samchain/econo-pairs-v1 huggingface dataset:
The first is the need for place-based policies to invest more in at-risk communities to improve their childhood environments. The second is to facilitate families to be able to move into areas with better childhood environments. 2  Piketty and Saez (2003) and Chetty, et al. (2014). 3  Chetty, et al. (2014). 4  Chetty and Hendren (2015), Chetty, et al. (2014). 5  Measured by income-adjusted test scores, drop-out rates, average class size and per-pupil spending. 2  BIS central bankers’ speeches  With respect to the first, I would initially like to talk about the importance of schools―and in particular, strong public education. Consistent with the findings by Chetty, there exists a large literature that has established the importance of high-quality education as a key determinant of economic mobility. While there are differences of opinions on the most relevant measures of school quality, there is ample evidence that children who attend better schools on average end up with better outcomes later in life – such as higher levels of educational attainment and higher earnings. It is also well known that there exist large disparities in the quality of education by geography and socioeconomic background. Compared to children born to lowincome parents, those born to higher-income families can better afford to move and live in areas with high-quality schools. The sorting of families by income and their desire for better educational opportunities leads to enclaves of higher-quality and higher-spending schools that are separated from areas of economically less-advantaged populations and lower-quality schools.

President Reagan thought that one element of the American dream is “the opportunity to grow, create wealth, and build a better life for those who follow,” while President Obama has described it as follows: “A child’s course in life should be determined not by the zip code she’s born in, but by the strength of her work ethic and the scope of her dreams.” One’s destination in life should not depend on where the journey begins. Equal opportunity does not imply equal outcomes – some people may work harder, be more fortunate in terms of their disposition and endowments, or just be luckier in how their lives evolve. But it does require that income mobility – in particular, upward mobility – be widely evident and remain part of the fabric of the nation. It is important to keep in mind the distinction between income mobility and income inequality. Income mobility is a dynamic concept – the degree to which individuals or families can move  1  Rajashri Chakrabarti, Andrew Haughwout, Giorgio Topa, Joseph Tracy and Wilbert van der Klaauw assisted in preparing these remarks. BIS central bankers’ speeches  1  up or down in the income distribution over time. Income inequality is a static concept – how unequal are individual or family incomes at a particular point in time. Recognizing that rising income inequality in the United States is an important issue, my focus today will be mainly on income mobility. I don’t think the issue of income mobility receives the attention it deserves.
As the UK’s Fair and Effective Markets Review argued in 201512, you can’t evaluate an FX transaction if you (or your agent) don’t know when it was executed (timestamping), why some trades were rejected and others not (reject codes), whether your counterparty was acting as principal or agent, how long your request to trade was held before a decision was made (hold time), or what was happening during that hold period. Good disclosures should not be documents written by lawyers for lawyers, aimed solely at limiting liability. They should be clear and practical tools to inform trader-to-trader contact. The FX Global Code13 stresses the importance of clear and effective disclosures in many of its high level principles. And in February this year, the Global FX Committee (GFXC) published supplementary guidance on the key characteristics that good disclosures should have, covering: content, accessibility, clarity and review frequency.14 At the Bank of England, we take disclosures from our own wide range of trading counterparties very seriously. We recently reviewed these documents to ensure firms were following through on their commitments under the Code. Most covered the topic headings we would expect to see, and the best scored well across a broad range of criteria. But few had been reviewed since the GFXC’s guidance came out. And in general we found significant room for improvement, in particular on clarity and accessibility. A recent review of public disclosures by Risk magazine15 came to similar conclusions.

