samchain/econo-pairs-v1 huggingface dataset:
22  All speeches are available online at www.bankofengland.co.uk/speeches  22  The UK faces perhaps no greater challenge, economically and socially, than its productivity challenge. Meeting that challenge would deliver benefits to workers in improved wages and skills and to companies in greater efficiency and profitability. It would also contribute to closing inequalities of income, wealth and opportunity which have rightly and increasingly pre-occupied policymakers over recent years. The UK has a rich, in some respects world-leading, endowment of innovation and talent. This is, however, unevenly spread. Developing an institutional infrastructure, which draws on the UK’s comparative advantage in innovation but which spreads its benefits more widely, would support the long tail of UK companies and the people who work for them. It would help close the pay and productivity gaps between the best and the rest, the present and the past, the in-crowd and the out. It would put the rhyme back into R&D. The returns to doing so are difficult to quantify precisely. As a thought-experiment, imagine the bottom three quartiles of the UK productivity distribution saw their productivity gap with the quartile above closed. That would boost UK levels of productivity by around 13%. 58  This would close a large part of the productivity  shortfall relative to its pre-crisis trend. And it would make inroads into closing the productivity gap with the US and Germany. In today’s prices, it would boost the level of UK GDP by around £ billion.

Nevertheless, I hope that I have given you a big picture of the changing role of central banks post global financial crisis. This encompasses the reorientation of monetary policy and regulatory frameworks and to a lesser extent central banks’ financial-sector development role. As I outline what lies ahead in the policy environment, some of you may worry about the increasing interest rate environment and higher regulatory costs, outweighing your excitement for the AEC. But let me assure you that these are healthy developments for the long run. With lower crisis risk, risk premia will be lower. And the most efficient and well-run financial institutions will be the ones who reap the most benefits from this new environment. Thank you for your attention. 4  BIS central bankers’ speeches
Andres Sutt: Are ROEs peaking? Luncheon speech by Mr Andres Sutt, Deputy Governor of the Bank of Estonia, at the 9th Annual Nordic Financial Services Conference, Stockholm, 31 August 2006. Background slides (PPT) for the speech can be found on the Bank of Estonia’s website. *  *  *  Ladies and Gentlemen, It is my honor to address you at this conference. You represent financial institutions that control the flow of money, the lifeblood of the economy. I as a central banker can contribute the experience of someone who stands in the middle. Central banks, as you know, have a double task: to safeguard the price stability on the one hand and the wellbeing of the financial system on the other. It is with this balance in mind that I would like to address three topics today. •  Firstly, what are the characteristics of a Nordic-Baltic region as a closely integrated economic and financial market;  •  Secondly, the challenges posed by recent economic and credit growth;  •  Thirdly, some financial sector policy and supervisory challenges in this highly integrated regional market. Not surprisingly, the focus of my examples will mostly be on Estonia. Some special characteristics of the Nordic-Baltic region The economic situation in the Nordic-Baltic region is outstanding, especially in comparison with other regions of the EU. Output growth in the Nordic countries is up to two and in the Baltic countries even 4 to 5 times higher than the EU average.

This divergence may tempt the Nordic owners to be more aggressive in the high-growth market. It is therefore and with these risks in mind - though with a very low probability at the time - that Bank of Estonia as a regulator has set higher capital charges for banks operating in Estonia. From the point of view of a central bank or a financial regulator it is positive that Nordic banks seem to treat the Baltic market as a part of their home market. Parent banks extend their advanced risk evaluation models to their Baltic subsidiaries and branches. However, risk measurement and management systems used in the Nordic countries need to be appropriately calibrated when applied in the Baltic countries. The principles of risk evaluation that work well at the level of the whole group may not be optimal in countries where borrowers have a limited credit history, in most cases less than one full cycle. For example, there is no experience of loan servicing in the environment of increasing interest rates. The integration and the presence of foreign banks have brought new challenges for surveillance and policy, especially regarding appropriate risk assessment. The host country's options for mitigating macroeconomic instability are often limited. Therefore, cooperation between supervisors and exchange of information is becoming increasingly important and a part of a business as usual practice. Bilateral cooperation can ensure the effectiveness of regulation, but it has its limits. Thus, it is vital to keep the EU legislation up with market developments.
REMARKS ON THE CHILEAN ECONOMY Mario Marcel 1/ Governor, Central Bank of Chile April 2017  1. The last few months have brought mixed signals for the Chilean economy. Recent data suggest the global outlook appears more favorable, particularly for emerging economies. On the one hand, activity data and expectations in advanced economies have been more upbeat, marked by better than expected performance by the manufacturing sector and a more positive outlook following years of stagnation. As a result, deflationary risks have dissipated, as inflation is expected to return to more normal levels. The Federal Reserve (Fed) has continued to normalize monetary policy and monetary authorities in Europe and Japan appear to have set aside the possibility of additional stimulus measures. Markets have incorporated these changes in their expectations avoiding any serious disruptions. Along with better signs in advanced economies, activity in China has remained relatively stable, which contrasts with what had been observed one year ago. 2. In this context, there has been a generalized increase in willingness to take on risk in financial markets, increasing stock market indices, reducing sovereign risk premiums and increasing capital flows to emerging markets. Commodity prices have also benefitted. Copper, our main export product, has been trading at prices near its two year highs and prospects for the next few years have improved, which has had a material impact on the Chilean terms of trade.

