samchain/econo-pairs-v1 huggingface dataset:
On occasions it has been argued that the higher regulatory pressure on banking activity in recent years, together with the future regulatory requirements pending implementation following finalisation of the Basel III agreements, have negative effects on banks’ profitability. Irrespective of this, it should be recalled that the Basel III reform package aims to address the shortcomings identified in the regulatory framework in place prior to the global financial crisis and to strengthen regulation, supervision and banking practice internationally in the interest of financial stability. In accordance with this aim, the Basel III reforms have significantly strengthened the resilience of the global banking system. Specifically, since 2011, internationally active banks’ common equity tier 1 (CET1) capital has risen by 91% to over € trillion. In addition, the average risk-weighted CET1 ratio has risen from 7.2% to 13%, while banks’ average tier 1 capital leverage ratio has risen from 3.5% to 6%. Moreover, these figures will likely continue to rise in coming years, given that some of the Basel III reforms will not be fully in place until 2022. Indeed some, such as the output floor, which limits the difference between risk-weighted assets (RWAs) under the standardised and IRB approaches, have a transition period that may continue up until 2027. A document published by the Basel Committee3 in June reviews the recent academic literature on the macroeconomic benefits and costs of higher capital requirements.

Similarly, banks should address the technology risk stemming from the impact of the adoption of new technologies on, for example, the probability of suffering cyberattacks, with extremely high potential effects on operational risk and banks’ own reputation. Lastly, climate change and the transition towards a more sustainable economy pose another key challenge. Although this affects all economic agents, it is particularly important in the financial sector. Banks face two types of risks in this area: “physical” risks linked to the direct effect of climate change on their asset values, and “transition” risks linked to the process of technological and regulatory transition to a more sustainable economy. In coming years, identifying, quantifying and mitigating these risks will require considerable effort, although the notable development of green sustainable financial markets in Spain in recent years should be highlighted. 2. Low interest rates and banks’ risk appetite In a low interest rate setting, there are greater incentives for economic agents to take on greater risk. The work of the macro- and microprudential authorities consists in ensuring that this greater risk-taking is not excessive and does not ultimately generate problems for financial stability. The authorities should use the various prudential instruments at their disposal to prevent this from occurring. The longer interest rates remain low, the more likely it is that risk-taking may become excessive. Clearly, deposit institutions are not immune to this, especially when profitability is low. Let us now assess the situation in this respect in the case of the Spanish banking sector.
Privatesector job growth has been strong enough to more than offset government layoffs, particularly at the state and local levels. A particularly encouraging sign is the rapid growth of manufacturing jobs over the past year and the recent broadening strength in services employment. While the exact pace of a jobs market recovery is always hard to predict, we were expecting the rate of job growth to pick up over the first half, and I am hopeful that job growth will continue to strengthen in the coming months. We would welcome this. However, even if the economy added 300,000 jobs per month from now on, we would likely still have considerable labor market slack at the end of 2012. Despite these clearly encouraging signs, there are still some downside risks to the growth outlook that bear watching. Let me list them for you:   As I mentioned earlier, high oil and commodity prices have cut into household purchasing power, a difficult situation for many families that could constrain overall spending more than I anticipate.   The renewed decline in home prices could dampen consumer spending and housing activity more than I expect.   Finally, aggressive near-term government spending cuts or tax increases could slow economic growth at least in the short- to medium-term. I would emphasize, however, that a credible plan for medium-term fiscal consolidation is sorely required and would have many economic benefits. Although these issues bear watching, they remain risks rather than likely outcomes.

Profitability is an important component here - if the banks’ profitability is poor, it may drive them to invest in more risky projects in an attempt to regain profitability. What loan losses might the banks suffer in the future? By looking at the quality of the banks’ assets, we link the analysis of the banks to the analysis of the borrowers. Might the banks suffer liquidity problems? We study the banks’ financing capacity to obtain an impression of this. The final chapter contains an analysis of the financial infrastructure. This must function so efficiently that any problems arising within an individual financial institution or sub-market will not spread to other participants or markets. Nor should there be any problems in the infrastructure resulting from shocks to the systems themselves. Analysis of the infrastructure is made difficult by the fact that it also requires fairly detailed insight into how different computer systems are constructed - technological issues thus become more important here than in other areas. Each report concludes with one or more articles. These articles give us an opportunity for more in-depth analysis of various fields or for presenting the results of various studies. This is all done with the aim of increasing our knowledge and making us even better at analysing and overseeing the financial system. Although the standard layout of the report provides some form of framework for our analysis work, we are constantly developing our analyses. Conditions change, with new operators, risks and technological developments.
Figure 2  Private consumption (*)  Gross fixed capital formation (*)  (contribution to annual change, percentage)  (contribution to annual change, percentage)  10  2  5  1  0  0 -1  -5  -2  -10  -3  -15  -4 -20 15  16  17  18  19  20  Durable goods  Non-durable goods  Services  Private consumption  21  -5  15  16  17 M&E  (*) Source: Central Bank of Chile. Page 15 of 27  19  20  Construction and works  18  GFCF  21  Figure 3 Selected employment indicators (1) (millions of persons)  National, Metropolitan Region and Greater Santiago INE (National)  UC (National)  Salaried formal (2)  UCH (G. Santiago)  10 9  6.0  INE  AFP  AFC  Jul-19  Jan-20  Jul-20  5.5  8  5.0  7 6  4.5  5 4  4.0  3 2  3.5  1 3.0 Jan-19  0 Jan-19  Jul-19  Jan-20  Jul-20  Jan-21  Jan-21  (1) INE, AFC, and AFP data in moving quarterly averages. (2) Quarterly data with monthly interpolation.

