samchain/econo-pairs-v1 huggingface dataset:
While these results are specific to the model and should not to be taken literally, they do suggest that policies should be assigned to the frictions that they have a comparative advantage in addressing. In the model, the limit on leverage always binds. So it is unsurprising that when adjustments to credit supply are called for, an instrument which acts directly on that friction – the macro-prudential instrument – is more effective than one working through several channels, namely monetary policy. So, to the extent that movements in bank capital and leverage are key factors driving risk taking and aggregate lending, the deployment of macro-prudential policy is likely to be more effective than trying to “lean against the wind” using monetary policy. The experiments shown in Chart 8 assume a single policy maker, who is able to commit to future policies. In practice it is probably more plausible to assume an inability to commit, as well as the possibility that decisions on monetary policy and macro-prudential policy are made by different actors. In particular, the latter allows us to investigate the risk of a “pushme, pull-you” outcome, in which the macro-prudential authority tightens the availability of credit and then the monetary authority just offsets that by lowering interest rates in order to stimulate aggregate demand to keep inflation on track. We first consider the case of a single policy maker who controls both instruments, but who is unable to tie his hands over future policy actions (Chart 9, red dashed line).

And we have, of course, tried to assess the impact of the dramatic stock market decline from the peaks in 2000 on macroeconomic conditions and financial stability. In this regard, it mattered that, partly linked to the introduction of the euro, the outstanding amount of shares substantially increased in the euro area. For non-financial corporations in the euro area, the annual net issuance of shares increased from 1.7% of GDP in 1995 to 7.3% of GDP in 2000. At the same time, during the late 1990s, the distribution of shares across the euro area population broadened significantly, implying that more households invested in shares in the late 1990s than before. Corrected for valuation effects, the amount of household’s holdings of shares and mutual fund shares increased between 1995 and 2003 by 78%. Against this background, stock prices have become more relevant to economic conditions in the euro area in recent years. And indeed, when stock prices started to fall, we could see that this had a notable dampening effect on the euro area economy in the period 2001-2003. What role do asset prices play in the ECB’s monetary policy? After this description of the current situation, the crucial question is: how do asset price developments enter into the assessment of the outlook for price stability and how they influence the policy-formulation of the ECB. Recently, much attention has been devoted to the question of which monetary policy strategies are optimal in an environment of strong asset price fluctuations.
This is particularly important due to the different phase of development of the various countries in the takaful sector. The sharing and learning of the experience of the more advanced jurisdictions will not only accelerate the development of takaful but will also allow for the maximization of efficient usage of limited resources. The Islamic Development Bank (IDB) together with the IFSB should be commended for having initiated the move to chart a 10-year Masterplan for the Islamic financial services industry, one that could assist member countries in their quest to develop a well-structured Islamic financial  4  BIS Review 13/2006  system. Malaysia and the IDB have also signed a memorandum of understanding to enhance cooperation among member countries of the Organisation of Islamic Conference, or OIC, in the areas of trade, investment, Islamic finance and ICT development. In the area of takaful, a working committee has been created to encourage the establishment of takaful companies in member countries and promote retakaful business amongst IDB members. 22. For the regulators in charge of Islamic finance, the setting up of the IFSB remained one of the landmark developments in this decade. Established in 2002, the IFSB's core role is to promote prudent, transparent and robust development of the Islamic financial services industry through the promulgation of international prudential standards that are consistent with the principles of Shariah. This would be the foundation for the stable and sustainable development of Islamic finance.

