samchain/econo-pairs-v1 huggingface dataset:
The system also presents other positive features. The Fund serves as a buffer between wide swings in petroleum revenues and domestic spending. The decisions relating to petroleum revenue spending over the central government budget can be made independently of the size of the revenues in the period. As a result, swings in petroleum revenues do not have an automatic impact on the Norwegian economy. As I mentioned earlier, however, we spent a large share of our petroleum wealth in the 1970s and early 1980s. In the years 1982-83 to 1986, the state acquired considerable and well hidden savings in the form of higher government deposits with Norges Bank, matched by higher foreign exchange reserves. This capital was used during the recession and the currency crisis in the following years. It can therefore be said that the entire cash flow from petroleum activities was spent over the central government budget up to 1995. However, the revenues were used to finance current government investments in petroleum activities. After the construction of the Petroleum Fund started in 1996, the spending of petroleum revenues has been fairly independent of the cash flow in each year. This is a positive result. We also see that oil price swings have had little impact on the krone exchange rate. The correlation between changes in the nominal value of the krone and oil prices has been very low since 1999.

In that case, the country is poorly poised to cope with an end to easy money. The economic literature includes many studies that look at the relationship between income from natural resources and economic growth. An article by Jeffrey Sachs and Andrew Warren entitled “The curse of natural resources”2 sets the basic tone: Countries with large income from natural resources  1  Hermod Skånland, ”Norge og oljen – gamle eller nye utfordringer”. (Norwegian only). Lecture, 2 November 1988. 2  Jeffrey D. Sachs and Andrew M. Warner, The Curse of Natural Resources. European Economic Review 45 (2001), pages 827-838. 1/8  have generally recorded weaker economic growth than comparable countries. Professor Thorvaldur Gylfason illustrates this relationship for a large selection of countries in an article published last year.3 Both Gylfason and other authors4 in this field point to Norway as an exception to this general rule. Norway’s management of its petroleum revenues is often referred to as an example of successful organisation. 5  The construction of the Petroleum Fund In 1990, Norway established a transparent system for managing government petroleum revenues. All the revenues are transferred directly into a foreign currency fund, the Petroleum Fund. The Storting (Norwegian parliament) must adopt a resolution on any use of the capital in the Fund. Spending will be prioritised in the same way as for other government spending. There is no hidden use of revenues, or any use for special purposes. The Fund is strictly and effectively “out of bounds” to special interests.
(i)  Distortions to cash balances  Money - notes and coin - may no longer, as Sally Bowles claimed, make the world go round, but, even in a world of plastic, it oils the wheels of transactions. Cash still accounts for a large number of transactions, albeit a smaller fraction of the value of all transactions. The opportunity cost of holding cash is the interest rate on deposits. Inflation raises nominal interest rates and hence this cost. So agents economise on their real money balances, and incur additional costs in the form of more frequent trips to the cash dispenser - the so-called ‘shoe-leather costs’ of inflation. The traditional view was that these costs could be measured by the area under the money demand curve. Such estimates were typically small, and left researchers wondering if the costs of inflation were really all that important. But high inflation rates can affect more than just money demand. If agents economise on money balances, transactions costs may rise in markets for goods, labour and assets. As argued by Hahn (1965) and more recently articulated by Wallace (2001), many monetary models contain hidden inconsistencies in the sense that they ignore the credit or trade frictions - in particular, imperfect  BIS Review 68/2002  11  monitoring and enforceability - that give to money an essential role in the first place. To assess the welfare implications of inflation we need a theoretical framework that takes seriously the role of money in all these transactions.