Accounting for 99.2% of the total business establishments in the country, there is vast potential to enhance the SMEs' contribution to the economy. In view of both their significance and potential, the Government has given due recognition and allocated significant amount of funds and resources to further enhance the growth of this sector. Various initiatives undertaken by the financial sector had also led to the SMEs enjoying a high level of financing from the financial system. In 2006, banking institutions approved RM39.6 billion to more than 84,000 SME accounts, an increase of 10.7% from the previous year. Meanwhile, outstanding loans to SMEs expanded by 4.2% on an annual basis to RM104.6 billion at end 2006, accounting for 45% of total outstanding business loans. In spite of these priorities and efforts, certain segments of the SME sector continue to lament the lack of financing access, which is deemed as a major challenge that hinders their growth and development. Interestingly, this is not unique to Malaysian SMEs, but rather a worldwide phenomenon. According to the Asian Banker's 2005 Report, it was estimated that only about 5%3 of the world's 500 million lowincome entrepreneurs have access to financial services. The main reasons for the financial constraints faced by SMEs are quite generic, and high on the list is the perception that SMEs are historically a high risk group lacking in financial discipline and unable to provide trustworthy financial track records.
There are two clear dents in Swedish GDP post-war development: during the financial crisis in the 1990s and during the global financial crisis 2008-2013. The most acute problems are remedied but some work remains A crucial cause of the most recent financial crisis was that banks around the world had taken on too much risk. This was possible for two reasons. Firstly, the regulatory framework applying at the time did not sufficiently influence the banks’ risk taking. Secondly, the banks themselves evidently did not have the will or ability to manage their risks on their own. The answer was the Basel III Agreement - a comprehensive package of reforms with the main purpose of strengthening the banks’ capital base to ensure that they can manage losses in a better way and improve the banks’ liquidity management. But even if Basel III dealt with the most acute shortcomings, work remains to be done to ensure that banks around the world are well capitalised. I intend to spend a little  1 [5]  time here talking about the reform work the Basel Committee is currently involved in and why it is important that the new reforms are put into place. The global capital regulations will become more reliable and easier to compare between banks A basic idea behind the design of Basel II -the global capital regulations that were completed a few years before the financial crisis - was to create a stronger link between capital requirements and the banks’ risks.

SPEECH DATE:  10 November 2016  SPEAKER:  Governor Stefan Ingves  VENUE:  The Swedish Bankers’ Association bank meeting, Grand Hôtel, Stockholm  SVERI GES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel. +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  Necessary reforms for a more stable financial sector Crises are expensive and should be avoided When financial crises afflict us it becomes obvious to all how much damage they cause. Unfortunately, this insight is often temporary, as it is easy – even a human survival instinct – to forget problems and leave them behind us. As a representative of the Basel Committee I therefore see it as an important task to remind you of how costly financial crises are to the national economy and how important it is that we have robust regulatory frameworks that reduce both the cost of crises and the probability that they will occur. Although we often see a return in the growth rate of the economy, crises usually lead to a permanent fall in GDP, which takes a very long time to recover from. Even today, almost 10 years after the financial crisis broke out, many countries are struggling with low growth, high unemployment and low inflation. In several cases they also have high sovereign debt. And in the case of Sweden, there is no other event since the Second World War that has affected Swedish GDP as negatively as financial crises.
That’s why, as we review the issues with open-ended funds, we intend to have in mind not just how reform could promote financial stability, but also how it can promote the supply of productive finance too. Because we all want not just stability in our financial system, but opportunity from it too. Conclusion  We all want a financial system that serves the economy in bad times and good. It’s an ambitious outcome that we’ve been tasked with promoting. But it’s an outcome that households and businesses deserve. They didn’t get what they deserved before the financial crisis and certainly didn’t get what they deserved in the crisis. Instead they saw opportunity constrained and the economy crunched. Now, after a decade of reform, the core of the system is, or is being made, resilient to a wide range of challenges it might face. And with that, opportunities have, or are being, unlocked for finance to better serve the economy. It would be contrary to our mandate and costly to the economy if we were to row back on those reforms. Our focus is instead on the future. On sustaining a financial system that serves in bad times and good; a system offering stability and opportunity. To sustain that in a changing world and changing financial system, we don’t need more or fixed rules. We need agility. Agility to respond to new challenges and ensure stability. And agility to open up new opportunity.

