samchain/econo-pairs-v1 huggingface dataset:
House price declines were reported in all but 11 states. House prices in Arizona and Florida, two of the housing boom states, declined by 8 percent. Distressed sales as a fraction of all repeat-sales increased to more than 40 percent after having declined into the low 30s earlier in the year. Some housing economists are forecasting house prices to fall by 10 percent or more this year. The growing inventory of defaulted mortgages continues to weigh down any recovery in the housing market. According to the most recent Mortgage Metric Report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, there were 598,000 newly initiated foreclosures in the third quarter of 2010. 1 This inflow of new foreclosures exceeded the outflow due to completed foreclosures and properties sold through short sales and deeds in lieu. As a result, the foreclosure pipeline increased to 1.9 million mortgages – double the level from a year earlier (Chart 6). Efforts to modify mortgages have not managed to prevent the foreclosure pipeline from increasing. As a consequence, distressed sales are expected to grow even further over the coming year. The combination of declining house prices and increasing delays in the foreclosure process will put upward pressure on default rates as well as losses on defaulted mortgages. CoreLogic estimates that in the third quarter of 2010 there were 10.8 million borrowers in negative equity where the balance on the mortgage exceeds the current value of the property.

As per the “Mahinda Chintana” development strategy, every endeavour is to be made to tap domestic resources for investment. At the same time, the Government clearly realizes that it is imperative to encourage large scale investment flows into the country to make a significant impact in the acceleration of the growth process. It is now an accepted norm that large infrastructure projects such as highways, railways, airports, ports and power projects not only add to the stock of investment in a country, but are also considered a better recipe for poverty alleviation rather than income support and subsidies. A large number of such investment opportunities now exists in Sri Lanka and no doubt in many other Commonwealth countries as well. In that context, we need to use the opportunities provided by events such as today’s meeting to establish bi-lateral relationships leading to the promotion of investments. While Governments attempt to achieve consensus for multi-lateral facilities and agreements, it may also be time for individuals to seriously consider B2B investment opportunities. Your Excellencies, Distinguished Guests, I am confident that the delegates present at this Forum will actively, seriously and diligently explore possible ways and means of promoting interactive growth that would generate livelihoods and reduce poverty in our respective countries. If we all do that successfully, we could look back and proclaim that we did our bit to fulfill the lofty outcomes as envisaged in the 1971 Singapore Declaration. Thank you. BIS Review 83/2006  3
68  That is more than counter-balanced, however, by productivity performance in the lower tail. This tail appears to be both materially longer and lower than the UK’s main international competitors (Chart 8). Moreover, this lower tail has lengthened by more over the past decade than in those countries. 69  The already slower rates  of technological diffusion in the UK, by international standards, have slowed further over the recent past. These diffusion dynamics are important to productivity and living standards. The wider dispersion and longer lower tail of companies helps explain the UK’s roughly 30% productivity gap with, say, France and Germany. And the widening dispersion in productivity performance between the upper and lower tails of companies helps explain the UK’s relatively poorer productivity performance than these countries over the past decade. These diffusion dynamics are also consistent, or at least are not inconsistent, with the dawning of a Fourth Industrial Revolution. This will have had the effect of shifting outward the technology and productivity frontier for pioneer firms. There is clear evidence of that having happening. Productivity among firms in the top 1% of the distribution grew, on average, by 8% per year over the ten years to 2014. The most-productive 0.1% of firms exhibited 12% annual growth. 70  As a point of comparison, the lower 99% tail of firms have experienced annual average productivity growth of less than 1% over the same period.

