samchain/econo-pairs-v1 huggingface dataset:
Output, Employment and  Productivity in the Business sector Faster-Growing Advanced Economies, Percent -2  -1  0  1  2  3  4  5  6  Finland  Australia  United States  Spain  Netherlands  Capital deepening Total factor productivity growth Employment growth  Canada  Norway  Sweden  Sources: OECD Analytical Data Bank and IMF staff estimates  Meanwhile, there have been passable attempts from various quarters to bridge over the gap in the statistics. The OECD has made a comparison of IT investments over one year between countries, which clearly places Sweden at the top of the list, together with the USA (slide 7). In addition, there are approximate calculations on expenditure on software which actually show a higher percentage in relation to GDP in Sweden than in the USA. 7. Expenditure on Information and Communication Technology Advanced Economies 1997, Percent of GDP 0  2  4  6  8  10  12  14  16  Sweden Australia United States United Kingdom Canada Japan Netherlands Denmark France Korea Belgium Finland Norway Ireland Germany Austria Portugal Italy  Sources: OECD Analytical Data Bank and OECD Information Technology Outlook 2000  Spain  However, in the work on the Riksbank’s Inflation Reports, there are factors that are easier to pick up. One is of course the fall in computer prices. Prices have fallen by almost 35% a year since 1996.

This is done by growth strongly accelerating (see slide 1A). However, when the technological revolution has subsided, the boost in growth will also subside. However, it is not self-evident that there is some form of “natural” growth rate to return to. Over a long-term perspective the growth rate has both varied and accelerated. I therefore intend to take up the other possible angle of approach sometimes mentioned, that IT could raise growth permanently. This could only be achieved by the technological innovations also creating the right conditions for a more rapid development in technology in the future (see slide 1B). One example of this type of development is what is known as Moore’s Law. It is now 25 years ago that Gordon Moore, the founder of Intel, predicted that the capacity of a microprocessor would double every 18 months. So far he has been proved right and many believe that Moore’s forecast may hold true far into the 2010s. However, despite the fact that certain technological indicators, such as the number of patents granted, indicate an increasingly rapid development in the USA and Sweden, it is difficult to believe in a perpetual technological acceleration. From a central bank perspective, we can probably keep our distance to this debate by reminding everyone that our monetary policy goal horizon is one to two years. It suffices to imagine that the adaptation periods between the first and second dotted-line curve (in slide 1A) will take perhaps five to 10 years.
The problem is that countries and companies alike are pledging to hit targets in almost three decades’ time without committing to action for which they can be held accountable in the short term. To achieve net-zero by 2050, the necessary policies and the associated investments must be made between now and 2030. Singapore is firmly committed to doing its part in the global effort to reduce greenhouse gas emissions. Last year, the government launched the Singapore Green Plan, which sets out a road map towards sustainable development, a green economy, and net zero emissions. Singapore aims to peak carbon emissions around 2030 and to achieve net zero by or around mid-century. If anything, the direction of travel in the coming years can only be towards greater climate ambition, not less. The world should be upfront about the cost of decarbonisation and have concrete plans to support those adversely affected. There will no doubt be opportunities in green technologies and industries, and the long-term cost of doing nothing will be much more than the cost of mitigation measures. But decarbonisation will impose substantial short-term economic costs and have profound distributional implications. Like all economic transformations, the green transition will involve winners and losers, and unless this is recognised and dealt with, the sustainability agenda will lose social legitimacy. If we do not support the losers, there will be a strong backlash against the shift to a greener, cleaner future, much like the backlash we have seen against globalisation by those who were adversely affected by it.

