samchain/econo-pairs-v1 huggingface dataset:
Stripping out the effects of the two World Wars, this ratio has declined fairly steadily, from around 15% in 1830 to around 5% at the start of this century. Financial panics over this period did little to interrupt the downward trend. Events of the past two years have dramatically altered that picture. In relation to GDP, base money in the UK has risen by a factor of four – easily the highest financial crisis multiplier ever. 8 It has reached a peak last witnessed almost two centuries ago. Past liquidity crises are foothills by comparison with recent Himalayan heights. Measures of central bank balance sheet expansion under-estimate the scale of liquidity support provided during this crisis. As in Harman’s time, there has been a widening of the collateral taken by most central banks in their operations. 9 The taking of imaginative forms of collateral has a history which predates central banking: in the 12th century, King Baldwin II of Jerusalem secured a loan using his beard as collateral. Nonetheless, recent efforts are probably unprecedented in scope. Collateral swaps, typically not involving beards but often requiring haircuts, have also played a significant role during this crisis. They too do not expand base money, but do liquefy banks’ balance sheets. And guarantees of wholesale liabilities have similarly served as an important liquidity insurance device for a number of countries. Together, these two instruments have totalled between 10% and 40% of GDP across the UK, US and euro-area.

Research indicates that a fall on the stock market affects household confidence relatively quickly, that is already after two to four weeks.5 The indicator of Swedish consumer confidence in the economy published by the National Institute for Economic Research tends to fall when the Stockholm stock exchange falls (see Figure 6). There may therefore be good reasons for believing that the recent falls on the stock markets of the world are one of the reasons why the Swedish households have become more cautious and are expected to increasing their saving. Financial turbulence has also led the companies to lower their expectations regarding the period ahead and to begin to postpone investments. All in all this has a dampening effect on economic activity in Sweden. High sovereign debts abroad affect Sweden As we have noted, the level of debt is high in the euro area and the United States. Following many years of budget deficit, what were in many cases already weak public finances were further undermined in connection with the financial crisis of 2008–2009. In 2009, the average budget deficit in the euro area amounted to 6.4 per cent of GDP. This figure fell to 6 per cent  5  See for example Jansen and Nahuis, 2003; Kremer and Westerman, 2004; and Beckmann, Belke and Kuhl, 2011. BIS central bankers’ speeches  7  in 2010 and is expected to be 4.4 per cent in 2011.
In an effort to further modernize our financial system, the Bank of Thailand, in cooperation with stakeholders and representatives from the SEC and the Department of Insurance, is in the process of drafting the country’s first Financial Sector Master Plan. Scheduled to be implemented in 2003-2012, the Master Plan is intended to increase competition within the Thai financial systems and at the same time to improve the soundness of the system as a whole. The preliminary vision for the future of commercial banking and financial services in Thailand given by a high-level steering committee comprises three pillars – accessibility and availability of financial services for all potential users nationwide; a competitive and efficient financial system; and finally fairness for all customers. This preliminary vision of the Master Plan reflects our changing perception of the country’s new financial architecture. As there are already two Asian financial centers in Hong Kong and Singapore, there is no point to try to be the third one. Instead, what Thailand needs is probably a more customeroriented financial sector with efficient operation and minimum systemic risk. The extent to which Thailand’s financial service landscape is going to change from today will depend on the results and recommendations of an ongoing study. What I can tell you now is that whatever the final outcome will be, for Thailand, this is a change to rectify past shortcomings for the better. As we are drafting our Financial Sector Master Plan, the SET is working tirelessly on its Capital Market Master Plan.

