samchain/econo-pairs-v1 huggingface dataset:
Marzunisham Omar: Welcoming remarks - 23rd Asia/Pacific Group on Money Laundering (APG) Typologies Workshop Welcoming remarks by Mr Marzunisham Omar, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 23rd Asia/Pacific Group on Money Laundering (APG) Typologies Workshop, 9 November 2021. * * * It is my pleasure to welcome all of you to the 23rd APG Typologies Workshop. This is the second time the Annual Typologies Workshop is held virtually. Malaysia is pleased to jointly host the Workshop with the APG Secretariat. After more than a year of COVID-19, the past few months have seen the ease of the pandemic and the lifting of restrictions by most countries. Despite the challenging environment, it is encouraging to note that the authorities remain vigilant in the fight against money laundering (ML), terrorism financing (TF) and proliferation financing (PF). Indeed, we are facing new and increasing challenges following the increasing sophistication of financial tools and products. This morning, allow me to share four observations on the recent developments and challenges that are pertinent in strengthening AML/CFT/CPF measures. First, on therapid changes of ML/TF/PF methods and risks that are driven by technology. As the shift towards digitalisation especially in the financial industry accelerates, the emerging risks presented are intensifying. The rapid change in technology sometimes result in AML/CFT/CPF measures undertaken by authorities to be reactive. For example, we see this in the virtual asset sector given its rapid development and widespread innovations.

Given the significant potential of PPP, we have identified it as one of the APG Co-Chairs’ Priorities and we have also successfully conducted the first part of the PPP Technical Seminar in July this year. For the upcoming PPP sessions in this Workshop, I believe speakers will explore more advanced topics including the operational and technical challenges of diverse PPP arrangements as well as the future of PPP, especially in relation to possible regional collaborative efforts. I trust that this would bring the conversation to the next level and encourage similar set-ups by other APG members. The third observation is on changes in the international AML/CFT/CPF standards . The FATF is continuously enhancing its Standards through various workstreams to ensure the availability of up-to-date policy responses and to facilitate better incorporation of the Standards into domestic laws and regulations. As you are aware, a recent change to the FATF Standards was the introduction of a requirement to identify and assess the risks of potential breaches, nonimplementation or evasion of the targeted financial sanctions related to PF and to take action to mitigate these risks. As authorities and the private sector are expected to promptly take necessary steps to implement this new requirement, it is timely for our Workshop to have further discussions on this matter. Compared to ML and TF, proliferation financing is usually considered a relatively new area and less understood.
The economy has experienced a soft landing after the long period of high cost inflation in Norway and sluggish external activity. •  Output has returned to trend and is now showing a marked rise. •  Employment has returned to trend and is rising. •  Unemployment is at the 1996-level, and is at the average for the 1990s. •  Wage growth is broadly in line with a level that is consistent with the inflation target given nomal productivity growth. •  Overall credit growth is balanced. Credit is expanding broadly in line with trend growth in nominal GDP. •  Labour costs in Norway relative to our trading partners are now broadly in line with a long-term average. •  The nominal krone exchange rate is in line with the average for the 1990s. •  The interest rate level is near the level prevailing among our trading partners. •  Inflation expectations are approximately consistent with the target. In that respect, there is equilibrium in the Norwegian economy. But the current inflation rate is low, and external and domestic interest rates are low. Lagged effects of the strong krone in 2002 are exerting downward pressure on inflation. At the same time, a change in trade patterns and external economic conditions are pushing down import prices, even when measured in terms of what Norwegian importers pay in foreign currency. In Norway, intensified competition appears to be resulting in high productivity growth, which is probably contributing to low inflation.

