samchain/econo-pairs-v1 huggingface dataset:
On the demand side, private consumption remains strong, growing more than 7% per annum in the first quarter of this year. Consumption is backed by the sustained growth in salaried employment and good financial conditions. But the main change has been the recovery of fixed capital investment which went from an average increase of 2.4% during the last three quarters of 2006, to a solid 7.9% in the first quarter of this year. Behind this strong investment are good corporate profits and favorable credit conditions, the progressive exhaustion of output gaps and good prospects for growth. In addition, exports of goods and services have strengthened, going from average growth of 3.8% in the last three quarters of 2006, to an average around 10% in the first quarter of 2007. Recent fuel price hikes begun in January have acted as a brake to the expansion of private consumption, through their effect on households’ disposable income. The renewed strength of output has also contributed to a remarkable improvement in the labor market, with significant job creation and reduction in the seasonally-adjusted rate of unemployment. From a longer perspective, in the past 13 quarters GDP has grown at an average annualized quarterly rate of 6%, considerably above trend GDP growth. Over the same period, the seasonally-adjusted rate of unemployment went down from 9.5% in 2003 to only 6.8% in the quarter ending last May.

Chile and global risks Globalization and strong growth of the world economy have opened great development opportunities for the Chilean economy, but at the same time have increased the risks of shocks coming from abroad. The natural question is what should be the policy regime that most adequately could maximize the benefits of interacting with a world that becomes ever more integrated. Here, as elsewhere, the best policy is prudence. This includes macroeconomic policies and institutions that contribute to stability, to keeping a sound financial system and easing the adjustments to less favorable world scenarios. Chile’s present policy regime (i.e., mature inflation targeting regime with floating exchange rate, fiscal policy whereby government spending is tied to the public sector’s permanent income, thus enhancing its solvency before transitory terms of trade improvements, and an efficient system to regulate and supervise the baking system) increases resilience and facilitates the adjustment of the Chilean economy to less favorable external scenarios. This policy framework permits to prevent episodes of unsustainable expansion and crises that accompanied terms of trade cycles in the past. In particular, with inflation expectations well anchored around 3%, the Central Bank of Chile can apply countercyclical monetary policy. Furthermore, the flexible exchange rate helps to make foreign exchange adjustment if and when circumstances so warrant. Final remarks The world economy is headed toward completing its most dynamic five-year period in over thirty years.
2  See Wage Formation in Sweden 2005, National Institute of Economic Research. 3  For 2004, some data in Table 1 might be changed since all agreements have not yet been concluded. 4  See Wage Formation in Sweden 2005, National Institute of Economic Research. 5  The quotient between the10th and the 90th percentile is considerably higher for white-collar employees' wages, see "Lönespridning i näringslivet 2004" (Wage spread in the business sector in 2004), Confederation of Swedish Enterprise. 6  It is primarily in the quotient between the 90th percentile and the median wage that blue-collar workers and white-collars workers' wages differ, unlike the quotient between the 10th percentile and the median wage, see "Lönespridning i näringslivet 2004" (Wage spread in the business sector in 2004), Confederation of Swedish Enterprise. BIS Review 84/2005  5  On the whole, though, the wage spread has widened in Sweden over the past 25 years, at the same time as wage formation has been decentralised. But despite the increase in the wage spread, it is still low by international standards. It is still smaller than it was in 1970 and in a comparison of 17 OECD countries the wage spread in Sweden is lowest. High minimum wages likely mean that many jobs never get created. The services sector is also affected by this, and many low-productive work duties are not performed since nobody is willing to pay what they cost, with our high minimum wages. Table 1.