Dear participants, We recognised the efforts made by the Government aimed at enhancing a broad spectrum of skills in the country through such institutions as TEVETA. What is required is a more Targeted intervention in order to improve labour market opportunities for individuals by helping them obtain necessary skills and facilitating labour market transitions. Countries that have been most successful in skills development did so by sustaining implementation of coordinated policies linking education systems, skills formation, employment and decent work. These countries include India, Costa Rica, and South Korea. They made quality education broadly available and introduced mechanisms to match supply to the current demand for skills, often by means of linking training providers and employers at sector and local levels. They helped workers and enterprises adjust to change and used skills strategically as a core element of industrial, technology and trade policies to move from lower to higher productivity activities and facilitate investment in new industries. Involving workers and the private sector was a main feature of this approach. Zambia can learn a lot from some of these countries. Effective training systems in conjunction with the private sector should facilitate demand-driven training in sectors and locations with high job growth potential, avoiding bottlenecks and improving employability. 2  BIS central bankers’ speeches  Expanding accessibility to quality training is a powerful instrument for empowerment and inclusion of the youth and disadvantaged groups: women, rural dwellers and persons with disabilities.
First, despite the increasing integration of the world economy, which might appear to reduce the effect of national policies, the nation state has in fact flourished since 1945. The collapse of ideology and empire, and the triumph of the ideas of a liberal market economy, have been accompanied by an extraordinary expansion in the number of countries in the world. In 1946 there were fewer than 80 countries. Now there are 192 members of the UN. Much of that increase represents the division of empires, such as the former Soviet Union, into new states, as well as growing ethnic separation. Most of these new countries were not “present at the creation” and see no reason why they should acquiesce in governance arrangements made in their absence. And the economic weight of countries has changed greatly since the post-war international institutions were set up. In 1950, Asian countries accounted for a sixth of world GDP measured at purchasing power parity. Now they account for more than a third. Second, the world economy is very different today than when the IMF, the World Bank, and the other international economic institutions were set up. At the end of the Second World War, the international monetary system was built around fixed exchange rates and controls on capital flows. The rules of the game were simple. Countries were supposed to balance their current account. When “imbalances” arose, they were under an obligation to correct them. In practice, however, the obligations on creditor and debtor countries did not prove to be symmetric.

Ladies and Gentlemen, Now let me turn to the issues that directly impact the banking industry: what might be the implications for financial institutions as a result of the measures discussed earlier, and what are the challenges ahead for the banking sector? I would like to point out a few: First, in the new financial landscape following the implementation of the Master Plan, we anticipate a structural change in the banking sector with more industry consolidation and emergence of financial conglomerates, embraced by the “One Presence” principle. Such processes should lead to larger size and falling number of financial institutions. Although not a sure ticket to success, size will allow the working of economies of scale and scope - to eliminate redundancies in administrative and operational functions, reduce costs from more diversified portfolio of clients and enhance income from provision of wider range of services. For the first time ever in the Thai banking history, banks will have the opportunity to do all these and grow through consolidation and/or forming a financial group. Up until now cost cutting and income enhancement, for example, were possible only through reorganization and re-engineering within the same organization. Of course, there were cases of mergers in the history, but they were mainly out of necessity to solve the problem of some weak  BIS Review 43/2004  3  banks, not as a calculated move for growth.
Progress is also needed on the capital markets union agenda and in completing the banking union, specifically ending the current deadlock over its third pillar, a European Deposit Insurance Scheme with a risk-pooling component. Structural challenges and policies to address them The Banco de España has detailed, in various reports, the main challenges that will influence the course of the Spanish economy over the years ahead. Most of the challenges facing the Spanish economy clearly pre-date the pandemic. Examples here include the need to boost productivity growth, to correct dysfunctions in several goods and factor markets, to make public finances more sustainable and to address the challenges posed by population ageing, inequality and climate change. However, others are relatively new, such as the need to adapt to an accelerated digitalisation of economic activity and to the recent changes in globalisation dynamics. The Spanish economy’s ability to follow a robust and sustainable growth path will hinge on the economic policy response to this set of challenges. In this regard, a proper definition and decisive implementation of the reforms contemplated in the Recovery, Transformation and Resilience Plan (RTRP) approved last year and a careful selection of the different projects financed under the NGEU may be key to this strategy. (i) The challenge of boosting job creation and strengthening employment stability The first challenge we face is the need to reduce the high unemployment rate and temporary employment ratio, which have been persistently high in Spain in recent decades and particularly affect young people.

