samchain/econo-pairs-v1 huggingface dataset:
While pursuing our primary objectives of safety and soundness and policyholder protection, we also have regard to a number of important considerations, including the competitiveness of the sector and the contribution it can make to long-term economic growth. We are also mindful that as part of its review of the Future Regulatory Framework, the Government has proposed to give the PRA a new secondary objective to promote long-term economic growth and international competitiveness, alongside our existing secondary competition objective. With all of those factors in mind, we think we can deal with the risks we are worried about while also supporting the government’s wider objectives. Specifically, some in the insurance industry have the impression that we are opposed to any release of capital requirements for insurers. I want to be very clear that that is not the PRA’s position – indeed, following a lot of work and examination of the evidence over the last year or so we think that a substantial capital release should be possible while continuing to protect policyholders adequately.

Buoyed by favourable economic and financial market conditions, 2004 marked another year of strong profitability performance by the banking system where the combined pre-tax profits rose by 16.1% to RM11.8 billion. Banking institutions have diversified their revenue source by venturing into a broader range of fee-related activities, which yielded a strong growth of 17% for the banking sector as a whole. This shift in the sources of revenue has been gradually taking place over the past few years as banking institutions seek to lessen their dependence on interest-based activities as their main source of revenue. With the growth in the middle-income group in Malaysia, banking institutions are poised to provide value-added services to this increasingly affluent group including wealth management services and sale of unit trusts and bancassurance. Perhaps the biggest contributor to strong earnings has been the steady improvement in asset quality, consistent with a gradually improving economy. The net non-performing loans have declined to a record low of 5.4% as at end-March this year, the lowest level since the Asian financial crisis. Improvement in economic conditions is a key reason for the sustained decline and credit quality is on track to improve further, more so as the economy improves. The underlying strength of the Malaysian banking system is also confirmed by trends in capital adequacy. The banking sector continued to exhibit strong risk-weighted capital ratio where the level has remained above 13% for 33 consecutive months and continues to improve.
Three years later, Banco de Portugal came on board thanks to Mr Rui Pimentel, to jointly create a conference that certainly grows into a recognizable brand name, set with the aim to inform of all relevant payment-related matters, to share knowledge and to educate, to influence and last but not least to network and socialize. Payment systems and market infrastructures – why this topic in the first place? There is no doubt that payment systems comprise vital part of countries’ economic and financial infrastructures. However, it was only the last two decades or so when this issue gained in topicality, concerning both, service providers and policymakers and central banks. This is because of the new global landscape, which shaped by the streams of globalization, the dramatically rising volumes of payments and the advancing fintech innovation has returned payment systems to the focus once again. With their safety, resilience and efficiency becoming critical to the financial stability and the well-functioning of the economy as a whole. We started this Conference as domestically oriented, having the domestic financial sector as target audience, to later on move to expand internationally from Southeastern and Central and Eastern Europe to the Black Sea Region and the Middle East with Northern Africa countries joining us lately. Allow me to extend my sincere appreciation to the Vice Governor Maja Kadievska Vojnovic and to Igor Velichkovski, Head of the Payment Systems Department within the NBRM for successfully turning this conference into a truly international one.

To be frank, this very gradual normalisation has already started. I will begin by focusing on the progress that our accommodative monetary policy has already achieved, before talking about prospects for the future, and then come to the necessary completion of non-monetary tools in Europe. **  I. The progress that we have already achieved Economic recovery in the euro area is here [slide]. It is robust and broadly based across countries and sectors. Our latest ECB forecasts ii confirm this: growth should stand at 2.2% in the euro area in 2017, that is, a significant upward revision of 0.3 point compared with June’s forecast of 1.9%. This means that for the second consecutive year, euro area growth will be  Page 2 sur 8 comparable to that of the United States. And, according to Eurosystem calculations, the output gap will return to close to zero by the end of the year (-0.6%). The non-standard monetary policy that we have been conducting since 2014 is contributing to this acceleration of growth in the euro area, by fostering very favourable financing conditions and by supporting domestic demand. In concrete terms, this acceleration results in more jobs – over 6 million jobs created in the euro area since the start of 2013 – and in a pick-up in investment. Corporate investment in particular, decisive for supply capacity, is clearly recovering: up 4.7% in 2015, 6% in 2016, and is expected to be up 4% in 2017 and 2018.
This would need to be every bit as radical as the first, but would require central banks to engage with, and draw on, the general public – their “folk wisdom” – as never before. Central banks were put on earth to serve the public. The second revolution is about putting the public more firmly into public institutions. At a time of raised expectations and lowered trust, a reinforcement of central banks’ social contract with society could make them even more effective in the period ahead, whether you are the Bank of England (into its fourth century) or the Bank of Estonia (commencing its second). Let me start by saying a word about the central bank revolution of the recent past, before turning to the present and the future and the challenges and changes that may lie ahead in engaging the general public. The Bank of England has already begun taking important steps towards increasing its engagement. Some 1  For example, Tucker (2018). 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  of the steps taken by central banks may have relevance to other public institutions, many of which face similar challenges of raised expectations and diminished trust among the general public. A Central Bank Revolution You do not typically associate central banks with revolution, unless the “r” is silent. Yet I do not think it is an exaggeration to say that, over the course of recent decades, a revolution has swept through pretty much every central bank on the planet.

