samchain/econo-pairs-v1 huggingface dataset:
International trade and FDI Let me now turn to international trade and Foreign Direct Investment (FDI). Over time, trade and FDI integration have contributed to productivity growth and prosperity. But important distortions in the international trade system remain, as shown by large global imbalances. These are linked, for example, to the export-led growth model in Asia and managed exchange rate regimes in most emerging countries, as trade issues have become intertwined with other concerns: growing inequality, environmental damage, security, etc. The issues are real, and partly explain the resurgence of protectionism; but protectionism doesn’t solve any of these problems. Bilateralism cannot solve bilateral imbalances and even less global imbalances. A renewed multilateralism needs to be more effective, in at least three ways. First, on trade, the G20 has agreed – in principle – that action is necessary to improve the functioning of the WTO. Concrete progress is now needed on a package of reforms, in particular regarding the 2/3  BIS central bankers' speeches  dispute settlement mechanism. The WTO needs to strengthen and broaden the Most-favourednation principle, and it should continue to strongly support trade liberalisation, including in the services sector where it is lagging. Secondly, we need to better understand and address global imbalances. At 40 percent of world GDP, global external imbalances – measured by the sum of the absolute values of net creditor and net debtor international investment positions – are now at a historical peak and four times larger than in the early 1990s.

François Villeroy de Galhau: 75 years later – thinking about the next 75 Welcome address by Mr François Villeroy de Galhau, Governor of the Bank of France, at the G7 high-level conference, Paris, 16 July 2019. * * * Ladies and Gentlemen, It is a great pleasure to welcome you to this G7 high-level conference dedicated to the next 75 years of the Bretton Woods system… which is a sign of confidence. 75 years ago, John M. Keynes for Britain, Harry Dexter White for the US, Pierre Mendès-France for France inaugurated what we now see as the “golden age” of multilateralism and cooperation. Quite remarkably, the Bretton Woods Conference preceded peace: economic cooperation was seen as a prerequisite for peace. Today, we are unfortunately far away from this spirit: multilateralism is facing a major crisis. Yet the Bretton Woods institutions (BWI) are remarkably resilient, thanks to the commitment of their successive leaders – many of them are here – and to the strength of their history. They are priceless assets – we are probably all convinced of this. But we also know that the current situation is not stable. So, where do we go from here? The worst-case scenario would be an implosion of the system, implying a real step backward, with a rise of protectionism and bilateralism. A more promising scenario – and this is what we should fight for – would be to come out of this crisis stronger by re-building common solutions.
This, if applied to ‘real world’ assets, like equities, could offer a substantial improvement in the efficiency of financial market infrastructure and reduce risks by enabling instant settlement – T plus now[5]. There are of course risks in such integration as I mentioned earlier, whether it happens organisationally or technologically. The Bank of England is working with the FCA and the Treasury to set up a regulatory ‘sand box’ for developers to explore whether and how those risks can be managed to the level of assurance we expect from the current system[6] So my third reason for bringing the activities of the crypto world within the relevant regulatory frameworks is to foster innovation. This may appear counter intuitive to those who see regulation as opposed to innovation. But, as I have said before, ‘people do not fly in unsafe aeroplanes’. Innovation may start in unregulated spaces. But it will only be developed and adopted at scale within a framework that manages risks to existing standards. And by holding innovative approaches, using technological advance, to the same standards as existing approaches we can ensure that the benefits of new technology and new business models actually flow form innovation rather than from regulatory arbitrage. This in turn, determines the answer to the second question of ‘how’ regulation should be extended to these areas. The guiding principle should be ‘same risk, same regulatory outcome’.

