samchain/econo-pairs-v1 huggingface dataset:
For example, if one of the costs of debt is that it encourages the pursuit of risky ventures by managers, you’d expect to find less of it in fast growing firms and more in mature companies where the opportunities for further growth are more limited. This is what you do find: high-leverage companies tend to be larger, older and have less volatile earnings. They also tend to have more tangible assets, on which debt can be secured, and are less R&D intensive. All this is in line with theory. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  But theory does much less well explaining why debt grows or falls within particular firms, or indeed across the whole economy, over time.9 One possible reason why the economic fundamentals can’t explain these swings is they they’re often less justified by those fundamentals, and instead driven by swings in sentiment among the suppliers of finance. Empirically, periods of rapid growth in corporate debt in the US have tended to coincide with deteriorations in credit quality and other signs of easing supply.10 Protections for lenders tend to decline, debt issuance skews towards riskier borrowers and, despite this, lending spreads often contract. It’s clear that we’ve seen many of the same things in the recent growth of “leveraged loans”. These are loans issued to already-indebted companies, which are often then packaged up and sold (as “Collateralised Loan Obligations” (CLOs)) to institutional investors.

And nominal regular pay growth (which strips out bonuses, but includes merit related increases in pay) has remained subdued over the past year, averaging around 2%. Assuming that the potential growth rate of the economy has not been damaged by the financial crisis (and there is no compelling evidence to suggest that it has), then this level of wage growth would be too low to be consistent with the inflation target in the medium term. Looking ahead, it is most likely that there will remain a reasonable margin of slack in the labour market, which should help contain any pressure on nominal wages and hence price inflation. But this is unlikely to persist indefinitely. Historical analysis of the UK labour market shows that the longer individuals are unemployed, the lower their chances of getting a job become. Hence, persistently high actual unemployment tends to be followed by an increase in the level of structural unemployment. Theory and empirical evidence predict that the structurally unemployed exert less downwards pressure on wage inflation. Major shifts in the pattern of employment – as we are likely to see from the shifts in growth from services to manufacturing, and from the public to private sector – tend to reinforce that effect. If structural unemployment rises sufficiently, then the downwards pressure on inflation from spare capacity will eventually start to dissipate. For now, contacts of the Bank’s Agents confirm that the margin of slack in the labour market should continue to restrain wage growth in the coming months.
With more global and regional functions anchored here and as the sector transforms with digitalisation and new growth engines, FIs might need to bring in foreigners with the experience and skills that are not yet available locally. Most do so responsibly, by ensuring that they concurrently build the local talent pipeline in specialist expertise and groom locals into leadership positions, even as they bring in foreigners to plug immediate capability gaps. FIs should commit to good HR practices that consider Singaporeans fairly, and have action plans to grow their pool of Singaporean professionals and leadership. 17. FIs should abide by the Tripartite Advisories on Human Capital Practices, and put in place progressive human capital practices. Where an FI is suspected to have discriminatory hiring practices due to their workforce profiles, the FI will be subject to additional scrutiny in its employment pass applications, as has happened to firms put on the Fair Consideration Framework Watchlist. Building a strong pipeline of local talent, is key to supporting and sustaining an FI’s long-term build-out in Singapore. It will engender rootedness of the FI to Singapore, and 18.  facilitates their deeper appreciation of Singapore and the region’s dynamics to facilitate better business outcomes as well. We must work to ensure that Singaporeans have opportunities to grow and take on bigger roles in their careers. MAS urges all FIs to step up in three ways 19. First, FIs should review their hiring practices to ensure compliance with MOM’s requirements under the Fair Consideration Framework. 20.

