samchain/econo-pairs-v1 huggingface dataset:
A significant step forward came last month when our respective Trade Ministers announced a target for bilateral trade of USD30 billion in the coming years. This is a doubling of USD13.8 billion recorded in 2016. I strongly believe that this target is very much achievable and with the closer banking relationship our trade will further flourish. Reflecting on our journey towards ASEAN integration Our partnership in ASEAN marks another integral part of our long standing and deep relationship. There is always the risk that many may take ASEAN integration for granted. If we reflect closely on our journey and how far we have come, is not by mere coincidence. It is a culmination of the collective vision, commitment and conviction to realise the benefits from deeper integration. Where we stand today is the true embodiment of the spirit of ASEAN of mutual trust and close cooperation. We continue to believe that this is the path forward for our region, and one that requires us to further deepen our strong ties to meet the challenges of the future. This occasion is also a testament to the leadership of Indonesia and Malaysia and the excellent working relationship between the two countries. It gives me great pleasure and satisfaction to see many familiar faces today who have been instrumental in realising this efforts, especially Pak Muliaman and Pak Wimboh. For those who are not aware, we go back a long way.

Muhammad bin Ibrahim: Major milestone for financial integration in ASEAN Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Luncheon, hosted by Bank Mandiri, Kuala Lumpur, 6 July 2017. * * * I am pleased to be here today to deliver the remarks for the lunch gathering hosted by Bank Mandiri. I am confident that Bank Mandiri will be the first Qualified ASEAN Bank in Malaysia, a major milestone for financial integration in ASEAN. Indonesia and Malaysia – neighbours and friends Let me start with the close relationship between both of our countries. Our relationship extends beyond our geographical proximity but is bound by our similarities in language, culture and of course – food. These natural forces have allowed us to forge and strengthen a strong history of cross-border trade and investments. Businesses from both countries have also strongly committed to invest and contribute to each other’s socio-economic development. Malaysian companies have made significant investments in Indonesia, amounting to USD12.1 billion at end 1Q-2017. These investments span the financial services, telecommunication and agriculture sectors. In fact, the collaboration between Malaysian and Indonesian corporates gave birth to Malindo Airways Sdn Bhd in 2012. It speaks volume of the partnership and close cooperation between our two countries. Indeed this venture will further open up ASEAN skies and expanded the close ties between the people of Indonesia and Malaysia. Over the last few years, Indonesian firms have also started to increase their presence in Malaysia.
Of course, safeguarding the soundness and discipline of fiscal policies that largely remain the competence of national governments presents a particular challenge. Ultimately, it must be ensured that twelve national budgets taken together are consistent with sustained stability for the euro area as a whole. In this regard the Stability and Growth Pact provides for a clear allocation of responsibilities between the Commission and the ECOFIN Council. The Commission is responsible for compiling the necessary information and analysis for effective multilateral surveillance, for formulating recommendations for decisions by the Council, and for overseeing the correct application of the Pact. The Council is responsible for taking the final decisions and it thus has the ultimate responsibility for enforcing the Pact. These two principles of surveillance and enforcement form the basic idea of the Stability and Growth Pact and must not be put into question. Having said that and in the light of the ongoing discussions on the future of the EU fiscal framework, let me re-affirm the ECB’s view that the Stability and Growth Pact is appropriate in its present form, but that there is scope for improving its implementation. Specifically, given that the experience with the Pact since 1999 has been mixed at best, there is a need to provide enhanced incentives to comply  BIS Review 71/2004  1  with the commitments under the Pact and to increase peer pressure towards enforcing the rules.