It is not easy, therefore, to reconcile the revised earnings data with other information on the labour market. And these data really matter for the MPC’s assessment of the UK economy. I can promise you that the Bank, the Treasury and the Office for National Statistics will, as a matter of urgency, be working together to try to understand what is happening to earnings. Decisions on interest rates must take into account not only those factors which I have highlighted this morning - the international economy, the possibility of a credit crunch and uncertainty about the trend in earnings growth - but also a wide range of other information relevant to the outlook for inflation, including the behaviour of the monetary aggregates, which are still growing quite rapidly, and the fall in sterling’s effective exchange rate. Over the next two weeks more important data will become available, including the first estimate of GDP growth in the third quarter, a CBI Industrial Trends Survey and the monthly report from our regional Agents. At our next meeting on 4 and 5 November, the MPC will take into account all of this information, and occasions like today are part of the process by which we obtain more information and exchange views with those most directly affected by our decisions. BIS Review 86/1998
At the very least, the SGP has served well in bringing the political attention to the need for sustainable public finances. A final observation concerns the dichotomy of before and after entry into the union. The general view among euro area accession countries seems to be that a lot would be gained from membership of the monetary union and the convergence criteria are viewed as a goal, while a widespread view among the old member countries seems to be that once a member, the SGP is a cumbersome constraint. 5  For a recent study of the SGP’s effects on fiscal policy, see, for instance, Annett (2006). BIS Review 73/2006  5  Characterising the two cases – wanting to join and being a member – I believe it is clear that the carrot outperforms the stick. Contrasting the willingness to undertake reforms in the new accession countries with the state of affairs among the old members, the difference is rather striking. It is equally evident when comparing today’s situation among the old members, with that before membership. Given the importance of equal treatment of countries, it is far from certain that it is possible, or perhaps even desirable, to align the economic and legalistic view, but I believe that it is worth trying when establishing such a framework. With Rwanda and Burundi having applied to join, these types of considerations are currently a matter for the EAC as well.

Although I believe that low inflation fosters financial stability, it would be wrong to disregard the possibility that changes in the inflationary process can have unintended consequences for the stability of the financial system. The success in bringing down inflation has lowered both nominal and real interest rates. Moreover, factors such as the integration of emerging markets into the world trading system, and high productivity growth, has put downward pressure on prices of manufactured goods. This may have induced key interest rates to be lower, than what otherwise would have been justified in this cyclical position of the economy. Given the fact that the low inflation regime has yielded high and stable growth, in conjunction with low interest rates, it is no wonder that asset prices have surged. While much of this price movement is fundamentally based, there is a risk that households and firms might become too optimistic about future earnings and interest rates. Put differently, there is a risk that  1  2  See e.g. Schinasi, G. (2004): ”Defining Financial Stability”, IMF Working Paper, WP/04/187. BIS Review 101/2007  asset prices rise to unsustainable levels during the transition from a regime with high inflation to a regime with low inflation. Another, but not unrelated issue, concerns how risk is priced in the credit markets. The last few years saw risk premiums in credit markets falling to record low levels.
The key themes and lessons from this play remain as relevant 400 years ago as it does today. Firstly, it reminds us to just say “no” when friends come knocking at your door to borrow money you don’t actually have. It also reminds us that one should never count one’s eggs before they are hatched. But most relevant, it drums home the importance of sound financial planning and knowing one’s rights as a financial consumer. If Bassanio had the foresight to save for a rainy day, he would never have needed Antonio’s help to secure a loan from the unscrupulous Shylock. If Antonio was a more astute financial consumer, he would never have agreed to such unsavoury lending conditions. If Bassanio and Antonio had a friend who was a fully certified financial planner, they would have been strongly advised against putting their lives on the line just to secure a loan. While no modern-day financier will ask for a pound of flesh as collateral as Shylock did from Antonio, there remains many unscrupulous lenders who take advantage of those facing financial distress by offering loans at astronomical rates, as well as financial scammers that offer unbelievable schemes which they do not intend to honour. The tragedy being that there are still many desperate and unsuspecting financial consumers who succumb to these, at the expense of their own financial futures and that of their families and dependents. The role of financial planners and advisers in this age of disinformation becomes even more relevant.

It is my pleasure and honour to be invited to deliver today’s keynote address, to share my views on the importance of ethical conduct in upholding the trust of financial consumers in the quality of financial services and advice offered by financial practitioners. Alleviating the Impact of COVID-19 The wide-reaching impact from efforts to contain COVID-19 has exposed long-standing fault lines and gaps in financial management among households and businesses. While essential for the protection of lives, the impact of global and national containment strategies in the form of mass or targeted lock-downs have inadvertently impacted the livelihoods of many segments of society. These lock-downs have been gradually uplifted and are temporary in nature, but for consumers who lack adequate financial safety nets, the after-effects are real and significant. In line with our intent of providing financial reprieve to those adversely affected by this pandemic, 1/3  BIS central bankers' speeches  Bank Negara Malaysia has worked tirelessly with the banking industry to provide loan moratoriums and targeted repayment assistance to individuals and entrepreneurs who have lost their jobs or whose earnings have been adversely impacted. Similarly, we have also worked with the insurance and takaful operators to implement premium and contribution deferments from 1 April 2020 until the end of this year, to ensure policyholders and takaful participants who face temporary financial constraints can preserve essential coverage during these unprecedented times.
Foreign bank branches, especially European banks, are better prepared to implement the IAS 39 and IFRS as they  2  BIS Review 114/2007  are more familiar with the new accounting principles. This is because they get the supporting systems, as well as knowledge, from their head offices. Thai commercial banks, on the other hand, are studying the implications and the context of the new accounting standards, and are preparing their IT systems with the help of external consultants. In terms of regulation, as I already noted, the Bank of Thailand has begun implementing IAS 39 for the impairment of assets or NPL since December last year. By June this year, commercial banks have set an additional provision of about 90 billion Baht, with their BIS ratios remaining comfortably well above the minimum requirement at 14 percent. We at the BOT are studying the remaining issues of IAS 39 pertaining to supervisory policies and financial impacts on the banking sector. And our policies on components of capital and related reports are scheduled to be prescribed by the end of next year. Ladies and Gentlemen, Implementing Basel II and IFRS has been a challenging experience. For Basel II, the most difficult issue is arguably going to be the application of the principles embedded in Pillar 2 where supervisors have the ability to require banks to hold capital in excess of the minimum.