Moreover, no doubt that the available reserves serve as an insurance from the market point of view and make the access to debt financing somewhat easier. In conclusion I would like to say a few words about how to reach the path of strong economic growth amid tough monetary and fiscal policies and prudent build-up of government debt. The matter is the structure of budget expenditure, rather than its volume, and the use of structural reform potential. The external conditions push the economy towards structural changes and balanced structural reforms may accelerate this process and make it less painful. The emphasis should be put on those industries, which turned out to be competitive in the current situation without government support. Only they could become an efficient engine of development amid new reality. As it often happens, the best way to help businesses in the current conditions is not to interfere. The deficit resources of government support should be concentrated on assistance to the most vulnerable population groups, as well as on the development of infrastructure and human capital. BIS central bankers’ speeches  3
In fact, during those early days, some of those countries were able to freely utilize the labour and resources of the countries that were colonized by them, and benefit immensely by the fruits of the foreign lands and natural resources. They had to adhere to very few laws and regulations relating to education, training, health or labour practices, or standards on working conditions. There were no environmental laws or treaties, and the environment was often the first casualty in their quest of accumulating wealth. Capital accumulated by illegal means or criminal activity was used freely without any restriction. 2  BIS Review 29/2008  But, today the situation is completely different. Today, emerging countries are acting in a much more responsible manner in driving their economies forward. In fact, the present day emerging economies are achieving their attractive levels of growth, while adhering to, and respecting international conventions on copyright, anti-money laundering and terrorist financing, environmental, labour, human rights, safety, health, etc., etc. This situation is sometimes forgotten by some of the economic and political analysts, particularly from advanced nations and therefore it may not be too inappropriate to remind the world of this state of affairs, on and off. All in all, from the point of view of individual developing countries, the most important economic need at present is to maintain the high economic growth momentum that they are currently achieving, in a sustainable manner.

Ajith Nivard Cabraal: Harnessing sustainable growth in emerging markets Keynote address by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at the 2nd World Management Summit 2008, Karachi, Pakistan, 11 March 2008. *  *  *  As salaam Aleikum, Ayubowan, Good Morning. Mr. Chairman, Distinguished Delegates, Ladies and Gentlemen, At the outset, I wish to thank the organizers of this World Management Summit for inviting me to deliver the keynote address. I am also greatly touched by the wonderful hospitality accorded to me in this very interesting and historic city of Karachi. Mr. Chairman, I consider it a privilege and honour to share my thoughts and views on a very timely topic, “Harnessing Sustainable Growth in Emerging Markets” at this important forum. I hope I would be able to plant a few seeds in your distinguished minds so that such seeds may be nurtured by you in your deliberations to follow. As a first step, let us examine the current global and regional trends in relation to World Economic Growth, so that we could deal with this topic in a wider perspective. As we know, over the past few years, the global economy has been experiencing one of its’ strongest sustained periods of growth, since the early 1970s. This expansion is projected to be very strong even after accounting for the impact of the recent financial market turbulence. Significantly, this growth has, as its foundation, the strong results of the emerging markets which have been leading the way.
By easing market-based financial conditions, and by putting downward pressure on the real interest rate that banks charge to borrowers, central banks can stimulate aggregate demand, even when short-term interest rates approach the effective lower bound. The validity of this relationship is also crucial for assessing the price effects of monetary policyinduced movements of the exchange rate. With policy being effective in boosting growth, any disinflationary effect of a stronger currency arising from expectations of a tighter future monetary policy stance might be mitigated, or offset, by the ensuing improvement in the economic outlook. However, exogenous shocks to the exchange rate, if persistent, can lead to an unwarranted tightening of financial conditions with undesirable consequences for the inflation outlook. Thank you. References Ahmed, S., M. Appendino and M. Ruta (2015), “Global Value Chains and the Exchange Rate Elasticity of Exports”, IMF Working Paper WP/15/252. Al-Eyd, A. and S. Pelin Berkmen (2013), “Fragmentation and Monetary Policy in the Euro Area”, IMF Working Paper No 13/208. Altavilla, C., G. Carboni and R. Motto (2015), “Asset purchase programmes and financial markets: lessons from the euro area”, ECB Working Paper No 1864. Andrade, P., J. Breckenfelder, F. De Fiore, P. Karadi and O. Tristani (2016), “The ECB’s asset purchase programme: an early assessment”, ECB Working Paper No 1956. 11 / 14  BIS central bankers' speeches  Ball, L., (1998), “Policy Rules for Open Economies”, NBER Working Paper No. 6760. Bernanke, B. and A. S. Blinder (1988), “Credit, Money, and Aggregate Demand”, American Economic Review, Vol.