But we can, and do, aim to offset the impact of persistent external influences on the prospect for inflation so that inflation in the economy as a whole stays on track to meet the inflation target given to us by the Chancellor. That is what we have been doing – and is the context of our further move today. No-one, my Lord Mayor, is more conscious than I am of the limits to what we can hope to achieve through monetary policy. But by operating within those limits we have been able to achieve greater macro-economic stability, and consistently lower inflation, than we’ve seen for a generation. And that stability, together with the improved supply-side flexibility of the economy, has delivered our highest ever level of employment, and a rate of unemployment in the economy as a whole that is still close to its lowest for almost 20 years. 3  BIS Review 68/1999
And a final question: how is the Spanish banking system dealing with the banking union project? Unquestionably, the banking union project entails appreciable challenges for the whole European banking system. In particular, the single supervisory mechanism inevitably involves the need to adapt to new rules, criteria and procedures for interacting with supervisors. Furthermore, the new resolution regulations, and particularly the burden-sharing procedures (along with the changes soon to be made to the solvency regulations), may affect the composition and cost of bank liabilities. All in all, the Spanish banking system will foreseeably not face more complex challenges than those being posed in other jurisdictions, thanks to the unprecedented reform  4  BIS central bankers’ speeches  implemented in the past year following the assessment commissioned from an external consultant within the framework of the financial assistance programme. The significant reduction of the exposure to the real estate sector through the substantial increase in provisions and the entry into operation of Sareb made it possible to defuse one of the main sources of vulnerability of the Spanish financial system. Also, the quality of assets and, in particular, the accounting treatment of restructured and refinanced loans, were reviewed. Finally, banks’ solvency ratios were notably strengthened. Currently, all banks meet the capital requirement of 9% according to the EBA definition, generally by an appreciable margin.

The second pillar of the Eurosystem’s strategy therefore consists of a broadly based assessment of the outlook for price developments and the risks to price stability in the euro area as a whole. This broadly based assessment takes into account, inter alia, the information provided by wage developments, exchange rates, fiscal indicators, real economic activity, and asset and commodity prices. Forecasts of economic activity and prices in the euro area can certainly also contribute to the success of an appropriately forwardlooking monetary policy. Thus we take into account forecasts available from international organisations such as the IMF and the OECD as well as internal forecasts. 3  BIS Review 60/1999  We are aware that forecasts have to be interpreted with great caution. Given behavioural, institutional and structural uncertainties, forecasting price and other developments in the euro area is inevitably difficult. Moreover, a forecast cannot encompass all the indicator variables that are important for monetary policy. Nor can it always incorporate indicators in a timely manner. Furthermore, by the time the forecast has been finalised, the original assumptions may have become less realistic, requiring a careful interpretation of the results. Therefore, a thorough analysis of individual indicator variables plays an important role in our monetary policy strategy, in addition to any role that these variables may have in the forecast. Within the stability-oriented monetary policy strategy, the Eurosystem also takes into account the external value of the euro as an important determinant of the outlook for price stability.
Over the years, SME customers have gained a more prominent standing in the books of banking institutions in Malaysia. Consequently, it is in the banking institutions' best interest to meet the requirements of viable SME customers, which may face difficulties in the current challenging environment. Banking institutions need to engage and regularly interface with the various associations that represent SMEs to ascertain and formulate solutions to address issues confronting the SMEs while also communicating the requirements expected of the SMEs. Banks also need to provide greater flexibility in structuring the financing facility including customisation of the repayment periods within acceptable risk management levels. Banks may also expand the provision of advisory services to SMEs and proactively seek out SME customers that may be facing stress in this difficult business environment well before their conditions deteriorate. Adequate advice on financial management could pre-empt and avoid problems with respect to the financing facility. Bank Negara Malaysia has also advocated for the migration to electronic payments as a measure to improve efficiency levels. This cannot be overemphasised in the current environment. The adoption of electronic means of payments would result in greater business efficiency in addition to reducing the cost of doing business. It is important for the businesses including the SMEs to place high priority on the adoption of more expedient and efficient means of payments.

With the foundations now in place, on 2 June 2008 the Council announced the formation of the SME Central Coordinating Agency to further build on the successes that have been achieved and to take the SME sector to the next stage of development. This dedicated SME Agency represents a major structural enhancement in the SME development agenda and marks another milestone for SME development in Malaysia. The Small and Medium Industries Development Corporation or SMIDEC, will be transformed and repositioned to undertake this role. This new entity, that will be known as the SME Corporation Malaysia or SME Corp, will be a one-stop agency that undertakes the overall coordination of SME policy formulation and assessment of the SME development programmes. The SME Corp will serve as the central point of information, reference and advisory services for SMEs for all sectors and will assume the role of Secretariat to the Council, a role which has until now been undertaken by Bank Negara Malaysia. Increasing SME access to financing Bank Negara Malaysia's own efforts have been focused on ensuring that SMEs, at different stages of the business life cycle, have adequate access to financing. The initiatives have been directed at four broad areas. Firstly, the strengthening of financial service providers. This has involved strengthening the role of the banking institutions in providing financing to SMEs. This recent five years have seen the financial institutions accord greater focus to the SME sector.
Karolina Ekholm: Macroprudential policy and clear communication contribute to financial stability Speech by Ms Karolina Ekholm, Deputy Governor of the Sveriges Riksbank, to the Swedish Banker’s Association, Stockholm, 30 March 2012. *  *  *  The views expressed in this speech are my own and are not necessarily shared by the other members of the Executive Board of the Riksbank. I would like to thank Mr Johan Molin and Mr Per Sonnerby for all their help with writing this speech. A new policy area has attracted a lot of attention recently – an area that has come to be called macroprudential policy. Macroprudential policy entails focusing on the financial system as a whole instead of on the health of an individual institution, as is the case in traditional supervision. In my view, such a broad approach is an important, and perhaps even a necessary, complement to traditional supervision. However, we must of course be realistic about what macroprudential policy can actually achieve, particularly as monetary policy and fiscal policy are also important to the stability of the financial system. Today I will speak about how I believe macroprudential policy can be used as an element of the work to prevent financial crises. This also gives me the opportunity to mention that we have recently taken a step towards a broader approach to promoting financial stability. We have namely set up a council for cooperation on macroprudential policy together with Finansinspektionen.

