samchain/econo-pairs-v1 huggingface dataset:
BIS Review 30/2000  4  Local banks have upgraded their corporate governance. They have renewed their boards, appointed nominating committees, and emphasised recruitment of talent, including from abroad. The structures are now in place. But getting the new forms to work as intended will take time and effort. Banks must persevere to strengthen their boards and management, their systems of recruitment and promotion, and their ethos of shareholder value, meritocracy and professionalism. Investing public The public needs to shift more towards an investment rather than a punting mentality. Few fully appreciate the meaning of caveat emptor: that they take responsibility for their own investment decisions, and accept the risks along with the upside. Unfortunately this is only brought home when the market crashes, or when problems surface. The tech stock mania has reached Asia. Even Abby Cohen of Goldman Sachs, the foremost Wall Street bull, last week sounded a cautionary note about tech stocks, and stressed the importance of a diversified investment portfolio. In Hong Kong, tom.com was 669 times over-subscribed. An old lady queuing up for her application form was heard to ask “What is the internet”? People believe that tom.com is a sure bet, even though it has no business and no revenues to date. Mr Andrew Sheng, Chairman of HK’s Securities and Futures Commission, has been trying to cool the frenzy. But he told me that investor education does not work. This is the universal lament of regulators.

The regional network provides figures for the same quarter far earlier. In 2008, the regional network was able to provide clear evidence that mainland output fell markedly in the fourth quarter as early as December of the same year. National accounts figures for the fourth quarter were published more than two months later, on 19 February 2009. Employment in Norway has held up well through the downturn. It appears that unemployment will be considerably lower than expected. Seasonally adjusted registered unemployment was 2.9 per cent in August. Over the past year, the level of unemployment has risen most in the counties of Aust-Agder, Sør-Trøndelag, Østfold and Vestfold and least in Sogn, Akershus and Finnmark. Unemployment is highest in Oslo, at 3.9 per cent in August. Unemployment may be low because firms have chosen to retain their employees. Perhaps firms are opting to keep a certain labour reserve because of recruitment problems and high costs experienced during the previous cyclical turnaround. Higher government expenditure has contributed to holding up public sector employment. Unemployment may move up if global developments deteriorate and have a stronger impact on output in Norway. Between 1000 and 2000 new jobseekers from other countries are still being registered each month, even though work permits were no longer required for nationals from new EU countries as of 1 May for work lasting less than three months. The level of registered work permits, however, seems to have stabilised over the past year.
6  BIS Review 62/2008  Figure 8: Consumer Loans (Annual Percentage Change) 60  450 400 350 300 250 200 150 100 50 0  50 40  Automobile  30  Housing (right axis)  20 10 0 -10  03/08  01/08  11/07  09/07  07/07  05/07  03/07  01/07  11/06  09/06  07/06  05/06  03/06  01/06  -20  Source: CBT. The sharp slowdown in the second half of 2006 created some slack in the economy. The recent methodological change in national accounts led to a limited upward revision in our output gap measure and hence did not change the inflation outlook. Looking ahead, we expect a continued moderation in economic activity and non-farm employment on the back of rising precautionary saving due to global and domestic uncertainties (Figure 9). Figure 9: Private Consumption Expenditure and Non-Agricultural Employment* Private consumption (Million YTL, 1998 prices)  18000  16000  Non-agricultural employment (thousand, right axis)  15500  17000  15000  16000  14500 15000 14000 14000 13500 13000  13000  07Ç3  07Ç1  06Ç3  06Ç1  05Ç3  05Ç1  04Ç3  04Ç1  03Ç3  03Ç1  02Ç3  02Ç1  01Ç3  12000 01Ç1  11000 00Ç3  12500  00Ç1  12000  *Seasonally adjusted Source: TURKSTAT, CBT. Accordingly, demand and capacity conditions are expected to continue to support disinflation (Figure 10).

