samchain/econo-pairs-v1 huggingface dataset:
Third: provision of adequate housing for citizens which is an issue of diverse dimensions and causes. Perhaps the most prominent of which are the limited availability of developable land within the urban boundary at prices appropriate to the citizen’s income, and the weakness of funding sources due to the absence of a regulatory framework. Here lies the importance of issuing financing and mortgage laws. May Allah bless your majesty and guide your steps along the path of goodness. 4  BIS Review 128/2010

The recognition of losses was postponed and, as a consequence, capital continued to be allocated to investments with limited positive impact on Japan’s long-term growth potential, which some have called “zombie lending”4. Ultimately, this resulted in Japan’s “lost decade”, namely an extended period of anaemic growth (see Chart 3). A second lesson is that institutional and structural reforms are essential Early in the crisis, emerging Asian economies strengthened prudential regulation and supervision, together with bank governance and market transparency and discipline, in order to prevent further instability and bring domestic standards closer to the international norms.5 Furthermore, they generally acknowledged that their economic “miracle” before the crisis was not sustainable. It was driven by over-investment encouraged by Colbertist policies, implicit government guarantees, and too often, opaqueness and political interference in market mechanisms.6 As a result, at the macro level, growth was led by capital accumulation in the wrong sectors and not by a rise in total factor productivity. In Paul Krugman’s words, the Asian miracle was “the fruit of perspiration, not of inspiration”7. To address the root causes of the crisis, structural reforms aimed at improving governance and challenging vested interests, both in public policy-making and in the corporate sector,  2  See FRBSF Economic Letter (2011). “Could We Have Learned from the Asian Financial Crisis of 1997–98?”, February 2011. 3  See Lindgren, C.-J. et al. (1999). “Financial Sector Crisis and Restructuring. Lessons from Asia”, IMF Occasional Paper, 188. 4  See Fukao, M. (2003).
Although the turmoils in global financial markets that started in July have been reduced by the determined actions taken by the central banks of industrial countries, especially the Fed, risk aversion is still high, credit maturity has been reduced considerably and, except for prime firms, financial conditions have narrowed around the world. It is foreseen that turbulences in global financial markets will have effects on the perspectives of the world economic growth. In any case, this adjustment comes at a time in which most firms and the banking sector around the world are on solid footing, perhaps with the sole exception of some economies in Eastern Europe. The epicenter of this trembling is in the United States, which economy already was experiencing an important adjustment in its housing market, now expected to be more intense and extended as a result of the deterioration in the credit conditions that experiences its mortgage market. At the same time, the drop in US housing prices and the less favorable financial conditions faced by US consumers will affect the dynamism of private consumption. Although the deterioration of financial conditions has no direct effect on prime firms, their economic perspectives have been negatively affected by lower dynamism expected for consumption and by more restrictive financial conditions faced by their consumers and suppliers. Nevertheless, it is important to emphasize that the indicators of real activity of the third quarter have shown a surprising strength of the labor markets and consumption.