This suggests that the Monetary Policy Committee did not explain well enough that sometimes it is better to raise rates now so as to avoid a much larger rate increase later on. In view of this criticism, I think it appropriate to explain this more fully. In general, Central Bank attempts to keep interest rates as low as possible — but as high as necessary — at any given time. What that optimum level is, however, depends on conditions, and it changes from one time to another. If Central Bank rates deviate from this optimum, the public will bear the expense. If they are higher than need be, inflation could fall below target and GDP growth would be weaker than it might be otherwise. If they are lower than need be, inflation could get out of hand and economic instability could take root. In that case, a much larger rate hike would be needed later on. So interest rates that are too high or too low do not come without costs to the general public. In this instance, it should not be forgotten that household mortgages tend to be long-term loans, and a majority of them are indexed to the CPI. If inflation is kept at target over the long term, these mortgage rates will be lower in the long run than they would be otherwise, even though an increase in short-term central bank rates might sometimes be required.
The different surveys and asset prices can be read in more than a way in regards the true pace of normalization. Actually, the same as in June, the MPR implicit in swap contracts is lower than the one that can be inferred from the forward curve, mainly reflecting significant differences between the rates on non-indexed Central Bank bonds and swap contract as equivalent maturities. It is possible that these differences originate in the type of institutions operating in each market, which are not fully integrated, reflecting different preferences for instruments in pesos and in UF by resident and non-resident institutions. Similarly, this partial integration may mean that swap contract rates reflected more quickly and more intensely the movements of risk-free interest rates abroad. The baseline scenario of this Report uses as a working assumption an MPR trend that is comparable to the one observed in various expectations surveys (figure 11). Certainly, if actual conditions differ from those assumed in this baseline scenario, alternative policy measures will be required. Specifically, the Board believes that the scenario outlined here is subject to a number of risks. Considering that in June domestic demand – and output – already was showing faster than foreseen velocity, we cannot rule out gaps closing faster than assumed in the baseline scenario. Nor can we rule out that some part of that strength responded to merely temporary factors, such as the earthquake, and output will slow down before we think. In the global context, several risks are still latent.

The CPI figure published today is a little below the expectations of market agents and our own, but as we have said time and again we do not react to the news of the day, although we do take them into account to detect the trends. In any case this figure does not change the direction of monetary policy. Nor does it modify our forecasts of strong growth with limited inflation we include in this Report. Our monetary policy strategy is a preventive one, headed to normalization, and does not respond – luckily – to an inflationary spurt or to some unsustainable expansion process. In this Report’s baseline scenario, gradual progress toward MPR normalization is assumed, but its level will continue to be expansionary still for several quarters. As always, the pace of normalization will depend on how domestic and foreign macroeconomic conditions unfold, and will be consistent with the inflation target. Accordingly, it is essential that we do not lose sight of the external scenario. The latest developments have increased uncertainty about the pace of global growth while financial markets are still highly volatile. Also, the nominal appreciation of the peso over the past few months has been substantial. Although the current levels of the real exchange rate do not reflect an obvious misalignment with its long-term fundamentals, exchange rate movements do affect the conduct of monetary policy significantly, as they play a stabilizing role.
The number has declined from 29 institutions per million inhabitants in 1997 to 21 in 2004. The high level of concentration in small countries may be an indication that there are economies of scale in the financial industry. In large countries, even banks with small market shares can achieve economies of scale. Large credit institutions offering a range of services can also achieve economies of scope by selling several types of product to the same customer. Norway has more banks per capita than the euro area, and the number of banks has remained fairly stable over the past few years. One reason may be that bank alliances have allowed smaller banks to benefit from economies of scale and scope. This occurs in part through integrated technology and product development solutions, and the sharing of knowledge and expertise. In addition, the number of foreign operators in Norway has increased. Concentration in the banking industry also results in a concentration of risk. At the same time, larger entities may manage risk better than smaller entities. Cross-border activity In countries with a high level of concentration, more consolidation may weaken competition. Particularly in small countries, it has been necessary for banks to establish activities in other countries in order to achieve economies of scale. In the Nordic countries, Nordic financial conglomerates have emerged in recent years, and the largest banks now define the entire Nordic region as their domestic market. The Nordic region is very advanced in the development of cross-border solutions.