As a result, national governments and wage setters alike should be able to design and implement the policies under their responsibility in a manner that allows for the interdependencies of these policies with the single monetary policy. Obviously, if they take the single monetary policy’s credible commitment to maintain price stability as given, this will help to align expectations and condition their behaviour in a favourable way. National governments and wage setters, in turn, are reassured that monetary policy will respond favourably to appropriate fiscal polices and wage settlements which allow to maintain price stability over the medium term. Sustained stability - be it maintenance of price stability or stability in a wider sense - needs a sound institutional framework. As regards monetary policy the independence and clear mandate of the ECB provides the best possible arrangement. At the same time it is obvious that a monetary union which is not a mature political union also requires a framework for fiscal policy. This framework must respect the sovereignty of national governments and parliaments on the one hand and the need to ensure sound fiscal policy across the euro area on the other hand. Both, sound monetary and fiscal institutional arrangements are indispensable for a consistent and sustainable stability framework. The success of EMU rests not only on the ECB and its monetary policy but also on a robust framework for national fiscal policies.
There are two reasons for this: the size and the international orientation of the financial industry. First, the financial industry makes up a large share of gross domestic product (GDP) in Switzerland – larger than in other rich nations. For example, at its peak in 2007, the financial industry contributed around 13.5% to GDP in Switzerland, compared to just 8% in the US, 7.5% in the UK, and less than 5% in Germany 1. In countries with large financial industries, households and non-financial companies generally rely more on external capital. Consequently, in these nations, shocks to the financial system have larger output effects. The financial industry’s considerable share of GDP thus implies that shocks to the financial system potentially have more substantial effects on the real economy of Switzerland than in other countries 2. Second, parts of Switzerland’s financial industry are very internationally oriented. In the aggregate, around half of the entire value added by banks in Switzerland stems from  1  Source: OECD, Structural Analysis Database. 2  This has been documented empirically by Levintal (2009), who shows that the effects of fluctuating bank profits on GDP growth are related to the size of the financial industry as a share of GDP; Kroszner, Laeven and Klingebiel (2007) find that bank crises have more pronounced real effects in countries with a higher ratio of loans to GDP. 2  BIS central bankers’ speeches  business conducted with foreign customers. Over half of all assets under management by Swiss banks come from foreign customers 3.

Due to this pivotal function, the banking sector plays a crucial part in the transmission of monetary policy. On the other hand, however, it may also be the source of financial shocks that impact on the real economy. Second, the industry is itself a large part of the Swiss economy. The significance of the financial industry and our position as a global financial centre are important contributors to the wealth of our nation. This is especially apparent here in Zurich, where the financial sector generates much employment, wealth and tax revenue. In my remarks, I will first discuss the macroeconomic challenges associated with the banking sector’s key role in the transmission of monetary policy, as well as the risk that it may  BIS central bankers’ speeches  1  propagate financial shocks to the economy. Then, I will discuss the challenges for the industry itself. Lastly, I will address the main implications from the SNB’s point of view. Macroeconomic challenges Let me start by focusing on the macroeconomic challenges associated with the importance of the Swiss financial industry, and, in particular, the banking sector, for the rest of the economy. The main reason why the banking sector is so important for the Swiss economy and the SNB lies in its traditional function as financial intermediary. As banks collect funds and provide financing to firms and households, they are the “life blood” of the economy. Related to this traditional function, there are two distinct aspects I would like to point out.
[...] the existence of public debt [on a large scale] imposes frictions and obstacles to readjustment [...] If the Government wish to help revival, the right way for them to proceed is, not to revert to their old habits of lavish expenditure ... “ The debate between Keynes and Hayek took place at a time when millions of people were out of work. Governments, firms and households were heavily in debt and many banks were on their knees. In many countries, deflation made debt even heavier to bear. At the same time, pessimism and caution put a damper on the willingness to spend. Deflation and unemployment led to a low level of consumption, and investment that could have generated jobs and growth was held back. The question is, then, can the authorities curb a crisis by spending borrowed money? According to Keynes, spending would not only prevent the economy from sinking even lower, it would also reduce the extent of the crisis and bring the economy back into balance more quickly. Or was Hayek right when he claimed that misjudged attempts to curb a crisis by means of debt-financed spending can sow the seeds of a subsequent and even deeper crisis? According to Hayek, measures should be focused on the underlying challenges, such as public debt, that had created the crisis. In Hayek’s opinion, higher public debt would inevitably end up funding unproductive investments and consumption in the public sector, which would lead to low growth.