The previous trend growth update (2019), only considered changes in the labor factor associated with immigration to the country, without modifying the TFP growth assumption made in the previous estimate (2017). Page 6 of 27  As for the long-term prices of copper and oil, they are revised in opposite directions. Copper is raised from USD 2.7 to 3.3 per pound, while oil is reduced from USD 70 to 60 per barrel. It should be noted that these prices are the ones where the prices of copper and oil are expected to be in 10 years’ time. In the case of copper, this is different from the assumption used in the calculation of the structural rule, which corresponds to the average of the next ten years, and not its end point. The upward revision to the copper price stems from the expectation of exponential growth in copper demand associated with the “green wave”. This presents itself in a context where, although conventional demand is declining, the foreseen increase in production will be insufficient to offset the aforesaid demand increase due to said “green wave” towards 2030. For this to occur, new investment projects would need to enter the sector, and there are no such projects in sight. Moreover, in the past year different international organizations and specialized institutions have raised the copper price expectation five and ten years ahead and is now around USD 3.3.
This is buttressed by the way in which the Bank’s Court of nonexecutive directors approaches its statutory responsibility of reviewing the MPC’s processes, involving annual bilateral meetings with each MPC member. And, externally, it is similarly underpinned by the Treasury Select Committee holding us individually accountable for our monthly votes, which are published as part of the minutes of our meetings. This establishes very powerful incentives for each member to reach their own considered view. There is no free-riding in the MPC; and our policy debates are full and free. That lies at the very heart of the MPC’s operation, performance and communications. Indeed, it might be wondered whether the tone of some of the public scrutiny could set up incentives to cast minority votes with the aim of demonstrating independence of thought and action. 23 That, of course, would be perverse. Each member wants their individual decisions to matter – to the current Bank Rate, and to the expected path of policy and so the monetary conditions embodied in the money market yield curve. One votes in a minority when one disagrees with the immediate decision and the strategy it might convey. Occasionally, doing so, with the reasons disclosed in the minutes, can be an effective way of influencing monetary conditions. The make-up of the MPC’s majorities and minorities shifts around over time. There are no “blocs” on the Committee. And there is no distinction between “internals” and “externals” in that respect.

Reflecting changes in the structure of the financial system, we have included questions on demand for  30  “The transmission mechanism of monetary policy”, a paper by the Monetary Policy Committee, April 1999. 31  “The Bank of England’s submission regarding the economic context”, memorandum submitted in evidence to the Treasury Select Committee inquiry on “The Monetary Policy Committee of the Bank of England: Ten years On”, April 2007. 32  See Goodhart, C. A. E., 2007, “Whatever Became of the Monetary Aggregates?”, Peston Lecture at Queen Mary College, London, and King M. A. K., 2007, “The MPC ten years on”, lecture to the Society of Business Economists, May. 33  See Tucker, P. M. W., 2006, “Macro, asset price and financial system uncertainties”, Roy Bridge Memorial Lecture to the ACI – The Financial Markets Association, Bank of England Quarterly Bulletin, Spring 2007, page 127 for discussion on growth in financial sector money holdings, and page 129 for discussion of the composition of balance sheets of large banks. 8  BIS Review 66/2007  credit from hedge funds and structured finance vehicles, as well as on the terms and conditions on bank lending to households and firms. Second, we need to be careful in distinguishing the implications of credit conditions and asset prices from any extra role played by the rate of growth in banking sector liabilities (broad money).
We actively support the design of, and participate in, a number of market wide exercises to explore coordination in the unlikely event of a major outage to the retail systems, or participants’ connections to the retail systems. SIMEX16 focused on a multi-day outage to RTGS and SIMEX18 focused on a protracted operational outage of a Global Systemically Important Bank; a summary report of SIMEX18 was published last month.15 Next month, we will participate in a desktop exercise to explore the impact of large scale rerouting of payments between CHAPS and Faster Payments. These exercises are sponsored by a Cross Market Operational Resilience Group which is co-chaired by UK Finance and the PRA. The Bank and Pay.UK are also exploring a potential solution for allowing batches of critical retail payments to settle directly over the renewed RTGS infrastructure, whilst ensuring critical wholesale payments are not impacted. This solution could help the FPC’s pilot impact tolerance be met for retail payments in the unlikely event of a major outage to the retail systems. Providing additional channels for retail payments to settle in a contingency situation increases the resiliency of the whole financial system, making it even less likely that users will experience a delay to their salaries, pensions, or other time sensitive payments. The Bank is planning to introduce ISO 20022, an international standard for financial messaging, for CHAPS. Pay.UK also plan to introduce ISO 20022 in their New Payments Architecture: together we are developing what is known as a Common Credit Message.