Whether for market counterparties, central banks or backstop providers, lending decisions are much easier to contemplate where solvency is assured in the operating entities that need funding. Work in FSB to date has concentrated on what is necessary to stabilise G-SIBs at the point of entry to resolution, whether changes to firms to make them resolvable - like TLAC and operational continuity requirements - or to market contracts and conventions - like the ISDA Protocol or access to FMIs. But bail-in is not the end of the task. It is a prelude to whatever reorganisation is necessary to restore a firm to viability or to wind it down. Importantly though bail-in buys the time for that process to be orderly. Post bail-in restructuring runs as a thread through some of the other initiatives I have mentioned. It is part of the operational continuity principles. And, as part of the access to FMI work we are keen to investigate how easy it would be in resolution to dismantle the quasiFMI functions – payment services, clearing and custody – provided by G-SIBs to clients, financial and non-financial. However easy or difficult it is to transfer or wind-down services provided by a G-SIB, clients may have contingency providers themselves or may want to rely on the portability of their positions to move. If they are to move we need to find a way for that to happen in an orderly way. Post bail-in restructuring is also where ring-fencing of UK banks fits in.
In order to mitigate the inherent pro-cyclical nature of financial activities, to which I will return later, the Basel Committee’s proposals also contain capital buffers and forward-looking provisioning. Finally, the proposals include global minimum liquidity risk requirements enabling credit institutions to withstand a short-term liquidity stress and aiming to ensure longer-term stability in their funding requirements. The objective of this comprehensive package is to enable financial institutions to better withstand the adverse effects of economic shocks. In order to assess the cumulative impact of the proposals, quantitative impact assessments are underway. The outcome will be available in the coming weeks, and will assist decision-makers in properly calibrating the measures. At this stage, therefore, it is premature for me to say anything about the desirable  2  BIS Review 87/2010  calibration of the measures. Nevertheless, I am of the view that the measures are warranted from a conceptual point of view, though their cumulative impact needs to be carefully assessed. Indeed, it is important that the right balance is struck between enhancing banking stability and maintaining a stable provision of credit to the economy. IV. What has been done? The main strands of the reform agenda I come to paint are at various stages of development. It is therefore useful to briefly run through what has already been achieved, in particular in Europe. Starting with the prudential framework for banks, most FSB members, including the EU Member States, have fully implemented the more risk-sensitive Basel II framework.

John C Williams: A different kind of recession Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Institute of International Finance: Central Banking in the Age of COVID-19 Summit, 30 June 2020. * * * As prepared for delivery Thank you for the warm introduction. When the United States entered the pandemic in March, I never expected that three and a half months later I would still be making speeches from my apartment: I look forward to the day when gathering in groups is safe and we can meet in person. We're now 17 weeks into a catastrophic pandemic which has cost over 500,000 lives worldwide and has had a devastating effect on economies across the globe.1 Today I'm going to talk about the current state of the U.S. economy, our goals for the recovery, and how the Federal Reserve is responding to the worst recession in living memory. Before I continue, let me give the usual disclaimer that the views I express are mine alone and do not necessarily reflect those of the Federal Open Market Committee or anyone else in the Federal Reserve System. A Different Kind of Recession The economic effects of the coronavirus have caused great hardship and created enormous uncertainty. The root of this downturn—a global pandemic—means this is a completely different kind of recession compared to anything we've experienced in the past.
Supervisors should also stand ready to act if bubbles like phenomena appear in some markets. For emerging economies, measures aimed at stabilizing capital inflows may help and relieve the pressure on domestic financial conditions and prevent further asset bubbles. International financial architecture In the longer run, however, we may need to work together towards a more efficient and stable international financial architecture. Let me highlight three possible avenues for progress. First, we have to find ways of dealing with international capital flows volatility. For one given country, capital controls may temporarily reduce the pressure on its capital account or even permanently limit the volatility of its exchange rate. For the whole international system, however, they may simply displace the pressure to other countries or asset classes and exacerbate, rather than reduce, overall volatility. There might be ways to eliminate those  2  BIS Review 160/2010  negative effects by creating a predictable framework defining the circumstances, modalities and conditions through which temporary controls would be implemented. Second, there would be benefits in finding ways to disconnect reserve accumulation from exchange rate management and, more generally, from balance of payment situations and monetary policies. At present, reserve accumulation can only occur through a conjunction of balance of payment surplus and some degree of exchange rate intervention. Emerging countries have increased their foreign exchange reserves from 4 percent of GDP in 1990 to over 20 percent on average today.