One possibility I consider worth testing would be to wait for some months before the Board evaluates the measures comprehensively and publishes more detailed minutes. This, in any event, is a matter to which the Board intends to return later this autumn with the aim of establishing a procedure for preparing these matters and providing information about them in ways that are appropriate to the current exchange rate regime. At the same time, it should be underscored that the arrangements we lay down will not be set in concrete. There must be some latitude for unforeseen circumstances. It is worth mentioning that when the Executive Board came into being in January 1999 and chose to work with public minutes, the interval before they were published was comparatively long, 6 to 8 weeks. Since then it has proved possible to reduce the lag to only a fortnight without giving rise to serious detrimental effects. Conclusion The main message in my address today has been that in the current monetary policy regime the exchange rate ought to be regarded mainly as one of a number of forecast variables. The problem here is that, like other currencies, the Swedish krona is difficult to forecast in the time perspective that is relevant for monetary policy, namely a couple of years ahead. The situation is complicated, moreover, in that the exchange rate is a variable that in certain situations monetary policy can conceivably affect directly. We try to use all the available information in order to arrive at our forecast.
Weak design of crisis management frameworks may also lead to ex ante excessive risk-taking in the private sector (e.g., “too-big-to-fail” behaviours) and, in cross-border crises, to a lack of trust and free-riding behaviours by crisis management authorities, amplifying the initial shock. Since the 1970s, the frequency of financial instability episodes has increased globally. This prolonged trend appears to coincide with the gradual undoing of the post-war financial and regulatory structures. The shift towards less stringent financial regulation, combined with 1/5  BIS central bankers' speeches  breakthroughs in financial innovation, has profoundly altered the incentive structures underpinning the financial industry. This is likely to have been a primary cause of the episodes of financial instability that punctuated the global economic history of the 1980s, 1990s and 2000s and reached a climax with the global financial crisis.1 To prevent the emergence of such bad outcomes, a sound, system-wide approach to financial regulation is of the essence. But what is the role of monetary policy? Can monetary policy be conducted in a way that reduces the likelihood of financial instability? The long-running debate on these issues within academic and policy-making circles can be broadly broken down into three different viewpoints.2 The first is the “pre-crisis consensus” view, which argues that monetary policy should maintain a relatively narrow mandate of price stability, leaving financial stability to prudential authorities. Under this view, the monetary authority should only take financial stability concerns into account in so far as they affect the outlook for price stability and economic activity.

The creation of a macroprudential framework with its own objectives, authorities and tools provides an important complement to monetary policy. In the long term, the complementarity naturally arises because the respective objectives are intertwined and one cannot be achieved without the other. At the same time, they complement each other equally well in the short term. When asset prices, leverage, financial exuberance and strength of the economy and inflationary pressures move in the same direction, monetary policy and macroprudential policy typically pull in the same direction too. On the other hand, when financial imbalances increase amid an environment characterised by relatively muted inflation, the twin goals of price stability and financial stability can be best achieved by resorting to two separate instruments, in line with the Tinbergen principle.4 While more restrictive monetary policy may be able to lean against the build-up of financial imbalances, targeted macroprudential measures are typically a more efficient way of addressing their causes. This is especially relevant in the euro area, given its multi-country composition. Macroprudential measures can be targeted to specific member countries to address the build-up of local imbalances, which cannot be addressed in an efficient manner by the single monetary policy. The presence of macroprudential policy should, however, not lead monetary policy to neglect financial stability issues.
The global recovery, in a context of ongoing logistical problems for production, has led to a widespread increase in costs. For now, this is expected to be a transitory phenomenon, as the increasing openness of economies and greater adaptation will normalize the supply of many goods and services. In any case, considering also the high domestic demand, local inflation may be somewhat higher than expected in the short term. The temporary nature of such an event does not require a monetary policy reaction. However, the scenario would be different if these global inflationary pressures were to have a more persistent impact on local inflation. In that case, an earlier withdrawal of the monetary stimulus would be necessary. In addition to the sensitivity tests, risk scenarios are analyzed in which the changes in the economy would be more significant and which would call for a more intense monetary policy reaction. At home, the risks associated with an evolution of public finances that is not clear about their long-term stabilization stand out, which could affect domestic financial conditions, investment, and the perception of country risk. Externally, the main risk continues to be an abrupt change in international financial conditions, an event that has become more prevalent due to doubts about the evolution of inflation in the United States. The intensity of these scenarios may jeopardize the convergence of inflation within the policy horizon, push activity below the expected ranges, and/or compromise the proper functioning of financial markets. VI.

