samchain/econo-pairs-v1 huggingface dataset:
My talk today is to update you on the recent economic and financial developments, and to share with you our assessment of the prospect for next year, including the challenge for policy. Let me begin first with the global economy. Recent economic data, especially of the last few months, point to a picture of greater stabilization and more consistent signs of recovery in the global economy. The severity of the early economic contractions has eased while the levels of economic activities are gaining traction on a worldwide basis. In most major economies, final demand is showing signs of strengthening along with improvements in consumer confidence and business sentiment. More importantly, although the financial system in the advanced economies has not returned to normalcy, financial conditions have improved markedly with lower market volatility, reduced risk premia, and the unfreezing of interbank and other short-term funding markets. These positive developments have led to a view that the worst of the global crisis is now behind us, and forecasts of economic growth have been revised upwards for this year and next year. On the financial front, reflecting these recent developments, appetite for risky assets has returned, leading to a resurgence of capital flows to emerging markets and strong rallies in equity markets especially in Asia. And for economies that the prospects for recovery look most certain, policy interest rates have started to increase to return policy accommodation to a more normal level, as is the case of Australia and Norway.

After two years of market stress and decline in economic activities, we can now cautiously look forward to a return to growth. Looking back, the last two years have also been an important testing time for Thailand as the impact from the global financial crisis has been large and quite unprecedented. As it turns out, the economy has been able to weather the impact of the global crisis quite adequately. This is to say, while the decline in output was unavoidable, economic and financial stability was maintained, the banking sector remained resilient, and the economy was able to adjust to the impact of the turmoil in an orderly manner, with output growth now recovering. In my view, these things were of no accidents. Instead, they manifest a number of inherent qualities embedded in the Thai economic system that have contributed to the relative resilience of the economy. Such qualities include: first, a strong and resilient banking sector resulted from good risk management practices by financial institutions and careful supervision by financial regulators at home; second, a disciplined conduct of macroeconomic policy that emphasizes prudent fiscal and monetary frameworks with a clear focus on maintaining growth with price and financial stabilities; and third, the promotion of economic flexibility as a mechanism for the economy and the private sector to adjust to macroeconomic shocks. To me, these qualities are of no accidents.
Thank you. ***  13  Figure 1 Annual GDP growth (contribution, percentage points)  6  6 Total  4  4 Non-mining  2  2  0  0 Mining  -2  -2 15  16  17  18  Source: Central Bank of Chile. Figure 2 Employment creation (1) (annual change, percent)  10  10 Construction  8  8 Trade  6  6  Services (2)  4  4 Total private salaried  2  2  0  0  -2  -2  -4  -4  -6  -6 14  15  16  17  18  (1) Quarterly moving average. (2) Communal and financial serivces. Sources: Central Bank of Chile and National Statistics Institute (INE). 14  Figure 3 Activity gap (*) (percentage points)  4  4  2  2 Sep18 Report  0  0  -2  -2 Jun18 Report  -4  -4 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2013  2014  2015  2016  2017  2018  2019  2020  (*) Gray area shows minimum and maximum gap estimates using different calculation methods for potential GDP (see Fornero y Zuñiga (2017)). Source: Central Bank of Chile.

As I noted earlier, while the Code is not a set of rules, nor is it regulation, support for the Code and its principles is central to achieving its goals. With that in mind, I would like to turn now to the Statement of Commitment that was developed alongside the Code, talk about steps the New York Fed itself is taking, and then touch upon some of the industry measures underway to support adoption. The Statement of Commitment was developed and appended to the Code to provide a standard tool by which an institution may—on a voluntary basis—demonstrate its commitment to the principles of the Code. The Statement of Commitment provides that an institution is an FX market participant and has reviewed the Code. By using it, an institution acknowledges the principles as reflecting good practice and exhibits a commitment to conducting that institution’s activities in a manner consistent with the Code. The Statement, like the Code itself, acknowledges that market participants vary by size, complexity and nature of activities, and that diversity should be reflected in the steps they may need to take for adoption and adherence. Central banks, similar to FX market participants, are committed to the Code’s adoption as well. Following its publication, BIS central bank governors expressed their support for the Code by noting that central banks “are strongly committed to supporting and promoting adherence to the Code.
The ideas and experiences shared could then be contextualised to the prevailing local conditions to enhance financial inclusion. This proposal was welcomed by the members and resulted in the first Financial Inclusion Advisers programme conducted in Lusaka, Zambia in April 2009. The success of this inaugural programme hosted led us to this second programme hosted here in Malaysia with the support of JICA. JICA has long been involved in capacity building in  BIS Review 4/2010  1  the African continent, and we look forward to collaborating in the future in this area of building more inclusive financial systems. The Malaysian experience on the financial inclusion agenda In Malaysia, the commitment to the financial inclusion agenda is reflected in the new Central Bank of Malaysia Act 2009 which incorporates financial inclusion as an objective of the Central Bank. With the enactment of the Act in November of 2009, the Central Bank has imbedded in the legislation the financial inclusion agenda to ensure that future generation of central bankers will continue to direct efforts to building an inclusive financial system. Additionally, the Central Bank in the process of formulating a new blue print for the financial sector for the next decade. This blueprint would also ensure the development of a more inclusive financial system. The results of the financial inclusion measures thus far have shown positive results.

