samchain/econo-pairs-v1 huggingface dataset:
I will return to banks' capital adequacy later but  BIS Review 4/2001  1  first I want to say a few words about our perception of the US economy and the implications for the UK. US Economy: Soft or Hard Landing? The dramatic improvement in US economic performance through the 1990s, in terms of growth and productivity, gave rise to a sharp increase in expected returns to investment and, as a result, increased domestic and foreign demand for US assets. Investment has been particularly concentrated in ICT (information, computers and telecommunications), much of it financed by borrowing on the strength of projected future profits. However, growing uncertainty over the size and permanence of these productivity gains, and about the long run growth of GDP and profits, has fuelled the recent increase in market volatility. In addition, there have been more immediate worries about the impact of a cyclical downturn in productivity and earnings. Another area for debate has been the implications of any reversal in capital flows. As I have noted, buoyant earnings expectations drove up equity prices and encouraged high rates of investment. But alongside the rapid rise in the market value of US household wealth in relation to income came a sharp fall in domestic savings. The gap between savings and investment - manifested in an external current account deficit which has risen to an unprecedented rate of 4½% of GDP - has been filled by large capital inflows.

Mervyn King: Jackson Hole Conference - remarks to the Central Bank Governors’ Panel Remarks by Mr Mervyn King, Governor of the Bank of England, at a symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, 27 August 2005. *  *  *  Jackson Hole speakers normally draw out the lessons of economic theory for one specific area of policy. But this year we are trying to distil lessons from the practice of monetary policy in the United States - over an extraordinarily successful quarter century under the leadership of Alan Greenspan – for the theory of monetary policy. At most celebrations of a long and successful career, invited speakers talk at length and the great man himself is allowed a few minutes at the end. It is a remarkable tribute to Alan that on this occasion the tradition has been turned on its head. We all remain intrigued by what he has to say. In the few minutes I am allowed, I want to describe the three important lessons that I have learnt from Alan during my time at the Bank of England. First, to be a successful central banker requires an extraordinary degree of objectivity. The key is to recognise that economics tells you how to think, not what to think. It is not a set of settled conclusions about issues. Above all, it is vital never to confuse the world with a model.
2  But weak UK investment also reflected a necessary adjustment in the capital stock. That overhang – which peaked at close to 10% in the UK – is being gradually worked off through a combination of a recovery in output and a prolonged period of subdued net investment (Chart 5). And in part weak investment could reflect a misallocation of capital in the run-up to the crisis. In this regard, the situation in the UK was a bit different to that in countries such as Spain and the US where significant residential and commercial property construction booms subsequently turned to busts. Without a housing glut to work off, the weakness of UK investment is all the more striking. Another form of misallocation could be the ability of so-called zombie firms to live on in the very low interest rate environment. The BIS’s proxy for this has seen the share of the “living dead” more than double since 3  the crisis. In contrast, the Bank of England estimates that the proportion of zombie firms in the UK has fallen by a quarter since 2008 (Chart 6). 1  See, for example, Reinhart, C. and K. Rogoff. 2009. This Time is Different: Eight Centuries of Financial Folly. Princeton: Princeton University Press, and Jorda, O., Schularick, M. and Taylor, A. (2013), ‘When Credit Bites Back’, Journal of Money, Credit and Banking, Vol. 45, Issue s2.