The other is how difficult most of us in western Europe find it to understand how rapidly things are moving and how much has already occurred in these countries. The image of a west European with shopping bags full of aid to the poor neighbours in the east still remains, while we are incapable of seeing how much we can pick up from the new member countries. How poor are the candidate countries? I should like to begin with a critical examination of the picture we normally give of the applicant countries. Two common illustrations of the economic side of the EU enlargement eastwards are graphs showing the development of production since the fall of Communism and a table of the income differences between east and west. If we look at the statistics summed up in the European Commission's reports, GDP per capita adjusted for purchasing power (PPP), the gap certainly looks huge. The riches of the 10 central and east European candidate countries, Slovenia, with 72 per cent of the EU average, and the Czech Republic, with 60 per cent of the EU average, are around as poor as countries like Greece, Portugal and Spain were before they joined the EU. However, the poorest countries in the applicant group, Bulgaria and Rumania, have only approximately 25 per cent of the EU average. The graphs for production levels since 1990 look equally gloomy, only at the end of the 1990s do they reach the same level as at the fall of the Berlin Wall.
Given the fact that in many economies, the banking system predominantly relies on domestic sources of financing, we will also take a look at the impact on the yield on savings. Second, the ECB monetary policy through the quantitative easing, flooded the system with liquidity, part of which potentially could be allocated into the region. Therefore, we will analyze the financial flows in the region to better understand the abundance of the flows, changes in the pattern and in their structure. Third, we will explore whether the suppressed interest rates in the Euro Area have impacted the cost of sovereign borrowing of the government. Despite the heterogeneity of the monetary policy and exchange rate regimes in the region, the policy rate reaction of the central banks has been mostly in line with the accommodative stance of the ECB. In general, low interest rate environment in the Euro zone allowed a room for lower interest rates in the region, without any major disturbances in the external sector. At the very beginning of the crisis, some of the countries due to some specific constraints were not able to follow the ECB actions, while since 2009 almost all economies followed a loosening pattern. This was the case for Macedonia, where the central bank initially tightened, as well in 2016, as a response to pressures on the exchange rate, which is a primary concern in a fixed exchange rate regime.

Interest rates and exchange rates Percentage points and index, 18 November 1992=100, quarterly average 4  130 Interest rate differential (left scale) KIX index (right scale)  3  125 Weaker krona  2  120  1  115  0  110  -1  105  Stronger krona  -2  100 95  97  99  01  03  05  07  09  11  13  Sources: National sources and the Riksbank  4  BIS central bankers’ speeches  The effect on the krona has thus arisen when expectations of the repo rate have changed, rather than when repo-rate decisions have been made. The expectations have probably been affected gradually, as the significance of the indebtedness for the decisions has become clearer. Moreover, exchange rates are at the same time affected by several factors that are connected with both expectations and market functioning. This makes it difficult to see with the naked eye how a particular monetary policy stance will affect the krona rate – unless it entails a large, sudden and unexpected deviation from earlier patterns. But nevertheless, consideration to household indebtedness and developments on the housing market have entailed a larger interest rate differential in relation to other countries, and thus probably a stronger krona, than we would have had otherwise. Between spring 2010 and autumn 2013, the interest rate differential in relation to other countries measured in terms of the KIX9 index increased by around one percentage point.
To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. 2/3  BIS central bankers' speeches  In order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer-term growth potential and reducing vulnerabilities. The implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. This is particularly important in view of the overall limited implementation of the 2018 country-specific recommendations, as recently communicated by the European Commission. Regarding fiscal policies, the mildly expansionary euro area fiscal stance and the operation of automatic stabilisers are providing support to economic activity. At the same time, countries where government debt is high need to continue rebuilding fiscal buffers. All countries should continue to increase efforts to achieve a more growth-friendly composition of public finances. Likewise, the transparent and consistent implementation of the European Union’s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. Improving the functioning of Economic and Monetary Union remains a priority.

Third, we decided to launch a new series of quarterly targeted longer-term refinancing operations (TLTRO-III), starting in September 2019 and ending in March 2021, each with a maturity of two years. These new operations will help to preserve favourable bank lending conditions and the smooth transmission of monetary policy. Under TLTRO-III, counterparties will be entitled to borrow up to 30% of the stock of eligible loans as at 28 February 2019 at a rate indexed to the interest rate on the main refinancing operations over the life of each operation. Like the outstanding TLTRO programme, TLTRO III will feature built-in incentives for credit conditions to remain favourable. Further details on the precise terms of TLTRO-III will be communicated in due course. Fourth, we will continue conducting our lending operations as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of the reserve maintenance period starting in March 2021. Today’s monetary policy decisions were taken to ensure that inflation remains on a sustained path towards levels that are below, but close to, 2% over the medium term. While there are signs that some of the idiosyncratic domestic factors dampening growth are starting to fade, the weakening in economic data points to a sizeable moderation in the pace of the economic expansion that will extend into the current year. The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment.
And we also monitor new developments in the financial system to check that everything is appropriately covered by regulation and that we are not missing any new risks. We have taken action to insure against potential financial stability risks from the housing market. And we aim to protect the system against wider operational and cyber risks as well as from financial ones. 3 The UK’s evolving economic resilience  What does all this mean for how we are setting policy today? The biggest single shock to the UK economy since the global financial crisis has been the Brexit referendum result and its aftermath. In many ways the nations and regions which make up the UK have proved resilient to that ongoing shock. Employment growth has remained historically strong, with unemployment falling to 3.8%. Wage growth has picked up after years of subdued growth, with private sector regular pay growth now at 3½%. And GDP turned out to be robust: it has grown by around 1% more than we predicted in August 2016, immediately after the referendum – but still by around 1½% less than we predicted in May 2016. Part of that resilience reflects the fact that Brexit has been a slow-moving policy and political process, now nearing the end of its third year.