The synchronized recession which ensued has made it even more urgent not only to ensure that our financial systems are resilient and able to absorb external shocks but that sufficient attention and resources are also available for achieving the financial inclusion agenda. We are now entering a period of improved international economic and financial conditions. However, even in times of economic stability, financial inclusion is a demanding endeavour. Firstly, the outreach needs to be comprehensive to include the low income and underserved segments, given that that they are generally geographically dispersed and have low levels of financial literacy. Secondly, micro finance institutions need to generate sufficient sustainable returns to cover the high costs involved in providing such services and the lack of potential for economies of scale so as to remain viable. Thirdly, such financial institutions also face the challenges of obtaining sustainable and competitive funding. Recognising the challenges in addressing these issues to achieve financial inclusion, this programme, which started more than two years ago, is an outcome of a proposal I made at the Langkawi Commonwealth Partnership for Technology Management (CPTM) Heads of Government meeting in 2007, which discussed the subject of poverty eradication through human capital development. The purpose of the Financial Inclusion Advisers programme was to provide practitioners and regulators in the area of financial inclusion with practical ideas via the sharing of knowledge and experiences on developing institutional structures, creating an enabling environment and enhancing financial literacy.
That is achievable for relatively simple commercial banks operating in a single jurisdiction, and all of whose contracts are under the law of that jurisdiction. It is harder for so-called Systemically Important Financial Institutions (SIFIs), spanning many markets, jurisdictions, and currencies, with complex counterparty relationships. As one international colleague put it, the standard toolkit would face an “exponentially greater challenge”. Top-down capital restructuring: bail-in That is why resolution authorities in a number of countries are exploring how to execute “top-down” resolutions of complex groups, employing bail-in of debt issued by the holding company or top-level operating company. The US and UK have been working together very constructively in planning how to operationalise that strategy; and if we continue to make progress I hope that we will be able to say more about it over the next few months. Imagine that a large, complex, global firm – just one legal entity for the moment – has 20 lines of business, each the same size, which is to say using the same amount of balance sheet and capital. Imagine it is 50 times levered. Now imagine that one of those lines of business is completely toxic, worthless. The firm is insolvent, bankrupt. Unless it can be resolved, it must cease trading and go into insolvent liquidation. But, in this stylized example, only a single line of business is toxic; the other 19 are fine. In other words, the franchise has value. In the non-financial corporate sector, there are established tools for this.

And we don’t have much time to succeed, in the very next years. *** In conclusion, let me come back to the natural complement to the Banking Union: the Capital Markets Union. We all agree that we badly need it, even more so after Brexit: here in Eurofi, on 3/4  BIS central bankers' speeches  the Governing Council, and – in principle – around the Ecofin table. But almost nothing, or very little, has been done. One paramount reason for this failure is that our technical product has not so far engaged sufficient political ownership. We need a stronger purpose, a more visible “flag”. Let me suggest one: the implementation of the European Green Deal will require the reallocation of resources towards “green” activities, in a Financing Union for Sustainable Investment. To keep its leadership in the green transformation, Europe must act as a united block in its financing. Moving forward on the Banking Union requires effort, but the rewards will make it more than worthwhile. Thank you for your attention. 4/4  BIS central bankers' speeches
(2015), shows that EMEs countries exposed to the original sin (unable to borrow internationally in local currency) appear as tightening CBMs on banks’ liabilities during the 2013-2015 period. Our understanding is that the databases used in cross-country analysis still contain a high degree of self-judgement by reporting countries that sometimes affect the quality and consistency of the information provided. At least this is our experience regarding answering the IMF’s survey on exchange rate Page 3 of 12  Central Bank of Chile September 2019  arrangements and exchange restrictions (AREAER), which is used in the majority of cross-country comparison of CBM and capital controls usage. High-level Policy Seminar on Integration or Fragmentation? International Capital Flows in the Post-crisis World, September 2019 CENTRAL BANK OF CHILE  Currency-based measures  With the exception of China, only countries suffering from original sin used and tightened CBMs on banks’ FX liabilities  Tightening  No tightening  No Original Sin  Original Sin  Source: De Crescenzio, Golini, and Ott (2015), “Currency-based Measures Targeting Banks - Balancing National Regulation of Risk and Financial Openness,” OECD Working Papers on International Investment 2015/03. Recent evidence on the evolution of capital controls shows that Chile has taken more liberalization actions than tightening actions on both inflows and outflows (Pasricha et al., 2018). The following Figure shows the cumulated weighted net inflow easing actions and weighted net outflow easing measures in Chile and in a group of EMEs (excluding Chile).