In the first quarter, Gross Fixed Capital Formation (GFCF) posted slight annual growth, driven by the recovery of its Machinery & Equipment component, which grew 21.5 percent annually. The Construction & Works item, on the other hand, fell by 10 percent year-on-year, due to works being slowed down and/or postponed because of the pandemic (Figure 2). The labor market has shown a noticeable, albeit heterogeneous, improvement with respect to its worst levels of last year. The measured magnitude of this improvement varies depending on the source of information: while National Statistics Institute (INE) data show the recovery of more than half of the jobs lost since the beginning of the pandemic, the number of pension fund and unemployment insurance contributors —which can be associated with formal salaried employment— has returned to pre-pandemic levels (Figure 3). At the same time, inactivity has declined, although it remains high by historical standards, and vacancies have increased, with the result that the unemployment rate remains at around 10 percent. In any case, there are different indicators showing the fragility and heterogeneity of the labor market’s recovery, even though it still has a long way to go. On the one hand, the recent extension of quarantines had a greater impact on self-employment and informal salaried work, and there was also an increase in unemployment insurance applications, although still below their 2020 levels. Low-skilled workers and women continue to be the segments that lagged the most in the recovery of employment (Figure 4).
The origins of the present approach go back to 1992, when the Conservative government adopted an inflation target as the centrepiece of a package of reforms designed to rebuild credibility with financial markets in the wake of sterling’s abrupt departure from the ERM. This approach - which came to include the popular “Ken and Eddie show” - proved successful in establishing a track record of low and stable inflation. In 1997, the incoming Labour Government “entrenched” this success by handing the operation of monetary policy over to the Bank of England and setting out a detailed institutional and legal framework for the conduct of monetary policy. The result was to depoliticise interest rate decisions, within a framework of accountability that left the Government clearly in charge of setting objectives for inflation. Taking operational monetary policy decisions out of the hands of politicians was a decisive step. The touchstone of a successful monetary policy framework is its credibility. If people believe policy makers will always act to keep inflation low, this expectation will itself put a brake on inflationary wage and price increases. Economists long argued that it was difficult for politicians to make a fully credible commitment to low inflation. And perceptions are what matter: even if a government has no intention of manipulating  BIS Review 71/2004  1  monetary policy for political ends, as long as firms, workers and financial markets entertain that as a possibility, the job of keeping inflation low will be that much harder.

Zeti Akhtar Aziz: Islamic banking and finance Welcoming address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the inauguration of the Islamic Financial Services Board, Kuala Lumpur, 3 November 2002. *  *  *  "In our endeavour to build a strong and sound Islamic financial system, of importance are the critical milestones that we establish to crystallize this quest ... the first was the establishment of the Islamic Development Bank in 1975. The second was the establishment of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in 1990. And today, the establishment of the Islamic Financial Services Board marks another important milestone". It is our great honour and pleasure to welcome you to this momentous occasion to commemorate the inauguration of the Islamic Financial Services Board. This occasion is of particular significance as, on this day, with the grace of Allah, we are laying the foundation for the promotion of a sound and stable Islamic financial system that will pave the way for its successful integration as a viable and credible component of the global financial system. Allow me to take this opportunity to express our gratitude to Yang Amat Berhormat Dato Seri Dr. Mahathir bin Mohamad for his unwavering commitment and support for the development of Islamic banking and finance. This has indeed opened a gateway for Malaysia to develop a comprehensive Islamic financial system and our participation in the global development of Islamic banking and finance.
Good institutions help to accumulate experience, knowledge, expertise and resources to further build capacity, thereby sustaining growth. Poor institutions, on the other hand, could be exploited by those in power for their own benefit. Corruption can easily shave off a country's potential growth rate by a few percentage points. I should emphasise that having good institutions does not presume or argue for any particular political system. What is important is that the political system must work for the country based on its own history, cultural context, national conditions and the support of its people. 2  BIS Review 86/2006  The third pillar of effective implementation is ensuring social cohesion and forging social consensus. As policies impact on the people directly, it is important that there is social consensus and trust between the government and society, and between different ethnic and social groups. This can be achieved only if people are given equal opportunities to learn and work, progress according to merit and rewarded based on performance and contribution. The government and the more able must also help those less able, so that no one is left behind. Sustained growth often requires trading short-term pain for long-term gain. Even the best policies can be undermined if the people are not united behind their leaders. When there is social cohesion, the different groups in a country look beyond their immediate differences and co-operate to achieve their shared vision.