Often, the money they send home is a critical lifeline for their families. Malaysia is also a major remittance sending country to other ASEAN nations. Last year, migrant workers in Malaysia sent 2 billion USD to Indonesia and the Philippines alone. For the recipient countries, these funds lifted many households out of poverty. In a way, they also supported the countries’ socio-economic developments. A new game plan: Digitalisation as gateway to greater financial inclusion This is where our work in Project Greenback 2.0 comes in. We started Project Greenback here in Sabah 8 months ago, with a new game plan – digitalisation. We considered the following factors – around 70% of the migrants here work in the agriculture and plantation sectors; they are scattered across the remote areas; but one good thing is that majority of them own smartphones. With this, we knew that it was an opportune time to go all out on digitalisation of remittance services. The implementation, however, will be an uphill task because of the geographical barriers we face in East Malaysia. To ensure we reach out to as many migrants as possible, we collaborated with the plantation companies and organised remittance talks and fairs in the plantations themselves. The participating banks facilitated the migrants to open bank accounts; and remittance service providers taught the migrants how to register and to use their e-remittance services. We also encouraged the plantation companies to pay the migrants’ salaries into their bank accounts to eliminate the use of cash for remittance transactions.
Without any asymmetries of information, banks would not be necessary, since households could invest their savings directly or through mutual funds. Therefore, by definition we cannot have banking with full transparency. 14 Fortunately, banks are not totally opaque either. Some risks can be assessed more or less readily. A US Treasury bill is clearly less risky than an unsecured loan to an obscure software company. Therefore, capital requirements can at least partially be based on the relative riskiness of various types of assets, even in our non-ideal world. “Basel I”, the first Basel Accord of 1988, introduced “risk buckets” for this purpose. For instance, loans received a risk weight of 100%, government bonds a risk weight of 0%. “Basel II” – the revision of the  10  Raghuram Rajan and Luigi Zingales (1995): “What Do We Know about Capital Structure? Some Evidence from International Data”, Journal of Finance. 11  Tier 1 capital to total assets. Source: The Banker, July 2007. 12  See, e.g., Jean-Charles Rochet (1992): ”Capital Requirements and the Behavior of Commercial Banks”, European Economic Review. 13  See, e.g., the classic article by Douglas Diamond (1984): ”Financial Intermediation and Delegated Monitoring”, Review of Economic Studies. 14  See Charles Goodhart (1988): The Evolution of Central Banks, p. 63. BIS Review 158/2008  3  first Basel Accord – which is currently being implemented, tries to go beyond what were perceived to be rather crude risk buckets. Under Basel II, risks are differentiated in more detail.

2  BIS central bankers’ speeches  Turning to jobs, data for the second quarter of 2011 indicate that businesses in the region, on balance, expanded employment at a more rapid pace than the nation. Still, the number of jobs being created each month is not enough to sustain a robust recovery. Given the slow recovery of employment across much of the region, unemployment rates have edged up in most places. June’s unemployment rate of 8.0 percent in New York State and 9.5 percent in New Jersey remain unacceptably high. While Puerto Rico’s unemployment rate has fallen sharply in recent months, it is still particularly elevated at 14.9 percent. One factor that remains a drag on overall employment growth in much of the region is the weakness of the public sector. As we have discussed at previous press briefings, our state and local governments continue to cut jobs more sharply than governments elsewhere. The recent exception to this trend is Puerto Rico. While the island sustained deep cuts in government jobs in 2009 and 2010, a recent increase in this sector was a key reason for Puerto Rico’s relatively strong job growth in June. Overall, the weakness of the public sector continues to pose a risk to employment growth throughout our region going forward. Another potentially troubling development for the region is the recent weakness in the financial sector. The finance industry, which had begun to recover late in the cycle, appeared to be showing signs of expansion when we last met.
Moreover, we must recognize that the rest of the world is closely monitoring our ability as a nation to come to grips with our long-term fiscal challenges, and to pay our debts when they come due. This is an important litmus test of our credibility and ability to exercise global economic leadership. But the challenges extend far beyond fiscal policy. We, as a nation, have to take steps that facilitate the needed structural adjustment of U.S. economic activity that will position us to thrive in the next chapter of global economic transformation. We need to make sure the next business cycle will be more sustainable than the last, which was built on an unstable foundation of asset price gains, easy credit and outsized financial-sector profits. This will require a shift in orientation from consumption to export and investment-led growth. As EMEs have shown us, comparative advantage and global competitiveness are not inevitable consequences of factor endowments – they are the result of the choices we make as nations. There are no easy answers or quick-fix solutions. But in this regard, ensuring broad access to educational opportunity and improving opportunities for people to retool their skills mid-career so they can compete in a rapidly evolving global economy are important. So too is ensuring that regulation is calibrated such that it achieves public policy goals in the most efficient manner possible, with the least compliance costs and unnecessary delays. A continued commitment to open markets and free trade is essential.