Undoubtedly, it must compete and present a viable alternative to the conventional insurance. At the same time, it has a unique value proposition that can meet the Muslim demand and Shariah requirements. The sustained demand for takaful, especially among Muslims, has contributed towards the industry’s steady growth – from 3% market share a decade ago to almost 18% in 2018. The growth potential for takaful industry remains clear and promising. In 2018, almost half (45.8%) of the Malaysian population have yet to obtain protection. Based on a recent demand survey, 46% of Malaysian households and 48% of businesses responded that they are unaware about the comprehensive range of solutions that the takaful industry is able to offer. To reduce this gap, as an industry, takaful operators must collectively elevate the prominence of takaful and its capabilities to be a solution of choice for Malaysians. I wish to suggest three pathways for this aspiration to be realised: First, by offering good value solutions to customers; Second, by adopting innovative tools and effective distribution strategy; Third, by inculcating sound understanding of financial protection and prudent financial behaviours among Malaysians. Allow me to elaborate on these . Firstly, the takaful industry has the advantage of a business model that is grounded on the values of mutual assistance and solidarity. Unlike insurance, which is premised on the buying-and-selling of risks at a premium, takaful advocates 2/5  BIS central bankers' speeches  for value propositions that consumers are likely to find unique and take comfort in.
Mr Gjedrem focuses on monetary policy challenges in Norway Article by Mr. Gjedrem, Governor of Norges Bank, the Norwegian central bank, published in the Norwegian daily Aftenposten on 3 May 1999. In Norway, fiscal policy has a prominent role in stabilising growth in production and employment. The Government Petroleum Fund shall serve as a buffer so that fluctuations in the government’s oil revenues do not influence the mainland economy, but only have an effect on capital exports. The local and centralised income settlements determine wage growth. Monetary policy instruments are oriented with a view to maintaining a stable krone exchange rate against European currencies. If the government budget stabilises the domestic economy, wage growth is kept on a par with the level in Europe, and fluctuations in oil revenues are absorbed by the Petroleum Fund, Norges Bank stands a good chance of ensuring exchange rate stability through monetary policy. However, this has not been the case since 1996. The government budget has not made a sufficient contribution to smoothing growth in domestic demand and production, wage growth has been substantially higher than in other countries, and oil revenues have fluctuated widely. Furthermore, it seems that the krone is easily exposed to the contagion effects of turbulence in international markets. The krone exchange rate has fluctuated in spite of Norges Bank’s active use of instruments. Developments in recent years indicate that Norges Bank cannot fine-tune movements in the krone exchange rate.

Similarly, after an appreciation a situation may arise whereby a movement of the exchange rate back to the initial range may require that interest rates be reduced to such a low level that this results in higher inflation. However, this would weaken the basis for exchange rate stability over time. Hence, Norges Bank cannot with open eyes orient its policy instruments towards triggering higher inflation or a deflationary recession. If a situation arises whereby Norges Bank is not able to return the exchange rate to  BIS Review 51/1999  2  its initial range without such consequences, the Bank will inform the government authorities that measures other than those available to the central bank are required. The present exchange rate range has more or less prevailed for more than ten years. On the basis of its analyses, Norges Bank does not find grounds to maintain that this range is not the appropriate one. Interplay between policy areas There are considerable differences between Norway and other industrial countries in the structure of the economy, the organisation of decision-making processes and the formulation of economic policy. In Norway, income and wage determination is fairly centralised; a number of fora to foster cooperation between the social partners have been established, as has special legislation which makes it easier to resolve labour conflicts than in many other countries. The central government budget is used more actively to stabilise economic developments, partly because the Norwegian state has substantially greater economic leeway than other countries.
As well as its own actual mandate of keeping prices stable, some people seem to be under the impression that it should be used to strengthen growth, lower unemployment, safeguard the financial system and guarantee citizens adequate interest rates”3. Yet, monetary policy can only buy time for structural reforms in the short run, while tensions are accumulating in the background. One major source of tensions refers to the wage policy. Chapter 2 of REO discusses in much detail the “European wage dynamics and labour market integration”. The main messages of this 2/5  BIS central bankers' speeches  part can be summarized as follows: a) in EU 15 wages are subdued because they respond very slowly to changes in unemployment and are closely related to inflation and inflation expectations, which are unusually low; b) in NMS wage growth responds very quickly to changes in unemployment, and inflation expectations play a lesser role; c.) average wage increases in NMS were much higher since 2012 than in EU-15; d.) about one quarter of wage growth in Europe can be explained by EU-wide and group-level factors; e.) there was a decrease in unemployment, but also an increase in involuntary part-time employment; f) migration plays a role in the faster increase in wages in the countries of origin. One hot debate topic in Europe these days –reflected in the report- is the flattening of the Philips curve.

