samchain/econo-pairs-v1 huggingface dataset:
In the USA, productivity growth between these periods has increased from 1.4 to 2.9% while productivity  BIS Review 20/2000  2  growth between the same periods has increased from 1.4 to 1.9% in the Swedish economy (see diagram 3). In the USA, the improvement in productivity has been preceded by strong increases in investment throughout the 1990s and investment during this upswing has contributed to GDP-growth to considerably higher extent than during previous upswings. The great productivity increase is one of the reasons why demand has been able to grow so strongly and for so many years without inflation accelerating. The questions raised are what underlies the US development, and whether there is anything to indicate that we will see the same development in Sweden. The new economy does not seem to have come as far in Sweden as in the USA. We see no equivalent to the investment boom in the USA or even for that matter to that in Sweden in the 1960s. The information technology will have its main impact first when the new technology has penetrated the whole economy. To get that, huge investment activity is needed which we still are waiting for. There are many explanations for the successes of the American economy. In common to most of these is reference to the economic policy carried out since the end of the 1980s. Price stability and a fiscal policy focused on budget consolidation have been highlighted as important components of the successful policy.

However, according to the law, the Riksbank shall also support the objectives of general economic policy without setting aside the inflation target, in order to maintain sustainable growth and high employment. As the Swedish economy is approaching balance in many respects and the long-term inflation expectations accord with the target, the conditions for carrying out monetary policy are more favourable in many ways than before. This does not prevent there being many components of uncertainty now as well. Major structural changes are taking place in the world economy to some extent driven on by information technology. Deregulation, EU membership, and stiffer competition are other factors that can be assumed to have an effect on the economy’s mode of functioning, although it is difficult to say how and over what period. I am planning to take up some factors here in the risk scenario that must be taken into consideration in the ongoing evaluation of monetary policy. One issue concerns the extent to which we, inter alia as a consequence of the development of information technology, will see a higher productivity growth than we had expected and which, all other things being equal, would create scope for higher demand without threatening the inflation target. Another way of putting this question is whether we can expect to be on our way into something that is called “the new economy” in debate.
Caleb M Fundanga: Broadening access to mortgage financing in Zambia Opening speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the re-launch of the Pan African Building Society (PABS), Lusaka, 24 July 2007. *  *  *  • The Shareholders of PABS; • The Board of Directors of PABS; • Senior Government Officials present; • The Deputy Governor-Operations and Registrar of Banks and Financial Institutions; • The General Manager of PABS; • Distinguished Ladies and Gentlemen. It gives me great pleasure and gratitude for having been invited to speak on this occasion of the re-launch of the Pan African Building Society. Ladies and Gentlemen: Today marks an important day in the calendar of Pan African Building Society which brings on board new shareholders. The Bank of Zambia is happy to note that this development has turned around the financial condition of Pan African Building Society. Ladies and Gentlemen, as you are aware, there is shortage of housing in Zambia and therefore the demand for housing finance is increasing. It follows therefore, that the primary challenge of housing finance institutions in Zambia is the broadening of access to mortgage finance particularly to many people in urban areas. Due to the prevailing macro-economic stability that the country is experiencing, we have seen substantial growth in the housing finance industry in recent years. For instance, in the last four (4) years to December 2006, the mortgage portfolio of the building society industry has grown five fold.

In this respect, banks and financial market participants that act independently, and take responsibility for their actions, remain a prerequisite for a stable and secure system, even if it is well-regulated and supervised. Thank you for your attention. BIS central bankers’ speeches  5
This seems a sensible outcome, and it is reasonable therefore to test whether the equivalent treatment for collateral swaps, which captures only the CCR add-on in the exposure measure, really captures all the leverage firms are taking on. This is a big business – for example, a recent survey of 14 UK-based broker dealers found a stock of £ trillion in collateral swaps. As a thought experiment, had Basel chosen to capture these exposures for leverage purposes in the same way as it captures repo (so counting the collateral borrowed, in the same way as the cash leg is counted for repo) then, under some worst case assumptions, and bearing in mind that the data can vary from year to year, the aggregate leverage ratio of firms in our sample could fall by 50 basis points (from 5.3% to 4.8% - see Chart 9). Two other parts of the leverage framework should also be in the sights of our horizon-scanning teams as they ask whether we are missing anything important. First, the proportion of repo activity which is netted 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  – which (based on initial data) grew from 14% to 19% from 2015 to 2017 for firms in our sample. This matters because the netting of cash payables and receivables in repo transactions reduces the exposure measure – this seems perfectly reasonable, but is out of line with the general philosophy of the leverage ratio of not recognising collateral.