As discussed earlier, no issue is more important than a credible commitment for getting our fiscal house in order, but at a pace that does not forestall a sustained economic recovery. What is needed here is fiscal consolidation that begins slowly, builds over time to substantial magnitude, and is difficult to dismantle – i.e., it requires the commitment of both political parties. The decision of how big the U.S. government should be and what functions it should perform is a political decision that I leave to the voters and our legislators. However, as a nation we need to acknowledge that we must be willing to pay for whatever government services and transfers we want to have. We should not assume that an excess of global savings will always be available to easily finance our public deficits. 5  To be more precise, as of the first quarter of 2011 with statistical discrepancy of 1.2 percentage points attributed to private balance, the figures are as follows: government balance –9.5 percent + 6.3 percent private sector balance equals current account balance of –3.3 percent. BIS central bankers’ speeches  5  The choice of fiscal sustainability is not a political one, it is an economic one and if we do not act voluntarily and preemptively, the market will inevitably force the outcome later – most likely in a much more difficult and messy fashion.
Thereafter, the MPC expected that inflation was more likely than not to fall back and be below target for a period [Slide 5]. You can see that the most likely outcome, shown in the darkest band, was for inflation to stay below the target at the end of the forecast period. But the MPC also saw upside risks to that projection, stemming from the possibility that the current high level of inflation might become embedded in inflation expectations, so making inflation itself more persistent. To make these risks easier to discern, the MPC also makes available charts of the cross section of the probability distribution at particular points on the forecast horizon, like the one shown in [Slide 6]. The upside risks mean that at the end of the forecast horizon, the MPC judged that inflation was as likely to be above the target as below it. We can see this in the chart, because the narrower bands towards the left hand side mean that the mass below the vertical line marking 2% is about the same as the mass above it. But why do we show our projections like this? Many other economic forecasters publish their forecast as a single, most likely outcome. In our view, this sort of forecast is not very informative, as the actual probability of it being correct is very close to zero. In contrast, the whole distribution contains much more information. What matters for policy is the entire distribution of outcomes.

Overall, however, both from the point of view of how policy is determined, as well as how it is communicated, it is the broad distribution that matters. 8. Conclusions  Self-confidence is infectious. It can also be dangerous. How often have we drawn false comfort from the apparent confidence of a professional advisor promising certain success only to be disappointed by subsequent performance? Uncertainty pervades almost all public policy questions. Economics and many other disciplines are united by a common need to grapple with complex systems. As the crisis of the autumn of 2008 showed, such systems can sometimes be subject to abrupt changes, the precise timing of which cannot easily be identified in advance. But policy-makers are often expected to anticipate the unpredictable. How can they retain the trust of the public while being open about the true degree of uncertainty? Or, to put it another way, what is the appropriate bedside manner for policymakers when dealing with complex uncertain problems in a public debate? We have explained how the Bank of England tries to deal with some of those challenges in the context of monetary policy. We are sure we have much to learn, and our efforts to improve communication will continue for a long time to come. References Anderson, R and May, R (1991), “Infectious diseases of humans: dynamics and control.” Oxford University Press. Arrow, K (1995), Interview with “The Region” magazine, available http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3675. at  Asch, S E (1951), “Effects of group pressure upon the modification and distortion of judgment”.
Also, if the current expectations for rising interest rates are incorporated, the public debt burden will increase from 2.2% of GDP at end-2021 to 2.7% in 2024. Against this backdrop, allow me to repeat the recommendation I have made on numerous occasions to adopt a medium-term fiscal strategy. This should include immediately setting out a multi-year fiscal consolidation plan for implementation once the economic impact of the pandemic and of the war in Ukraine has been overcome. The plan should have broad  3  A household is deemed to have a high financial burden when its financial expenditure minus financial revenue represents more than 40% of household income. 4  political consensus and be accompanied by an efficiency review of public spending and the tax system, including all tiers of general government. Defining the plan early on would generate greater certainty and trust, which is particularly important against the current backdrop of monetary policy normalisation. The potential impact of the current climate of uncertainty on the banking sector calls for exercising extreme prudence Estimating the impact of the current setting on the banking sector’s profitability and solvency is more complex. First, the rise in interest rates will mean higher returns on new loans and likewise on existing loans at a floating rate. Thus, although the volume of credit will presumably moderate in the current setting, gross income will likely increase, particularly in the near term. However, financing costs will also be pushed up.