Bank estimates based on the impact of historical financial crises in a sample of advanced economies, reported in Brooke et al (2015), suggest that the average cost of a financial crisis has been 73% of GDP, which translates to a cost of roughly £ per capita if a financial crisis had taken place in 2016. 3 The Bank of England’s Financial Policy Committee identifies, monitors and takes action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. The FPC is not authorised to take action that is “likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term”. 4 See Figure 1 of my article ‘An evolving financial system: Don’t leave it too late, simulate’. 5 Peak amount of cash support in the form of loans and purchase of share capital. Source: National Audit Office. 2  2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  Losses that would have wiped out the entire British banking system in 2007 can now be absorbed in buffers of capital.
Although the exchange rate, still less the level of interest rates, may not be the root cause of all our present sectoral, and related regional, pressures, there is no doubt that the exchange rate in particular is adding to the pain that some of you are going through. So what then is my defence? My first, and principal, witness, is the macroeconomic data - the data relating to the UK economy as a whole. For the past seven years or so - starting well before the MPC came into existence - monetary policy has been directed specifically to achieving a low and stable rate of retail price inflation - the inflation target set by the Government. Low inflation is not simply an end in itself. Achieving it consistently involves keeping aggregate demand continuously broadly in line with the underlying supply-side capacity of the economy as a whole to meet that demand. So low inflation is in effect a measure of macroeconomic stability in a much broader sense - it, too, in fact is a “policy with a purpose”, the purpose in this case being sustainable growth of output and all that that means for a high level of employment and rising living standards. 1  BIS Review 31/2000  Since that policy was adopted some seven years ago we have in fact achieved the longest period of sustained low inflation we’ve known for a generation. Retail price inflation, on the Government’s target measure, has averaged 2.7%.

We have refrained from changing the repo rate when energy prices have risen, although they have meant that inflation, and the forecast of inflation two years ahead, have periodically deviated from the 2 percent target. If energy prices remain at a high level over a longer period or continue to increase, the inflation rate could be higher than we have assumed. The conclusions for monetary policy would be different if this development begins to leave a mark on inflation expectations. All in all, the risks of lower inflation stemming from weaker economic activity are judged to be approximately balanced by the risks of higher inflation stemming from wage and energy price developments. The balance of risks therefore does not change the forecast I have reported earlier. It indicates that the underlying, cyclically-related inflation rate will be in line with the inflation target at the end of the forecast period. The Executive Board of the Riksbank therefore found it natural to leave the repo rate unchanged. The future stance of monetary policy will depend as usual on the new information received and on how this affects the overall assessment of inflation prospects in the coming years. BIS Review 44/2003  3  Long-term growth prospects Allow me at this point to shift focus and speak about long-term growth prospects. These are of course a decisive factor for welfare and deserve therefore to be given considerable attention in the economic policy debate. But they also have a huge impact on the Riksbank's operations, which I shall return to.
The difference between the two lies in the fact that a household, firm, national treasury, or nation is facing a debt sustainability problem if cannot service its debt with the available revenue surplus no matter how long the debt is stretched out. Then debt relative to income rises without limits. In that case, there are only three solutions: increased revenue surpluses, reduction of debt, or reduction of interest rates. On the other hand, a payment and refinancing problem exists when a longer loan duration would eliminate temporary debt service shortfalls. But two provisos must be made here. First of all, the boundaries between the two are not always clear. Unlimited loan durations are not available. A sustained refinancing problem can lead to a default and a debt sustainability problem. It can also change into a debt sustainability problem if interest rates rise steeply upon refinancing. Second of all, a nation’s debt is different in nature than the debt of an individual. A nation consists of numerous legal entities, and if some of them cannot handle their debt, it need not have severe consequences for other parts of the whole, provided that the sovereign is not involved. Under a flexible exchange rate regime, national debt service in excess of surpluses will also cause the currency to depreciate and the surplus to grow. But this process is not without limits.

