samchain/econo-pairs-v1 huggingface dataset:
This is something that I view as being critical to successful implementation of the New Accord. (b)  Challenges for banks  Within the United States, supervisors have long considered how the new framework will apply to our banks. Recently, our efforts have focused on the preparations and challenges ahead for some of the largest U.S. banks as they look towards implementing the IRB approach to credit risk. Among other important topics, the dialogue has focused on application of the minimum standards for entry and ongoing use of the IRB approach. Our sense from this interaction is that banks have both the desire and commitment to continue to develop their internal ratings systems in a manner consistent with the ideals embodied in the IRB framework. The discussions with the industry have also highlighted a number of areas where banks may need to expand their efforts in preparing for implementation. These include the design and structure of rating systems; the availability and quality of credit data; and the role of corporate governance in evaluating bank assessments. I will touch on each of these in turn. Rating system design The design of a risk rating system is key to its effectiveness. The Basel Committee believes that banks’ internal rating systems should accurately and consistently differentiate between degrees of risk. The minimum IRB standards in this area build on leading risk management practices observed in the industry.

Critical to this process is the need for banks to understand how the estimates produced by their internal ratings systems compare with the actual performance of a borrower. In practical terms, banks will be expected to have in place - or be actively developing - a data "warehouse". By data warehouse, I mean a process that enables a bank to collect, to store, and to draw upon loss statistics in an efficient manner over time. Corporate governance I mentioned earlier that responsibility for managing risk lies squarely with senior management and its board of directors, and I know that the involvement of senior management will be critical to the successful implementation of the New Accord. This will be particularly true for those banks seeking to adopt the more advanced approaches to calculating regulatory capital. As a bank’s capital requirements will more closely reflect the actual risk to which the bank is exposed, there will be a need for its board of directors and senior management to gain a deeper understanding of their bank’s internal rating systems. How will this be put into practice? It will be the responsibility of bank management to expose its board members to the key elements of the organization’s ratings process. Members of the board will need to be fully aware of whether the system complies with the Basel standards, makes use of the necessary data and produces reliable quantitative estimates.
The enhanced strength and increased competition has fostered continued profitability as well as expansion of economies of scale and scope in the banking system, with wider range of products to serve the public. Going forward, Phase II of the Financial Sector Master Plan seeks to build further on this process, and ensure that the Thai banking system can meet future challenges. These challenges include globalisation and technological development which will increase competition in retail banking. The Thai economy will become more open, with increasing intra-regional trade and investment, due to the growing importance of regional economies in the world economy as well as various trade and investment treaties. Hence, financial institutions need to not only build resiliency and ability to adjust to these changes, but also build capacity to serve clients which will have growing needs for international businesses and risk management. Moreover, demographic factors point to an aging-society in the future, thus increasing demand for wealth management. The regulatory framework will continue to evolve with due regard to international standards and local needs. Indeed, with the current global financial turmoil, each of these challenges will become even more poignant in the future. The implication of these challenges to Thai financial institutions is that they must enhance their operating efficiency and risk management, while also becoming more responsive to clients, with fair and transparent treatment. Given these challenges, what do we envisage are the key features of the future landscape?

Our export to Austria was 1.1 billion USD and import from Austria was 1.6 billion USD at the end of 2012. These numbers are quite small compared to the potential. On the financing side, however, there is good news. Austria is the leading country in foreign direct investment flows to Turkey for the period after 2008 with 7 billion USD in total. Direct investments are mainly focused on the energy sector. There are currently 643 Austrian firms operating in Turkey. Distinguished Guests, The European Union is a success story regarding peace and cooperation among nations with rather bitter historical memories. No wonder the European Union obtained the Nobel Peace Prize in year 2012. Despite all the debates and a high degree of uncertainty regarding the new economic governance structure in the EU, I sincerely believe Turkey’s closer cooperation with Austria will bring invaluable outcomes in line with the European spirit. To conclude, I would like to express my view that the future of the commercial, financial and economic relations between Austria and Turkey looks more promising than ever. Today’s joint meeting and the opening ceremony of the Exhibition “Contemporary Turkish Painting and Printmaking in the Republican Era” are small, symbolic, yet quite significant steps to mark the start of this new and healthy trend. Thank you very much for your attention. BIS central bankers’ speeches  3
BIS central bankers’ speeches  7  The FLS has been implemented in large part because of the developments in financial markets I have described: an example of the important and powerful linkages between the real economy and the financial sector. The continued uncertainties about the future of the Eurozone and about the European banking system meant that during the past two years bank funding markets have had periodic bouts of closure. And when open, spreads of bank debt over risk-free rates have remained elevated. A number of large UK banks still rely on wholesale markets for funding at the margin and higher wholesale funding costs have spilled over into other funding markets – driving up retail deposit rates for example. Prior to the announcement of the FLS, banks were passing on their elevated funding costs to their lending rates. Over the 12 months to mid-2012, we saw lending rates to businesses and for mortgages rising (Chart 5). Furthermore, the Bank of England’s 2012 Q2 Credit Conditions Survey of UK banks suggested that household secured and corporate lending rates were expected to rise further. Chart 5  Chart 6  Change in bank funding and mortgage rates between 31 July 2011 and 31 May 2012  Annual lending growth to households and companies(a)  Per cent  16 14 12 10 8 6 4 2 0 -2  2004  2006  2008  2010  2012  (a) Based on scheme definition.

