samchain/econo-pairs-v1 huggingface dataset:
The positive example is actually none of the strong economies in eastern Europe, not Estonia, Poland or Hungary, but Ireland – which made good use of all opportunities to compete with its cheaper and increasingly well-educated labour force after EU membership, while gradually reforming its tax and subsidy system. During the 1990s, Ireland doubled its growth rate from just over 3.5 per cent a year to over 7 per cent – well in line with the most dynamic Asian economies – and GDP per capita, which was 40 per cent below the EU's average as recently as in the 1970s, is now above. We must hope for the sake of both the EU and the candidate countries that the new members will follow the example of Ireland and not that of the former GDR. It is important to focus the enlargement process on what is relevant to the real economy. What is important for the candidate countries and the current EU economies is that the new members are given the chance to catch up with the EU. Free trade (as in the Europe agreement), stable institutions (adopting and applying the EU's fundamental regulations, what is known as the "acquis") and a wise macroeconomic policy are the things we should hope for and expect – no more than that.

The Riksbank is also involved when the candidate countries present their "Pre-accession Economic Programmes" (PEP) for the EU countries. These PEP programmes are exercises where the countries attempt to analyse and present their economic challenges in the way they will in future, as  BIS Review 9/2002  5  EU members, present stability and convergence programmes and consult on economic policy within the framework of the Broad Economic Policy Guidelines. Hopefully, the Riksbank will be able to contribute with analysis of economic activity and structural issues in these countries, not merely for our own forecasts but also in relation to the EU and ECB. What we can learn from the candidate countries Before I finish, I would like to go from speaking of what the candidate countries can learn from us to pointing out what we can learn from them. Several of the former planned economies are now in some areas better adapted to the EMU than today's EU countries. Several of them have, for instance, a flexible labour market and wage formation. This appears to have contributed to enabling the Baltic states to cope with the Russia crisis and the breakdown of the Russian market, without their reform efforts and growth coming to a standstill. This flexibility also makes them extremely well suited in this respect for a monetary union like the EMU. The preparedness to implement structural reforms also appears greater.
If we have a world made up of one very large country and several very small countries, with full cross-border financial integration (in the 1  For a more expanded version of what follows, see my published work, in particular Gudmundsson (2008) and Gudmundsson (2016). 2  economic sense of these terms rather than the legal one), and assume that relative risk premia are constant, then long-term interest rates in the small countries will be pegged to long-term rates in the large one. This, of course, is an “unrealistic” theoretical simplification. But it gives us a reference point to start to think about these issues, and it indicates the direction we might be heading in as global financial integration progresses. In this type of world, the small countries could still have independent monetary policy of a sort, provided that they have a flexible exchange rate regime. They could pick their own inflation targets and set their own short-term rates that would affect economic activity in the short run and inflation in the long run. In this case, monetary policy works mostly through the exchange rate channel. If exchange rates are “well behaved” and the financial sector is sufficiently regulated and supervised, then a floating exchange rate and “keeping your own house in order” is sufficient for independent monetary policy and financial stability. The problem is, however, that exchange rates are sometimes far from being smooth reflections of underlying fundamentals.

The problem with both is that other policies, such as fiscal policy, will then have to take care of domestic economic stabilisation. But will they? Third, they can use FX intervention to reduce the effect of volatile capital flows on the exchange rate. Fourth, they can increase resilience and the ability to live with exchange rate fluctuations (reduce the fear of floating) by strengthening financial regulation and supervision or employing macroprudential tools. Fifth, if everything else fails, they can introduce tools aimed directly at the financial integration part in order to regain greater monetary independence and shift the effect of monetary policy more to the interest rate channel and towards the non-traded goods sector. These so-called capital flow management measures are probably most needed when countries are faced with large capital inflows at the same time as domestic conditions warrant significantly higher interest rates than among core rate setters. In Iceland, we have used many of these tools in recent years. We have used FX intervention to reduce short-term exchange rate fluctuations and, in recent years, to lean against strong appreciation pressures. We have introduced a liquidity coverage ratio and a net stable funding ratio in foreign currencies. In 2016 we were faced with strong capital inflows that flattened the yield curve as the policy rate was being increased and more was signalled. We then introduced a special 2  Rey (2013) and Obstfeld (2015) analyse this issue and provide somewhat different views on whether it is a dilemma or a trilemma.
Notwithstanding this significant progress, the process of innovation in Islamic finance has generally been structured mainly along the adaptation approach. Although there are Islamic financial instruments that are distinct from the conventional financial instruments, the numbers are still few. In most instances, the Islamic financial products are repackaged along the features of the conventional financial products, while eliminating the elements that are not in compliance with the Shariah. The Islamic financial services industry is now at the threshold of a new level of development. As we advance forward, the Islamic financial services industry can expect to have a different set of regulatory and supervisory standards which is conducive to its unique financial operations. There is also an increased awareness and understanding amongst the international financial community on the distinct nature of Islamic banking and financial operations. In addition, a higher degree of Shariah dynamism is evident in the evolution of sophisticated Islamic financial products that are being structured based on multiple Shariah concepts. Against these developments, it is timely to move away from “plain vanilla” innovation and to embrace a new wave of innovation that will evolve Islamic financial instruments into distinct products that will maximize the potential and wisdom of the Shariah and that meets the greater sophistication of consumers and the more complex requirements of today’s businesses. This paradigm of innovation in Islamic finance, which by itself shall accord Islamic financial institutions with the competitive advantage to forge ahead, entails substantial and continuous investments in research and development (R&D).