There are factors which exist outside the financial system and beyond SMEs which nonetheless affect resource flows. These might include poor infrastructure, bureaucracy which makes it difficult to carry out business, an unattractive tax regime and unclear or unfavourable government policies. Acquiring an appreciation of these factors and appropriately dealing with them can help to foster the efficient use of available financial resources by SMEs, increase their success in the application of credit and therefore give positive feedback to financing institutions which itself encourages them to lend more to the sector. Let me conclude by wishing you all a fruitful three days of deliberations and to reiterate my challenge to you to attempt narrowing that undesirable gap between the identification of problems and the delivering of practical solutions that will enable the flow of appropriate and sustainable financial resources to SMEs to enable them to play their wealth creation and development role in Africa. For me, the SME sector can be a great engine for economic development in Africa. Meetings like this can help in making them become just that. But we must also go beyond just paying lip service to the sector and show true and real commitment to making the sector strong on our continent. I suspect that to go beyond lip service might, in some instances require a paradigm shift on the part of financiers, governments and the players in the SME sector itself. I thank you for your attention!!! BIS central bankers’ speeches  3
The Financial Stability Board’s Global Monitoring Report on Non-Bank Financial Intermediation 2018 shows that collective investment vehicles with features that make them susceptible to runs represent 71% $ trn) of the FSB’s risk-based narrow measure of non-bank financial intermediation. 17 See the November Financial Stability Report for a discussion of the similarities and differences between the current leveraged lending market and sub-prime lending in the run up to the crisis. Chart F.8 also illustrates which market actors are holding the collateralised loan obligations. 18 See FSB Plenary Press Release 19 IIF Global Debt Monitor. 16  10  All speeches are available online at www.bankofengland.co.uk/speeches  10  As published by the Bank in the past, the rate of growth and level have passed the points where other economies, advanced and emerging, have experienced sharp corrections in the past (Chart 1). Chart 1: China’s credit boom in a historical context Per cent of GDP 300 Danish financial crisis 250 Japan asset price bubble China credit boom Thailand (Asian crisis)  200 150 100  Spanish housing crash US subprime crisis  50 0  1980  1985  1990  1995  2000  2005  2010  2015  2020  Sources: BIS and Bank of England. The Chinese authorities have, since the start of 2017, taken material policy measures to de risk the financial sector and bring the growth rate of debt into line with the growth rate of nominal GDP.

As to removing the weakest institutions from the system, 2 banks and 28 savings banks had disappeared up to December through integration processes, and there should be further processes in the coming months. Finally, as concerns having institutions on a more efficient scale, average size measured by managed assets has doubled over these years. 1  RDL 9/2009; Third Additional provision of Law 3/2009; RDL 6/2010; RDL 11/2010; RDL 2/2011; RDL 16/2011 y RDL 19/201; and RDL 2/2012  BIS central bankers’ speeches  3  But perhaps the results best testifying to the transformation of Spain’s banking system during the crisis are not quantitative but qualitative, for example, the metamorphosis of savings banks into banks. If before the crisis someone had said that, except for two small institutions, all Spanish savings banks would be converted into banks, nobody would have taken them seriously and they would have been accused of seeking to do away with one of Spain’s oldest and best-loved institutions. Yet today what this conversion brings in terms of improved management, market discipline, etc. has been accepted, and should in the future spare Spaniards from again suffering the consequences of the excesses detected at certain savings banks. Another most important qualitative advance with a view to the medium term has been the enhanced transparency of our banks, not only thanks to the stress tests which, as you know, were first proposed by Spain, but above all to the greater disclosure requirements progressively imposed over recent years.
This is important because our collective efforts here today to improve overall welfare by providing more people and businesses with efficient access to remittance services will be severely set back if trust and confidence in the industry are eroded. When this happens, rules often have to be rewritten, the costs of compliance will increase, and the public is saddled with reduced 2/3  BIS central bankers' speeches  access and other burdens that result from the actions that have to be taken to protect the integrity of the system and manage risks to consumers. We must avoid this path, which will come at a heavy cost to communities and countries that depend on remittances. We have seen this in recent times with de-risking measures taken by financial institutions, and we still continue to see their effects in parts of the world. We must not expose our system to the same effects. In Kota Kinabalu, we also hope to build on Greenback activities to achieve greater financial inclusion of migrant workers and small businesses. For example, beyond remittances, suitable savings, payment and insurance products can help migrant workers make their earnings go further, facilitate access to goods and services, and provide protection for their families against financial hardship as a result of unforeseen events. For small businesses, electronic remittances can be harnessed to build transactional histories which can help improve their overall creditworthiness. This needs to be supported by a strong focus on financial education.