But the point that really should be emphasized is that external surplus and reserves accumulation, for the most part, are a reflection of the dynamic of the adjustment in global investment and saving that has taken place since the Asian financial crisis. This dynamic has been instigated by the configuration of policies pursued by the major economies and by emerging markets, as well as by the development of financial institutions and markets around the world that has sped up and influenced the direction of global capital flows. But why the Asian financial crisis as a starting point? To me, the Asian financial crisis marks a number of important watersheds in the global financial relationship. BIS Review 134/2007  1  First, the crisis reaffirms the dominant roles of market and globalized capital. Second, the severity of the crisis led many emerging economies to rethink their policies of relying on external help for crisis prevention and resolution. And this has led to consideration to selfinsure against risk of crisis, with reserves accumulation becoming an important aspect of this consideration. And third, sharp adjustments in relative prices, especially real exchange rate and real interest rates after the crisis, brought into play the major forces that led to the adjustment in global investment and savings, as well as reserves accumulation. Today, I want to identify three factors as the major forces contributing to external surplus and reserves accumulation. The first is the process of global investment-savings adjustment that I have noted.
BIS Review 60/2006  3  Chart 4  : Cross-border investments in shares, 1989-2002  USD trillion 30 25.9  25 21.3  20  16.8 13.5  15 10.5  10  0  11.9 11.2  9.7 8.0  5.1  5  18.7  15.0  2.4  2.1  5.7 10.9  3.0  1.5 0.6  1.4 1.0  2.1  1989  1992  1995  4.8  5.5  7.1  1997  1998  1999  2000  9.4  2001  7.5  2002  Purchase of domestic security by a foreign investor (CAGR - 16%) Purchase of foreign security on investors' local exchange (CAGR - 22%) CAGR ― Compounded Average Growth Rate. Source: McKinsey Global Institute.

21  Feldstein M., Horioka C. “Domestic Savings and International Capital Flows”, Economic Journal, June 1980. 10  BIS Review 60/2006  work of 1980 estimated the correlation between the national savings rate and the investment rate in the years 1960-1974 at 0.89. This correlation for the years 1990-1997 was estimated at 0.60, and having included South Korea – at 0.76. Despite a pronounced fall, the correlation between the national savings and investment remained high. 22 his constituted a peculiar puzzle, as in the global world of finance there were no good reasons for which investments were to be financed with residents’ savings rather than with loans drawn on the global financial market. As in the case of the “Lucas puzzle”, numerous works have been written to explain this phenomenon. In the most recent work by Martin Feldstein regarding this subject, 23 the newly estimated correlation rate gradually decreased over subsequent decades to reach a mere 0.19 in the decade ending in 2002. The decreases regard mostly smaller countries, but the estimates for large countries also show that the correlation rate fell from 0.92 down to 0.59. Therefore, it seems that over 10 recent years the process of globalization of financial markets exhibited a pronounced deepening. One may wonder why the recent years have witnessed acceleration and deepening of the globalization process, given that some phenomena that are universally deemed the reasons behind globalization, started a few decades ago.
My remarks today will focus on three areas – firstly, the outlook for the Malaysian economy as developments continue to unfold in the domestic and international economic environment. Secondly, I will discuss some of the key lessons that may be drawn from the recent credit turmoil and their implications for the Malaysian banking system. And finally, I will take the opportunity to share with you some thoughts on our vision for the financial sector beyond our current financial sector masterplan and the thrust of our strategies going forward. The Malaysian economy enters this more challenging period following several consecutive years of solid growth that averaged 6%. The economy grew by 6.3% in 2007, the fastest pace in three years with the growth momentum being sustained in the first half of 2008. In the first quarter of this year, the economy expanded by 7.1%. This stronger growth was achieved despite the more difficult environment with slower global growth and increased uncertainties in the international financial markets. The successful transformation of the Malaysian economy in this recent decade has been one of the important contributing factors. It has led to more diversified sources of growth resulting in a more balanced economy. While the external sector remains important, domestic demand now has a more significant role in driving the growth process. In addition, the services sector has become a more important source of growth. Moreover, the agriculture sector continues to expand as Malaysia benefits from the high commodities prices.