International Capital Flows in the Post-crisis World, September 2019 CENTRAL BANK OF CHILE  Monetary policy framework and its effectiveness  Monetary policy is strongly supported by the free-floating FX regime 10Y interest rate and FX volatility (*)  Currency implied volatility 1-month EE  (sample: 2017-2018)  (percent) 30  FX Median  10-year interest rate (weekly change)  0.14  20  Brazil  Egypt  0.12  Nigeria  Turkey  10 0.10  Philippines  0.06 Indonesia 0.04 Vietnam  0.02 0.00  0 Jan.10  Romania  0.08  Bulgaria  Peru  Mexico  Croatia Hungary  Poland  10-y rate Median  Jan.14  Jan.16  Jan.18  (percent)  0.6 0.4  Russia  0.2  Chile  0.5 1.0 Exchange rate (weekly percentage change)  Jan.12  10Y rates volatility 1-month EE  South Africa  India  Thailand Malaysia China  0.0  Colombia  1.5  0.0 Jan.10  Jan.12  Jan.14  Jan.16  Jan.18  (*) Red points correspond to economies with free-floating FX regime according to IMF classification (Annual Report on Exchange Rate Arrangements and Exchange Restrictions, 2017). Source: IMF and Bloomberg. This framework has basically remained in place for almost two decades and its effectiveness has improved as markets, agents and institutions have adapted to it.
In a world of popular narratives, where emotions shape decisions and where stories can snowball, aggregates measures of activity may do a less good job of capturing the forces shaping people’s decisions. The qualitative, the conversational, the narrative, the emotional are the new data in this new world – optimism and anxieties about tomorrow, as much as income and jobs today. Harvesting these new data calls for a different set of approaches and reaching new communities in new ways. 71  One example of that is making greater use of surveys of sentiment. The Bank of England recently set up a new survey of companies to assess their degree of uncertainty around Brexit and what impact this was having on their decision-making. It is as much a survey of sentiment and perceptions as investment intentions. This follows previous analysis undertaken by Nick Bloom and Steven Davis in collaboration with the Atlanta Fed. 72  Working with psychologists, the Bank has undertaken research to capture sentiment in financial markets, applying semantic-analytic techniques to the words used by market participants. 73  More generally, the same  semantic techniques used to study central bankers’ words could be applied to the words used by the general public to capture their topics of conversation, their sentiment and their popular narratives on the economy. Clearly, there is further to go.

Regularly canvassing the views of the public, on the economy and on the setting of monetary policy, would be one way of harnessing that wisdom. This would allow central banks to listen to a potentially much wider and richer array of views on the setting of policy, in particular from those who might otherwise be distant, disenfranchised or distrustful of central banks and their actions. It would open central banks’ ears (and eyebrows) to a wider range of societal stakeholders when setting policy. The information provided from the public could serve as another input to the policy-setting process, much as monetary policy rules (and other data) do today. What are the public telling us about the right setting of policy and why? Clearly, neither rules nor polls should be followed slavishly - the scope for misinformation and mishap is simply too great. And the whole purpose of delegating policy to an independent third-party is to avoid the short-termism that may sometimes affect the general public. Nonetheless, if crowds, like rules, sometimes contain wisdom – different perspectives, different views, different narratives – then harvesting this information could be an important additional input into the policy 79 80 81  Earle et al (2016). Mackay (1841). Tetlock and Gardner (2016). 26  All speeches are available online at www.bankofengland.co.uk/speeches  26  process. It would help reach, and solicit direct feedback from, those parts of society otherwise out of central banks’ reach. And it may, as a by-product, also improve public understanding of policy and the economy.
Lee Hsien Loong: Seizing the opportunities Address by Mr Lee Hsien Loong, Deputy Prime Minister of Singapore and Chairman of the Monetary Authority of Singapore, at the MAS Staff Seminar, Singapore, 18 November 2003. * I. *  *  Introduction  We held our last Staff Seminar in October 2002 against a backdrop of weak global economic conditions and uncertainties in the Middle East. We anticipated then that MAS would have to manage within a riskier environment. And this turned out to be so. For us in Asia, the Iraq war and the SARS outbreak weakened business and consumer spending, and caused a major setback to the recovery of the regional economies. However, with the easing of geopolitical tensions and the containment of SARS, sentiments have rebounded and the outlook has brightened. We should now actively prepare ourselves to ride on the recovery and seize the opportunities that are emerging. II. Economic and financial landscape  In the third quarter this year, the US economy expanded at a brisk annualized 7.2%, buoyed by rising productivity, strong investment and consumption. Economists are generally upbeat about US prospects for 2004. But they are concerned that in the longer term the US may not be able to drive the global economy, because of its large twin deficits, record household debt, and low personal savings. Europe is just starting to recover from two years of very weak growth.