Jessica Chew Cheng Lian: Generating new solutions for remittances in Malaysia Remarks by Ms Jessica Chew Cheng Lian, Deputy Governor of the Central Bank of Malaysia, at the Launch of Project Greenback 2.0 Kota Kinabalu, Kota Kinabalu, 4 March 2018. * * * It is my great pleasure to be here today for the launch of the Greenback 2.0 Project in Kota Kinabalu. First of all, on behalf of Bank Negara Malaysia, I would like to thank Dewan Bandaraya Kota Kinabalu for agreeing to host this Project. We are sincerely honoured by the presence of YB Datuk Hajah Jainab at today’s launch event. And of course, the World Bank has been a truly committed and equal partner in this project with Bank Negara Malaysia, and as we concluded our collaboration in Johor Bahru last year, we are excited to begin another chapter in this journey together with the World Bank. Kota Kinabalu is Malaysia’s second remittance champion city and only the third champion city for the Greenback Project in Asia. Through the project, our aim is to help more people living and working in Sabah remit moneys whether for business or personal purposes, safely and at lower costs. To achieve this, we want to provide people in Sabah with information, with access and with the confidence to use remittance services. And we want to encourage more competitive remittance services in Sabah that will better serve the community. You may ask what is the significance of being a champion city?
21  7  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  7  Absent a more comprehensive response, it is hard to see how we will prevent the ethical drift which periodically undermines market integrity and impairs finance’s ability to function effectively.27 And most fundamentally, without greater individual responsibility, it is hard to see how social capital can be fully regained. ******** The recognition that “markets don’t always clear” has spurred major reforms to make markets less complex and more robust. A decade ago, OTC derivative trades were largely unregulated, unreported and bilaterally settled. When Lehman fell, uncertainty about such exposures sparked panic. Since then, the FSB has designed a series of reforms to make these markets safer and more transparent, including by requiring trade reporting and by encouraging central clearing of over-the-counter (OTC) trades. These reforms are having their desired effects. Supervisory authorities and market participants can now readily monitor activity and exposures. 90% of new OTC single-currency interest rate derivatives are now centrally cleared in the US. And an additional $ trillion of collateral is now held globally against all derivative trades. Central counterparties (CCPs) reduce systemic risk, provided they meet the highest standards of resilience, recoverability and resolvability.

Most importantly – and this is the lie – complacency among individuals and institutions, fed by a long period of macroeconomic stability and rising asset prices, made this remorseless borrowing seem sensible.3 When the crisis broke, policymakers quickly dropped the received wisdoms of the Great Moderation and scrambled to re-learn the lessons of the Great Depression.4 Minsky became mainstream.5 Lie II: “Markets Always Clear” A deep-seated faith in markets lay beneath the new era thinking of the Great Moderation. Captured by the myth that finance can regulate and correct itself spontaneously, authorities retreated from their regulatory and supervisory responsibilities.6 The second lie, the belief that “markets always clear,” has two dangerous consequences.7 First, if markets always clear, they can be assumed to be in equilibrium— or said differently “to be always right”. If markets are efficient, then bubbles can neither be identified nor can their potential causes be  2  Raghuram Rajan (2010), “Fault Lines: How Hidden Fractures Still Threaten the World Economy”. This emphasis on the endogenous tendency of financial systems to become unstable is reminiscent of Hyman Minsky’s “financial instability hypothesis” (Minsky (1992)). 4 See for example, Krugman, P, (1999, updated and reissued 2008), The Return of Depression Economics and the crisis of 2008, Penguin.
Our contacts in the money market fund industry could foresee, based on their own business plans and discussions with their clients, that these reforms would lead to a substantial shift in money market fund assets. Substantial amounts were expected to come out of prime funds and into government-only funds, which generally hold Treasury securities, repo against Treasury collateral, or similar ultra-low-risk assets. As a result, this reallocation was expected to bring about somewhat lower rates on Treasury bills and repo backed by Treasury collateral, and somewhat higher unsecured rates. It is important that the monetary policy implementation framework take note of changes to the broader financial market landscape, including its regulatory structure, and adapt as necessary in response to such changes. Ahead of the reforms, our focus, which I discussed in a speech in early 2016, was on whether the reforms would have an impact on the transmission of monetary policy that might require such adaptation. In particular, we wanted to observe whether markets remained sufficiently competitive to allow for robust control of rates, and see whether the shifts in volume—particularly the anticipated upswing in demand for government-fund-eligible assets— would impair competition.12 We also wanted to see whether linkages across markets remained strong enough to ensure that policy was transmitted in accordance with the FOMC’s forecasts, especially given prime funds’ broad investment scope, and their ability to reallocate across markets according to relative value.13 The size of the reallocation ended up being quite a bit larger than most had expected.