Øystein Olsen: Economic perspectives Annual address by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), to the Supervisory Council of Norges Bank and invited guests, Oslo, 14 February 2013. The underlying data series can be found on the Norges Bank’s website. *  *  *  Introduction Life was blessed for these people, living in a small capital in a small country, geographically outside the world; geographically, but not economically. The bright springs bubbled up as never before (...). They were sent sparkling to the sky by popping corks over tables set for a feast (...) But all those who lived by the banks of the bright springs knew that they could not spring eternal.1 Johan Borgen’s portrayal of Norway as it was almost a hundred years ago could also serve as an apt description of today’s Norway, even though the environment was entirely different at that time. Five years after the financial crisis started in earnest, growth is weak and unemployment high in many countries. The economic situation in Norway stands in stark contrast to developments abroad. Norway’s economy is still growing and unemployment remains low. There is a tendency to see ourselves as a country apart. Norway’s oil and gas resources provide an economic base that few other countries enjoy. Income levels are among the highest in the world and the people of Norway are generally highly educated. Our access to natural resources makes a significant contribution to our prosperity.
Also, valuation gains and losses may encourage risk taking or trigger sharp pull-backs. Should procyclicality be avoided? Not necessarily: •  Financial stability is not an end by itself. It only helps if it is conducive to better macro economic performance. Volatility may be driven by fundamentals. Sharp movements in asset prices may help the financial system to serve as a cushion, an "absorber" for exogenous economic shocks. This is welfare improving since it avoids, or mitigates, adjustment in more rigid goods or labor markets. •  By the same token, not all procyclicality is bad. It all depends on the causal link: is the financial system the origin or the amplifier of destabilizing dynamics? Or does it simply react to cyclical evolutions in the real economy? We should only be concerned by "intrinsic procyclicality", which is created inside and by the financial system. 4  It should be noted that there no consensus on whether accounting rules matter. According to one view, accounting is "neutral" and procyclicality in financial variables faithfully reflect an exogenous reality. An opposite view would state that accounting creates incentives, influences behaviour and, therefore, accounting rules have a significant impact on the dynamics of financial systems. The views presented here are my own. 5  See Adrian and Shin (2007). 6  See Adrian and Shin (2008).

Positive developments in the external sector of the economy, primarily owing to expansion of exports and foreign currency inflows from the Eurobond, contributed to the generation of contained pressures in the foreign exchange market. From the macroeconomic viewpoint,  2  BIS central bankers’ speeches  relative exchange rate stability during the year reflected a new equilibrium in foreign currency demand and supply. In sectorial terms, the Albanian economy development relied chiefly on growth of industry and services sectors, while construction sector continued to contract in 2010. Industry and services sectors benefited, to a great extent, respectively, from foreign demand and structural shift of the domestic demand to short-term consumption goods. In the short- and mid-term horizon, both sectors are expected to remain the main supporting pillars of the Albanian economy. Agriculture, the other important sector of the Albanian economy, marked a positive performance in 2010. Even so, based on the broader concentration of the country’s population and the great potential for development, the increase in this sector’s productivity remains a long-term priority. Money and financial markets Monetary developments in the past year were in line with the performance of the real sector of the economy, reflecting simultaneously the fully restored confidence in the financial system, improved supply and demand ratios in the financial markets and prudent liquidity management policy of the Bank of Albania. Expansion of monetary stock by 10.6% on average complied with the economy’s demand for money and did not trigger any inflationary tendencies in the economy.
But interest rate normalisation in the US is not without its challenges. First, it amounts to a de facto tightening of global financial conditions. Second, it accentuates a divergence in monetary policies among the advanced economies. The tightening of financial conditions will have a dampening effect on spending in both advanced and emerging economies. Such is the strength of US monetary policy dominance that the recent back-up in long-term interest rates in the US has lifted bond yields everywhere – including in the EU, despite the ECB’s ongoing asset purchase programme. Higher growth in the US will provide some support to emerging Asia through the trade channel. Asian exports should benefit, especially if corporate investment picks up in the US. But the increase in US interest rates will weigh down on emerging Asia’s prospects through the financial channel. Higher interest rates will squeeze the debt servicing capacities of corporates and households in Asia, which have taken on more leverage in recent years amid the low interest rate environment. The trajectories of economic growth, inflation and monetary policy between the US and the rest of the world are expected to diverge further. Headline and core inflation rates in the US are well above those in the Eurozone and Japan. While demand is expected to pick up slightly in the Eurozone and Japan this year, inflation will remain well below target. Monetary policies are therefore expected to remain ultra-easy. The divergence in monetary policies could mean considerable movements in exchange rates and capital flows.