With considerable capacity to meet large investment requirements, opportunities therein lie in the more effective and efficient channelling of the  2  BIS central bankers’ speeches  sizeable surplus funds towards the vast productive investment opportunities within and across the emerging economies. These trends are being reinforced by the rapid expansion of financial institutions in emerging economies that have ventured beyond national borders. Financial institutions from the emerging economies have grown significantly in size and strength in this recent decade to now account for almost half of worldwide financial industry market value. Eight out of the twenty largest global banks, including the top two, are emerging market financial institutions. As the emerging market financial institutions continue to regionalise and internationalise, their role and importance can be expected to further expand. Another key development is the integration of financial markets amongst emerging economies, driven in part by the increased economic inter-linkages and the increased liberalisation trend in the financial sector. The rapid internationalisation of Islamic finance is reinforcing this trend and has enhanced the economic and financial connectivity between the emerging economies. The high level of savings and wealth accumulation in several of the emerging economies, including in Asia and the Middle East, need to be effectively channelled towards productive investments including for large infrastructure development. In this environment, Islamic finance has emerged as a viable and attractive form of intermediation including financing of large scale infrastructure projects.
There are large disparities in the quality of education a student receives, which are highly correlated with where that student lives. We need to look for ways to provide higher-quality education regardless of where people live. Reducing the role of local property taxes in school financing to better equalize school quality across locations is one example.5 In addition, education’s benefits start very early in life and are cumulative. While we need to further strengthen primary and secondary education, there is convincing evidence that educational investments in early childhood have especially high rates of return in terms of lifetime earnings and are associated with many other positive outcomes.6 Workforce development is another key policy area that can improve economic mobility and reduce inequality. Because of the swift pace of economic change driven by advances in technology and globalization, we ought to step up efforts to help workers build the skills necessary to adapt to change. This means providing these types of services at the local level. These efforts should include innovative workforce development programs, coursework and certifications in key skills that are in demand, and fostering partnerships between higher education institutions and local employers. Here, I would point to Monroe Community College in Rochester as a model of successful collaboration with employers to create job-training programs that align with current employment opportunities.7  Conclusion The issues of economic inequality and income mobility are among the most important that we face as a nation and as a region.

While the “rags to riches” story has been a popular theme in U.S. history, income mobility in the United States is now notably lower than in many other advanced economies. Unfortunately, substantial differences in economic mobility exist within the United States. Important research by Raj Chetty and his co-authors suggests that upward mobility strongly depends on where one grew up.4 That is, places themselves seem to have a measureable effect on economic outcomes for children as they reach adulthood. In particular, this research indicates that higher upward mobility is associated with areas that are less residentially segregated by race or income, and that have higher-quality schools, stronger social networks, greater community involvement, and stable family structures. Significantly, they find that places with greater upward economic mobility tend to have lower income inequality. This evidence suggests that there is a fundamental inequality of opportunity for advancement that is tied to where people live. Reducing inequality of opportunity is something we should all work toward. Directions for Policy So, what are some specific ways policy can address inequality and improve economic mobility? While this is a difficult and complex set of issues with no easy answers, I do have a few thoughts. First and foremost, we can improve the quality of education for our most vulnerable citizens. Children who attend better schools and attain higher levels of education have more favorable long-term outcomes, including better job prospects and higher earnings.
Moreover, Spanish banks’ business models are strongly oriented towards the retail segment, which bolsters their resilience to adverse shocks to wholesale market financing conditions. This has also allowed the sector to record a favourable financial performance of late, both in terms of higher profitability and improved balance sheet quality. In any event, in a situation in which interest rates have had to be raised swiftly, banks face upside and downside risks to their net interest income, the value of their financial instrument holdings and their balance sheet credit quality. Banks whose average lending rates have adapted to the new situation faster than their average deposit rates (e.g. those with a greater share of variable rate loans and/or shorter maturities, and a greater share of retail funding) are seeing a substantial improvement in their net interest income, which has boosted their profitability. Conversely, the value of fixed income financial exposures (e.g. bonds, especially those with longer maturities) has declined. 5  This was particularly due to the growth in their RWAs on account of their business expansion abroad. 6  Autumn 2022 Financial Stability Report. 7  Specifically, the adverse scenario considers a cumulative fall in GDP over the three years of 1.3% (as opposed to growth of 9.8%) and a certain rise in risk premia. 8  By contrast, the baseline scenario, drawing on the December 2022 economic forecasts, envisages a moderate increase in the CET1 ratio of 0.35 pp in the period 2022-2024.