While these period-end approaches may be less administratively burdensome to implement than daily or weekly averages, they can incentivize firms to temporarily adjust their balance sheets around quarterend to report higher ratios: balance sheet growth incurs no cost on most days, but incurs a significant capital cost on one or three days a quarter. Much activity in unsecured markets is lowmargin intermediation in which banks borrow funds from non-banks and deposit them at the Federal Reserve to earn IOR; this activity can be less economic for leverage-ratio-constrained foreign banks on the few days when the ratio is calculated. Third, since liftoff in December 2015, I see a modest and gradual uptick in dispersion in the index that combines both secured and unsecured markets. This increase seems to have occurred in two stages: once at liftoff, and again in autumn 2016. In contrast, there was nearly no change in dispersion following the FOMC’s two additional policy rate increases in December 2016 and March 2017. This rise in dispersion in the combined measure reflects the fact that the spread between unsecured and secured overnight rates rose around those times. Much of the fairly modest pick-up in that rate spread seems tied to individual, one-off factors. To begin with, the dispersion in money market rates was compressed to some extent by the zero lower bound, and as rates moved into positive territory, they were able to “unpack” to an extent.
Moreover, buyers of services increasingly elect to travel elsewhere to consume them. Thus the international price elasticity of a wedding ceremony, a game of golf, hospital or health spa treatment, or conference facilities is ever rising. Soon there will remain only very few location-specific activities - heritage tourism perhaps, but even that is not immune from the pressure of the law of one price, if one considers the competing heritage sites around the world. I see some evidence in Hong Kong of the impact of this process of more broad-based globalisation, and I am sure it is happening elsewhere too. Liberalisation of trade policies and the achievements of the WTO will also have contributed. Thus, deflation is being driven in part by the expansion and intensification of competition across an ever larger range of sectors and countries. This may explain why some price surprises on the macro-policy front in the recent past have been on the downside, but if central banks can digest this ingredient there is no reason why they should be more than temporarily knocked off course by it. 3  For the UK, the peak-to-trough comparison would be 1873-95, during which the average compound deflation rate was 1.7% pa.  4  My thanks to HKMA colleagues Daryl Ho and Lu Dai for researching the historical data.

3 A more recent example of this phenomenon is provided by Japan, where the persistent deflation which has gripped the country since the early 1990s has consistently led, ceteris paribus, to a heavier debt burden for households that had contracted mortgages in the boom phase of the late 1980s and deterioration of banks’ balance sheets. In a symmetric fashion, high inflation – which, historically has also consistently meant volatile inflation – threatens the very foundations of the financial system because of the resulting capricious and unpredictable redistribution of wealth between debtor and creditor institutions. The most glaring example of such a phenomenon is provided by episodes of very high, or hyper-inflation, such as those plaguing a significant fraction of belligerent nations in the aftermath of World War I. Evidence from the Great Inflation episode of the 1970s is, although less dramatic, equally telling. Altogether, historical evidence therefore leads us to conclude that, although not sufficient, price stability is indeed a necessary precondition for financial stability. I now turn to a final point concerning the relationship between financial and price stability, namely the need to preserve the stability of the financial system in order to prevent the emergence of “tail risks” to price stability. I will start by discussing risks on the downside – that is, the possibility that the economy falls into a deflationary spiral – and I will then turn to those on the upside.