprudential policy (3). Lastly, I will say a few words on how we should complete financial regulations (4). * * *  1.

13  Remarkably, an excessively low repo rate was something that Dagens Nyheter’s editorial pages warned against in December 2009, when Lars Svensson entered a reservation against holding the repo rate at 0.25 per cent and advocated cutting it to zero and they commented on his “input to the Executive Board of the Riksbank being reminiscent of a captain slavishly following his nautical chart, even when the ship hits an iceberg. It was one thing to cut the repo rate in an acute situation during the crisis to ward off a depression. But now that the economy has begun to recover, a zero interest rate would only add fuel to the housing price fire.” (See Wolodarski, 2009). 14  Of course, some measures were taken earlier, but the introduction of the framework must nevertheless be regarded as an important condition for being able to conduct macroprudential policy systematically. BIS central bankers’ speeches  5  Unfortunately, I believe one must accept that this cannot be quantified in a very precise way. I can only note for my own part that if I had not found the developments in household debt and on the housing market problematic, I would have advocated a somewhat more expansionary policy – but definitely not that the repo rate should remain at 0.25 ever since the crisis. But it is difficult to be more precise than this.
The risk of a conflict of interest lies in the fact that their suggestions for investment have been designed more to promote the seller’s or the company’s interests rather than to fulfil the needs of the investor. The second example comes from the life insurance sector. When the life insurance part of a company buys services from the property and liability insurance part, there may be incentives to deviate from correct internal pricing, especially when one part of the company is a mutual company and the other is a profit-making company. Another problem in an insurance company is how a surplus - or a deficit - should be distributed between different groups of insured parties. The question is whether, for instance, those receiving pensions now should share the burden of the insurance companies’ poorer income, or whether they have had the level of their pension payments guaranteed. However, today we have gathered to discuss conflicts of interest in banks, and I have promised to talk about the classical conflict between commercial banking and investment banking. The conflict lies within the universal bank’s double role as lender and investment adviser. If a bank’s borrowers suffer deterioration in their financial prospects, the bank can reduce its credit risk by helping with new share issues, etc. This conflict of interest has been discussed in the United States for several decades now, but in Sweden it has scarcely been mentioned. There is reason to ask why the differences are so great, and I shall return to this point.

This does not necessarily mean that Swedish bankers are more honest than American ones, just that the advantages of exploiting conflicts of interest are less and the costs are greater. My second conclusion is that it is important that all significant conflicts of interest should be discussed openly and publicly. There are justifiable claims for reliable information on borrowers and issuers, but the same applies to information on the measures taken by the banks to avoid exploiting conflicts of interest. I believe that there are relevant market solutions in most cases, as long as the conflicts of interest are clear. Thirdly, I would like to encourage the Swedish banks to carefully follow international developments within the field of compliance - i.e. the routines to ensure that internal and external rules are adhered to. In many cases the requirements have become much more stringent in recent years, and it is important to thoroughly assess developments in other countries. For instance, the Chinese wall has been repaired in the United States, and is now higher than ever. This has been achieved through legislation. It remains to be seen whether the Swedish banks can solve these problems themselves. Fourthly, I believe that the supervisory authorities play an important role with regard to identifying and overseeing potential conflicts of interest. Our Finansinspektion has begun to do this to a greater extent, not only with regard to banks but for the financial sector as a whole.
From the European and Spanish standpoint, this represents a major negative shock to our international purchasing power. In other words, a relative impoverishment has taken place, on top of the price rises in some of these commodities – particularly energy commodities – that had already been observed before the invasion. In addition to a possible decline in the production of some of these goods as a direct consequence of the fighting, there could also be deliberate supply cuts, which would clearly have an even greater impact on prices and economic activity. Against this backdrop, Europe has formally announced its intention to reduce its energy dependence on Russia, but clearly this is not something that can be achieved in the short term. ii. Trade. In addition to the impact from commodities prices, the conflict will also disrupt trade in all other goods and services, not only as a result of the economic sanctions but also because of the expected deterioration in the Russian and Ukrainian economies. In this respect, Europe’s direct trade exposure to Russia is relatively low, being larger in the case of the central and eastern European economies and smaller in the others, including Spain.2 Nevertheless, the indirect effects may also be considerable. The complexity of global supply chains means that the impact on  1  Russia accounted for some 20% of total euro area oil imports and some 35% of total euro area gas imports in 2020.

When Bank Negara Malaysia and the Bank of Thailand first operationalized this arrangement between our central banks in March 2016, we saw the potential and benefits for local currencies to play a more important role in enhancing regional trade linkages. The expansion of the arrangement today to include our close trade partner, Indonesia, underscores this potential. The signing of this MoU between Bank Indonesia and Bank Negara Malaysia represents another important milestone in the move to strengthen the relationship between Malaysia and Indonesia. Following the conclusion of the ASEAN Banking Integration Framework, we are confident financial institutions in both countries will be able to collaborate towards realizing the objective of facilitating greater cross-border trade and investments. Both Thailand and Indonesia share important links with Malaysia, forged through a long history of trade and investment activities, and close cooperation between our central banks. This occasion reflects how far we have come in this process. The cooperation arrangements between our central banks have now expanded to include clearly defined protocols and operational frameworks in a broad range of areas, including financial market development, supervision, surveillance, payment arrangements and crisis management. Bank Negara Malaysia has long been a strong supporter of financial and economic integration in both ASEAN and broader Asia – to unlock the region’s growth potential and support a stronger, more resilient economic community.