We have evaluated what effect of a worst case disorderly scenario, featuring much lower GDP, higher inflation and unemployment and much lower house prices, would be on the core banking system, and concluded that it would be resilient to such an event – in other words that banks would be able to continue to lend to households and businesses in a way  11  All speeches are available online at www.bankofengland.co.uk/news/speeches  11  Chart 11: Expectations for the impact of Brexit on business  Net percentage balance 50  Deal and transition  No deal and no transition  40 30 20 10 0 -10 -20 -30 -40  they couldn’t at the time of the financial crisis. Just as importantly, we have published our assessment of the most significant risks to financial stability from disruption to cross-border services in a disorderly scenario, and we have worked with other authorities in the UK and EU to mitigate those risks. This work has been largely successful: in our view most risks to financial stability that could arise have been mitigated – although, particularly in the absence of further actions by EU authorities, some potential risks to financial stability, primarily to EU households and businesses, remain. And it’s important to note that financial stability is not the same as market stability; a no deal, no transition Brexit could still be expected to bring significant market volatility, as well as economic instability.
It has the drive and solutions to bring our economy forward and the wisdom and compassion to help all Singaporeans. The government is paying particular attention to those in the lower-income group to help them and ensure that they, like the rest of Singapore, benefit from globalisation. It is a strong and pragmatic government with integrity and sound values. It gives the country a clear sense of direction, anticipates and solves problems, rallies the people towards common goals and takes care of all Singaporeans. The challenge for Singapore is how to keep on producing an exceptional government. Without exceptional government, Singapore will lose its influence internationally, become a mediocre country and be marginalised. This brings me to the second critical success factor – talent. While good governance provides the necessary conditions for growth – political stability, social harmony, justice and equal opportunities – what drives the economy and Singapore forward is talent. We need talent in the public and private sectors, in the arts and the social sector, in government institutions, in NGOs and the people sector, and in business and the economy. Countries now actively compete for talent to power their economy. They want to attract foreign talent while retaining their own. Even China which has 1.3 billion people wants to attract back its overseas Chinese talent and import foreign talent. 2  BIS Review 55/2007  To ensure that Singapore continues to have a strong talent base, we have to build, attract and retain talent.

Finance will complement - and potentially amplify these initiatives– but it will never substitute for climate policy action. The policy frameworks with the greatest impact will be: time consistent; transparent; target-based; and committed, through treaties, nationally determined contributions (NDCs), domestic legislation and consensus. The 20 countries – including the UK – that have plans to legislate for net zero show what can be done. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  If countries build their track records, their credibility will grow, and the market will allocate capital to deliver the necessary innovation and growth and pull forward the adjustment to a low carbon future. The more prolific the reporting, the more robust the risk management and the more widespread the return optimisation, the more rapidly the insurance sector can build resilience while promoting the transition that our citizens demand. 10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10
When used in connection with these products, the Internet no longer acts solely as an access device to communicate payment information to merchants and banks. Instead, the transfer of “value” over the Internet will become, for all practical purposes, the modern day equivalent of tendering currency in satisfaction of a debt. While private electronic money will not have “legal tender” status, electronic money issuers will use private contractual relationships to effect discharge of their obligations. “Electronic money” is essentially the re-emergence in the United States of privately-issued currency, the value of which depends on the financial health of the issuer. Because electronic value is simply a promise of the issuer to pay on demand, the question arises as to whether the issuance of electronic value should be limited to banks and other supervised institutions. In the United BIS Review 26/1998  -3States, banks have been intricately linked to the payments system and, as a result, are subject to unique regulatory burdens such as reserve requirements, deposit insurance premiums, and extensive supervision. Some argue that the safety and soundness of the payments system require limiting the issuance of electronic money to banks. In fact, some foreign jurisdictions, such as Japan and the European Union, have limited the issuance of electronic currency to banks or credit institutions in EU parlance. Unlike Europe and Japan, however, the United States is, at least for the time being, remaining silent on the issue of nonbank issuance of electronic money.