The really hard question for us is could we - or should we - attempt to protect those businesses most affected by the strong exchange rate even if that meant putting the economy as a whole at significant risk of rising inflation. The reality is that, were we to do so - notwithstanding our specific mandate from the Government - we would not succeed in protecting even the suffering sectors except possibly in the very short term; and in the medium to long term our overall economic performance - in terms of growth and employment would - on all past experience - almost certainly be worse. As it is, Mr President, the recovery in the world economy, and the extraordinary efforts of UK businesses themselves to cope with the hostile international environment, are already resulting in a stronger net external trade performance. That in turn is contributing to the recovery in our own economy, particularly in manufacturing output growth, and to the more encouraging news in recent surveys. To the extent that this improvement in external demand persists, it will help to ease the exceptional pressures on the most internationally-exposed sectors, and contribute to a better balance within the UK economy. But it needs, of course, to be accompanied by corresponding moderation of the growth of domestic demand - after the offsetting stimulus of a year ago - if we are to maintain overall stability. That essentially is why interest rates have had to rise since last autumn.
It is also well-known, including from historical experience, that productivity depends importantly on a number of structural features of the economy, including levels of education and skills in the workforce, the quality and quantity of infrastructure and innovation and the scale of financing to companies. Price and financial stability are necessary conditions for rising productivity. But they are far from being sufficient ones. When it comes to those structural features of the economy, central banks do not have the tools to affect lasting change. Central bank tools are cyclical, rather than structural, because their impact on the economy is temporary, not permanent. We do not build schools, colleges, houses, roads, railways or banks. Nor do we finance them. Those tools, rightly, are in the hands either of governments or private companies. So too is the financing of them. Through their role in securing stability in prices and the financial system, central banks do have a clear interest in understanding the forces shaping productivity and the supply-side of the economy. Central banks can also help in diagnosing productivity problems and in identifying policies that could lift barriers to productivity improvement. That is the purpose of this lecture. It is also the reason several Bank colleagues have given recent speeches on this topic. 51  Before turning to that, let me say something about monetary policy. The job of securing price stability falls to the Bank of England’s Monetary Policy Committee (MPC), of which I am a member.

4.1  Innovative and diversified Swiss international trade  Looking at the structure of Switzerland’s international trade will allow me to dispel some wellestablished preconceptions about the Swiss economy. If I asked you to list some core Swiss economic sectors, you would probably mention banks, watches and chocolate. But Switzerland is much more than that. The Swiss economy is in fact highly diversified. For example, the share in total value added of the sector comprising financial, insurance and  BIS central bankers’ speeches  3  business services is smaller than the EU average (20.3% vs 26.2% in 2012, according to OECD figures). By contrast, the share of the manufacturing sector is significantly larger. Overall, the amount of goods and services that Switzerland sells abroad is equivalent to half of its Gross Domestic Product (GDP). Goods dominate export activity but, with a share of one-third, the contribution of services is by no means negligible. The export intensity is significantly above the OECD average. Switzerland is surpassed by the Benelux countries, however. Part of the gap with the Benelux reflects the extensive re-exports of imported goods generated by the activity of the world-class ports in Belgium and the Netherlands. Admittedly, access to the sea is not a key comparative advantage of Switzerland… In order to maintain competitiveness, the Swiss export sector has gone through profound structural changes during the last decades. First, there has been a shift in the composition of the export sector (figure 4).
Our research indicates that this increase in aggregate debt was due to increases in both the number of borrowers as well as increases in the average balance per borrower. Between 2004 and 2014, the number of borrowers increased by 92 percent from 23 million borrowers to 43 million. In the same period, average debt per borrower increased by 74 percent, from about $ to $ With respect to the rise in the number of borrowers, we find that a steadily increasing share of young people are taking out student loans: in 2004, only about 27 percent of 25 year olds had student debt while 9 years later, in 2013, the proportion of 25 years olds with student debt had increased to about 45 percent. There are several explanations for these increases. First, more people are attending college 1. Second, students are staying in college longer and attending graduate school in greater numbers, and loans to finance graduate study have become more readily available. Third, competing non-education sources of credit such as home equity loans and credit card debt have imposed tighter underwriting standards, and generally have become less available since 2008. A fourth reason is the slow repayment rate on these loans, which I will discuss in more detail a little later. But another important reason for the increase in overall student debt, which I will discuss first, is the significant growth in the cost of a college education during the period 2.