Before the crisis, the most common view among central bankers was that monetary policy should only react to sharp increases in indebtedness and asset prices if these could be expected to lead to overheating in the economy as a whole and thus to a too high rate of inflation. Otherwise, the central bank should wait-and-see before adjusting monetary policy, but be prepared to quickly cut the policy rate if a burst asset-price bubble initiates a dramatic fall in demand in the economy. However, this view has been called into question recently. Many observers, including myself in one of my first speeches as a member of the Executive Board, have asked themselves whether monetary policy shouldn’t also be used to counteract the development of bubbles. 4 Would it have been possible, for example, to prevent this financial crisis if monetary policy had been tighter in the United States in the years leading up to 2007, when the problems on the US financial market began? As can be seen in Figure 1, the actual real policy rate was relatively low in this period. However, it is doubtful whether a higher policy rate would have been able to bring growth in property prices and credit to a more moderate pace in the United States without driving the economy into a recession at the same time. 5  2  See for instance BIS (2012): European bank funding and deleveraging, BIS Quarterly Review, March 2012.
Causes of the financial turbulences and their implications on financial regulation The subprime crisis is the result of the convergence of several elements at the same time – what some observers have called a “perfect storm.” Trying to keep things simple, the element that triggered this crisis lies in the U.S. mortgage sector and a process of rapid financial innovation. In this regard, the banking industry contributed to the lending and housing boom as follows. First, the traditional banking model – hold loans until they are repaid – was replaced by a distribution model, where loans are pooled, tranched, and finally sold via securitization to other financial investors, thus this process led to banks’ off-loading risk. Second, the funding of highly leveraged financial intermediaries with short term liabilities increased throughout this period, which exposed those intermediaries to potential stress derived from changes in market liquidity conditions. As we all know, the originate and distribute model led to the fast development of securitization markets characterized by an ever-increasing supply of complex financial instruments. Given the course of events, these turned out to be quite difficult to value. On this last point, the rating agencies are involved, as they are responsible for assessing the credit quality of such instruments, which is an essential piece of information for investors. Nowadays, these institutions are also under public scrutiny regarding their capacity and incentives to correctly evaluate risk.

My impression is that the fundamental causes of the current crisis were the same market failures that have played key roles in many previous financial or banking crises, which we all know well from our previous experience in emerging markets. The first of these are the distortions in financial intermediaries’ behavior introduced by implicit or explicit bailout expectations. The second are the intrinsic vulnerabilities of financial intermediaries that finance long term (or illiquid) assets with short term debt. BIS Review 97/2009  1  What differs in the current crisis is the way in which these components showed up. As for excessive risk taking, the mechanism to deal with it was the securitization of high risk loans, which allowed banks to sidestep capital regulations by either creating off-balance-sheet agents or by bringing back loans packaged into highly rated assets, with low capital requirements. As for short term funding of long term (or illiquid) assets in the current crisis, this was prevalent in investment banks, SIVs and conduits. Hence, the lessons to be learned from the current crisis fall into two categories. The first are broad reforms that seek to align incentives and reduce the vulnerabilities of financial intermediaries. Higher capital requirements, a broader regulatory scope, and reforms to management incentive schemes are all in this category. These are all important aspects. However, the devil is on the details, and the exact way they should be implemented is yet to be defined.
In any event, this business segment is not free from challenges, especially at present when some of the economies to which our banks are exposed, such as Turkey and Argentina, are undergoing significant difficulties. Against this background, the international business model of Spanish banks, based primarily on activities conducted through subsidiaries operating in a decentralised fashion, with financial independence and engaging in traditional banking activities, is a mitigating factor that should be borne in mind. That said, and despite the conjunctural difficulties facing some of the countries in which Spanish banks are present, I would like to underscore the undoubted importance of geographical diversification as a source of medium and long-term value added and stability for these banks. The low profitability of the banking business in Spain is attributable to a combination of factors, some cyclical and others more structural. First, the high level of non-performing assets ensuing from the effects of the crisis adversely affects banks’ income statements both through the decline in interest received and, especially, the increase in the attendant asset impairment losses. The volume of these losses for Spanish deposit institutions as a whole peaked in 2012 and has subsequently tended to fall, although these losses continue to consume a large portion of revenue, meaning that pre-crisis levels have not been restored. Specifically, in terms of assets, these losses were, between 2015 and 2017, double those recorded between 2003 and 2005.