Conclusion Roughly eight years of extremely accommodative monetary policies on both sides of the Atlantic might lead to the notion that the ECB and Fed have been confronted with similar or even homogenous challenges. This would be a misapprehension. Major institutional and structural differences at the onset of the financial crisis explain why the clean-up efforts in the US were faster and more effective and the recovery was more sustainable. After the institutional short-comings of Monetary Union had been painfully exposed, much progress has been achieved on the road to completion and further integration. However, this institutional reform package took time. Now, economic recovery, although still timid, is under way in the euro area. But this finding cannot be taken as an excuse to rest on our laurels. More determined structural reforms need to be implemented to lift the growth potential and overcome the ultra-low interest rate phase. A more determined approach to tackle the problem of non-performing loans is necessary to tackle the remaining legacy of banking crisis. When the macroeconomic ship is engulfed by a major storm, all hands – not just monetary policy – need to man the pumps. This, indeed, holds true on both sides of the ocean. 1 Lang, J. H., Peltonen, T. and Sarlin, P., “A framework for early-warning modeling with an application to banks”,  Working Paper Series, ECB, forthcoming. 2 Ghysels, E., Idier, J., Manganelli, S. and O. Vergote, (2014), “Ahigh frequency assessment of the ECB Securities  Market Programme”, ECB Working Paper No. 1642.
The MPC helps to determine monetary conditions in the UK, with a view to hitting a 2% inflation target on a sustainable basis. Monetary conditions in the UK remain highly accommodative by any historical metric. Bank Rate currently stands at 0.5%, as it has stood for much of the past decade. That is, by some margin, lower than at any time in the Bank’s 324-year history, which it celebrates next month. With headline inflation running at around 2.4%, this means inflation-adjusted interest rates in the UK are currently significantly negative. The MPC has also undertaken asset purchases amounting to almost £ trillion since 2009. This has provided additional monetary stimulus to the UK economy, at its peak equivalent to a further reduction in interest rates of up to around 2.5 percentage points. 52  Taking account of that would put inflation-adjusted  interest rates into even more deeply negative territory. 50  As discussed, for example, in Carney (2017). For example, Ramsden (2018) and Tenreyro (2018). 52 Estimated based on simple ready-reckoners. There is a high degree of uncertainty around these estimates. In the May 2014 Inflation Report, the MPC judged that QE had a peak effect on GDP of around 2.5% in 2013. The range of QE estimates in Joyce et al (2011) would suggest that would have a percentage point impact on annual inflation of roughly half that amount. Joyce et al (2011) also suggest as a ready reckoner than a 100bp cut in interest rates would boost inflation by 0.5pp.

Unfortunately it is not possible to repeat the outstanding performance observed in macroeconomic aggregates in the labor market. In February 2006, the unemployment rate increased by 0.2 percentage points compared to February 2005 and reached 11.9 percent. Meanwhile, non-agricultural unemployment decreased by 0.6 percentage points compared to the same period last year and came down to 14.8 percent. In the last one-year-period, the number of people working in sectors other than the agricultural sector increased by 829 thousand. The rise in employment can mostly be attributed to structural factors. Non-agricultural sectors have a bigger potential for creating jobs. However, it is a fact that there are structural problems in the labor market, especially in the agricultural sector. Now, let me share these problems with you briefly. The data pertaining to the labor market in Turkey point to a rapid shift of workers from the agricultural sector to other sectors for the last four years. The share of agricultural employment in total employment, which was 38 percent in 2001, came down to 25.1 percent by February 2006. However, when the EU-15 average of 3.7 percent recorded in 2004 is taken into account, it is obvious that 25.1 percent is still very high. Meanwhile, it is expected that the shift from the agricultural sector to nonagricultural sectors will continue and the share of the agricultural sector in total employment will gradually decrease. The decline in agricultural employment prevents a decline in the unemployment rate.