8), which will be published in May. Discussion of the timetable for a potential Swedish EMU membership The timetable for a potential full Swedish membership of EMU will be determined by the political process. The Government Bill "Sweden and the Economic and Monetary Union" from 1997 states that if the government later finds that Sweden should participate in the monetary union, the matter should be put before the Swedish people. Pronouncements by, for instance, Prime Minister Göran Persson indicate that a referendum will be held next year. Other political leaders have expressed similar opinions. If the result is a "yes", then Sweden would put forward an application to the European Commission and the ECB for an examination of whether we fulfil the legal and economic convergence criteria. The economic criteria assessed are the inflation rate, long-term interest rates, exchange rate stability and the public sector's budget and central government debt. Following this scrutiny, the European Parliament and the European Council shall present their views on the reports made by the Commission and the ECB and after this the ECOFIN Council will decide on the Commission's proposal to allow Sweden to participate in the union. If Sweden is accepted, there will be negotiations on when entry will occur and at what exchange rate the krona will be fixed against the euro, which is decided by the ECOFIN Council. After this a national changeover plan will need to be drawn up.
All direct life and composite insurers had participated in QIS1. I would like to thank the LIA and its members for the active participation and feedback. Indeed, many of you have expressed understanding and support for many of the proposed enhancements in the RBC2 framework. 21. Let me share a couple of high level observations from the QIS1 results with you. 22. First, there is an increase in risk requirements compared to the existing RBC framework. This is to be expected, given the more comprehensive risk coverage and higher target confidence level under RBC2. RBC2 targets a 99.5% confidence level over a one-year period, which is increasingly seen as the benchmark for insurers globally. From the results that I have seen, most of our insurers are able to maintain capital adequacy ratio or CAR of well above 100% under the preliminary set of RBC2 proposals. 23. Some industry players are naturally anxious if they will still have to maintain the same high buffers of way above 100% CAR or FSR under RBC2, as they do currently for RBC. This is not our expectation, given that the risk requirements under RBC2 are designed to be more risk sensitive, comprehensive and calibrated to a higher target confidence level. 24. A second observation is the greater differentiation in CAR between firms with different risk profiles.

Si les investisseurs et les emprunteurs internationaux considèrent que l’euro deviendra une monnaie stable, ils détiendront des actifs libellés en euros pour réduire au minimum les risques dans le cadre de la diversification  BIS Review 22/1999  8  internationale de leurs portefeuilles. En outre, un marché financier de l’euro large et liquide peut conduire à un usage étendu de l’euro, usage qui, en retour, pourrait faciliter son développement en tant que monnaie de facturation ou de dénomination sur les marchés des produits de base . L’euro va progressivement accroître son rôle comme monnaie internationale utilisée par le secteur privé, même si le rythme de son internationalisation peut être variable selon la fonction considérée. b) Les relations de change de la zone euro vis-à-vis des principales devises mondiales En ce qui concerne les relations de change entre l’euro et les principales devises mondiales, à savoir le dollar et le yen, je pense qu’il ne faudrait jamais oublier ceci : dans un régime de changes flottants, la stabilité du taux de change dépend des données fondamentales de l’économie. C’est pourquoi des politiques saines et avisées dans les domaines monétaire et budgétaire sont les meilleurs garants d’un fonctionnement approprié du système monétaire international. Il est encourageant, à cet égard, de noter que des deux côtés de l’Atlantique, nous partageons la même optique globale au sujet d’une monnaie qui conserve sa valeur et d’un budget tendant à être proche de l’équilibre ou en excédent.
•  Significant progress in reforming labour market policies – especially in the areas of pension schemes, early retirement and part-time work – has been achieved over the last ten years in some European countries, contributing to the significant rise in the euro area employment rate, accompanied by a decline in the aggregate unemployment rate from 10.6% in 1996 to 7.2% most recently. The latest number is the lowest on record since the early 1980s, but should not give rise to complacency. •  These encouraging developments show that past labour market reforms, immigration and wage moderation have helped to overcome some of the constraints on growth stemming from rigid and over-regulated labour markets. Despite this progress, we are still a long way from having exhausted the potential for further increases in participation rates and employment. The unemployment rate is still unacceptably high and the employment rates, especially among young, female and older workers, remain low by international standards. These features appear to be consistent with an “insider-outsider” characterisation of the European labour market, where structural impediments, triggered by the legal and regulatory environment, high taxes on labour and rigidities associated with wage regulations may prevent those groups “at the margins” from actively participating in the labour market. •  In addition, in those European countries and regions where competitiveness has been lost in the past or the unemployment rate remains too high, it is essential that wage increases do not fully exhaust productivity gains in order to provide incentives for firms to create additional jobs.