Global GDP growth has averaged between 3.0 and 3.5% – a sub-trend outcome that we have not been able to break out of since 2011. This is significantly lower than the average of 3.8% that we witnessed before the global financial crisis, between 1990 and 2007. There are some broad themes that have shaped economic outcomes during the last five years. In the advanced economies, there are accommodative monetary policies, fiscal consolidation, and deleveraging. In the emerging economies – a shift toward domestic demand, credit expansion, and a buildup in debt. In both advanced and emerging economies, we have seen slower growth in the key drivers of long-term prosperity – namely trade, investment, and productivity. Everywhere, the pace of structural reforms has been slow. Outlook for 2017 – renewed optimism, higher uncertainty What does 2017 hold for the global economy? Let us consider first what financial markets are saying. Since late last year, the markets have been pricing in higher growth, higher inflation, and higher interest rates. 1/7  BIS central bankers' speeches  Long-term bond yields have risen sharply in the advanced economies. Equity prices have surged. This reflation story has been particularly accentuated in US stock and fixed income markets. Reflecting this, the US Dollar has appreciated sharply, rising to its strongest level against the major currencies since 2003. The market narrative goes something like this: The new Administration in the US will inject a substantial fiscal stimulus – based on reduced corporate taxes and higher infrastructure spending.
Since the centralization of open market operations in a single Reserve Bank in 1935, the Federal Reserve Bank of New York has always been designated as the Selected Bank, owing in part to New York City’s historical importance to U.S. financial markets. 10  According to Ken’s research, “the concept of a recognized dealer was somewhat amorphous. An October 1939 Bank memo remarked that the term was ‘not an exact appellation’ and noted that ‘the principal factors which we consider in extending such recognition are (1) reputation for integrity, experience, and knowledge, (2) capital at risk of the business, (3) willingness to make markets under all ordinary conditions and to take positions both long and short, and (4) large volume [of business] of national scope, with the contacts which such trading provides.’” (Garbade, The Early Years of the Primary Dealer System, pp. 8–9). 4  BIS central bankers’ speeches  In the early 1960s, a reporting dealer regime was created, featuring reporting on positions and a public list of the firms that communicated various data to the New York Fed. During the 1980s, in considering new firms for primary dealer designation, Desk staff increasingly looked for evidence that a firm had a certain share of total customer trading activity. The working threshold was generally 1 percent, with some fluctuations in this level over time. An explicit requirement for primary dealers to participate in Treasury debt auctions was added in the mid1980s.