This requires all actors – both at national and European level – to play their parts in line with their respective mandates as laid down in the EU Treaties. BIS central bankers’ speeches  1  No monetary stimulus, indeed no fiscal stimulus, can be successful unless accompanied by the right structural policies – policies that foster potential growth and instil confidence. I would like to illustrate this argument by focusing on investment, which will also be discussed at the informal ECOFIN this weekend. Investment has been one of the great casualties of this crisis. The downturn in business investment in the euro area since 2008 has been much more severe than in earlier business cycles. From peak to trough, business investment decreased by around 20%, against 15% in the 1992 recession. The level of business investment in the euro area has only slightly improved since 2008, whereas in the US it is above its pre-crisis level. We will not see a sustainable recovery unless this changes. A decisive rise in investment is essential to bring inflation closer to where we would want to see it, to stimulate the economy, and to bring down unemployment. So what can we policy-makers do to revive investment? My main message today is that only if structural, fiscal and monetary policies go hand in hand will the euro area see investment return. Let me focus in particular on the decisive contribution which structural policies can make.
(a) Descending the Jobs Ladder The global financial crisis generated a sharp fall in output. Given that fall, the subsequent rise in unemployment was more modest than expected. Between 2008 Q1 and 2009 Q2, UK output fell by around 6 ¼%, while unemployment rose by just over 2 ½ percentage points. By comparison, in the early 1990s recession output fell by around 2% peak-to-trough, while the unemployment rate increased by over 2.5 percentage points. Chart 15: Forecasts for unemployment Per cent  12 10 8 6 4 2 0  2005  2007  2009  2011  February 2009  2013  2015  February 2010  2017  2019  Actual  Sources: ONS, Bank of England and Bank of England calculations. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  Put differently, in the immediate aftermath of the global financial crisis, unemployment rose by less than was expected by most mainstream forecasters, including the Bank. Chart 15 shows Bank forecasts for unemployment in early-2009 and early-2010. Having expected unemployment to peak at over 10.5%, the eventual peak of 8.5% was reached in late-2011. More recently, the “Okun’s Law” relationship appears to have steepened as weak productivity growth since the crisis has seen unemployment fall sharply since 2012 despite more modest GDP growth (Chart 16).

On the cusp of the pandemic, inflation expectations had just started to go down as we saw them approaching 4%. The pandemic derailed that trend. Inflation expectations this year have grown drastically to a five-year high. What does that mean in practice? It means that people rush to buy everything before prices grow, and are taking out a lot of loans. And that further fuels demand and inflation. Whereas some central banks can afford to take a wait-and-see stance to adjust to demand — thanks to the consumer behaviour shaped by the expectations that price growth will stop, we cannot afford that policy. Conversely, if we miss the right moment to make a prompt monetary policy response, we will then have to raise the key rate even more. Our own experience and some countries’ history prove that. We are in a situation similar to that in the US and Germany in the 1970s and 1980s. The Bundesbank moved to raise its interest rate right away, but the Federal Reserve maintained its accommodative policy for a long time on expectations that the crisis would pass. As a result, while Germany saw a quick drop in inflation and an economic rebound, the US went into stagflation, and the Fed was forced to conduct an extremely tight policy, the consequences of which were felt for many years. Food prices are soaring on the back of a disappointing harvest, a rise in global food prices and in labour costs in agriculture.
This occurs because all firms assume a worst-case scenario – that they will be unable to access liquidity when required – and this causes them to hoard liquidity. Alternatively when information is dispersed across a large number of people, each with a noisy signal about economic fundamentals, outcomes may be determined by an “information cascade”, the outcome of which is hard to predict (Banerjee, 1992; Bikhchandani et al, 1992). 5  See May and Arinaminpathy (2010) for a model of the financial system which makes this distinction. 4  BIS Review 36/2010  There is strong experimental evidence that people are subject to biases when collecting and processing information under uncertainty, and that such processing occurs only intermittently. 6 The evidence suggests that people are also frequently incoherent in assessing, assigning and processing probabilities – even in highly artificial settings where information is complete – and find it particularly difficult to assess probabilities which are very low or very high, partly because there is less scope for learning in these cases. There is also evidence that, when making complex decisions or without full information, such as when deciding whether to have eye surgery, people often use rough heuristics, or go on first impressions, appearances, gut instinct or intuition. We want to highlight four main aspects of the behavioural view: (i)  Perceptions of risk have been shown to be unduly influenced by recent or personal experience.

But structural factors are also playing a role: higher import volumes as a result of advanced globalisation have increased the importance of international prices relative to domestic prices, forcing domestic mark-ups to be less sensitive to the state of the domestic economy. This may imply that monetary policy has to react more aggressively to counteract shocks. So in combination, central banks may be facing a two-pronged challenge to their mandates: a situation where, due to the role of global inflation, more stimulus is needed than in the past to deliver their domestic mandates; and where, due to the falling equilibrium interest rates, their ability to deliver that stimulus is more constrained. That would certainly offer one explanation for why monetary policy has needed to stay accommodative for so long across advanced economies. This does not make monetary policy ineffective. As we have seen in the euro area, even with a low equilibrium rate central banks can still steer conditions in the wider economy by targeting directly the constellation of interest rates that matter for borrowers. But one nonetheless cannot deny that the fall in the equilibrium rate poses a challenge for central banks. This challenge for monetary policy has been recognised, with a number of innovative solutions proposed by academics. Let me mention two but also say upfront that I am not particularly convinced by any of them. One option that has been mooted is to allow nominal interest rates to go deeper into negative territory.