Chart: Price and cost levels relative to trading partners Price and cost levels in Norway relative to trading partners have weakened Norway’s competitive position in recent years. So far this has not been an obstacle to solid growth and near-normal capacity utilisation in the Norwegian economy, partly as a result of high prices for many of our exports. Nevertheless, we should bear in mind that a high cost level makes us vulnerable, particularly in the event of any renewed downturn in the global economy. Chart: Oil price (Brent Blend) The Norwegian economy emerged quickly and fairly painlessly from the global economic downturn partly owing to high prices for oil and other commodities. Norway’s terms of trade have improved further. High commodity prices and strong growth in emerging economies are an advantage for both commodity-based industries and high-technology export firms. Norwegian exports are increasing. Unemployment is slightly lower than expected and it appears that wage growth in 2011 will be somewhat higher than envisaged in the March Monetary Policy Report. Norway has been fortunate, but effective systems for managing high revenues have probably also played a role. 2  BIS central bankers’ speeches  2. A decade of inflation targeting  Chart: Inflation A decade has passed since the inflation targeting regime was introduced. Inflation has varied in this period, although less so than previously, and has generally been close to target. Inflation expectations now seem to be firmly anchored. This shows that monetary policy has been effective.
As Rabbie Burns wrote, “O wad some Pow’r the giftie gie us To see oursels as others see us!”  1  BIS Review 111/1999  The real test of the MPC is whether it aims continuously to meet the inflation target. For that reason, the Monetary Policy Committee must be setting a policy for all seasons. Some of you may say that it is all very well to set a policy for all seasons, but what about a policy for all regions, or parts of the UK? Many critics disapproved of the recent increase in interest rates. Indeed, the Scottish Council Development and Industry (SCDI) itself described the decision as “disappointing”. It also described the rise as “premature”; we would describe it as pre-emptive: prompt action to head off inflationary pressures in the future and so lower the level at which interest rates might otherwise need to be set. The SCDI said that “Scottish business is regaining confidence after a tough period, but this announcement [of a rate rise] will dent that confidence”. Yes, it has been tough – indeed remains tough – for some industries, especially agriculture, tourism and parts of manufacturing. But there has not been an overall recession. GDP growth in the UK, over the previous twelve months, reached a trough of 1.3% in the first quarter of this year, and has been rising since then.

Second, decisions on interest rates are taken each month by the Monetary Policy Committee (MPC) comprised of nine individuals with expertise in monetary policy – five executive members of the Bank and four non-executives – who operate on the basis of one person, one vote. There is, therefore, an appropriate division between the objectives of monetary policy, which are set by the democratically elected government, and the implementation of those objectives, which is delegated to a group chosen for their expertise. The third, and crucial, component of the regime is that the monetary policy process is characterised by a high degree of transparency and openness. Minutes of the MPC meetings are published within two weeks and the Bank’s quarterly Inflation Reports contain the Committee’s views on the outlook for inflation and output. It is important that the Monetary Policy Committee explain its decisions, not least to make future decisions as predictable as possible in the light of the evolving economic data. Of course, it is always easier to explain policy when the decisions are popular. We have to redouble our efforts when decisions are less popular, and so I am delighted to have an opportunity this evening to explain and to listen. I shall leave plenty of time for questions because one of the purposes of visits such as these is to see things from your perspective.
Five years since the countries in this region emerged from the financial crisis we have seen financial stability restored and the financial systems significantly strengthened. Despite the more challenging environment in the more recent period, the financial systems in this region have demonstrated resilience. While this is a positive development, challenges remain. In view of the increasingly more difficult environment these efforts to strengthen the financial systems need to continue. Today, I would like to focus my remarks on the background against which these efforts are being undertaken. In particular, I will focus on the emerging changes that are taking place in our region that are likely to be important in sustaining the growth prospects for this region. In the context of these changes, I will touch on the important role that the banking sector has in contributing to the growth and development process. Ladies and gentlemen, The region is highly integrated with the world economy in terms of the high volume of trade and investment flows between the region and the rest of the world. While this has contributed significantly to the strong growth in the region, it has also brought with it increased vulnerabilities arising from shifts in demand and reversals in investment flows. Indeed, developments in the advanced economies arising from the bursting of the technology bubble, the unprecedented declines in the stock markets, uncertainties arising from international geopolitical tensions all had implications on this region.

It is possible that the e-krona could play a role for Sweden's crisis preparedness. But in any case, the Riksbank needs to clarify its role as provider of money in appropriate forms in a crisis situation. In the same way as the Riksbank is ‘lender of last resort’ for the banking system, we have a responsibility to enable payments in a crisis, to be a ‘money provider of last resort’. Personal reflections Two years of intensive work on the e-krona have now passed and I will be leaving the chairmanship of the steering group as the project enters the next phase. It has been two incredibly educational years, but I think it is still too early for me to decide whether or not I shall support an e-krona for the general public in the future. As has hopefully been clear from my earlier reasoning, this depends on whether it emerges that there are better alternatives to guarantee both the security and efficiency of the payment market. And to answer this, the analysis needs to continue. At the Riksbank, we will work in two parallel tracks: partly, we will develop the pilot version of a simpler form of the e-krona and learn the lessons that may be needed if it turns out that an e-krona is to be issued. And partly we will deepen our analysis of the consequences for Sweden if the payment market should become entirely privatised.