Chart 8: Real pay by region 1998-2007  2009-2018  Average annual real pay growth (per cent) 2.5 2 1.5 1 0.5 0 -0.5 -1 -1.5  Sources: ONS and Bank of England calculations. Notes: Data at annual frequency using median gross weekly pay in ASHE deflated by CPI. Regional calculations at NUTS1 level. Over the past decade, average growth rates of real pay in every UK region have fallen into negative territory and well below average GDP growth rates in the economy over the same period (1.3%). The worst-affected regions have been the East Midlands and London. Scunthorpe has been towards the lower end of this pack, with real pay falling by, on average, 0.8% per year over the past decade. The distribution of real pay rises across the wage distribution tells a nuanced story (Chart 9). In the decade prior to the crisis, real pay growth was fairly evenly distributed. The one exception was the top two wage deciles, where real pay growth averaged 2 ¼% – 0.5 percentage points higher than in the lower deciles. The global financial crisis (2008-11) saw a sharp and significant amplification of these pre-crisis trends. The distribution of real pay rises fell below zero for all income groups. But while for the top two income deciles real pay shrank by only 2%, for the bottom two deciles it fell by 4%. This widened pre-existing wage inequalities. For the poor, this really was a Great Recession.
So it is critical that we are able to devise a strategy that could continuously retain and develop talent. While the supply of talent is abundant, the supply of top talent is scarce. The so-called “Talent Paradox”, where we find ourselves with a large pool of talent in the market, but have difficulty in finding competent talent, particularly in the more specialised areas is a reality, requiring a solution. In the context of organisational learning and development, I wonder whether we have been effective in equipping our employees with the needed competencies or proficiencies in our learning interventions, where teaching approaches such as case studies, experiential learning and reflective practices are common pedagogies applied to strengthen our developmental curriculum. This I believe requires profound pondering. Most of the problems we face in the 21st century, would likely require unique and creative solutions, especially if we want to position ourselves in that elite position where possessing the competitive edge is an imperative. Matthew E May, the author of “In Pursuit of Elegance” wrote about “Design Thinking”, a concept that requires an approach to solving problems far beyond the traditional way of problem solving. Great design is a result of a clear and thorough understanding of the user, competing resolution of competing tensions, multidisciplinary collaboration, rapid experimentation via prototypes with continuous modification and enhancement of ideas and solutions. I thought it is quite apt to extract the idea from the book to describe the current and future challenges face by the financial services industry.

Consolidation is already far advanced in investment banking, where critical mass is of particular importance to profitability, and a US link has proved a competitive advantage. The recent mergers between Citibank, Salomon Smith Barney and Schroder, and between Chase, JP Morgan and Robert Fleming, affect investment banking activity in Europe as much as in the US. Consolidation is much less far advanced in retail banking in Europe, where national differences in the retail markets are still pronounced. Finally, regulation. Much has already been done to remove obstacles to the integration of Europe's capital markets. But the launch of the euro has served to highlight the barriers that remain. To remove these barriers, market practitioners in London do not believe that it is necessary to provide uniform regulation of European securities markets. Rather, the changes required can be implemented by relying on the principles of the Single European Market, and giving the necessary priority to implementing the European Commission's Financial Services Action Plan. And a Committee of Wise Men, chaired by Baron Lamfalussy, has been established in an attempt to speed up the process of change. We welcome the direction of the Wise Men's initial report last autumn, and we look forward to its final report, which is due shortly. The City has maintained its market share 16 I have identified five main ways in which the structure of the euro markets is developing.
This is the approach that minimizes costs for economic activity and for the society at large, contributing to consolidate a sound, efficient, and fair economic structure. Thanks for your attention! 2  BIS Review 108/2008

We have said that the prerequisites for capital account liberalisation are macroeconomic stability, sufficient foreign exchange reserves, and a financial system that can stand on its feet without capital controls. The first of these conditions has been met, and the next will be met upon successful conclusion of the third IMF review. The prospect of meeting the third condition in the next few months has improved in view of strong interim earnings reports from two of Iceland’s large commercial banks and the recent Supreme Court judgment concerning the interest rate to be used for loans with nonbinding (illegal) exchange rate linkage clauses. But it would be a misunderstanding to assume that the timeframe can be measured in terms of weeks rather than months. We must receive the next tranche of the IMF loan after the third review, and we probably cannot pronounce the banks sound with respect to capital account liberalisation until late November. Furthermore, it is appropriate to bear in mind, as the recent unrest in the bond market shows, that there are short-term risks related to the removal of the controls; thus it is important that each step be well prepared. But if nothing unexpected arises, the time is coming closer, and preparation is underway within the Central Bank. BIS Review 130/2010  3  Of course, we won’t make much progress in lifting the controls or gaining access to foreign credit markets if the Icelandic Government is considered unlikely to be able to fulfil its foreign loan obligations.
Financials have reverted to being close to a break-even strategy. That is broadly what long-run growth theory would lead us to expect. So what lessons should we take from this? Many practitioners and policymakers were seduced by the excess returns to finance during that twenty-year golden era. Banks appeared to have discovered a money machine, albeit one whose workings were sometimes  BIS Review 85/2009  1  impossible to understand. One of the South Sea stocks was memorably “a company for carrying out an undertaking of great advantage, but nobody to know what it is”. 1 Banking became the 21st century equivalent. We should aspire to a financial system where there is greater market and regulatory scrutiny of future such money machines. In achieving this, there is a role for some body – a systemic overseer – which is able to detect incipient bubbles and fads and, as importantly, act to correct them. This role is about removing the punchbowl from future financial sector parties. Lesson 2: Unless the golden goose is geared At one level, the crisis tells us that banks may not be special after all, at least in terms of their long-run profitability. There is, however, one dimension along which banks are a different animal: leverage. To see this, consider a simple decomposition of return on equity (ROE) for a firm: (1)  ROE = Return on Assets * Leverage  The first term is a measure of management skill in extracting profits from a pool of assets.