Banks, brokers, insurers, nongovernmental pension funds, and microfinance organisations should get equal opportunities to combine their activities with asset management and investment consulting. In the next few weeks, we are going to release a consultation paper to discuss these and other proposals in greater detail. I have already mentioned the trend related to the energy transition, the green economy, and green finance. It will require a turnaround in the operation of the financial sector. The last trend in the financial market I would like to focus on today that requires our regulatory response is the transformation of financial consumers’ behaviour. During the pandemic, increasingly more people started to invest their savings in market instruments, that is, shares and bonds, rather than deposits. This is a positive trend for the development of the national stock market, financing investment projects, and forming the sources of long money. However, it is crucial to protect people in the stock market: risks they accept should be adequate to their knowledge and needs. Disappointingly, financial institutions often abuse customers’ trust. Consequently, we are forced to regularly toughen the requirements for products, selling practices, and services. The market is not happy with our policy as it believes that we are simultaneously curbing the launch of good products. We would have also preferred to avoid tightening the screws regularly because this is not a proactive way of doing things. Only during its last session, the State Duma adopted 12 laws on financial consumer protection.
This obviously poses challenges for competing high value-added producers in Asia. •  But China is also offshoring lower value-added, labour-intensive production. This creates opportunities for the less-developed regional economies to catalyse their own industrialisation. Second, China’s import composition is shifting in favour of consumer goods and services. •  The more developed economies in the region are well-positioned to tap into China’s demand for financial services, healthcare, education, and tourism. Third, China is emerging as a significant source of capital for the region. •  In the middle of last year, while the world’s attention was focused on the volatility in China’s financial markets, an important development took place that went largely unnoticed. •  China became, for the first time, a net exporter of direct investment. •  Chinese FDI in ASEAN has been increasing by an average of 25% every year, in the five years to 2014. Vietnam and Cambodia are examples of countries that have become more plugged into the global markets as a result of becoming part of this new regional value chain. BIS central bankers’ speeches  1  •  Vietnam has emerged as a key assembly hub for electronic and electrical products. •  Cambodia has become a manufacturing base for Chinese garment and footwear companies, with three-quarters of its garment and footwear exports in 2014 headed for Europe and the United States.

A bank neither has to put aside capital for government bonds nor is bound by an upper limit on how much it can be indebted vis-à-vis an individual sovereign debtor. On the one hand, government bonds are treated as if they were risk-free. On the other hand, banks may easily hold very many government bonds of a single issuer – and this is usually the home country. First, banks in this way increase their exposure to the financial problems of states. Because government bonds are not as risk-free as the regulation assumes. The crisis has shown this. Second, it becomes easier for an individual state to run a loose fiscal policy. It’s becoming more likely that systemic problems are emerging or intensifying: a state infects the national banking system, or vice versa, and the problems spread across borders. Such systemic risks can then only be kept in check by way of a fiscal risk-sharing. In order to promote ownership and private risk-sharing, we must revise the preferential regulatory treatment of sovereign debt. One option is to introduce a risk weighting for government bonds which rises along with the concentration risk. The more government bonds held by a bank, the more capital the bank would have to hold against each of these bonds. In this way, the capital requirement and upper limit would be combined in a single rule.
Prior to 1970 published accounts understated the true level of banks’ capital because they did not include hidden reserves. The solid line adjusts for this. 2009 observation is from H1. (c) Change in UK accounting standards. (d) International Financial Reporting Standards (IFRS) were adopted for the end-2005 accounts. The end-2004 accounts were also restated on an IFRS basis. The switch from UK GAAP to IFRS reduced the capital ratio of the UK banks in the sample by approximately 1 percentage point in 2004. Sources: Bank of England, Financial Stability Report June 2009 and “The British Economy, Key Statistics 1900–1970”, published for the London & Cambridge Economic Service. From 1968 the liquidity ratio is: Cash + Bank of England balances + money at call + eligible bills + UK gilts as a percentage of banks’ total asset holdings. Prior to 1968 the ratio is calculated as the liquid assets of the London Clearing Banks as a percentage of gross deposits, as defined in “The British Economy, Key Statistics 1900–1970”. Furthermore, in recent years the quality of banks’ capital deteriorated as banks exploited the availability of new hybrid capital instruments which often had the tax advantages of debt. In practice hybrid capital did not absorb banks’ losses despite being treated for regulatory purposes as if it was like equity.

BIS Review 100/2010  7  1.  the possibility that if a bank has more equity capital the return on equity is less variable lowering the required rate of return. (This is a partial allowance for the mechanism underlying the Modigliani-Miller result.) 2.  the likelihood that the extra tax revenue that accrues to the government as banks are forced to switch to equity that is less favourably treated is used to offset any resultant rise in the cost of finance for companies using bank debt. (For example the government could use the extra revenue to increase capital allowances so that the negative impact on investment from a higher cost of bank debt is neutralised.) 3.  the likelihood that the relative importance of bank funding for investment is lower than the baseline conservative estimate that banks account for 1/3 of private, nonfinancial companies (PNFCs) external finance. 4.  the likelihood that the sensitivity of investment and the capital stock to a rise in the cost of funds to non-financial firms is lower than the value assumed in the baseline (where an assumption of a unit elasticity of substitution between capital and labour is used). Suppose we first allow the cost of equity to fall as more capital reduces its volatility.