2  BIS Review 134/2009  I would like to thank everyone, particularly Bahçesehir University and Koç University, who have contributed to the organization of this conference. I hope that it will be a productive conference and I would also like to extend my regards to the contributors of this event, to the participants and all the guests. BIS Review 134/2009  3
However, it is worth mentioning once more that the banking system should not slacken risk management principles by simply relying on the more flexible and effective liquidity management of the Central Bank; to the contrary, it should use risk management principles effectively. 10  BIS Review 1/2007  ANNEX: Calendar for 2007 MPC Meeting Dates  Inflation Report  16 January, Tuesday  29 January, Monday  Financial Stability Report  15 February, Thursday 15 March, Thursday 18 April, Wednesday  27 April, Friday  14 May, Monday  31 May, Thursday  14 June, Thursday 12 July, Thursday  27 July, Friday  14 August, Tuesday 13 September, Thursday 16 October, Tuesday 14 November, Wednesday  26 October, Friday 30 November, Friday  13 December, Thursday  BIS Review 1/2007  11

This is to ensure that the adopted international standards are consistent with Asia’s long-term interest in sustaining economic growth and stability, while helping to promote higher standards for banking supervision and regulation globally. To this end, I think emerging markets Asia, as a group, must aim for a coordinated response on at least three fronts. First, is the coordinated approach with respect to implementing the new global regulatory standards. This means emerging market Asia needs to aim for a degree of flexibility whereby national or regional variation or discretion is warranted in pursuing the shared global standards. The aim of flexibility is to adapt the new standards for local settings, taking account of the vast diversity that exists in levels of development and structures of the region’s financial systems. The dimensions which such adaptive flexibility may apply include timing of implementation, as well as technical calibration of policy measures. Second, to ensure an effective adoption of the global standards, Asia needs to establish a regional approach or standards on the key regulatory and supervisory issues. For example, on the issue of cross-border supervision, we need more effective home-host relationships with more authority for host supervisors with regard to information sharing especially during a crisis, and national discretion on capital and liquidity requirements of local operations of SIFIs.
Of course a fall in house prices benefits buyers just as it hurts sellers so there is no necessary link to wider consumption. But the belief that in housing you could have your cake and eat it – that is your house would not just provide a place to live but would also provide an assured capital gain – has become widespread and the shock to expectations appears to be having a wider impact on confidence. There are also signs in some of the more timely survey indicators of consumer spending that weakness is spreading there too. If nothing else were going on, the MPC would expect this prospective weakness in overall demand to put downward pressure on inflation in the medium term and that would be pointing to further rate cuts. The commodity price cycle However, there is something else going on! Because if the US still drives the financial cycle, it has become less dominant in the world economy. According to the IMF, emerging and developing countries together generated around 70% of world growth in 2007, with China alone generating around 25%. And the world economy has been and still is growing strongly. That is what has been driving the rise in oil and commodity prices. For example, since the start of 2005, China has accounted for almost all of the increase in world demand for key metals such as aluminium, copper and zinc. And since 2000, around one-third of the increase in world demand for oil has emanated from China.

Inflation has fallen to single digit, while the exchange rate has remained relatively stable. In 2011 inflation closed at 7.2% from 7.9% in 2010. In February 2012, inflation was recorded at 6.0%;  iii. The financial sector has also recorded tremendous growth since the commencement of liberal economic and financial policies in the early 1990s; and  iv. Equally, positive developments have been registered in the payment systems. I must caution though that sustaining macroeconomic stability remains a key challenge in the face of a weak global economic outlook and limited domestic resources. It is important that we all keep an eye on economic developments with a view to striking a balance between wealth redistribution on one hand and sustaining the required investment and economic growth on the other. Ladies and gentlemen, in the recent past, we have witnessed a number of work stoppages as workers press for increased remuneration. In this regard, I wish to urge the Union leadership to be wary of sparking a wage price spiral because this may cause a rise in inflation. As you may be aware, high inflation is detrimental to our economy because of the following reasons: i. Makes Planning difficult for economic agents;  BIS central bankers’ speeches  1  ii. Companies and consumers are unable to draw up effective investment and expenditure plans;  iii. Government is also unable to make good projections of revenue collections and thus unable to effectively plan its current and capital expenditures;  iv.