Reflecting the Federal Reserve’s historical interest in the mitigation of settlement risk, and in anticipation of the emergence of real time retail payments in the United States, we are currently exploring an expansion in operating hours of the National Settlement Service to support the final and irrevocable settlement of interbank positions in central bank money. We are pursuing this interest in three phases. In 2015, we expanded the NSS operating window modestly, opening an hour earlier at 7:30am and closing a half hour later at 5:30p.m. Subsequently, we announced our readiness to open NSS as early as 9:00 p.m. on the prior calendar date, consistent with the operating window of the Fedwire Funds Service, if requested. Finally, we are currently evaluating prospects for weekend settlement hours, perhaps encompassing a 24x7 operating window for NSS, for which we are validating demand prior to finalizing our direction. It is critical to consider these matters in advance of the advent of real time retail payments to anticipate the needs of customers and to respond to the interests of policy makers. The Federal Reserve’s Strategies for Improving the Payment System also aspire to achieve greater end-to-end efficiency in cross-border payments, an historical pain point for end users. In support of this interest, and following an exhaustive season of consultation with industry leaders, we are currently in the midst of a multi-year effort to adopt the ISO 20022 payment message formats for the Fedwire Funds Service.
Nominal rates have fallen even further during this period, for three reasons. First of all, inflation and inflation expectations were brought to target levels in major industrialised countries in the last two decades of the 20th century; therefore, it was not necessary to keep nominal and real rates as high as before. It could be said that the same development has taken place here in Iceland in the recent term. Second, global deflationary tendencies have been strong in recent years, following the inclusion of China and Russia in the global trading system and due to technological advances and developments in international production and value chains. Third, a pronounced economic slack in major industrialised countries after the financial crisis has led to much more accommodative monetary policy than would otherwise have prevailed in those countries. All of these factors combined have contributed to the current situation, where nominal central bank rates in leading industrialised economies are extremely low in historical terms. Actually, many observers consider them dangerously low as regards their potential impact on financial stability and the efficacy of the financial system. 4  What about Iceland in this context? The Central Bank’s key rate is the interest rate that determines short-term market rates at any given time. In the recent past, this has been the rate on seven-day term deposits, which is now 5.25%, as Chart 2 indicates.

Monetary policy: achievements and review? Már Guðmundsson, Governor of the Central Bank of Iceland. Monetary policy meeting of the Iceland Chamber of Commerce, held at Harpa in Reykjavík on 17 November 2016  Madame Chairman, honoured guests, The Iceland Chamber of Commerce has a long-standing tradition of holding a meeting like this one on economic developments and prospects and monetary policy. The meeting is held following the publication of the Central Bank’s autumn forecast and, in latter years, the Monetary Policy Committee’s interest rate decision. In recent years, it has been the practice to select a particular topic for the meeting, and in keeping with this, today’s topic is: Is independent monetary policy too costly? This departs somewhat from the contents of the Central Bank’s Monetary Bulletin and current tasks of monetary policy, but I will touch on these towards the end of my speech today. Yesterday the Bank published Monetary Bulletin 2016/4, which contained the Bank’s new macroeconomic forecast, and announced the Monetary Policy Committee’s interest rate decision. The big picture of the current state of the economy is that things have seldom been better. Icelanders have received a significant boost from improved terms of trade and growing goods and services exports, particularly due to strong growth in the tourism sector. It is this that underlies the vast increase in Icelanders’ real income and the country’s high employment level. In addition, Icelanders have proven more cautious this time than often before during an economic boom.
There is, of course, traffic in the other direction, but this is of a much more volatile, potent, demanding, and at times predatory nature, and it can sometimes - as we saw in the late 1990s - be difficult to cope with, to put it mildly. There is now a common desire among economies within the region to reduce dependence on the recycling of domestic savings through the developed markets, and therefore reduce vulnerability to financial shocks, by promoting greater regional financial intermediation. A number of regional initiatives are being implemented, the most notable of which is the Asian Bond Fund project, a collective initiative of 11 central banks and monetary authorities to develop bond markets in the region. A great deal of emphasis is also being placed on getting one's own house in order, by practising sound macro-economic policies and building robust institutions. Some attempts have been made at financial infrastructure integration: in Hong Kong, in particular, we have been operating US dollar and  BIS Review 19/2005  1  euro clearing systems and opening linkages with other jurisdictions and international systems. But it has to be said that, so far, these facilities have been serving domestic needs far more than regional needs. This is, I think, a reflection of the rather moderate level of financial system integration in the region. To take banking as an illustration, there may well be quite considerable integration across the borders of immediate neighbours: between Hong Kong and Mainland China, for example, or between New Zealand and Australia.