Chart 7: Productivity levels relative to the US Per cent 100% 90% 80% 70% 60% 50% AEs  40%  EMEs  30% 20%  World  10% 0% 1950  1958  1966  1974  1982  1990  1998  2006  2014  Sources: Penn World Tables 9.0 and Bank calculations. Notes: Median TFP level at current PPPs; USA = 1  31  All speeches are available online at www.bankofengland.co.uk/speeches  31  Chart 8: UK and Germany firm-level productivity (Productivity Leadership Group (2017))  Sources: McKinsey & Company Inc. analysis of Orbis (2013) data, as shown in Productivity Leadership Group (2017). Available at: https://www.bethebusiness.com/wp-content/uploads/2018/04/how-good-is-your-business-really.pdf  Chart 9: Enterprises’ broadband connectivity by firm size in 2016 for OECD countries Per cent 100  90  80  70  60  50  All enterprises  10-49 employees  50-249 employees  250+ employees  Sources: OECD  32  All speeches are available online at www.bankofengland.co.uk/speeches  32
You can think of the appreciation, in this case, as the economy’s way of tempering the effects on relative demand and, at the same time, encouraging resources to move where they’re needed. If domestic demand strengthens, the resulting rise in the exchange rate reduces returns in the tradable sector and raises them in the non-traded sector, drawing investment from the first to the second. 3  This isn’t just theory. We know, for example, that fiscal expansions tend to be associated with an 4  appreciating exchange rate . More generally real exchange rates tend to be pro-cyclical. Chart 3 plots the relationship for the UK, with both lines – sterling’s real exchange rate and domestic demand growth – plotted 1  I’m interested here in the real forces driving the exchange rate. The nominal rate, e = εP*/P, where P* and P are price levels at home and abroad respectively, also depends on relative inflation rates. And in the shorter run, when those prices are sticky, monetary events can and do affect real exchange rates. But over time, the real exchange rate depends more on non-monetary things. And in this particular instance, sterling’s fall had essentially nothing to do with differences in monetary policy (as measured, for instance, by shifts in relative short-term interest rates).

Another way to promote creativity is to create a facilitative environment for public private partnerships provides the best prospects to drive innovative strategies. With advances in technology, the scope and potential for such partnerships have increased exponentially. We see this in partnerships between mobile network providers and financial institutions in sharing data which can increase financial inclusion among borrowers that do not have a prior credit history. Partnerships that leverage on e-marketplaces and social media platforms also have enormous potential to increase the reach and development impact through the deployment of innovative strategies. Enhance corporate governance For many institutions, the ability to significantly increase their impact is closely tied to issues of corporate governance. Narrowly defined financing targets and links between business and Government have led to suboptimal resource allocations, increased moral hazard, and market 3/4  BIS central bankers' speeches  distortions. These can pose a drag on the economy and the overall development agenda. Broader confidence can also take a hit on suspicion of undue preference in extending financing, making it more difficult to mobilise resources for development. The critical appraisal and monitoring functions are largely shaped by the strength of its corporate governance. These require competent and professional boards to be installed, clear rules of engagement with their stakeholders, and stronger performance management standards that are aligned with development outcomes.
It is difficult to say in advance what characterises a financial imbalance. A simplified way of describing a financial imbalance is that households, businesses and for that matter also the state base their decisions on increased indebtedness on expectations of the development of wealth and coming real incomes which are then not realised. When this becomes evident, major sacrifices must be made to be able to pay debts. The macroeconomic costs can be high when households are forced to reduce their consumption and businesses their investments to be able to adapt their balance sheets to new expectations. If the problems are so extensive that certain groups quite simply cannot pay their loans, the crisis can spread to the bank system and the macroeconomic costs in the form of unemployment and low growth rise further. These are questions that are discussed frequently and at length with regard to the US economy. There, demand by households and businesses for consumption and investment goods are to a great extent financed on the capital market. Strong growth in wealth and expectations of continued high production growth have driven forward development and this has also been reflected in share prices. A large part of demand has leaked out in imports and there have been continual large American current account deficits. This has been able to happen without inflation speeding up which has to some extent been due to the strong development of the US dollar.

Examples of such factors are, internationally determined raw material prices, changes in taxes and subsidies and interest expenses for housing. An increase in value-added tax would, for instance, temporarily lead to increases in CPI. To counteract such price increases, monetary policy would be forced to dampen the real demand in the economy regardless of the level of resource use in the economy. To avoid such unnecessary fluctuations in production, we disregard from factors which we assess only temporarily affect consumer prices, for example interest expenses, taxes and subsidies. The inflation target regime tested in a strong upswing! Before the economy had adapted to the new inflation target regime and inflationary expectations still remained at too high a level, it was not as evident that monetary policy in the short term could contribute to maintaining the growth of its long-term growth track. In order to bring inflation expectations down, higher interest rates were required and thus lower demand than if inflation expectations had immediately been adapted to the new regime. Although the economy is now approaching balance, all parts of the low inflation regime have still not been tested. During the entire 1990s, the use of resources has been under its long-term growth track. It is first during the few years to come that we will have a real test of how well the new regime has penetrated in Sweden. In earlier speeches, I have developed my ideas around the mode of functioning of the labour market.
Also, one of the lessons from the crisis was the need for higher financial literacy and awareness of financial risks, which among other things, required better tailored communication of statistics to different interest groups in society. Thus, in fact pandemics occurred in the midstream of our strivings to address the flaws in statistics revealed during the GFC. At the very beginning of the crisis, the official statistical process was threatened by a basic risk of disruption, so preserving continuity of statistics production was vital. Last year the World Bank conveyed a survey among National Statistical Offices to assess the initial impact of the health crisis on their functionality1. The key findings can be pinned down to several conclusions: 1) around 65% of the offices were fully or partially closed, and face to face data collection was stopped; 2) the ability to collect essential statistics and to meet international data reporting requirements was impacted, particularly in low income countries; 3) approximately two out of three national statistical offices altered their calendar of publication and data dissemination; and very importantly 4) many offices were adapting  1/3  BIS - Central bankers' speeches  and responding to new data needs by changing collection modes, using alternative data sources, adding Covid related questions, as well as reducing content and samples of Surveys. These challenges have been equally relevant for central banks, being one of the pillars of the statistical production systems.