This would increase greatly the chances of Mackay’s “madness of crowds”. Finally, let’s try an interior solution – say 1,000 people each spending 10 hours. This is large enough a number to gather most of the benefits of diversity, but small enough to harvest the benefits of deliberation. It would blend expert and non-expert opinion in a way which would allow collective deliberation. This is the “wisdom of crowds” solution. Figure 2 plots the relationship between insight and the numbers of people providing information in a group, in stylised terms. You might call it the “Insight Curve”. The curve (shown in dotted lines) results from combining the effects of a downward-sloping “deliberation” curve and an upward-sloping “diversity” curve. Consistent with the evidence, both exhibit diminishing returns. The inverted U-shaped “Insight Curve” identifies the optimal number of people to draw on to inform a complex decision. The two corner solutions – the “Oracle” (single person) and the “Madness of Crowds” (population) – involve very different trade-offs between diversity and deliberation. A single source of information gives you plenty of time for deliberation – a hermit-like 10,000 hours. But it leaves you short of diversity of thought. A population-wide pool of information gives us as much diversity as you could ever wish. But it leaves you long fast-thinkers, short slow-thinkers and vulnerable to irrationality. 15  All speeches are available online at www.bankofengland.co.uk/speeches  15  Both are inferior to an intermediate solution – the “Wisdom of Crowds” solution.
For me, the explanation lies in a second “i” – institutions. I will argue that it was the emergence of institutions that explains the rise in the other capitals that were essential pre-conditions for growth (human, social, infrastructural, intellectual etc.) It was the emergence of these same institutions which also cushioned the damaging effects of recessions. As with sight, to gain a true perspective on growth you need two “i"s.  This is, in one sense, not a new story. A number of distinguished economists have, over the years, placed institutions centre-stage in explaining secular trends in social and economic development. They include classical economists such as Adam Smith and John Stuart Mill and, more recently, Nobel Laureates such as Ronald Coase and Douglass North. 21  Broadberry and Wallis themselves conclude that the most likely cause  of fewer downside growth surprises since the Industrial Revolution has been the rise of institutions. 21  Smith (1776), Mill (1848), Coase (1960), North (1991). 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Empirical work supports the institutional hypothesis. Cross-country growth regressions suggest nations with high-quality institutions out-grow those without. 22  Detailed country case studies reach a similar conclusion. For example, institutional quality has been used to explain the very different economic fortunes of North and South Korea after separation. The absence of institutions is, for some, Why Nations Fail. 23  If institutions hold the key, what exactly do we mean by them and how exactly do they come about?

The 1992 tax reform streamlined the tax system and tax rates were substantially reduced. It became easier for investors to find projects that yielded high returns. State-ownership policy in Norway was changed to introduce a clearer division of roles and healthier commercial principles. And not least, the EEA Agreement provided access to the European Single Market for most of the Norwegian business sector. When oil prices fell again in 2014, Norway was better prepared. But as a nation, our income has nonetheless been reduced by the fall in oil prices and we should be cautious about introducing measures that will increase consumption. Reasonable measures in a period of restructuring are those that promote economic growth over time, without crowding out private enterprise. Monetary policy can facilitate restructuring. And it is able to do so because there is confidence that inflation will remain low and stable. With low and stable inflation, a weaker krone and higher import prices will not pass through to wage growth and inflation, as was the case after the fall in oil prices in 1986. On the contrary, the depreciation of the krone over the past couple of years has compensated for more than a decade of high cost inflation. This has improved the competitiveness of Norwegian firms – in foreign and domestic markets. In addition, lower interest expenses are easing the burden for many households and firms. There is still room for manoeuvre in monetary policy.
Chart 9 plots the average holding period of investors in the US NYSE index since 1940. This is estimated by simply looking at the ratio of the market value of the shares outstanding to the value of shares traded in any given year. It suggests a striking pattern. In 1940, the mean duration of US equity holdings by investors was around 7 years. For the next 35 years up until the mid-1970s, this average holding period was little changed. But in the subsequent 35 years average holding periods have fallen secularly. By the time of the stock market crash in 1987, the average duration of US equity holdings had fallen to under 2 years. By the turn of the century, it had fallen below one year. By 2007, it was around 7 months. Impatience is mounting. Chart 10 plots the same measure for the UK over a shorter window. It shows a similar trend. The average duration of equity holdings has fallen from around 5 years in the mid-1960s to around 2 years in the 1980s. At the turn of the century, it had reached just over a year. By 2007, it had fallen to around 7 ½ months. Chart 11 shows the average duration of equity holdings across a wider set of international equity markets over the past 15 years. The trends are much the same. Average holding periods have fallen. Today, they are typically below one year. For the Shanghai stock index, the mean duration is closer to 6 months.