It is up to the Singapore banks and their shareholders to consider these opposing arguments and continually reassess their strategies. They will need to decide whether they need further scale to compete effectively, and if so whether it should be achieved through consolidation at home, expansion and acquisition abroad, or a combination of both. MAS cannot make this judgment for them, though the continued strength of our banking system depends on their making the right judgment call. Whatever the outcome, we need a core of strong local banks, as the stability of our financial system hinges on that. Overall, the prospects for our financial centre look good. Last year, employment fell slightly because of mergers, consolidation and the general economic weakness, but the worst seems to be behind us. More jobs are being created by the new activities that are being attracted here and by expansion in  5  FitchRatings, The Singapore Banking System, 19 Apr 2002.  established areas like wealth management. The financial sector will continue to be an important contributor to economic growth. IV. Progress review of MAS’ 2003 business priorities  Let us now briefly review how well MAS has achieved its business priorities over the past year before we focus on what we must do to grasp the opportunities arising from the financial services upturn. Managing within a riskier environment First, managing within a riskier environment. The financial industry is ever-changing - risk management practices are constantly being tested and challenged by new business models and financial products.
Nonetheless, this pattern is at least consistent with a shift in working practices, towards a more divisible, idiosyncratic workforce, having contributed to a flatter Phillips curve relationship. None of this evidence is definitive or decisive. Taken together, however, it is at least suggestive that recent trends in the nature of work may have had some bearing both on wage-setting behaviour in general and on the weak wage puzzle in particular. Shifts in working patterns seem very unlikely, by themselves, to have been the prime-mover of weak wages. But they have probably been a contributor in the past and, more significantly, are likely to continue to do so in the future if these trends, as seems likely, perpetuate. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  The Case for Holding Fire  Let me now turn to monetary policy. Clearly, wages are a key factor when judging inflation pressures in the economy and the monetary policy stance. Continuing the pattern since the crisis, recent wage growth has been, once again, surprisingly weak. Despite unemployment falling to its lowest level, and employment rising to its highest level, in a generation, whole-economy wage growth has failed to pick-up. Indeed, wage growth over recent months appears, if anything, to have been falling. At the start of the year, the Bank of England Agents’ annual wage survey suggested pay settlements would slow from 2.7% last year to 2.2% this. At the time, there was healthy scepticism within the Bank about these findings.

In particular, it is worth exploring whether these changes may have contributed, in any way, to the weak wage puzzle experienced over recent years. And, if so, given that these trends are likely to persist, whether they carry implications for the durability of wage weakness too. Why, in principle, might these changes affect wage behaviour? One story here is “divide and conquer”. There is power in numbers. A workforce that is more easily divided than in the past may find itself more easily conquered. In other words, a world of divisible work may reduce workers’ wage-bargaining power. Another story is that more flexible working practices may have induced previously inactive people back into work. With more people willing to enter employment, upward pressure on wages may be dampened even as labour demand picks up given the higher rate of labour market participation in the economy. In either case, the downstream consequences would be similar: weaker wage growth than in the past, for a given level of unemployment or demand in the economy. That is the theory. What empirical evidence is there to support these stories? The Changing Nature of Work  Let me start by outlining some of the facts on the changing nature of work and the divisibility of labour. At the level of the profession or sector, one clear diagnostic comes from the changing pattern of unionisation. In 1990, around 38% of employees in Great Britain belonged to a trade union.