samchain/econo-pairs-v1 huggingface dataset:
Working towards a mutually-beneficial future together is the best way to prevent history from repeating itself. 36. Japan's relations with India are less problematic. Prime Minister Koizumi's visit to India in April 2005 signalled a desire to establish a new basis for relations. But there is an undercurrent of cultural unease that needs to be transcended so as to realise the full potential of Japan-India cooperation. 37. ASEAN, as a group and individually, has much to offer Japan. ASEAN can be a strategic partner for Japan to tap into the growing economies of China and India. ASEAN can also offer Japan a competitive production base, supplies of natural resources including oil and gas, and additional markets for Japanese products. 38. Japan is already the top investor in Indonesia. Under President Susilo Bambang Yudhoyono's leadership, Indonesia has begun to develop its economy, attract investments and play an active regional role. President Yudhoyono is also pressing ahead with difficult reforms to get the country moving on the fast track. 39. Vietnam is a relatively new partner for Japan. So it should not surprise you to learn that Japan is the third largest foreign investor there, while Singapore is second. Vietnam's bid to join the WTO has catalysed FDI flows totalling $ billion in the first nine months of 2005, about double the amount in the same period in 2004. Not surprisingly, Japanese companies are increasing their presence there. Remaking Singapore 40. Singapore has been remaking itself to enhance our competitiveness and seize the opportunities in the region. 41.

Chart: Unemployment, inflation, house prices and household debt ratio in Norway, the UK, the US and the euro area Norges Bank has in periods kept the interest rate somewhat higher than implied by mediumterm inflation and output gap considerations. In other words, we have been “leaning against  1  Tinbergen, J. (1952): On the theory of economic policy, North-Holland Publishing Company, 2nd edition. BIS central bankers’ speeches  1  the wind”. Norway is a large exporter of petroleum, and our economy has benefitted from 15 years of high oil prices. Unemployment has been low and consumer price inflation close to the 2.5 percent inflation target. At the same time, house prices have been rising sharply, and household debt is at a historically high level. Hence, our monetary policy trade-offs have in recent years differed from those of our trading partners. Before I return to the interlinkages between financial stability and monetary policy, let me describe some elements of macroprudential policy in Norway. Banking regulation has recently been reformed in Norway in accordance with Basel III and directives issued by the European Union. Capital requirements have been increased and the countercyclical capital buffer has been introduced. Norges Bank is responsible for conducting analyses and providing advice on the level of the countercyclical capital buffer for banks. The responsibility for the final decision on the buffer level lies with the Ministry of Finance. The current decision requires Norwegian banks to hold a countercyclical capital buffer as from July this year.
But we must also ensure that our financial system is truly reformed in a way that reflects the lessons of the financial crisis. At this Dinner six years ago, before the crisis began, I said, “Excessive leverage is the common theme of many financial crises of the past. Are we really so much cleverer than the financiers of the past?” We are all much wiser now. And this country can claim to have been in the vanguard in learning lessons. Much has been done. But we cannot be complacent. As the memories of the crisis fade, and those who saw it at first hand retire, it is vital that the ‘audacity of pessimism’ is not lost. We must deal once and for all with the problem of financial institutions that are too big, or too important, to fail. Some progress has been made. When the crisis hit, we in the UK had neither an effective deposit insurance scheme nor a resolution framework to deal with failing banks. Now we have both. But there is unfinished business. Although the UK is leading the way in the development of agreements among regulators worldwide as to how the largest banks could be resolved, managing cross-border resolutions is still fraught with difficulty. We also need to implement the proposals of the Independent Commission on Banking as soon as possible, including the ‘ring-fence’ to separate commercial from investment banking, and the leverage ratio.