Increasingly we are asking ourselves whether we are communicating messages in accessible language. xv  Whether we’re using the right media channels to reach the widest possible audience. And most fundamentally, whether people from different backgrounds deduce the same things from our policy messages. Diversity can help. The more homogenous an organisation the more likely it will fall foul of the ‘curse of knowledge.’ This cognitive bias occurs when people assume that their audience has the same background information and base level of understanding as themselves. xvi  It’s assuming that everyone has the same  narrow view of humanity as the representative agent at the heart of a DSGE model. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  To communicate to both the City and the country, the salon and the suburb, we need to create content that engages different audiences. The problem is that they don’t teach you this in Grad school (or at least the ones where we traditionally recruited). We need alternative perspectives to craft our messages so that they make sense and resonate with more people. The more people can recognise themselves in us, the more we can stand in their shoes and speak their language, the more likely the Bank is to be trusted. xvii  The how The Bank’s approach to increase diversity and foster inclusion is three-fold:   through inclusive recruitment,    developing an inclusive culture, and    creating inclusive communications.
The programme for development and renovation of our system of cash centres is well under way. The new cash centre in Plovdiv opened a bit more than a year ago, another cash centre is about to open in Pleven, and we have already initiated the project for acquiring a site and starting the construction of a new cash centre in Varna. The adaptation of the payment systems is also going as planned and in close cooperation with the European Central Bank. Of course, I can give numerous technical and logistic examples but I will leave it at that. The same applies to commercial banks' preparations, which are running relatively smoothly. We are monitoring and guiding this process. All banks have provided the required funds in their administrative budgets, including for setting up functional units to plan, coordinate and control their activities related to the entry in the euro area, along with the adaptation of the accounting and information systems. Thus, the Bulgarian National Bank and commercial banks will be highly prepared for the euro changeover during this year. The last group of tasks, of course not in importance, is related to the communication campaign. This campaign was very seriously delayed. I must say right away that this delay is not due to lack of readiness, but due to, let me put it this way, the peculiarities of the political process in our country in the last two years. By now, all the elements of a truly meaningful and good communication campaign are in place.

A good illustration of this is the industrial worker’s wage in 1975 and 1994. In 1975, an industrial worker earned 27 kronor per hour on average while in 1994 the hourly wage was SEK 95. However, if 1975’s hourly wage is recalculated at the 1994 price level, the 1975 wage was worth SEK 107 in 1994. Thus, twenty years of trade union struggle when nominal wages rose by an average of 6.9 per cent per year, resulted in a decline in real wages of 12 kronor per hour in 1994’s prices. However, it was not just trade union policy that failed. It was just as much a failure for the Government’s stabilisation policy. How could it have been so bad? Stabilisation policy activism The large devaluation of 16 per cent that the newly-appointed Palme Government carried out in October 1982 was what could be called an offensive (aggressive) devaluation, on top of that that had taken place in 1981. Through the 10 per cent devaluation in 1981, the real cost situation had been somewhat normalised and the competitiveness of Swedish industry restored. Now Sweden was to get off to a flying start. This was also the case as there was an upswing in the USA at that time and an exceptional long boom.
Over the year, i.e. from the beginning of January 2003 to the corresponding period in 2004, inflation measured 2.4%. This is just below the target. Excluding changes in the price of public services, the rate of inflation was somewhat lower. Until the closing months of 2003, goods prices were somewhat lower than the previous year, and the increase in prices of services slowed down significantly. Substantial increases were seen in housing prices, however, and the housing component of the consumer price index rose by much more than the CPI as a whole. Housing inflation began to inch downwards in the course of the year and this development has continued so far this year. The Central Bank can thus feel satisfied with the rate of inflation in the recent term, and bearing in mind the long lag in the transmission mechanism, price developments indicate that monetary policy over the preceding period has had the intended effect. The Central Bank lowered its policy interest rate to 5.3% in the beginning of February 2003. Its inflation forecasts did not warrant any further changes in the policy rate by the Bank. The policy rate was broadly neutral during the year, i.e. it neither stimulated nor dampened demand. In real terms the policy rate was therefore not far from the estimated equilibrium real interest rate during the year. Output growth Iceland experienced robust output growth from 1996 until 2002, when it was marginally negative. Output growth recovered last year.

For example, Schularick and Taylor (2012) find in a study of more than 200 recession periods in 14 economies during the years 1870–2008, that the more households and companies borrow during an economic upturn, the greater the risk that the upturn will be followed by a deep recession and a slow recovery – regardless of whether or not a financial crisis occurs. They also find that recessions linked to a financial crisis are more costly than normal recessions as production then falls more. An obvious example of a credit cycle that  3  For a few examples, see Geanakoplos (2009), Aikman, Haldane and Nelson (2010) and Borio (2012). 4  See, for example, Mian and Sufi (2010). There is a debate, so far mainly in the United States, on what has caused the main problems for the macro economy – the crisis in the banking system or households debt overhang (see, for instance, Krugman, 2013). An increasing number of people consider it has been the latter. 5  See, for example, Schularick and Taylor (2012). BIS central bankers’ speeches  3  went wrong close to home is the boom that contributed to a bank and property crisis and deep recession in the early 1990s. After the crisis – pay greater attention to the credit cycle!