•  More specifically: o  structural policies in the Member States are supposed to seek to create flexible and efficient structures in product and labour markets with a view to fostering the growth potential of euro area economies and improving the adjustment mechanisms in EMU;  o  fiscal policies are supposed to ensure the sustainability of public finances, effectively limiting government deficit and debt ratios, thereby also ensuring that automatic fiscal stabilisers work effectively as an adjustment mechanism in the currency union; and  BIS Review 31/2008  1  o  wage policies should be compatible with trend developments in productivity in order to foster full employment and should take into account the overriding importance of wage flexibility as an equilibrating adjustment mechanism in the EMU. •  Within the Lisbon strategy, as refocused and reaffirmed by the European Council in 2005, Member States aim to gear national policies towards micro-economic flexibility and macro-economic stability. This would strengthen the capability of the euro area economy to swiftly re-allocate economic resources in view of exogenous economic shocks and improve its long-term growth prospects. The Lisbon Strategy and the peer surveillance of its implementation at the national level have raised the awareness among governments in European countries that structural reforms are decisive for remaining competitive in an increasingly global economic environment and to fully realising the economic potential of the EMU.
And judging from their persistent low profitability and price-to-book ratios, developing sustainable business models remains a major challenge for many banks. One important element of this is misconduct, where the peak of the crisis for banks has arisen more slowly than the prudential crunch in 2008. It casts a very long shadow – most importantly, on the lives and livelihoods affected by unacceptable behaviour, but as a secondary effect on banks’ ability to generate sustainable returns and build capital internally. For example, in their 2015 results UK banks disclosed a further £ billion of provisions relating to past misconduct, which reduced their pre-tax profits by around one half. But this is only part of the picture – even leaving aside misconduct, many banks have simply not yet adapted to the new prudential constraints or the lower-rate environment. This is now a first-order issue for us as the PRA and FPC. A recent paper by Natasha Sarin and Larry Summers provides a useful reminder that on many market metrics the banking system still looks fragile, which they argue may be largely due to 6  weakened business franchises . While we have done a huge amount to repair the financial system in recent years, as supervisors we would be unwise to ignore these signals – we need to complete the implementation and give firms a proper chance to adapt to the new world. That’s what our forward-looking, judgement-based approach now requires.

At the same time, I intend that we will bring forward proposals under our Pillar 2 regime which should also reduce the risk that our capital standards are overly prudent for smaller firms using the standardised approach to credit risk to calculate their requirements – essentially by looking at capital requirements in the round rather than assuming that a simple “sum of the parts” approach will necessarily deliver the right answer. In the same vein, we will deliver what we promised in our Annual Competition Report this summer, improving the process by which small firms can transition to internal models. All this demonstrates how we can address unintended consequences while remaining true to the revolution’s goals. Too early to say  In 1972, Chinese Premier Zhou Enlai was asked about the impact of the French Revolution. His answer: “too early to say”. While it emerged forty years later that Zhou was probably not referring to the 1789 storming of the Bastille – 5  but instead thinking of the 1968 student riots in Paris – his remark is apt at the current juncture . It is too early to say how business models will shape up in the future. 5  Zhou’s cryptic caution lost in translation: By Richard McGregor, Financial Times, June 2011, available here: https://www.ft.com/content/74916db6-938d-11e0-922e-00144feab49a 8  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  8  For insurers, the low rate environment and persistent soft conditions in many segments of general insurance are creating real pressures.