As an anniversary usually brings up both a tally of what was done in the past, and wishes for the future, I will try to have some measure of both in my congratulatory address to you. Practicing our profession involves our capability to serve society and help the Bulgarian economy. Because, as we are all very well aware, banks have high responsibilities in a market economy – the ongoing technological innovation, developing and offering new products and services, as well as the predictability and stability of banks are a mandatory prerequisite for economic prosperity. From my first day as a BNB Governor to this very day, I have never stopped reiterating and instilling the idea that this responsibility requires the individual efforts of each one of us to be governed by a long-term goal – let’s call it a sense of mission – which goes beyond the specific financial or market considerations of the current day. It is exactly a jubilee like today’s that reminds us of the historic horizons behind the daily statistics, balance sheets or income statements, which ultimately mark the road of new and democratic Bulgaria. Speaking of history, exactly the current crisis stirs the need to examine the past. It is often said about this crisis that it has been the biggest one globally in the recent decades.
This would incorporate any direct transaction expense, such as fees or brokerage costs, the price the transaction was executed at relative to the midpoint of bid-ask spreads, how much – if at all – the size of the transaction moved market prices, and the immediacy or speediness with which the transaction could be completed. How quickly prices revert back to earlier prices after a large trade also is relevant in assessing liquidity costs. The costs of liquidity would go up if the costs of execution rose, the bid-ask spread widened, if prices moved more in response to a given sized transaction or if it took a longer period of time to complete the transaction and receive cash. In assessing liquidity, we also need to distinguish between those liquidity conditions that generally prevail versus those that arise during periods of market stress when liquidity may become constrained. Liquidity risk is the risk that liquidity might be impaired in the future when one wants to buy or sell an asset. If liquidity risk is high, this means that there is a substantial risk that the price received could be at a greater concession to the prior trade than anticipated. Liquidity is dynamic, unobservable and multi-dimensional in nature, and, as such, can only be measured indirectly. We can measure liquidity using a number of metrics, including bidask spreads, market depth and price impact. Bid-ask spreads are a measure of the potential compensation for market makers for liquidity provision.

The contention is that higher liquidity costs and more frequent illiquidity events will, over time, drive up the borrowing costs of households, businesses and the U.S. government; and that this is a substantial, largely unintended cost imposed by tougher regulation. Thus, the argument concludes, the regulatory burden should be rolled back. This is a noteworthy assertion and would have significant implications for regulatory policy if it were correct. However, as I will lay out in my remarks, I don’t think the hypothesis is wellsupported by the available evidence. First, the evidence to date that liquidity has diminished markedly is, at best, mixed. Second, even if one were to interpret the evidence as indicating that liquidity has been reduced, it is not clear whether regulation is the primary driver, as other changes have played important roles as well. Moreover, even if higher capital and new liquidity requirements were found to result in greater transaction costs, these costs would need to be assessed against the benefits of having a more robust and resilient financial system and a reduced risk of financial crises in the future. That said, more work should be undertaken to fully assess this issue. There is much that is still unknown. The available market liquidity data primarily focus on the inter-dealer markets and thus do not shed light on possible liquidity changes between dealers and customers. In addition, the financial system is adjusting in complex ways in reaction to regulatory, technological and other changes.
The rate of increase of household consumption, one of the most dynamic items in that period, will foreseeably slacken, in line with the diminished growth rate of earnings and the lower contribution of other sources of income, in particular those stemming from general government measures. The response of consumption is expected to be consistent with a declining trajectory of the saving ratio, in step with the changes observed since the start of the year, after almost two years of successive increases in this ratio. It is very likely the other domestic demand components will continue to reflect the  BIS Review 129/2010  3  weakness of their main determinants. In the case of investment in equipment, this will be due to the excess capacity built up during the crisis and the still-prevailing uncertainty over financing conditions; and in that of residential investment, to the need to complete the adjustment set in train back in 2006. In contrast, net external demand is expected to be more buoyant once the high growth rates of imports of the previous quarters ease, rates which were linked largely to the bringing forward of certain spending decisions, and exports continue on their rising course. For this to occur, perseverance will be needed in anchoring the cost- and price-competitiveness improvements obtained in recent quarters and entrenching them with genuine productivity gains.