(iv)  Costs of changing price lists  The costs of changing price lists and catalogues - so-called menu costs - are generally agreed to be of little direct consequence. But they may produce a degree of nominal rigidity in wages and prices which takes on greater significance. Inflation now causes relative price variability as not all firms are able to change their prices at the same time. The cost of greater relative price variability was discussed above, and continues to be an active field of research. Recent work at the Institute of Fiscal Studies (2002) shows that when inflation is higher, there is a larger dispersion in the inflation rates faced by individual households. This finding points strongly to the role of nominal rigidities in contributing to relative price dispersion. Taken together, the verdict of economics, history and common sense is that inflation and deflation are costly. It is clear that very high inflation - in extreme cases hyperinflation - can lead to a breakdown of the economy. There is now a considerable body of empirical evidence that inflation and output growth are negatively correlated in high-inflation countries. For inflation rates in single figures, the impact of inflation on growth is less clear.
However, increases in catastrophic risk events can provide both an opportunity and a threat to insurers. There is an opportunity for growth in underwriting new products. But the combination of concentrated exposures to large catastrophe losses, inadequate risk management and/or the potential for mis-pricing could undermine the sustainability of businesses. The insurance industry is already taking steps to stay ahead of the climate curve on the liability side with the establishment of Flood Re; ClimateWise forums; more sophisticated underwriting techniques; the development of climate change products and carbon offsets. However, it is worth bearing in mind that, even though the full impacts of climate change often may not be visible in the short term, it is well worth insurers being alert to the emerging risks, including those emanating from policy makers. But insurers, as long term investors, are also exposed to changes in public policy as this affects the investment side. One live risk right now is of insurers investing in assets that could be left “stranded” by policy changes which limit the use of fossil fuels. As the world increasingly limits carbon emissions, and moves to alternative energy sources, investments in fossil fuels and related technologies – a growing financial market in recent decades – may take a huge hit. There are already a few specific examples of this having happened. The Bank of England has been carrying out analysis to better understand these risks.

The main reason for the growing deficits of recent years is not the ageing of the population, but early retirement. The pension system deficit has been growing rapidly since 1992, when the minimum retirement age requirement was abolished. A new bill to correct this situation has already been approved by parliament. As regards privatization, public enterprises still play a central role in Turkey. We all know that a stronger privatization program would reduce the state’s involvement in commercial and industrial activities, and that this in turn would reduce the budgetary burden of subsidies and deepen the capital markets by encouraging wider ownership of shares. Since privatization has come to be seen as a key element of policies aimed at improving resource allocation, it will be essential to modernize Turkey’s legal and institutional framework for privatization and to bring it more in line with EU norms and the norms now prevailing in some of the region’s more successful transition economies. An adequate legal foundation will be the key element of such reforms. Important steps have recently been taken in this direction, and the constitution has been amended to reduce the legal obstacles obstructing the privatization process. And in order to attract foreign investors who could be interested in privatization, long awaited amendments to the constitution concerning international arbitration have also been approved by parliament. The agricultural sector is especially important in Turkey. It still contributes around 15% of GDP and accounts for about 42% of all employment.
Denis Beau: European Association of Cooperative Banks Keynote speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the General Assembly of the European Association of Cooperative Banks, 29 April 2022. * * * Ladies and gentlemen, I’m delighted to be with you, even if I would have preferred a more serene context after two years of crises. The war in Ukraine is casting a new shadow on our times with deep and possibly long standing consequences on economic and financial relations at global and regional levels. In the short run, it could alter significantly our macroeconomic and macrofinancial environment, bringing new challenges and amplifying old ones both for financial institutions and public policy makers and supervisors. Today, I would like to discuss some of these challenges, by sharing with you, with my central banker and supervisor lens, my perspective on short run challenges associated with the macroeconomic and the financial stability outlook and on longer term challenges associated with climate change and digitalisation of finance. 1.The macroeconomic outlook: the challenges associated to a new interest rates environment The war in Ukraine is likely to play an important role in the growth and price perspectives in the euro area, as it represents a so-called “slow-flationary” shock whose impact in terms of length and magnitude is highly uncertain at the current juncture.

The ECB’s asset purchases are being expanded in terms of both size and composition: the monthly purchase volume has been increased from € billion to € billion and the universe of eligible assets now includes non-bank corporate bonds. Purchases are intended to run until the end of March 2017 – or beyond, if necessary – , and in any case until the Governing Council sees a sustained adjustment in the path of inflation to levels close to 2% over the medium term. Taking into account the current outlook for price stability, the Governing Council expects the ECB’s key policy rates to remain at present or lower levels for an extended period of time, well past the horizon of the net asset purchases. We are confident that the very accommodative monetary policy stance will provide further support to the euro area recovery and will accelerate the return of inflation to levels that we consider to be consistent with our objective. The Governing Council has done and, within its mandate, will continue to do whatever is needed to pursue its price stability objective. Our very accommodative monetary policy stance has provided considerable support for the euro area recovery. By supporting growth prospects, our actions have also been beneficial for financial stability.
The Singapore dollar has been included as one of eight settlement currencies in the Continuous Linked Settlement (CLS) system - a global initiative aimed at eliminating foreign exchange settlement risk arising from time zone differences. Going forward, the outlook for the other segments of the financial sector has improved. The stock market has rebounded with daily transactions nearly tripling in Q2, compared to Q1. With the expected pick-up in domestic and regional economic activity in H2 2003, we are also likely to see further improvement in commercial banking. The financial sector is expected to post a small positive growth this year, following the 4.8 per cent contraction in 2002. BIS Review 33/2003  1  Enhancing supervisory framework for sound financial sector On the supervisory and regulatory front, MAS continued its efforts to move away from a prescriptive, rule-based approach to a more flexible, risk-based approach. This entailed strengthening risk-based and disclosure-based regulatory frameworks, enhancing corporate governance standards to foster better risk management on the part of institutions, and empowering consumers to make better informed investment decisions. Let me touch on key initiatives in each of these areas. An important step towards a disclosure-based regime was the full implementation last year of the Securities and Futures Act and Financial Advisers Act. MAS will continue to refine the regulatory framework for capital markets, taking into account industry feedback. In the area of risk-based supervision, we implemented last year the new Liquidity Supervision Framework for banks.