– Present, available at http://econ161.berkeley.edu/TCEH/1998_Draft/World_GDP/Estimating_World_GDP .html Favaro, K, Karlsson, P and Neilson, G L (2010), “CEO Succession 2000–2009: A Decade of Convergence and Compression”, Strategy+Business 59, Booz & Company. Figner, B, Knoch, D, Johnson, E J, Krosch, A R, Lisanby, S H, Fehr, E and Weber, E U (2010), “Lateral prefrontal cortex and self-control in intertemporal choice”, Nature Neuroscience 13, pp 538–539. Franke, R H, Hofstede, G and Bond, M H (2007), “Cultural Roots of Economic Performance: A Research Note”, Strategic Management Journal 12(S1), pp 165–173. French, K R (2008), “The Cost of Active Investing”, Journal of Finance 63(4), pp 1537–1573. Giffords, B (2010), “High Stakes Ahead”, Automated Trader, 2010Q1. BIS Review 114/2010  19  Goetzmann, W N, Ibbotson, R G, and Peng, L (2001), “A New Historical Database for the NYSE 1815 to 1925: Performance and Predictability”, Journal of Financial Markets 4(1), pp 1–32. Guven, C (2008), “Reversing the Question. Does Happiness Affect Consumption and Savings Behavior?”, Deakin University, School of Accounting, Economics and Finance, Working Paper Series 2008/20. Kahneman, D and Tversky, A (1979), “Prospect Theory: An Analysis of Decisions Under Risk”, Econometrica 47, pp 313–327. Karlsson, P, Neilson, G L and Webster, J C (2008), “CEO Succession 2007: The Performance Paradox”, Strategy+Business 51, Booz & Company. Laibson (1997), “Golden Eggs and Hyperbolic Disounting”, The Quarterly Journal of Economics 112(2), pp 443–77. League Managers Association (2010) “End of Season Statistics”. Levine, R (1997), “Financial Development and Economic Growth: Views and Agenda”, Journal of Economic Literature 35(2), pp 688–726.
But in case four months is too long to wait, I want to use my comments today to set out our assessment of prospects for financial stability as we near the end of 2006. Recent developments Our view remains that near-term risks to UK financial stability are low. That is mainly a reflection of the continuation of broadly benign macroeconomic conditions in the UK and globally A rebalancing in global sources of growth does appear to be under way - and we are watching developments in the US economy and movements in the US dollar closely – but overall the global economy remains strong. UK financial institutions profitability and capital levels have remained robust, providing them with a buffer against future disturbances. Financial markets have also demonstrated resilience over the past six months. Markets were turbulent at the time we were preparing the July FSR. It was unclear whether we were at the start of a significant correction. The subsequent rebound in asset prices, and declines in measures of volatility, showed that it was a pause not a sustained change in risk appetite. More recently, we have seen huge losses at the Amaranth hedge fund. These losses exceeded those of LTCM, yet markets facilitated a smooth wind down in positions. That is reassuring though some questions remain about the capacity of markets to handle such a disturbance if the macroeconomic backdrop and the balance sheets of major institutions were less rosy.