Among Iceland’s major trading partners, weighted output growth measured 0.8% in 2012, as opposed to 1.7% in 2011. To a degree, the capital controls have shielded the Icelandic financial system from the euro area crisis. The effects felt through external trade were unavoidable, however, and Iceland’s terms of trade deteriorated over the course of the year, while the import purchasing power of export revenues stagnated. This played a part in slowing down output growth, even though Iceland’s growth rate was much faster than in trading partner countries. According to preliminary figures from Statistics Iceland for 2012 as a whole, output growth measured 1.6% during the year, which is somewhat below the Central Bank’s February forecast of 2.2%. On the other hand, year-2011 growth figures have been revised upwards, from 2.6% to 2.9%. This is well in line with the Central Bank’s first forecast of GDP growth in 2011. It is not uncommon that output growth figures are revised upwards during upward cycles, when more detailed investment figures become available. It will be interesting to see how estimates of 2012 develop. Output growth in 2012 was driven by growth in private consumption and business investment, while other items, such as net trade and public consumption, made a slightly negative contribution. This is similar to the whole recovery phase in 2010–2012, where business investment and private consumption contributed to output growth more or less equally, with business investment holding a slight advantage.
In terms of market destination, in the past, our export performance relied heavily on the market conditions of the G3 countries, with our export growth usually deteriorating when these economies were in recessions. However, the situation has changed in recent years with intra-regional trade quickly gaining a more significant role. With this, our export has enjoyed greater market access in China and other East Asian countries. The intensification of intra-regional trade, which is likely to continue, has made Thailand’s export cycles less dependent on the G3 economies, and Thailand’s strong export performance over the past year amid G3 economic slowdown is just a reflection of our more well-balanced export market base. On this note, I would like to emphasize that the EU is indeed an important export market for Thailand, and export to the United Kingdom in particular comprises around 3-4 percent of Thailand’s total export value. The good news is that even with keener competition in the world market, Thailand’s export growth to the EU remains quite high at around 18 percent in the first half of this year, thanks in part to the contribution of chambers of commerce like yours. Regarding export of services, we are all aware that the Thai tourism industry was hit hard by the outbreak of SARS in the second quarter. The number of foreign tourists in May dropped by as much as 50 percent year-on-year, a magnitude that dwarfed the impact of 911 by comparison.

SNB stress tests continue to suggest that most of these banks have a sound capital base, enabling them to cover any losses they might incur under adverse scenarios. The proposed measures should help to ensure that the level of risks incurred in the mortgage market remains bearable in the future. For its part, the SNB will continue to monitor developments on the mortgage and real estate markets closely, and will regularly reassess the need for an adjustment of the countercyclical capital buffer. Page 3/3
2 The three lines of defense model creates a set of layered defenses that align responsibility for risk taking with accountability for risk control and provide effective, independent risk oversight and escalation. In the three lines model, the assignment of risk management roles is clear and comprehensive in order to prevent gaps,  1  https://www.newyorkfed.org/aboutthefed/fedpoints.html. 2  IIA Position Paper: The Three Lines of Defense in Effective Risk Management and Control, January 2013. BIS central bankers’ speeches  1  ambiguities, or overlaps in responsibility. More specifically, the business areas are the first line of defense, independent risk management units are the second line of defense, and internal audit is the third line of defense. In the Bank, the first line of defense is comprised of the business areas that execute and support the execution of the Bank’s mission. These first line units are responsible for both the operational activities that result in risk as well as control of the resulting risks. The first line “owns” its risk in the sense that it is accountable for both positive and negative outcomes and is empowered to manage the distribution of outcomes. At its core, the three lines model recognizes the strong incentives for effective risk management created by aligning accountability and responsibility. In other words, from the perspective of the first line, there is “skin in the game,” and risk management is not viewed as someone else’s problem.

These near miss events are a window into vulnerabilities that could cause an adverse impact in the future. The risk and control self-assessment process establishes a methodology for business areas to periodically assess their operational risks and ensure that appropriate mitigation is in place for key business processes. Importantly, the Central Operational Risk area is responsible for synthesizing the outputs of these two processes, along with follow-up discussions with business areas, to identify significant Bank-wide residual operational risks. We have found it useful to view operational risk through the lens of processes, risks, and controls. We have defined a comprehensive set of processes to characterize the Bank’s primary services and transactions. Along with that, we have articulated a standardized set of risk drivers, risk events, risk event impacts, and, finally, controls that prevent, detect, or mitigate the consequences of a risk event. We are using this risk taxonomy on a forward-  3  https://www.newyorkfed.org/aboutthefed/audit.html. BIS central bankers’ speeches  3  looking basis to assess the risks of Bank processes and as an analysis tool to investigate risk events after the fact. Using standardized process, risk, and control types allows us to aggregate as well as slice and dice our risks around dimensions of interest. For example, we identify processes associated with the highest levels of residual risk and the largest number of risk events as areas for additional attention. It may be the case that additional mitigation is required or there are weaknesses in controls.