Amendments introduced the legal provisions with the aim to extend investment possibilities of open pension funds, to provide better diversification and to decrease investment risk would fall within the trend currently observed in many countries. All over the world, pension funds may invest abroad, taking even recourse to hedging funds to this end 13 . In most OECD Member States, pension funds may hedge the value of investment portfolio on derivatives 14 . Those changes depend on thorough restructuring of supervision over the open pension funds sector, i.e. the development of a supervision system based on the assessment of risk of open pension funds’ portfolio (risk-based supervision). The supervisory institutions should not concentrate on analyzing formal restrictions imposed onto open pension funds by law, but they should examine the risk of the entire portfolio instead. This development has been widely observed also in other supervisory areas (banks, insurance companies). By way of recapitulation, let me outline the infrastructure of the European clearing system in about 10 years’ time, as prepared by the NBP. At first, let me define the main elements of this infrastructure, which include: 1.  trade platform where transactions on the capital market are performed,  2.  central counterparties (CCP) performing the clearing functions on the capital market,  3.  securities settlement systems (central depositories) performing the depository and settlement functions  10  Black F. (1989), “Universal Hedging: Optimizing Currency Risk and Reward in International Equity Portfolios”, Financial Analyst Journal, July-August 1989.
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Possibly, the number of authorities involved could be reduced somewhat if the mandate is based on an agreement between only the directly involved countries. At this point, it is however not very clear how such a contract could be made legally binding. Although solutions that are adapted to a specific situation are better than no solution at all, I am sceptical as to their practicability in a dynamic world. They have the same basic flaws as the model of home country lead supervision. In a constantly transforming banking landscape, relevant jurisdictions will change when principal ownership is transferred from one nationality to another. That’s why I also don’t believe in so called regional solutions. A third way, and in my opinion the most logical step in the long run, would be to focus some authority on a European level to deal with the relatively limited number of most important cross-border banks. Supervision of these banks would in my opinion benefit from the establishment of a European financial supervisor. Some opponents of this idea have claimed that proximity might then be lost, and a European supervisor wouldn’t receive enough knowledge about the markets where the institution operates. To my mind, this is not a very convincing argument. First, this problem is no less in the home-host model. Second, it is an organisational problem that can be solved. An EU supervisor would certainly employ staff from all EU countries and have local offices in the national financial centres.
In Finland, unemployment has fallen sharply from the high level that took hold in the 1990s, and wage growth has slowed. In the euro area, unemployment has dropped without an increase in wage growth. In Norway, the high growth in labour costs may be a source of rising unemployment. In connection with the wage settlement last year, short-term interest rates rose by 1½ percentage points. The substantial rise in costs in Norway, which was reflected in the strong pay increases for white-collar employees and in the centralised income settlement, contributed to pushing up interest rates. In previous periods, higher wage growth has also been accompanied by a rise in interest rates. In 1998, the negotiated wage increases, in conjunction with the depreciation of the krone exchange rate, led to a rise in interest rates of 4½ percentage points over the spring and summer months. The income settlement in 1986, which was negotiated during the strongest boom in the post-war period, resulted in a severe cost shock for Norwegian enterprises and, combined with the fall in oil prices, forced a devaluation of the Norwegian krone. This was followed by high interest rates over several years. Falling wage and cost inflation from 1989, however, provided the basis for the decline in interest rates from 1992. The centralised income settlements are important for wage and interest rate developments, but they do not take place in a vacuum. The outcome is influenced by labour market tightness and income developments for groups other than those covered by the centralised settlements.