-  6  this applies to the instruments used to provide liquidity: the MRO and LTRO  BIS Review 120/2007  -  this applies to minimum reserve features  -  this applies to the number of counterparties with direct access to central bank money  -  this applies finally to the range of eligible collateral  Let me say a word about each of these features of the Eurosystem operational framework: 1. At moments of term structure difficulties and shortening of the liquidity constraints, it is of advantage to have both: one-week and three-month liquidity providing tenders conducted weekly and monthly. Fine tuning operations and extraordinary additional tenders, according to standard procedures, allowed a commensurate response within a familiar context, rather than adding to prevailing uncertainty by introducing, in an emergency context, untested new facilities, instruments or procedures. 2. In monetary policy operations, the Eurosystem grants direct access to liquidity to a large number of credit institutions. All euro-area institutions subject to minimum reserve requirements and which fulfil the relevant contractual or regulatory arrangements applied by their respective NCB, may access the standing facilities and/or participate in open market operations based on standard tenders. At the end of August 07, 1 676 counterparties had access to the open market operations, 2 809 to the facility, and 2 141 to the marginal lending facility. 3. The combination of relatively high reserve requirements at 2% and the monthly averaging principle allowed banks to dip into their reserves to meet their liquidity needs.
6 See Altavilla, C., Canova, F. and Ciccarelli, M. (2019), “Mending the Broken Link: Heterogeneous Bank Lending  and Monetary Policy Pass-Through”, Journal of Monetary Economics (forthcoming) and Kayshap, A. and Stein J. (1994), “Monetary Policy and Bank Lending”, in Mankiw, G. (ed.) , Monetary Policy, Studies in Business Cycles, 29: 221–56, Chicago, University of Chicago Press; van den Heuvel, S. (2002), “Does bank capital matter for monetary transmission?”, Economic Policy Review, Federal Reserve Bank of New York, May, 259–265. 7 See Budnik, K. (2019), “Abird’s-eye view of the resilience of the European banking system: results from the new  macroprudential stress test framework”, Macroprudential Bulletin, 7 (March), European Central Bank. 8 See Altavilla C., Boucinha, M. and Peydró, J-L. (2018), “Monetary policy and bank profitability in a low interest rate  environment,” Economic Policy, 33(96): 531–586. 9 See Andersson, M., Kok, C., Mirza, H., Móré, C. and Mosthaf, J. (2018), “How can euro area banks reach  sustainable profitability in the future?”, Special Feature, Financial Stability Review, November, European Central Bank. 10 See Brand, C., Bielecki, M. and Penalver, A. (eds.) (2018), “The natural rate of interest: estimates, drivers, and  challenges to monetary policy”, Occasional Paper Series, No. 217, ECB, Frankfurt am Main, December. 11 See, for example, Holston, K., Laubach, T. and Williams, J. (2017), “Measuring the Natural Rate of Interest:  International Trends and Determinants”, Journal of International Economics, 108 (Supplement 1, May): S59–75. 12 Andersson et al. (2018), op. cit.

On the basis of the 2018 European-wide stress test data, we estimate that the banks’ behavioural reaction to the adverse scenario exacerbates the fall in GDP by a further 1.6% with respect to the initial shock, which itself further depletes banks’ capital.7  Cyclical factors Given that important link between bank behaviour and the cycle, let me turn to the cyclical factors affecting bank profitability in the euro area. The economic expansion continued through 2018, although with a sizeable reduction in the pace of growth relative to the previous year. Since the trough, the number of people in employment has increased by over 10 million. While the data since the end of 2018 have been weak – notably in manufacturing and the external sector – the economic fundamentals remain in place to support continued expansion. The economic expansion and employment growth have supported bank profitability. Loan growth has been robust in recent years, with higher volumes helping to mitigate margin compression.8 The stock of non-performing loans (NPLs) has been substantially reduced. Outstanding NPLs fell by € billion in 2018 and the aggregate ratio dropped to 3.8% of significant banks’ loans at the end of 2018, from 7% at the end of 2015. NPLs represent a double drag on bank profitability. First, NPLs have to be recognised and provisioned for, reducing current profitability. Indeed, the major driver of the increase in bank profitability over the past two years has been the smaller flow of new impairments.
The facility for a reverse-enquiry Singapore dollar sukuk was completed in January. We have issued the first tranche to the Islamic Bank of Asia, and are reviewing applications from other banks. We have also ensured equal tax, regulatory and liquidity treatment of the sukuk with Singapore Government Securities, effective immediately. Members of the IFSB Board and the industry have been very active in developing talent. Several credible Islamic finance training providers are offering courses here. The Singapore Management University offers an undergraduate module on Islamic Law, Banking and Commerce and the Wealth Management Institute has incorporated an Islamic Finance module in its Masters of Science in Wealth Management programme. The National University of Singapore recently organized an Islamic Finance conference. These initiatives help to raise understanding of Islamic Finance among students and industry practitioners. To support professionals who wish to deepen their expertise, I am pleased to announce that beginning from this year we will sponsor students for the eligible Islamic Finance Masters programmes. MAS will continue to work towards a regulatory approach that is clear, relevant and consistent, across the range of Islamic financial activities. We are committed to working with fellow regulators, and to developing the infrastructure and talent to support the growth of Islamic Finance in Singapore. Conclusion In conclusion, we face challenging times. But the dynamism of Asia, including the Middle East, will return and the structural economic changes are likely to accelerate.