In contrast to most European countries, Norway also has room for manoeuvre on the fiscal front, if necessary. But – as in the rest of Europe – the authorities cannot solve the deeper challenge, namely the need to establish new private sector activity. This is a task for the business sector. What the authorities can do is to establish framework conditions that promote innovation and growth. Hayek and Keynes In my introduction, I posed the question: can crises be curbed? quickly followed by: can misjudged attempts to curb a crisis sow the seeds of an even deeper crisis? Keynes and Hayek did not come to agreement on how a crisis should be managed. Their debate is still relevant today. Keynes advocated the use of public spending to curb crises. 6  See Financial Stability Board (FSB) (2011), “Key Attributes of Effective Resolution Regimes for Financial Institutions” and FSB (2015) “Principles on Loss-absorbing and Recapitalisation Capacity of G-SIBs in Resolution”. 7  The first pillar of the European Banking Union, the Single Supervisory Mechanism (SSM), with the ECB as supervisory authority for the 130 largest banks in the euro area, started in November 2014. The second pillar of the European Banking Union, the Single Resolution Mechanism (SRM), became operational in January 2015 and the joint crisis resolution authority, the Single Resolution Board, started its work. 6  BIS central bankers’ speeches  Hayek warned against such a policy: the misjudged application of government measures could easily lead to deeper crises and credit bubbles. Both were right.
European Systemic Risk Board (2011), Recommendation of the European Systemic Risk Board of 22 December 2011 on the macroprudential mandate of national authorities (ESRB/2011/3). Financial Crisis Commission, Preventing and managing financial crises, interim report, SOU 2013:6, 23 January 2013 Fiscal Policy Council (2011), Swedish Fiscal Policy, Report of the Fiscal Policy Council 2011. IMF, World Economic Outlook, October 2009. IMF, World Economic Outlook, October 2012. National Institute of Economic Research, “A Longer Term View of General Government Finances – Developments Will Require More Hours Worked”, The Swedish Economy, December 2005. National Institute of Economic Research, Wage Formation Report 2012. Kuttner, Kenneth (2012), “Low Interest Rates and Housing Bubbles: Still No Smoking Gun”, under publication in Douglas Evanoff (ed. ),The Role of Central Banks in Financial Stability: How Has it Changed?, World Scientific (Hackensack, NJ). Kydland, Finn and Prescott Edward (1977), “Rules rather than discretion: The inconsistency of optimal plans”, Journal of Political Economy, vol. 85, pp. 473–490. OECD Economic Outlook, November 2012. Bill 2007/08: 100, “Spring Fiscal policy Bill 2008”. Bill 2012/13: 1, “Budget Bill 2013”. Sveriges Riksbank, Monetary Policy Report, February 2012. Sveriges Riksbank, Monetary Policy Report, July 2012. Sveriges Riksbank, Minutes of the monetary policy meeting, July 2012. Sveriges Riksbank Monetary Policy Update, December 2012. Statistics Sweden, 2012 “Housing construction low for a long time”, SCB Economic Indicator, no. 2012:92. Svensson, Lars E.O. (2012), “The possible unemployment cost of average inflation below a credible target”, Working Paper, available at http://people.su.se/~leosven/papers/ Phillipsa.pdf. 16  BIS central bankers’ speeches  Svensson, Lars E.O.