The correction in terms of non-performing asset levels is in line with what was observed in previous cycles; but the adjustment in terms of the non-performing loans ratio is proving slower than on previous occasions, which is attributable to the flatness of credit during the current cycle. Compared with the banking systems in other euro area countries that have also accumulated a high volume of non-performing assets during the crisis, the correction in Spain is at a relatively more advanced stage. Indeed, the non-performing loans ratio in our country, at the consolidated level, stands at around the average for the euro area countries. 3/8  Moreover, the fall at banks is across the board, albeit sharper for those that were in a position of greater vulnerability, the reflection of which has been a lessening of the dispersion of the non-performing loan ratio. Despite this progress, the non-performing assets ratio in Spain is still at a high level from a historical perspective. Our forecasts indicate that non-performing assets will continue on a path of correction in the coming years, boosted by economic growth, which we expect to run into the medium term, albeit at more moderate rates than those observed in recent years. In the absence of an active management policy pursued by banks, the non-performing loan ratio will continue to be relatively high in late 2020.
We are now in a period where petroleum wealth is being invested in foreign financial assets via the Government Petroleum Fund. The government is to gradually phase in petroleum revenues into the domestic economy by using approximately the expected real return on the Fund. The fiscal rule was established in 2001. Growth in public expenditure started to accelerate in 1997 after having been low in the mid-1990s. Spending growth has also been fairly strong in recent years, but perhaps somewhat slower than earlier. Since 2000, spending growth has averaged 6.3 per cent, while GDP growth in value terms has been 4.5 per cent. We have limited overall knowledge about real growth in public service production. Reliable measures of productivity and price developments have not been developed. The fiscal rule for the budget implies that the government can use 4 per cent of the Fund over time. This year, a little more than 6 per cent is being used. The deviation partly reflects an unexpected shortfall in tax revenues in recent years. The government budget deficit is the difference between total  6  BIS Review 10/2005  revenues and total expenditure. They each account for about half of total GDP in Norway. Even small deviations from expenditure and revenue projections can have a major impact on the deficit. Exchange rate changes will also lead to fluctuations in the value of the Petroleum Fund. For these reasons alone, the use of petroleum revenues may in periods deviate from the 4 per cent rule.

Ardian Fullani: Recent economic and monetary developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on the Monetary Policy Decision of the Bank of Albania Supervisory Council, Tirana, 28 March 2012. *  *  *  Today, on 28 March 2012, the Supervisory Council of the Bank of Albania reviewed and approved the Monthly Monetary Policy Report. Based on the analysis of Albania’s latest economic and monetary developments and following discussions on their performance outlook, the Supervisory Council of the Bank of Albania decided to cut the key interest rate by 0.25 percentage points, bringing it down to 4.25%. This decision was motivated by the further decline of the balance of inflationary pressures as well as the need for increased macroeconomic stimulus to the economy under the conditions of a more prudent fiscal policy for the period ahead. The Supervisory Council deemed that, following the successive easing of the monetary policy, the latest key interest rate cut will provide more appropriate monetary conditions to meet the inflation target and stimulate economic activity in Albania. Let me now proceed with an overview of economic developments and main issues discussed in today’s meeting. *** Annual inflation in February was 0.6%, recording sharp decline from 1.6% recorded a month earlier. The rapid deceleration of inflation was a result of the annual drop of food prices during this month and the high base of comparison with the corresponding month a year earlier.