But data from different decentralised sources are not structured, there is a lack of transparency in methodology, no representativeness, and no use of international standards, concepts and semantics. Hence, there is a need to streamline the wealth of information to structured, understandable, shareable and most of all, reliable data of the future. The latter is prerequisite to preclude devaluation of the data, and statistics plays a critical role in preserving the value of data. In the new era when we have open access to multiple sources of information, it is not enough official statistics to be disseminated more effectively, but it has to be accepted, understood and trusted by the general public. Good official statistics, as dramatically shown during the Covid-19 crisis, can be crucial to provide a first line of defence against misinformation (Biancotti et al., 2020)2. High quality and reliable statistics is the "weapon" against fake news and divisive messages. More than ever as policy makers we are faced with misinformation, fake news and speculations that can undermine our ability to act effectively. The digital environment, the growing role of social media and absence of clear regulatory framework propelled the dissemination of the so called "mal-information". For example, we as a central bank, faced ungrounded speculations against the exchange rate on a couple of occasions. Keeping us 24/7 alerted is the least damage that this type of irresponsible behaviour implies.
And during the downturn of 2001 and 2002 Europe still underperformed the US and Sweden. This is the reality, and of course on a very simplistic level it makes poor publicity for EMU prior to the Swedish referendum. Yet I believe that it would be a mistake to blame monetary policy or indeed EMU itself for this disappointing performance. On closer inspection EMU as such has achieved its major objectives during the first three and a half years of existence. Most importantly price stability has been successfully achieved. Headline HICP inflation was below the stated maximum target level of 2 percent in 1999 and slightly above in the following years. However this was achieved under rather adverse conditions: during 2001 and the beginning of 2002 prices were very much affected by the triple impact of animal disease (affecting meat prices), oil prices and the changeover to euro coins and notes. Core inflation, excluding the most volatile food prices and energy, has been reasonably close to the 2 percent level 1999-2002. Inflation expectations also appear to have been firmly anchored close to 2 percent. Now there has of course also been quite a high degree of divergence inside the area, with inflation ranging from over 5 % in the Netherlands to 1.8 % in France in 2001 (and even lower figures in Germany during 2002). This has created differences in real interest rates, but not wide enough to explain the overall lag in productivity or growth. None of those caveats can explain the euro area's poor performance.

Experience shows that market confidence in failing or likely-to-fail banks can only be restored on the basis of the external support it can receive, be it from an eventual acquirer (as was the case with Banco Santander in respect of Popular) or elsewhere. And so far the question remains: what happens if there is no acquirer? How could other resolution tools be workable? 1  If the resolution is carried out by means of a bail-in or bridge institution, arrangements should be in place to tackle the possibility of closed markets and deposit runs. If we do not equip Resolution Authorities with the proper mechanisms to provide the institution with liquidity, such tools will be rendered useless. In this field, the discussion is quite open. The Single Resolution Fund could assume that role and, in that respect, the backstop the European Stability Mechanism (ESM) will provide is a very welcome improvement. However, as Ms. König has repeatedly remarked, the SRF’s resources may be insufficient to provide the significant amounts of liquidity that a systemic entity may need and, therefore, “the SRF would never be the sole answer to make sure a firm in resolution can continue to run with enough liquidity to meet its obligations”. In this sense, proposals such as the ECB’s Eurosystem Resolution Liquidity, which involves a fiscally neutral guarantee provided by the ESM in favor of the SRF, could be of paramount importance.
Managing risk in a soft market Speaking to firms about their approach to the market, they often talk about prioritising margins over growth, focusing on more profitable lines of business – for example, where they have established strong market positions or a particular niche, and making more active use of reinsurance. These all seem sensible approaches for an individual firm but, in aggregate, the risk must end up with someone. One indicator of the competitive pressure on insurers to source new business in the wholesale markets is that brokerage commissions have been increasing as a share of gross written premiums despite the common desire to lower costs in line with lower premium rates. Looking forward, the key challenge for insurers is how they preserve or even grow their activities while avoiding the “Winner’s Curse” of under-pricing in order to get the business. The PRA is a not a price-regulator. But we are concerned to see that firms are adequately managing their exposures – that they can identify and quantify the risks being covered, manage and control overall exposures, and estimate likely claims costs under different loss scenarios. Against this background, I make no apology for repeating the points made earlier this year by my colleague Chris Moulder, our Director of General Insurance, in a Dear CEO letter and subsequent speech.