To a certain extent, these high growth figures were of course a natural consequence of the major fall in GDP in late 2008 and early 2009. But, in contrast to many other countries, GDP in Sweden also began to exceed its pre-crisis level relatively quickly (see Figure 1). BIS central bankers’ speeches  1  Figure 1. GDP in Sweden and abroad Index, Q4 2007=100 106  106 UK Euro area  104  104  USA Sweden  102  102  100  100  98  98  96  96  94  94  92  92 07  08  09  10  11  12  13  Note. Seasonally-adjusted data Sources: Statistics Sweden and national sources. However, despite the relatively favourable development of GDP, it seems that unemployment has become entrenched at a high level. Initially unemployment increased less than we expected given the substantial fall in GDP – it peaked at 9 per cent in early 2010 – but since then it has fallen no lower than 7.6 per cent (see Figure 2). In my view, this is a level that is much higher than what can be considered a long-run sustainable unemployment rate.1 Figure 2. Unemployment in Sweden Per cent of labour force 9  9 Average 1999-2012 Unemployment  8  8  7  7  6  6  5  5 05  06  07  08  09  10  11  12  13  Note.
As we speak, the Parliament of Romania is holding a solemn plenary meeting dedicated to the before mentioned event. The National Bank of Romania had an important contribution during the First World War. Therefore it chose to acknowledge the historical moment by issuing a set of numismatic coins in gold, silver, coppered tombac and brass dedicated to this Union. On the obverse, in the foreground, there is an image of the building of the National Council in Kishinev where, on the 27th of March 1918, the union of Bessarabia with Romania was voted, while in the background, there is an excerpt from the Union Act; the inscription “ROMANIA” in an arch, the face value “100Lei, 10LEI, 1LEU, 50 BANI”, the coat of arms of Romania and the year of issue “2018”. On the reverse there are the portraits and the names of the three cosigners of the Union Act, i.e. Ion Inculeţ, Chairman of the National Council, Vice-Chairman Pantelimon Halippa and Secretary Ion Buzdugan; the inscriptions “100 ANI DE LA UNIREA BASARABIEI CU ROMANIA” and “27 Martie 1918”. Ladies and gentlemen, Allow me to say a few words about/ introduce Ms. Rachel Lomax. She is back to Romania after a decade or so and ready to share her valuable 40 years’ experience and expertise in policy making and financial markets. After obtaining a Master’s degree from London School of Economics in 1968, she joined HM Treasury.

Before getting to the substance, I should say first that the Bank is releasing a text comprising a few bullet points around which I shall frame my remarks; and second, that I am speaking for myself this evening and not for any of the policy committees, domestic or international, of which I am a member. Speaking notes Part 1: Prudential regulation of financial firms: rules versus discretion •  Bank of England is once again the prudential supervisor of banks. And this time of building societies and insurance companies too. •  Prominence given in public debate to the Bank absolutely not adopting a ‘tick box’ approach, but instead a ‘judgment-based’ approach. This has been widely applauded. •  In fact, market practitioners tend to be schizophrenic about it. For a couple of decades at least, they have called for ‘certainty’ whenever any specific, isolated policy area is being reformed; ie clear and complete rules. But taking the resulting monstrous rule books as a whole, senior practitioners rightly condemn the ‘tick box’ regulation that almost inevitably results. •  And leaders of firms have hardly stopped their staff from making a living finding ways around rules: endemic regulatory arbitrage was at the heart of so-called ‘shadow banking’ in the run up to the crisis. •  Step back to consider the public policy purpose. Contrast prudential supervision with securities regulation as traditionally conceived. Latter works on basis of: write rules; check compliance with those rules; punish breaches.
It not only creates a climate for higher economic and investment activities, but also reduces the economic and social inequalities caused by the asymmetric distribution of the costs of inflation among the various economic agents. In addition, in an environment of low inflationary expectations, inflation risk premia become relatively less important as a determinant of financial prices. As a result, other factors such as credit risk can play a larger role in the price formation mechanism. Ultimately, this results in clearer market price signals and a more efficient allocation of financial resources. On the BOT’s role in the pursuit of price stability, allow me to elaborate further on two points: First, the BOT’s inflation targeting framework aims ultimately at anchoring medium term inflation expectations. As we are all aware, central banks have direct control only on the very short end of the market interest rates. In the case of the BOT, it is the one-day repurchase rate. Meanwhile, the interest rates that matter to investment decisions by most businesses are those in the medium to long end of the yield curves. Thus, it is imperative that the central  4  BIS Review 118/2008  bank gain trust with the public by conducting monetary policy in such a way that is consistent with anchoring low inflation expectation in the medium and long term. To put in plain words, markets and the public must be confident that the central bank would not tolerate inflation developments deem to undermine long-term economic growth.