Such cooperation with other authorities has been enshrined by the CPMI and the International Organisation of Securities Commissions (IOSCO) as Responsibility E of the Principles for Financial Markets Infrastructures (PFMI). Given the stakes involved, blind trust is not enough. I would argue that we must strike a balance 1/5  BIS central bankers' speeches  between facilitating market integration through cross-border access and safeguarding the ability of authorities to fulfil their statutory tasks and objectives. Finding this equilibrium is, of course, a challenge and I welcome the work carried out by the Financial Stability Board, at the behest of the Japanese G20 presidency, to address potential regulatory causes of market fragmentation.3 As I see it, fragmentation is not always caused by overlapping regulations, but often by a failure to cooperate. Mutually acceptable solutions can and should be found to meet the legitimate expectations of all the authorities involved. The scope of these solutions may differ depending on the degree of interconnectedness. At the European level, for example, where financial markets are highly interdependent and integrated, it is clear that the cross-border stability implications are significant and in many ways exceed those of our banking sector. Supervisory coordination at the EU level should reflect this close nexus. Unfortunately, however, the competence for CCP supervision remains almost exclusively national.
Lars Heikensten: Monetary policy and the economic situation Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, at Handelsbanken, Karlstad, 26 January 2004. *  *  *  It is nice to meet a group of representatives of the business and social community in this way in Värmland. I would therefore like to begin by thanking the organisers of today’s lunch meeting. When I took office as Riksbank Governor last year I decided that I would leave Stockholm shortly before each monetary policy meeting and visit different parts of the country; both to learn more about developments in various parts of Sweden and to explain the Riksbank’s work and actions. My visit to Karlstad today is the first of these trips. During the morning, I visited the university and spoke about how the Riksbank works. Later this afternoon I will first be visiting coffee manufacturer Löfbergs Lila and thereafter be discussing labour market conditions at the county administrative board. We at the Riksbank make these visits in order to meet the Swedish people and increase understanding for our policy, something that is particularly important today given our statutory independence. In Sweden we have an inflation target, which the Riksbank has defined as 2 per cent with a tolerance interval of plus/minus one percentage point. As I see it, our policy of inflation targeting has worked well. We managed to gain respect for our conduct of monetary policy a lot quicker than many other countries.

This must be taken in the light of all the information that is available at the time. For my part, I will also look forward with great interest to what my colleagues have to say. Thank you. BIS Review 6/2004  5
What sorts of models does the Committee find useful? In his peer review of the Bank’s use of economic models3, Adrian Pagan suggested that economic modelling may involve a trade off between theoretical consistency (good economics) and data coherence (a good fit); our goal should be to ensure that we are positioned on the efficient frontier between the two. Any model we use should in principle be on this frontier – but we want to be able to move along the frontier and use different sorts of models for different purposes. 2  Charles gives five arguments for having an IR that is the responsibility of the MPC itself: transparency, discipline, a better informed MPC, better forecasts and accountability (in that order). I think they fit within my taxonomy. 3  Pagan, A (2003) ‘Modelling and forecasting at the Bank of England’, Bank of England Quarterly Bulletin Spring 2003. Adrian Pagan has been commissioned to produce a postscript, following the introduction of the new Bank of England Quarterly Model. This will be published later this year. 2  BIS Review 17/2005  For example, if, as I have suggested, we want to use models to facilitate discussions about fundamental economic issues, we clearly need models with rich economic structures – structures that reflect the Committee’s views on the way the economy works. The Bank’s new Quarterly Model (BEQM)4 has been developed with this function very much in mind.