A higher policy rate may also contribute to strengthening the krone exchange rate, which may curb imported goods inflation further out. Chart 3 Substantial labour shortages, but signs of cooling Activity in the Norwegian economy is high. Employment has risen over the past year, and labour shortages have become pronounced. Unemployment is at historically low levels. We are now seeing clear signs of a slowdown in the Norwegian economy. High inflation and rising interest rates have led to a fall in household consumption. Labour shortages appear to have eased somewhat. High electricity prices are also reducing profits for many firms. We projected a cooling of the economy in the course of autumn this year, but it now appears that the economy has passed a cyclical peak and that the slowdown may prove to be more pronounced. We have revised down our projections for economic activity ahead on the back of higher inflation in Norway and a weaker outlook for our trading partners. As things stand, prices will rise at a notably faster pace than wages this year. Many households will face a squeeze on their finances. Some people will find it difficult to cope with higher borrowing costs on top of the broad rise in prices. But most households have the finances to cover increased expenses. Next year we expect wages to rise at about the same pace as prices. Our projections for wage growth are in line with the expectations of the social partners according to Norges Bank’s Expectations Survey.
However, on a positive note, I am encouraged by progress in numerous countries to promote disclosure and transparency, for instance with regard to non-performing loans. The Basle Committee on Banking Supervision, the Committee on the Global Financial System, the International Accounting Standards Committee and other organizations have put forth initiatives to enhance the relevance, reliability and comparability of information disclosed by the financial sector. The most important initiatives will be those of national governments to apply these accounting and transparency frameworks, as well as the voluntary disclosures of financial institutions. Now that I have discussed the changing risk environment and how banks are responding to that challenge, let me turn to what this means for the current regulatory capital regime. Today, a major challenge for regulators is to develop capital standards that address more comprehensively the full range of risks to which banking institutions are exposed. These standards must also improve the differentiation among high-risk and low-risk exposures and between weak and strong institutions. Additionally, they must be flexible enough to accommodate the risks of newer and emerging activities, some that I have mentioned today. As you know, the primary tool of capital regulation currently is the set of minimum capital ratios that were devised in 1988 by the Basle Committee on Banking Supervision. They were set forth in an agreement known as the Basle Accord, and were adopted, among other reasons, to address the slide in international capital levels that was occurring over a decade ago.