Andres Lipstok: Opportunities of the Estonian economy in global competition Opening address by Mr Andres Lipstok, Governor of the Bank of Estonia (Eesti Pank), at the Conference "Opportunities of the Estonian Economy in Global Competition", Tallinn, 23 May 2007. *  *  *  Excellencies, Ladies and Gentlemen! Introduction It is a great honour to welcome you here in Tallinn. Fifteen years ago Estonia regained its currency, the Estonian kroon. As we know, money has three key functions – it serves as a unit of account, store of value, and medium of exchange. The rise and fall of an economy depends on how well these three functions are fulfilled. In smaller countries, such as Estonia, the meaning of money goes beyond that. Stable and credible currency becomes a national symbol of success. That is why the introduction of the Estonian kroon is the most important event for our people from the early nineties. The new constitution, the declaration of independence, free elections – all these political events were perhaps more significant. But our own currency was and still is very special for most people. Our historical background might partly explain the “euro” scepticism of Estonians. The unfortunate truth is that joining the euro area is not very popular right now among Estonians. People understand the importance of it but hesitations still persist, price rise fears being the most common.
To address the risk factors mentioned above appropriately, it is necessary to embrace a gradual change towards a growth pattern that is better balanced and more squarely based on those expenditure items that most contribute to building the economy’s productive potential and competitiveness. The economic authorities can contribute to this by focusing the available economic policy instruments on sustained macroeconomic stability, market flexibility and higher potential growth. In the case of fiscal policy, a primary role must continue to be played by budgetary stability to prevent demand-side pressures from exacerbating the existing risks, particularly in the present circumstances of monetary conditions that are overly generous given the degree of firmness prevailing in domestic spending. Consequently, the restrictive fiscal policy stance should be maintained and the budget balance further improved, in step with the foreseeable firming of the recovery. This stance is also needed to meet the medium- and long-term challenges to public finances. Here, the possibility that the current pace of revenue growth may not be sustainable in the future, the probable rise in financial expenditure (which has so far assisted consolidation), the foreseeable cutback in European funds from 2007 onwards and, in the longer term, the uncertainties over the sustainability of the pension system, are factors that strengthen the case for surpluses in public finances in good times to stave off the reappearance of major imbalances in the future.

We may not be entirely comfortable with the thought that every purchase we make is recorded. It may be too reminiscent of the society described in George Orwell’s 70-year-old novel 1984. Fourth, Ola no longer has access to money directly backed by Norwegian authorities. We no longer have functional legal tender. The monetary system has been turned over to private entities. Alternatively, Ola has to use another country’s currency – in our hypothetical case, the euro. We have to ask ourselves: should we allow private solutions to compete freely in developing means of payment, or must the authorities play a role? The crucial factor is whether solutions based on private money deliver the characteristics the payment system should have. The system must be able to channel payments swiftly, safely, at low cost and in a user-friendly manner. The means of payment itself – our money – must be universal, because money is only useful if it is widely used. This requires trust. Deposit guarantee schemes and banking regulation promote trust. The objective of monetary policy is to maintain stability in the value of the currency. Norges Bank assists private operators in implementing faster and safer payments. We cooperate with other authorities to oversee and supervise the payment infrastructure to ensure robustness and efficiency. Privacy rules prevent unauthorised access to payment information. But there are some characteristics deposit money lacks. It cannot offer anonymous payments. The system is vulnerable to advanced attacks. Having more money on deposit than is covered by the deposit guarantee scheme involves risk.
Then consumers would have nowhere to hide from negative rates, if they do not want to leave their local currency entirely If the central bank guaranteed the anonymity of transactions conducted in the new digital currency (Nobody knows if this is possible), it would behave much like cash – with the significant possibility of a non-zero interest rate charged on balances deposited in it. By the way, I do not think it is a good idea to push forward the concept of central bank digital currency just as a response to the fall in the use of cash in society. As I noted earlier, households already have access to a digital currency: they can deposit their cash on accounts at commercial banks. If a central bank starts to compete with commercial banks in this arena, it may stop the fall in seigniorage revenues, but of course at the expense of the profitability or even the very stability of the banking sector. Even worse, such “safe haven” digital currency accounts at the central bank available to all citizens would probably guarantee a “digital bank run” in any crisis – although deposits at commercial banks are fully insured, accounts at central banks, if no cap is set, will always be seen as safer.

Jean-Pierre Roth: The euro – a stabilising factor in the international currency system Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Fondation Jean Monnet pour l'Europe, Lausanne, 21 September 2007. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The euro is undoubtedly a success story. It has contributed to stabilising the international currency system. In Europe, the former monetary disorder has been replaced by a new monetary order. The European payment system has become more transparent and price stability is guaranteed. Switzerland, too, is benefiting from European currency stability. The Swiss franc is taking advantage of a monetary environment that is considerably calmer than previously. The euro and the franc are coexisting very successfully. Nevertheless, it would be wrong to claim that all the effects of European currency integration have already worked their way through to the real economy. In spurring on competition and promoting transparency, the euro is having an integrating effect. However, there are still considerable obstacles standing in the way of this integration process. BIS Review 103/2007  1