The next steps will be determined more by the newest indicators of economic developments and prospects than they have been in the recent past. At its next meeting, the Monetary Policy Committee will probably assess whether and how the Icesave referendum results and the newly published capital account liberalisation strategy will affect monetary policy in the near future. The strategy divides liberalisation into two main phases, with Phase I dedicated to unwinding offshore króna positions by allowing owners to exit through auctions or by investing in the Icelandic economy. Only when these measures have generated acceptable results can controls on residents’ capital outflows be lifted. If conditions are right, the latter phase could proceed relatively quickly, but if not, it will be executed more gradually. It is difficult to say how long Phase I will take, as its duration will depend on a number of uncertainties, such as access to foreign credit markets. But it is important for near-term monetary policy that Phase I be designed to minimise potential negative effects on the exchange rate and the foreign exchange reserves, at least at first. It is only in Phase II that the interest rate differential with other countries begins to assume much greater importance as regards exchange rate developments. In the recent past, monetary policy has been an element in the larger economic policy formulated by the Icelandic authorities in co-operation with the International Monetary Fund. The key features of that policy have been exchange rate stability, fiscal sustainability, and financial system reconstruction.
15  All speeches are available online at www.bankofengland.co.uk/speeches  15  At the time of the global financial crisis, then, workers and their employers were faced with a stark outcome of job insecurity (jumping off the ladder) or income insecurity (stepping down the ladder). Unlike in previous recessions, most chose the latter path. The result was lower-than-expected unemployment, but weaker pay and productivity growth. Charts 17a and 17b: Proportion of workers facing nominal pay freezes or cuts Job stayers  Job switchers Per cent  Per cent  40  40  35  1990  1994  1998  2002  2006  2010  Cut  Freeze  2014  35  30  30  25  25  20  20  15  15  10  10  5  5  0 2018  0 1990 1994 1998 2002 2006 2010 2014 2018 Cut  Freeze  Sources: ONS ASHE and Bank of England calculations. Notes: Chart shows percentage of workers either in current job or moving job who faced nominal pay cuts or freezes in a given year. Chart 18: Wage growth for job movers Per cent  12 10 8 6 4 2 0  1998  2001  2004  2007  2010  2013  2016  Sources: ONS ASHE and Bank of England calculations. Notes: Median hourly pay.

For the first 60 of those years, real pay growth grew steadily at over 2 ¼% on average each year. Over the past 10 years, real pay growth has averaged minus 0.4% – a “lost decade” for the average worker. Despite some recovery recently, that leaves the inflation-adjusted pay of the average UK worker still over 5% lower today than it was just prior to the crisis. You have to go back to the 19th century to find a similar period of stasis in UK living standards. The UK’s jobs bonanza has been accompanied by a pay disaster. Chart 7: Real pay Index, 2007 = 100 120 100 80 60 40 20 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Sources: ONS, Bank of England Millennium of Data and Bank of England calculations. Notes: Data at annual frequency using AWE deflated by CPI. Prior to AWE and CPI we use AEI and RPI, respectively, to extend the series backwards. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  These falls in real pay have been widely spread geographically. Chart 8 compares average real wage rises across UK regions in the ten years either side of the global financial crisis. In the ten years prior to the crisis, all regions experienced annual rises in real pay, averaging between 1.3% (Wales) and 2.2% (London). These pay rises were roughly in line with pre-crisis economic growth rates.