In today’s speech, I want to highlight some of the key features of this highly integrated economic system and discuss some of the challenges it may pose in the future. In particular, I will discuss how the changing shape of the world economy affects the task of national monetary authorities, such as the MPC. In other words, how can economic policy-makers maintain stability when we are constantly in danger of being buffeted by powerful global economic forces? The rise of Asia and the changing shape of the world economy A key feature of the new global economy we now inhabit is the increasing economic strength of the Asia-Pacific region. Chart 2 shows that the top ten economies in this region – led by China, Japan and India – have already overtaken both the European Union and the United States in their share of world economic activity. This compares with the situation thirty years ago when these economies were collectively just half the size of the European economy, and about two-thirds the size of the United States. 2  BIS central bankers’ speeches  Chart 2 – The rise of Asia Percentage share of world GDP, at current market prices and exchange rates US  EU-27  40%  Asia-pacific G10 *  35% 30% 25% 20% 15% 10% 5% 0% 1980  1990  2000  2010  *: Includes Australia, China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan Province of China and Thailand.
Fundamental to building and maintaining this trust is the need for every staff of the Bank to perform at our utmost and positively shape the Bank’s reputation in the eyes of the public. In this, Governor Ismail Ali led by example. There are two principles – trust and integrity – which were amongst the key principles that guided Governor Ismail Ali, and with which he formed the pillars of Bank Negara Malaysia. Governor Ismail Ali was strict, sharp, and straightforward. Meticulous in his duties, he was respected for his sound knowledge of central banking and rule of law. These virtues led him to set the highest standards of professionalism and excellence for himself, his staff and the people he dealt with. By his own admission, this made him a difficult leader to work for – but to create the able talent to build this fledgling nation, he demanded nothing less. Bank Negara Malaysia is proud to continue this tradition of fostering talent such as through the establishment of the Tun Ismail Ali Chair on Monetary and Financial Economics at the University of Malaya. This year, in conjunction with our celebration today, the Bank has awarded the Tun Ismail Ali scholarship to Miss Thulaja Thessa Vasudhevan who is pursuing her master’s degree in Nature, Society and Environmental Governance at Oxford University. Beneath Governor Ismail Ali’s reserved appearance, lies a warm soul.

It is only right that we continue to capture these recollections and stories of Governor Ismail Ali and therefore, the Bank will publish a Second Edition of this book. It is our hope that the vision, dedication and resilience of Governor Ismail Ali would inspire our future generations, be it central bankers or not – and to prepare them as they partake in the dynamic financial ecosystem. This book chronicles, not just who he was and what he did, but also what Governor Ismail Ali stood for and what he envisioned for this country. It is said that there are two things parents should give their children: one are roots, and the other are wings. As the first Malaysian Governor of Bank Negara Malaysia, Governor Ismail Ali planted the principles that now run deep within the Bank and gave us the vision to soar towards. As guardians of the financial system, central bankers must maintain public trust. Not only does a 1/3  BIS central bankers' speeches  central bank need to be careful custodians of monetary policy and an able adviser to the Government, we need to be seen and recognised as the competent authority to discharge these roles. A central bank needs to engender confidence. Governor Ismail Ali’s immutable emphasis on the integrity of the Bank’s moral compass and the strength of our competency stems from a sense of duty, Amanah.