Jessica Chew Cheng Lian: Corporate governance at the Central Bank of Malaysia Opening speech by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia, at the Third Institute of Chartered Accountants in Australia-The Malaysian Institute of Certified Public Accountants (ICAA-MICPA) Audit Forum, Kuala Lumpur, 27 September 2012. *  *  *  It gives me great pleasure to be here this morning at the 3rd ICAA-MICPA Audit Forum. The theme for the Forum this year is the role of the audit committee within the context of corporate governance in insurance companies. It has been said that an audit committee is like a good insurance policy - it is better to have it and not need it, than to need it and not have it. I am certainly happy to know that we have established strong audit committee practice within our financial industry, and while admittedly, some institutions have moved further than others in improving the effectiveness of the audit committee, it represents without exception a core pillar of governance systems in our financial sector. I say this because as we speak, there are countries that are now debating the requirement for financial institutions to establish separate audit committees. There are a number of reasons why the theme chosen for this forum is particularly relevant in current times. Corporate governance problems have once again come under intense global scrutiny since the outbreak of the global financial crisis.
This means that we replicate a combination of representative market indices to determine the size of each holding of securities in our portfolio. Index-linked management ensures that the SNB acts as neutrally as possible in the markets without engaging in ‘stock picking’. It also prevents some sectors and companies  12  For more details on the characteristics of the SNB’s investment policy, cf. Maechler, A.M. (2017), ‘The SNB’s investment policy and its distinctive features’, ‘Money Market Event’, 23 March. Page 9/12  from being over or under-represented. Besides these advantages, the choice of the passive management approach is based on political considerations. A more active management of our equity investments would be tantamount to indirectly pursuing a structural policy. The SNB could quickly acquire significant stakes in select companies – and these could be construed as strategic participations. Clearly, it is not part of the SNB’s mandate to promote or disadvantage certain companies or sectors. The aim is to avoid such conflicts of interest at all costs, not least in order to preserve the SNB’s independence and credibility. The SNB only departs from the principle of neutrality in certain, very specific cases. This is illustrated in chart 5. On the one hand, the SNB refrains from investing in shares of systemically important banks and medium and large-cap banks in the advanced economies in order to avoid any real or perceived conflict of interest. For the same reason, it does not hold shares in Swiss companies.

Ladies and gentlemen, we are convinced that our approach to managing our foreign exchange reserves is appropriate given the requirements of our mandate. More active management in the environmental field would severely limit our investment options. It could further accentuate the fluctuations in our results – fluctuations that are already significant as our balance sheet has to absorb exchange rate movements without recourse to hedging. Besides, it is not clear that an investment strategy based on ESG criteria would generate superior risk-  Page 10/12  adjusted returns. 13 In addition to this, given the particular profile and size of our portfolio, a more targeted selection of our investments would increase concentration risk, which would compromise our neutrality in the markets and hinder the implementation of monetary policy. Our approach is therefore the result of a careful weighing-up of interests. The benefits of more active management in terms of superior returns, risk management and climate risk impact are still highly uncertain. On the other hand, the costs of such an approach are very considerable indeed, particularly with regard to market neutrality, concentration, and – above all – the politicisation of our portfolio management. Let me illustrate this last point with an example. As I mentioned earlier, we invest a portion of our reserves in environmentally-friendly investments. Now imagine if our portfolio were overweight in this segment and the SNB had to shrink its balance sheet. To accomplish this, it would have to sell a significant proportion of its socially responsible investments.