In 2016, the National Bank conducted thematic control through the development of a tool whereby banks made their own assessments of the inherent risk and appropriately determined the activities that they needed to fulfill on different levels of readiness from attacks from the digital space (primary, secondary and advanced level of readiness). Blockchain technology and impact on central banks’ activity The potential of blockchain is immense and is an issue for the central banks as well. At retail level blockchain from Central bank perspective in regards to cryptocurrencies or Central bank cryptocurrencies (CBCCs) does not exist. However, the concept of a retail CBCC has been widely discussed by bloggers, central bankers and academics. While CBCCs for retail payments remain at the conceptual stage, some central banks have completed proofs of concept for DLT-based applications. One of the reasons for the interest in DLT is that many central bank-operated wholesale payment systems are at the end of their technological life cycles. The systems are programmed in obsolete languages or use database designs that are no longer fit for purpose and are costly to maintain. Project Jasper at the Bank of Canada (Chapman et al (2017)) and Project Ubin at the Monetary Authority of Singapore (MAS (2017)) and STELLA – a joint research project of the European Central Bank and the Bank of Japan simulate real-time gross settlement systems (RTGS) on a DLT platform. The two projects Jasper and Ubin show that central bank money can be transferred on a distributed ledger in real time, in realistic volumes.
3  For a more detailed description of the model, see Adolfson, M., S. Laséen, J. Lindé and M. Villani (2007), "RAMSES - a new general equilibrium model for monetary policy analysis", Economic Review 2, pp. 33-68, Sveriges Riksbank. http://www.riksbank.com/upload/Dokument_riksbank/Kat_publicerat/Artiklar_. PV/07_2eng_ramses.pdf. 4  BIS Review 66/2009  Sweden’s data on capacity utilisation in industry and the National Institute of Economic Research’s Economic Tendency Survey. Figure 5 shows capacity utilisation in industry as reported by the companies. According to figures from Statistics Sweden, capacity utilisation in industry reached a peak of around 91 per cent in the first quarter of 2007, and has since fallen to around 78 per cent in the first quarter of 2009. According to the National Institute of Economic Research’s Economic Tendency Survey, capacity utilisation in industry during the same period has fallen from around 88 per cent to around 72 per cent. In both cases a large fall is reported. But these data concern only a small percentage of the economy and do not in general provide the same picture as, for instance, the GDP gap also shown in the Figure. Aggregate measure of resource utilisation At the Riksbank we have also produced an aggregate measure of resource utilisation. But this is not intended to replace all other measures; it will be used as a generic complement to the other measures. The aggregate measure of resource utilisation has been produced with the aid of a principal component analysis.

These measures, which are not related to any normal level, show a slightly smaller, but similar, deterioration in resource utilisation to that described by the hours gap and the employment gap. But for these two later measures it is also a question of the deeper and more prolonged the recession is, the greater the part of the fall in employment and hours that will be interpreted as a weakening in the labour market trend that will not disappear in the next economic upturn. In this case we will have what is usually termed persistence in unemployment, a phenomenon that has proved common in many countries. To illustrate the significance of the recession for the calculations of the HP trend and the trend gap, one can compare the calculations of the future trend levels of GDP and employment in the calculations made in October 2008 and April 2009. The trend level for GDP in the fourth quarter of 2011 is approximately 5 per cent lower in the more recent calculations and the trend level for employment is approximately 2.5 per cent lower. The recession is thus assumed to have lowered the potential level of GDP and employment and thus also reduced the GDP and employment gaps. Monetary policy and resource utilisation in the current situation At the most recent monetary policy meeting at the end of April we made a substantial downward revision to the forecast for GDP growth in the world in relation to the February forecast.
We have experienced that partial reinvestment now for a few months because it was decided back in March. It has been well-absorbed by markets. We have not observed any disruption. Given the amounts that we are talking about, we have reasons to believe that it should be absorbed also in a smooth manner. But, of course, we will be very attentive. We will look at this process. We will, as I said, always have the means to take action and to use all the tools that we have available if it was needed. You've touched on the problem of the wage increases. At your speech at the European Parliament, you touched on the problem of corporate profits. If you take these both together, how confident are you that the relevant parties actually start to be more moderate on this, in particular as both of them start to criticise that interest rates are already too high? The second question: I'm also a bit puzzled about the real severity and persistency of this core inflation. May I ask you as well, please, to elaborate a little bit more where the Governing Council sees the reason for this really strong persistence? The labour market situation and the employment situation is the good news in Europe, and we have never seen the unemployment rate be so low. Actually in our forecast we see the unemployment rate go from this 6.5% that we have now, to 6.3%. We see the level of unemployment continuing to decline.