Credit derivatives have contributed to dramatic changes in the process of credit intermediation, and the benefits of these changes seem compelling. They have made possible substantial improvements in the way credit risk is managed and facilitated a broad distribution of risk outside the banking system. By spreading risk more widely, by making it easier to purchase and sell protection against credit risk and to actively trade credit risk, and by facilitating the participation of a large and very diverse pool of non-bank financial institutions in the business of credit, these changes probably improve the overall efficiency and resiliency of financial markets. With the advent of credit derivatives, concentrations of credit risk are made easier to mitigate, and diversification made easier to achieve. Credit losses, whether from specific, individual defaults or the more widespread distress that accompanies economic recessions, will be diffused more broadly across institutions with different risk appetite and tolerance, and across geographic borders. Our experience since the introduction of these new instruments - a period that includes a major asset price shock and a global recession - seems to justify the essentially positive judgment we have about the likely benefits of ongoing growth in these markets. Despite the benefits to financial resilience, the changes in the credit markets that are the subject of your conference have also provoked some concerns and unease, even among those on the frontier of innovation and the most active participants in these markets.
The trend here has also been more closely correlated to the level of economic activity, with prices falling over the last three years. However, the price decline in Malmö [9 per cent] has been considerably gentler than in Stockholm [24 per cent] or Gothenburg [18 per cent]. These declines have been mainly caused by lower rents, which essentially have been a result of lower demand for office premises due to the subdued economic activity. It also makes sense that Malmö has been affected less than the other major cities given that the slowdown has not been as severe here. The rapid rise in prices and their subsequently rapid decline points to a trend not all that dissimilar from that experienced during the property crisis at the beginning of the 1990s. Nevertheless, there are many differences between the two situations. There is no doubt that we experienced a bubble at the beginning of the 1990s, when prices largely lost their relationship to fundamentals and were instead underpinned by expectations of future price rises. For a period of time the direct yield on property was 8 percentage points lower than the yield on a government bond. So investors must have expected prices to increase a good deal more than 8 per cent in order to compensate them for the risk of investing in property rather than bonds. In this case, you can really say that expectations of price rises were high! This is not the situation today.

The use of this type of extreme scenarios, which are plausible but have a relatively low probability of occurring, is an integral characteristic of the main international stress tests and is consistent with the goals of prudential regulation which require that banks have sufficient capital to absorb unexpected losses. The adverse scenario simulates a further increase in energy prices and a greater impact of bottlenecks on global trade. This drives up inflation and, consequently, accelerates the monetary policy response. It also entails a worsening of financial conditions.31 Under the severe scenario, the price shocks are slightly more significant than under the adverse one, but the main difference is the inclusion of a more marked worsening of households’ and firms’ confidence, which causes further falls in the main domestic demand variables (consumption and investment).32 The adverse scenarios for the foreign economies that are important to Spanish banks are calibrated so that their severity is consistent with the impact of the shocks on the Spanish economy. These scenarios thus enable a rigorous analysis of the banking sector’s resilience to the risks deriving from the current geopolitical setting. 31  Specifically, further increases in the sovereign risk premium and the spreads in bank lending to households and firms, and a decrease in the value of the assets that make up household wealth, with substantial falls in stock prices and house prices.
For example, the Federal Reserve introduced the Commercial Paper Funding Facility (CPFF) to reduce rollover risk in the commercial paper market, the Federal Reserve and other central banks’ massively expanded the ability of banks to obtain dollar funding through the TAF and associated foreign exchange swap programs; the Treasury guaranteed money market mutual fund assets; and the FDIC increased deposit insurance limits and set up the Temporary Liquidity Guarantee Program (TLPG) to backstop bank and bank holding company debt issuance. Having described “what” happened on the liquidity front during the crisis, I next want to examine, in a bit more detail, “why” it happened. To do this, I will lay out a simple conceptual framework that I will then use to assess what can be done to mitigate the risk of such runs occurring in the future. As a starting point, I will talk about how unsecured lenders react in a crisis, and then I will consider the behavior of secured lenders. Unsecured liquidity providers run for two basic reasons. First, they run because there is a risk that the company they are lending funds to is insolvent. In other words, there is a risk that the assets will be worth less than the liabilities, creating the potential for loss to the creditor. The second reason that unsecured creditors run is the risk that they will not be repaid in a timely way.

We are trying to build financial capabilities among the population lunching the project that has a goal to raise the awareness for the importance of savings. At the national level, by improving the cooperation between the regulatory authorities, it is vital to ensure that the respective strategies are aligned to achieving the common goals of financial education and financial inclusion. Since last year, there have been some efforts for institutional arrangements to bring authorities together in the Coordinating Body of the Regulatory Authorities for Financial Education in Macedonia to secure a joint commitment towards clearly defined and measurable financial education and financial inclusion goals. With joint strength, we will establish national co-ordination frameworks, and our main goal is to define the national financial education and financial inclusion strategies. While we focus on financial education initiatives at the national level, equally important is that adequate attention be accorded at the global level. We begin this two-day regional conference with our vision firmly focused on our long-term goal of universal access for children and youth to financial services. This event provides an opportunity that brings together knowledge, expertise and best practices from all across the Europe and Central Asia that I am sure will prove useful for all of you here and will provide fruitful meetings, interesting sessions and most importantly – will make an impact. Thank you very much! 2  BIS central bankers’ speeches