Although the process has been somewhat streamlined since Charles’s day (when the committee spent a gruelling ten meetings a quarter on the forecast on top of the usual monthly decision meetings) the forecast round is probably still the largest single commitment of the Committee’s time. Why? An important reason is that the forecast is not just an occasion for agreeing a set of projections for the inflation outlook. It has come to provide an organising framework for assessing all the relevant information, and an opportunity for a deeper discussion of economic developments. Since I have been on the Committee, we have spent at least half our allotted forecasting time debating longer term issues, such as the effect of structural change in the labour market and the relationship between house price inflation and consumption. Sometimes the outcome of those discussions has had a material influence on our thinking about risks, even when the direct impact on the central projections has been relatively minor. What role do formal economic models play in the forecast? No set of economic projections – least of all one owned by a committee of nine experts – can ever be the outcome of a purely model-based operation. Judgement always plays a large role – although different people frame their judgements in more or less model-based ways. But it is difficult to make a forecast without using models: they provide an organising framework for ensuring intellectual and accounting consistency in generating baseline projections, and for considering alternative scenarios and risks.
A natural place to start would be with the “consumption boom”, which is often presumed to have preceded the bust. But in fact there was no such boom. Between the turn of this century and the onset of the financial crisis, consumer spending increased no faster than it had done, on average, over the past 40 years. 1 Moreover, the fraction of our national output consumed by households did not increase. The kernel of truth in the consumption boom story is that changes in the distribution of our national income meant that this stable growth of aggregate consumer spending was associated with a sharp decline in the household savings ratio. The proportion of income that households set aside fell from close to 10% in 1997 to a little over 2% ten years later. Although there was no spending boom, households were making less provision for the future. Where did all the debt go? But how does the absence of a spending boom fit with the headlines about the rise in debt. The big increase in household debt over the past decade is certainly not a myth. Household  1  Consumption growth was, however, unusually strong in the period 1996-2000. My colleague Andrew Sentance has stressed the importance of analysing trends in consumption over longer periods (eg Sentance 2007). 2  BIS Review 114/2009  debt as a proportion of income increased from 100% to 165% in the 10 years to 2007.

Either way, our actions will be guided by our remit of achieving low inflation with financial stability. Conclusion  The Covid crisis to date has demonstrated that QE and forward guidance around it have been effective in a particular situation. It emphasises that we remain in a world where the choice of tool to use is more important than it has been at times in the past. And there is more nuance and flexibility within tools – thus, while QE relies more on stock effects when used in normal times, in a case of extreme market dysfunction the flow effect of the liquidity channel may come to prominence. The MPC has moved on from that approach as market conditions have eased. In June we increased the stock of QE purchases, but at a slower pace. And in August we introduced forward guidance, stating that the Committee does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably. This important step is intended to ensure monetary conditions do not tighten prematurely when there are some initial signs of an economic recovery. We also made clear that our box does include other tools, including the possibility of negative rates. We have used private sector asset purchases through the corporate bond programme, longer-term liquidity provision to banks with targeted lending incentives, and direct purchasing of newly issued commercial paper to supplement market-based lending channels.
On the basis of the discussions at this conference, I draw the conclusion that there is no disagreement in the economics profession on this central tenet, but a  BIS Review 110/2006  1  lot of different views on how to organise the monetary analysis so that it has an appropriate influence on interest rate decisions. And this is the second issue mentioned at the opening of the conference. As was pointed out by Prof. Christiano and his co-authors Rostagno and Motto, including informational asymmetries, transactions costs and financial frictions in “state-of-the-art” macroeconomic models allows to better reflect the role of money and credit aggregates within such frameworks. I found compelling the argument that monetary analysis be used to monitor (and possibly offset) macroeconomic risks which are not related to price stability at shorter horizons, but which may nevertheless have important consequences for maintaining price stability over the medium and long run, like risks to financial stability. On this point in particular Lucas Papademos’ remarks yesterday evening were particularly stimulating. Although the use of such models for policy purposes is in its infancy, their further development is a promising way forward and should, therefore, remain an important field of ongoing research. However, at present the practical challenge of conducting the monetary analysis requires the adoption and employment of practical and fully operational tools. Conducting such an analysis has not always proven to be an easy task.

Transparency enhances the effectiveness of monetary policy by helping to guide the expectations of economic agents and bring them into line with policy objectives and actions. For these reasons, the ECB has striven to be as transparent as possible, communicating clearly, and by a variety of means, its policy objective, its strategy, its assessment of the economic situation, and its view of the outlook for price stability and associated risks. There is no doubt, however, that communication is a challenging task. I can assure you that we at the ECB – in light of the mandate that was assigned to us by the Maastricht Treaty and the trust and credibility we have earned from more than 313 million citizens – take this challenge very seriously. *** Chairman, Governors, Professors, dear friends, I have on behalf of the Executive Board and Governing Council of the ECB to thank all of you for having accepted our invitation and for having contributed so actively to the discussions. The ECB considers important to permanently guard against complacency and to remain open to criticisms and suggestions, to take regularly stock of the advances of academic research. I thank you for your attention. 2  BIS Review 110/2006