The second question, about your targets. According to projections you do not expect to reach the inflation target in the next three years. Some economists suggest that this target  6/10  BIS - Central bankers' speeches  is no longer valid, that 3% will be the new 2%. What do you have to say about that? We have a target. We have agreed on the target. We are in the middle of that fight against inflation and this is what we know. We're going to get to that 2% and we're going to reduce it to 2%. What happens next is another story, but we want to be at target and we want to be confident that it remains at target. So, the two elements are going to really drive our monetary policy going forward. On the lag time: we know that there is lag time, that the decisions that we have made in the last soon-to-be-a-year – which are monumental, by all accounts, both in terms of speed, in terms of height, volume of hikes, if you will, and we are seeing some effects. We are seeing it in market rates. We are seeing it in banking, financing. We are seeing it in credit, both in volumes and in rates. There is some lag time – not that much by textbook standards, which will typically say that it's anywhere between 18 and 24 months, maybe a bit more.
From a financial stability perspective, the resulting squeeze on profits could ultimately lead to banks having insufficient reserves with which to increase or maintain their capital levels. This reduces the resilience of the banking system and increases the risks to financial stability. In sum, I can say that particular attention needs to be paid to financial stability in an environment of persistently low interest rates, especially when combined with negative interest rates. Therefore, the slightly slower momentum currently being observed on the mortgage and real estate markets is welcome, but we should nevertheless remain alert. Conclusion In a number of respects, the current situation is unusual for Switzerland and its economy. The significant overvaluation of the Swiss franc and the very low, or even negative, interest rates pose a major challenge for economic agents and authorities – in particular the SNB. Yet, as I have explained, our monetary policy has not changed fundamentally. As a small economy that is strongly interconnected with the rest of the world, Switzerland is heavily dependent on economic developments abroad, and will remain so. These developments can explain the current strength of the Swiss franc, but they are also part of what has driven the exceptionally low interest rates in Switzerland. Neither the strong currency nor low interest rates are new phenomena. Rather, they are traditional characteristics of the Swiss economy, which have had a positive effect on living standards in the past.

In 2016 intra-regional trade contributed USD521 billion or 23.5% of total trade. IntraASEAN investments rose to a record level of USD24 billion in 2016 and accounted for 25% of total FDI flows into the region. Within the region, Indonesia and Thailand are important partners to Malaysia both in trade and direct investments where there is continuous growth propelled by inter-company linkages and cross-border investments. In 2016, Malaysia shared a bilateral trade volume of USD13.8 billion with Indonesia and USD13 billion with Thailand. However, only 5.8% and 11.4% of our trade with Indonesia and Thailand, respectively were settled in local currencies. This is an enormous business opportunity for the financial sector, which has yet to be realised. Similarly, on the investment front, Malaysia has invested USD13 billion and USD2 billion of direct investments into Indonesia and Thailand, as at second quarter of 2017. Indeed, the completion and enhancement of the Frameworks is an important step towards the use of local currencies to support cross-border settlements for trade and direct investments among the three countries. It is an opportunity to mitigate the impact of volatilities in major trading currencies on regional trade and investment activities. We can recall the Global Financial Crisis, where the tightening of global US dollar liquidity was a contributor to the 19% contraction of total trade and 11.5% contraction of total inward FDI into the region.
9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  Figure 1B: Improvement in performance after adding Governance scores  Figure 1A naturally led us to ask whether there are other measures which can better anticipate problems at smaller banks and building societies. We know that the quality of governance is vitally important, so we repeated our experiment, adding PRA supervisors’ judgements about the quality of a firm’s governance. We found that adding judgements about governance reduced our false alarm rates more often – and by more – for small firms than for large. This of course doesn’t mean governance isn’t important at larger firms – the opposite is true in our view. But it does suggest that supervising governance can be even more important for small firms. Source: Bank of England and Bank calculations. Notes: Balance sheet data as of July 2007, taken from historical regulatory returns (see Sebastian J A de-Ramon, William B Francis and Kristoffer Milonas, ‘An overview of the UK banking sector since the Basel Accord: insights from a new regulatory database’, BoE Staff Working Paper No. 652 (2017)). Supervisors’ scores for Governance from historic FSA records (see Joel Suss and Henry Treitel, ‘Predicting bank distress in the UK with machine learning’, BoE Staff Working Paper No. 831 (2019)). To test the robustness of our findings to definitional choices, results are shown for two different definitions of “Large” and six different definitions of distress.