Last, but not least, the CBC launched an external evaluation of its performance in the two central areas of monetary policy and financial stability by convening a panel of reputed academics and central bankers, some of whom are here today. We have committed to present the report to the Chilean Senate next September and to take the panel´s recommendations as a guidance to further strengthening reliability, adaptability and transparency of our work in the years to come. Page 7 of 8  Central Bank of Chile July 2019  Closing remarks and acknowledgements In sum, I underscore the importance of public trust as foundation of modern monetary policy and for the legitimacy of independent central banks in performing their broader mandates. This is ingrained in the agenda of our Annual Conference this year: new challenges to central bank independence, the management of central bank credibility, and the designing of the best communication strategies for an effective monetary policy. I would like to thank Ricardo Reis for being the external organizer of this Conference, as well as to Ernesto Pastén and Diego Saravia for being our local counterparts. I also thank all presenters and contributors to our program and the conference volume that will be published thereafter. I also thank to our friends and colleagues from the International Monetary Fund for being here and for organizing the conference further down the week.
There should be wider benefits from contracts based purely on the risk-free rate rather than embodying liquidity premia and credit-risk premia of various kinds. That is something for the industry. But better liquidity-insurance technology and better risk management will not abolish the credit cycle. Looking further ahead, the big question will be whether the authorities can tame the credit cycle without sacrificing the incentives to enterprise that are so important in a dynamic economy. The debate about the micro regulation of banks will need to take account of whether or not we can deliver that macroprudential objective. For too long, the debate has got sidetracked. Into whether we can rely on monetary policy “mopping up” after bubbles burst. Or into whether monetary policy could be used to control asset prices as well as doing its orthodox job of steering nominal trends in the economy, which I should say can include taking account of prospective risks of inflation volatility over the medium term. Ideas circulating already include minimum margin requirements or capital ratios that vary not only across firms but also through time as credit conditions change. We need calmly to explore whether there are also other possibilities. But let me make this absolutely clear: there are formidable obstacles to finding a solution. In the monetary sphere, a regime of floating exchange rates allows individual countries to pursue their own domestic monetary objectives.

We believe that a stable and dynamic financial system that serves the needs of the economy and the public cannot be built on regulation alone. Responsible and competent board and senior management who manage the risks of their financial institutions well are also critical. Growing interest in Islamic finance 10. The general outlook for Islamic finance remains positive despite the negative spillover from the financial crisis. As a basic tenet, Islamic finance emphasizes that financing activities should underpin real commercial activities. Due to its widening acceptance and its appeal as a means for ethical investment, the industry is expected to continue growing at twice the pace of its conventional counterpart. As such, surveys estimate that the industry will soon cross the $ trillion mark in total assets. 2  BIS Review 84/2010  11. But similar to conventional banks, Islamic financial institutions have been impacted by the economic slowdown and resulting weaker asset prices. Some financial institutions have been badly affected by the over-concentration in illiquid assets and overlyoptimistic business plans. The Islamic industry therefore needs to take heed of the lessons learnt from the current crisis and pay greater attention to issues related to capital adequacy, market liquidity and risk management. Overcoming these challenges will require strong cooperation within the industry and across different jurisdictions. MAS, as a full and Council member of the Islamic Financial Services Board (IFSB) since 2005, will continue to advocate and support multi-national initiatives that would bring about such improvements. Singapore as a global city for business and finance 12.
Another is the bond market; in the early 1990s bond rates in many parts of the world declined to low levels and when the U.S. Federal Reserve then raised its instrumental rate at the beginning of February 1994, bond rates moved up sharply in the following months. To sum up, new interesting theoretical and empirical arguments have been put forward in the past two decades against the notion that financial markets are efficient. They show that via increased or decreased demand, investors may well pull financial prices away from their fundamental level. Overreactions can occur so that excessive euphoria drives prices unduly high, just as undue pessimism can push them down too far. How can households benefit from stock markets? The combination of Markowitz’ approach to risk diversion and the efficient-market hypothesis meant that for a long time the best advice for saving in equity has been to build up and hold onto a broad portfolio that more or less mirrors the stock market as a whole. In that way, even an amateur could obtain the relatively higher yield that the stock market provides in the long run compared with other financial investments. This diagram shows that such a diversified share portfolio gives an average annual real return of approximately 7 per cent, which is appreciably more than financial alternatives (Diagram 1). The next diagram shows, moreover, that the level of this return has been stable over long periods (Diagram 2).