As shown in the chart, the risk premium in capital markets on long-term credit to enterprises has increased. In addition, many international enterprises now have a poorer credit rating than earlier This has also affected borrowing in Norwegian companies, which now have to place greater emphasis on their customers’ ability to honour commitments. International financial and capital markets are characterised by uncertainty and unrest. This unrest is not found among economic agents in Norway. As long as oil prices are high, the Norwegian economy is fairly sheltered. Many central banks are now reducing their key rates. As our economy is affected to a lesser extent, the differential between short rates in Norway and abroad may widen. Monetary policy The long-term objective of monetary policy is to provide the Norwegian economy with a nominal anchor – domestic price stability, and thereby the basis for a stable krone. Nominal stability is the best contribution monetary policy can make to economic growth and prosperity. A nominal anchor is also a necessary precondition for stable financial markets and property markets. High inflation and wide swings in the exchange rate impair the function of prices as an information vehicle. This leads to booms followed by busts and an arbitrary redistribution of income and wealth. Inflation therefore poisons the economy. By linking movements in the krone to the euro, we have chosen to follow the same standard for nominal stability in the economy as set by the euro area countries.
The Central Bank of Turkey aims to fulfill expectations by operating as a sound institution through its independent, transparent and accountable status, by policy implementations focused on its sole mandate of price stability and by practices to increase efficiency in institutional design. 4  BIS Review 57/2007  Hence, it is a great honor for me to be here with all the executives and former governors who have made the Central Bank of Turkey what it is today throughout this period. I would like to extend my thanks to them all again for all their valuable contributions to this important institution. Thank you. BIS Review 57/2007  5

“Working Together for Sustainable Growth” Special Address by Dr. Veerathai Santiprabhob Governor of the Bank of Thailand WFE General Assembly & Annual Meeting Programme 6 September 2017 | Grand Hyatt Erawan Bangkok, Thailand Khun Kesara Manchusree, President of the Stock Exchange of Thailand, Ms. Nandini Sukumar, Chief Executive Officer of World Federation of Exchanges, Chairpersons, Presidents, Chief Executive Officers and top management of leading global exchanges, Ladies and gentlemen, A very good evening to you all. First of all, I would like to thank the World Federation of Exchanges (WFE) and the Stock Exchange of Thailand (SET) for inviting me to be a part of this annual event. I must admit that while I was at the SET, I looked forward to participating in this forum every year, as it often generated good new ideas and reaffirmed our commitments to enhance capital market for the benefit of the global economy. I am delighted to be back at the WFE General Assembly and Annual Meeting. But this year, I join the meeting in another capacity - wearing a different hat. It is my great honour and pleasure to be among distinguished guests and former colleagues. Ladies and gentlemen, Let me start by saying that it is an exciting time for the Thai economy and our region. The Thai economy continues to expand at a faster-than-expected pace. We are witnessing strong growth in exports and tourism. Government large-scale infrastructure investments are making good progress.
We revised 2023 and 2024 and ultimately to 2.3% [in 2025] which moved by 0.1 from the previous projections [of 2.2%]. I think on the basis of that you can easily conclude that we are not satisfied with the results of that inflation outlook – which is only one of the three components that we look at. That is the reason why we are making the monetary policy decision that we make today, and why we are thinking that, unless there was a material change to the baseline, we would again hike interest rates in July. I don't want to comment about the terminal rate. This is what markets are considering. 5/10  BIS - Central bankers' speeches  The terminal rate is something that we will know when we get there because it is not what is driving our analysis and our deliberations. What is driving it is the ultimate destination, which is the 2% inflation. That's what we want and there are lots of components that come in to help us arrive at the 2% target. We spent a lot of time on the labour market. We spent a lot of time because it is becoming one of the major components of the drivers of inflation. It was energy for a long time. To oversimplify: energy played a significant role, then food kicked in, and energy is now fading, has moved now in May and is in slightly negative territory.

Christine Lagarde: ECB press conference - introductory statement Introductory statement by Ms Christine Lagarde, President of the European Central Bank, and Mr Luis de Guindos, Vice-President of the European Central Bank, Frankfurt am Main, 15 June 2023. *** Good afternoon, the Vice-President and I welcome you to our press conference. Inflation has been coming down but is projected to remain too high for too long. We are determined to ensure that inflation returns to our two per cent medium-term target in a timely manner. The Governing Council therefore today decided to raise the three key ECB interest rates by 25 basis points. The rate increase today reflects our updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission. According to the June macroeconomic projections, Eurosystem staff expect headline inflation to average 5.4 per cent in 2023, 3.0 per cent in 2024 and 2.2 per cent in 2025. Indicators of underlying price pressures remain strong, although some show tentative signs of softening. Staff have revised up their projections for inflation excluding energy and food, especially for this year and next year, owing to past upward surprises and the implications of the robust labour market for the speed of disinflation. They now see it reaching 5.1 per cent in 2023, before it declines to 3.0 per cent in 2024 and 2.3 per cent in 2025. Staff have slightly lowered their economic growth projections for this year and next year.