And on benefits, these may be relatively higher for large firms whose resilience the Basel Committee has had mainly in mind when designing regulation – indeed research by our PRA team suggests that some Basel metrics are more effective for large firms than small ones, whereas supervision of their governance seems to be even more important for small firms than for large ones (See Figures 1A and 1B). At the same time, in addition to the “proportionality” problem we face the “barriers to growth” problem – that if we strip parts of the regime away for small firms this will create new barriers for those firms as they grow out of the “small” category and need to take on additional regulation. 5  4 See: https://www.gov.uk/government/publications/solvency-ii-review-call-for-evidence 5 Another piece of simplification work that we are quietly progressing is a rationalisation of the various regulatory thresholds a deposit taker may find themselves subject to. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  Ideally, therefore, and with our competition objective in mind, we should want to move towards a graduated regime in which firms can migrate from a very simple regime, up through a series of steps towards the full Basel regime as they become larger and/or involved in more complex activities (See Figure 2). Strong and simple  Moving to a fully graduated regime of this kind would be a major undertaking.
In that sense, the construction of the aluminium smelter in Reydarfjördur can be called Alcoa’s international expansion into Iceland, though no one has bothered to call it that. But it is: it is investment combined with the utilisation of knowledge of the aluminium industry. That expansion is promising in many ways, of course, and some aspects of it have already generated substantial returns, not least because people took advantage of favourable conditions and external circumstances. For a while, cheap capital was readily available, and some were bold enough to grab the opportunity. But the flip side of expansion, and the side that cannot be ignored, is that Iceland is becoming uncomfortably beleaguered by foreign debt. At a time when the Icelandic government has rapidly reduced its debt and the Central Bank’s foreign and domestic assets have increased dramatically, other foreign commitments have increased so much that the first two pale into insignificance in comparison. All can still go well, but we are surely at the outer limits of what we can sustain for the long term. The term “international expansion” is so thoroughly bathed in radiance that even when people seem to be invading companies that are owned by the public, the invasion is called “expansion”.

The decision is not very popular, but it is necessary to ensure the economic efficiency of OSAGO. At the same time, we are looking for new growth areas together with the market. In particular, this is about developing life and medical insurance. We also had to take supervisory measures. As a recent example licence of a major market participant was restricted for two weeks. Certainly, the licence restriction of such a large player was an outstanding event for the market. As a regulator we realised the importance of such a step, but we consider it necessary for the benefit of consumers to implement all the available measures to restore order and eliminate unlawful practices such as imposing services, non-applying bonus-malus ratio, etc. We have established a consumer right protection service, and we pay special attention to processing claims. We will try to make the process of lodging claims convenient for citizens and will try to respond to claims in an efficient manner. One of our important objectives is to work out a concept of financial literacy. We also consider accessibility of financial services to be an important condition for proper functioning of the financial market. Another field of our concern is the development of the national payment system. In less than a year after the decision was taken, a processing and clearing centre was created and interRussian transactions of international payment systems were transferred there. Currently, we are actively developing our own payment card.
Financial System Risks in the UK – Issues and Challenges (John Gieve) (July 2006) www.bankofengland.co.uk/publications/speeches/2006/speech280.pdf . BIS Review 81/2007  1  To deliver these objectives effectively, the aim is also to use a rigorous and consistent analytical framework which integrates behavioural responses, interactions and feedback effects, to ensure that the system-wide implications are fully captured 5 So where is current practice against that ideal? A typical or traditional “macro” stress test has the stylised form set out in Chart A. The first stage is to put together a coherent stress scenario, typically using a macro-econometric model (which may include some assumed endogenous policy response). By mapping important propagation channels, an estimate of likely financial sector credit losses is produced; for example, by modelling the impact of the macro stress on corporate and household balance sheets and gauging the consequent impact on the probability of default and likely recovery rate on banks’ credit exposures. Market losses are estimated by judging the impact of the macro stress on different asset classes. Total bank losses are calculated by aggregating credit and market losses, perhaps including an additional allowance for the impact of the stress scenario on net interest income and on funding costs.

Indeed, in practice, banks often model the effect of even severe macroeconomic shocks as if they were occurring to the bank in isolation. They thus may assume that they have freedom to readjust their balance sheets and lending practices in the event of an adverse shock, without considering whether other banks may be trying to do the same thing and the effect that these behavioural responses may have cumulatively on market liquidity and on the economy as a whole. An important implication is that many firm-level stress tests may consequently underestimate the possible impact of adverse shocks. As I have highlighted, some of the potentially missing effects should be captured in the proposed suite of models. But the proposed enhanced “top-down” approach outlined above may still benefit from additional insights gained from closer dialogue and interaction with major financial firms on their likely reaction to episodes of stress. I consequently think there is merit in more formal comparison of “top-down” and “bottom-up” stress testing exercises, and of seeking ways of integrating the two into more formal “systemic” stress tests, where the authorities present an initial scenario to firms and then modify the scenario in the light of feedback on the potential response by firms in an iterative loop. This approach has recently been pioneered by the Dutch central bank.