To put this into perspective, the percentage of employment accounted for by firms under high financial pressure2 would rise by 1.6% following the interest rate increase, from 9.1% before the hike. Household income is primarily being supported by labour market developments – given the year-on-year increase of 3.6% in the number of persons employed and of 5.1% in hours worked – and, to a lesser extent, by the government policy support measures. However, high inflation is driving a significant decline in real disposable income. Indeed, in 2022 H1 households’ disposable income increased by 4.2% year-on-year in nominal terms, which transforms into a 3.1% fall once developments in the private consumption deflator are taken into account. Bank lending to households has held stable in recent months. However, a distinction can be drawn between the performance of mortgage lending (growing consistently at rates of just over 1%) and that of consumer lending (shrinking at rates of around 4%). Unlike firms, in 2022 households are not accelerating the growth of their bank deposits, which have been on a sustained growth path (above 5%) since 2021. Together with cash, they account for 40% of households’ total financial assets. Simulations have also been carried out on the potential impact on household income of the rise in energy prices and interest rates, which is notably uneven across income percentiles. The upturn already observed in energy prices would generate an increase in the median household's energy expenditure as a proportion of its budget from 10% to more than 12.5%.
…and gives vulnerable groups of unemployed a better chance of getting jobs It is also often said that more of those in vulnerable groups with a high rate of unemployment, such as young people and people born abroad, have entered the labour market and that this, rather than the business cycle, explains why unemployment has increased.18 However, it is the vulnerable groups that are most sensitive to economic fluctuations. They are the first to be given notice of redundancy if they have a job, and they are the last to be offered a job if they are unemployed. They are thus more vulnerable to fluctuations in the demand for labour and if they are to get jobs and work experience if they are unemployed, we need to have a very large demand for labour and thus very expansionary monetary policy. As a large share of the labour force now has job chances that are sensitive to demand, one could claim that employment as a whole has now become more sensitive to demand fluctuations. Increased demand could then have greater effect on employment and unemployment than it did before. The fact that more people in vulnerable groups have now entered the labour market is thus an argument in favour of a more, not a less, expansionary monetary policy. High unemployment over a long time requires more expansionary monetary policy to bring down unemployment The fact that unemployment has been high over a long period of time has meant that longterm unemployment has increased.

While such ambitions are quite legitimate, most of them would find achieving this goal very challenging. Why? Because an IFC, by definition, serves not only domestic customers on its own turf, it also captures financial businesses and money-flows either from a large hinterland or the neighbouring areas or both. This is a big challenge because it entails serving customers from the other jurisdictions or cross border transactions. It also entails the need to deliver consistent and efficient financial services in order to be competitive in international financial business. The truth of the matter is that only a small number of cities can successfully become international financial centres because IFCs need a critical mass and market depth. It should be noted that international financial transactions and money tend to migrate towards those centres that provide the most efficient and competitive services to customers. In other words, domestic financial centres will need to go through very fierce competition before a few of them can emerge as successful IFCs. Given Hong Kong’s accomplishment as one of the region’s premier IFCs, there are many study groups from abroad coming here to learn the tricks that have helped achieve what we have today.
Since these market-based measures were affected by risk illusion, it is reasonable to assume the MPC suffered that same illusion. Just like the students in the Asch experiments, MPC yielded to the wrong answers given by other financial actors. The MPC were looking for their keys under the wrong lamppost. It is too soon to tell whether any collective blind-spots remain. But compared with the precrisis period, the Bank today has two extra pairs of policy eyes through the PRA and FPC. Joint meetings between the MPC, FPC and the PRA Board now take place. These help strengthen the committees’ peripheral vision and are a safeguard against groupthink. As for economic forecasting, this is the most inexact of sciences. The Bank has already undertaken an external review of its forecasting procedures. 62 And it also has taken a sequence of measures to improve this process and the transparency around it. 63 This has included publishing more information on forecast inputs and outputs. This is progress. My own view is that improvements to the Bank’s forecasting process have some considerable distance still to travel. Since the crisis, the Bank’s forecast errors for output and inflation, like those of external forecasters, have tended to be one-sided and serially  61  This is part of a larger, on-going research project led by Stephen Hansen (UPF), Michael McMahon (Warwick) and Andrea Prat (Columbia University). 62  Stockton (2012).

The Swedish economy has coped relatively well This is a general outline of the international picture. Although the world economy has begun to recover, there is no doubt that it is facing fairly major challenges over the coming years. But what is the situation here in Sweden? Well, in many ways things look rather good. The Swedish economy appears to have coped fairly well in the crisis. Although production fell more in Sweden than in many other countries, the recovery has been much quicker. The situation now looks much more stable than in most other places. One important reason why we have managed so well is, I believe, that it is not so long since we experienced a crisis here in Sweden – both in the bank system and the economy as a whole. The crisis at the beginning of the 1990s was much more isolated than the recent crisis and can in many ways be described as “home made”. But we nevertheless managed to learn some important lessons from it. Stable frameworks provide security… Perhaps the most important lesson is that both monetary policy and fiscal policy need stable long-term frameworks. The previous crisis therefore led to a number of changes in this direction, many of them through decisions made here in the Riksdag. Unlike the situation in the previous crisis, monetary policy is now conducted by an independent Riksbank with an inflation target.