A framework that takes some signals from market prices could be more forward looking, for example, recognising the market pricing of climate risks, rather than a backwards view of the risks of failure. However, any alternative framework may bring in new risks, potentially in being over risk-sensitive; or for example if provisions are linked to credit spreads, there may be incentives to value assets nearer the top end of the plausible range, understating the credit spread. While this is likely a smaller risk for traded corporate bonds, the shift to less liquid assets brings in greater scope for valuation uncertainty, which may also need to be factored into the FS. Conclusion  I have focussed today on risks inherent in the MA, in particular on risks from less liquid assets stemming from uncertainty about the credit rating, uncertainty around valuations, and uncertainty about the amount of MA benefit that should be taken as a credit to insurers’ balance sheets. These are all risks that insurers’ Boards and senior management need to be across and to understand the vulnerabilities in assumptions that have to be made. The MA is a significant benefit for firms, in bringing forward unrealised profits that are then available to be deployed to grow businesses, or to reward shareholders. However, an addition to the risk-free rate is appropriate for annuities where they are well matched, and the MA is a valuable source of resilience for annuity writers.
East Asia in particular has become more integrated than ever before as manifested by the size of intra-regional trade, which now accounts for about half of the region’s total trade in 2014, and the increase in intra-regional investment flows (foreign direct investment for ASEAN-10 for example rose more than 50 percent to 17% in 2013 from 11% in 2003). Regional cooperation such as the harmonisation of rules, liberalisation and deregulation in various economic sectors, enhancing regional safety nets, has also intensified since the Asian financial crisis. The increase in the network of dialogue has also brought the region closer together. These trends have coincided with Asia’s increasing significance, influence and integration in the world economy, with the region contributing to more than half of global growth since 2008. There is hence a growing international interest to better understand the region and the implications of the greater regional integration in Asia within the context of the global economy. I believe we have an eminent and well qualified panel of speakers to provide us their perspectives on this topic. I hope you enjoy listening to their views. I am certainly looking forward to it. On that note, I wish to thank OMFIF for co-hosting this debate with Bank Negara Malaysia. BIS central bankers’ speeches  1

In modern times, most societies would demand proper protection of consumers when they purchase a wide variety of goods and services, such as food, electrical appliances, drugs, health care and financial services. Consumers, as compared to suppliers and their intermediaries, are normally in a disadvantaged position in terms of product knowledge and bargaining power. Therefore, they need to be protected from unscrupulous sales practices or misrepresentations. Regardless of what kinds of goods or services are involved, the basic principle in consumer protection is that consumers should be treated fairly. In essence, what it means is that consumers should be able to know what they are buying, the costs involved and all other relevant terms and features of the transactions and should not be subject to high handed sales tactics. In Hong Kong, when a customer walks into a typical retail bank, he or she can undertake a wide variety of financial transactions, ranging from conventional banking services, such as deposits, currency conversion, credit cards, remittances and loans, to the purchase of wealth management or insurance products. This is what we call “universal banking”, a regime in which banks operate like financial supermarkets. Naturally, banks like the universal banking regime as it offers non-interest income such as fees and commission as well as diversification of businesses. At the same time, customers also like universal banking as it offers great convenience in the form of a one-stop service instead of having to go through different firms for different types of financial transactions or products.