Two factors give Sweden an advantage: the surplus in the public finances and the current account before the start of the crisis (Figure 15). The public surplus has made it possible to conduct an expansionary fiscal policy during the crisis without jeopardising the long-term sustainable development of central government finances, which has mitigated the decline of economic activity. Even in the period ahead, the basically strong public finances will contribute towards a situation in which Sweden will not need to increase taxes and/or decrease expenditure to the same extent as, for example, the United States and United Kingdom in order to achieve the long-term sustainable development of public finances. BIS Review 11/2010  3  Significant uncertainty also as regards the strength of the recovery in Sweden There also exists significant uncertainty as regards the strength of the recovery in Sweden. The lowest point of the recession has undoubtedly been passed, but there is, as yet, no strength in the recovery. Following a decline of over 6 per cent between the first quarters of 2008 and 2009, GDP has only increased by a total of 0.5 per cent during the second and third quarters of 2009. Production in industry and the private service sector has not started to increase as yet (Figure 16). We expect to see fairly strong growth in GDP in the coming years. However, this expectation may turn out to be overly optimistic – the risk of weaker development is also present.
We are now working out the details for both schemes, and we look forward to further consultations with HKAB and other bodies as the proposals progress. The theme of the reform programme is facilitating greater competition in the banking sector while strengthening safety and soundness. Perhaps the single most important measure to remove barriers to competition will be the abolition early next month of the last remaining Interest Rate Rules, which involves removing the interest rate cap on savings accounts and ending the prohibition on interest on current accounts. There is, of course, much speculation about the immediate impact of this event: whether it will be a big bang that will change the face of banking services, or merely a quiet change of gear. Given the plentiful liquidity in the banking system, it is likely that it will be the latter. But there should be no doubt about its significance in bringing to an end restrictions that have been in existence for more than a third of a century. The restrictions, some of you may recall, were introduced in 1964 as a measure to prevent cut-throat competition among banks. They served their purpose, but they have now outlived their usefulness. Why do we place so much stress on facilitating competition through regulatory reform? I use the term “facilitate” because it is not within the power of a government – and it is certainly not the policy of our government – to create competition, or to force competition to happen.

2  BIS central bankers’ speeches  Next-generation SIC payment system The thoroughly redesigned SIC payment system known as “SIC4” came on stream in April 2016. Based on cutting-edge, forward-looking technology, this new system reinforces the principles of security, reliability and high performance that have proved their worth for more than 30 years. It is particularly crucial for Switzerland’s finance industry that transactions can be effected with the highest possible levels of security. The SNB therefore welcomes the fact that the former security infrastructure for accessing the SIC system has been overhauled and that a tailor-made security solution will be used from now on. A large proportion of cashless payment transactions in Swiss francs is settled via the SIC system. In 2015, SIC settled a daily average of approximately 1.7 million transactions worth CHF 154 billion, including both client and interbank payments in Swiss francs. Moreover, SIC is an important system through which the SNB implements its monetary policy. We therefore have a keen interest in the ongoing development of the SIC system to ensure that it is able to meet changing technical and professional requirements. BIS central bankers’ speeches  3  4  BIS central bankers’ speeches  BIS central bankers’ speeches  5
The Chinese government was not willing to allow its currency to float freely and the exchange rate against the US dollar was managed. This disabled an important stabiliser and contributed increasing world trade imbalances. Long-term interest rates remained low in spite of substantial monetary policy tightening in the US between 2004 and 2006. International organisations such as the BIS, OECD, IMF and others noted on more than one occasion that growing imbalances in the world economy were a source of concern. But economic policy decisions are the prerogative of national governments. Given the policy pursued by China, there were probably limits to what monetary policy in Western countries could in reality achieve in terms of rolling back these forces. Increased private saving in the US and other deficit countries would probably have required monetary policy tightening sufficient to push up long-term interest rates. Alternatively, a substantial increase in public sector saving would have been necessary. Both alternatives would probably have led to an economic policy driven downturn. It is demanding to pursue such a policy based on the proposition that a crisis might occur in the future. Improved financial regulation would probably have reduced the severity of the financial crisis. Regulation and insurance have similar features: in most cases an annual premium must be paid in the form of slightly lower growth. This occurs because capital is not allowed to flow entirely freely to the highest yielding vehicles. In return, regulation can counter the build-up of financial imbalances.

As noted above, many of the emergency liquidity facilities rolled out in the crisis were developed in a very short period of time by experts with years of experience in these various markets. All of the new facilities were designed to price the emergency liquidity such that as market stresses eased, their use would decline. This is exactly what happened. Furthermore, the most convincing evidence that the facilities correctly addressed market failures related to liquidity is the fact that none of them lost any money.19 Conclusion The past few years have seen important changes in the role of central bank interactions with financial markets. Some of the main lessons I take away are: published statistics and market prices only tell part of the story of developments in financial markets, at best; beliefs of market participants and the distribution across markets matter, and information on them needs to be collected and analyzed on a frequent basis; active operations in financial markets allow central banks to flexibly respond to unexpected events and understand market functioning issues and changes in market infrastructure. Most importantly, the global financial  18  The Federal Reserve established swap arrangements with the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Canada, the Danmarks Nationalbank, the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Korea, the Banco de Mexico, the Reserve Bank of New Zealand, the Norges Bank, the Monetary Authority of Singapore, the Sveriges Riksbank, and the Swiss National Bank.