samchain/econo-pairs-v1 huggingface dataset:
As a creature of the G10, the Committee could originally lay claim to coverage of most of the world’s truly internationally active banks. But as banks and financial markets became increasingly integrated across national borders, this claim to be the standard setter for all internationally active banks became more and more difficult to justify. During the 1990s and 2000s, the Committee made good use of its Core Principles Liaison Group to seek advice from members outside the G10. The CPLG’s contribution was highly  2  BIS central bankers’ speeches  constructive when Basel II was developed, for example. But as the size and importance of jurisdictions “outside the tent” grew, even this arrangement became increasingly untenable. And so, in 2009, the Committee essentially stepped up from a G10 to a G20 foundation as it sought a truly coordinated response to the global financial crisis. Indeed, we now have more than 40 organisations representing 27 member jurisdictions around the table. As a result, the Committee’s coverage of global banking assets has gone from about 60% to 90%. This much greater inclusiveness lends, in turn, greater legitimacy and credibility to the Committee’s standards, as they are now set by a process that is truly reflective of international markets. The fourth key influence is a more recent one – the shift in thinking from a micro- to a macroprudential perspective. For much of its life, the Committee focused primarily on microprudential issues.

That is not to say the macroprudential angle was ignored, but there was certainly a view – quite prevalent in the pre-crisis world – that if banks were individually stable, the financial system would itself stay upright. During the Great Moderation, little appetite existed for new tools and international regulations of a macroprudential nature, even if the Committee could have foreseen all of the looming threats. The financial crisis brought home the lesson that financial stability could not be assured only through the use of microprudential tools. And so Basel III represents another important step in the Committee’s development. Basel III has substantially enhanced the microprudential framework. And, in the countercyclical buffer, it has also introduced the first international agreement on a macroprudential tool. Subsequent work on the framework for systemically important banks (both global and domestic) has further expanded the Committee’s input into this relatively new field – a trend that is unlikely to be reversed. My fifth key influence on the Committee’s evolution is also quite recent, and hence its eventual impact on the Committee’s work is still difficult to foresee: its role in monitoring the implementation of Committee standards. Post-crisis, the Committee has not only expanded its membership, but it has also taken on the role of monitoring the implementation of the standards agreed by its members.
Rachel Lomax: UK monetary policy – the international context Speech by Ms Rachel Lomax, Deputy Governor of the Bank of England, at the APCIMS Annual Conference, London, 17 October 2005. *  *  *  Those of you who have logged on to the Bank of England’s website recently will have noticed that it has turned a cheerful shade of orange. It is a lovely website and we are very proud of it. But perhaps now was not the best time to major on pictures of happy shoppers clutching bulging carrier bags! The fact is that website design – like monetary policy - is beset by information problems and lengthy lags. These make it very hard to get the timing of changes just right. When the organisers of this conference pressed me for a title some weeks ago, I decided to talk about the international context for UK monetary policy for two reasons. First, I was fresh from a summer spent reading this year’s top business books, whose key theme is the dizzying pace of change in the global economy. But second, I wanted look beyond the shopping story that – understandably – tends to dominate the press, to some of the other factors that have to be weighed when the MPC sets interest rates. But let me start with the recent weakness in retail spending. Judging by the latest indicators, this looks like persisting, at least in the near term.

On the demand side, the relative importance of China and the US in powering the world economy may help to explain why world oil demand grew quite so strongly relative to world GDP last year. This year, however, the sharp rise in prices owes at least as much to supply factors. Allowing for these caveats, this is still a much stronger world economic background than, say, 2001. But there are several important risks to this outlook. The first concerns oil prices. So far the world economy has apparently taken a tripling in oil prices in its stride, thanks to the much lower oil intensity of output, and the greater flexibility in labour markets, in most advanced economies compared with a generation ago. It is also true that the short term capacity of oil producing countries to spend their increased revenues is now much greater than it was in the 70s. This helps to explain why consensus forecasts for world GDP growth next year have remained remarkably steady. But there is a very high level of uncertainty about future oil prices. Judging by the oil futures curve, the central view is that prices are likely to remain high, at around $ per barrel for the next few years at least. This is in contrast to 2000, when the oil futures curve was downward sloping. But the range of current Consensus forecasts is very wide – from around $ and $ per barrel.
It is therefore not enough for just central bank money to be sound money; bank deposits must be sound as well. When is central bank money sound money? But let us first consider the money that serves as the anchor of our monetary system. These days, central bank money is paper money: 4 there is no defined obligation as regards convertibility into gold, which makes the issuing of money completely flexible. 5 This brings considerable advantages. It allows central banks to adjust supply in line with demand and thus to keep the value of money stable over time. 6 Thanks to this flexibility, in crisis situations a central bank can make an important contribution to damage limitation by supplying additional 2  3 4 5 6  Just over two years ago, the Swiss electorate rejected the sovereign money initiative and its proposed change to a system based purely on central bank money. Prior to the vote, the SNB had also highlighted the disadvantages of such a move. Cf. inter alia Jordan, Thomas J. (2018), How money is created by the central bank and the banking system, speech at Zürcher Volkswirtschaftliche Gesellschaft, Zurich, 16 January, and Jordan, Thomas J. (2018), Why sovereign money would hurt Switzerland, speech at the Swiss Institute of Banking and Finance at the University of St. Gallen, St Gallen, 3 May. In addition to central bank money, the coins issued by the Confederation are also legal tender.

Against this background, it is timely that SEACEN Centre has initiated this course to explore the nature of financial intermediation, the role of financial markets in the allocation of resources and the need for appropriate regulatory framework. As regulators, we need to understand the concepts and the basics of the working, the pricing and trading strategies of the derivatives markets and instruments, how financial entities use them in risk management, as well as their potential impact on financial system stability. But more importantly, in these two weeks, we will benefit from the presence of a number of distinguished speakers that have kindly given up their time to be with us. I hope we will use this opportunity fully. On this note, I would like to thank Mr. Sunil Sharma, Chief, Asian Division, IMF Institute, for his efforts to coordinate this course with the SEACEN Centre and the Bank of Thailand. I trust that this course will be most fruitful and rewarding for all the participants, but above all that the interaction among yourselves will provide an opportunity for you to learn from one another, and strengthen the bonds of friendship that bind the works of our institutions for many years to come.
Norman T L Chan: The power of 3Cs Address by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Treasury Markets Summit 2012, Hong Kong, 12 October 2012. *  *  *  Good morning, ladies and gentlemen, I welcome you all to this fifth Treasury Markets Summit co-organised by the Treasury Markets Association and the Hong Kong Monetary Authority. In the past four Summits, discussions focused mainly on business opportunities available to financial market participants. This year, I am glad to note that, the Summit will also devote a session to analysing some of the fundamental elements of a first-class financial centre. Being an ardent believer of these fundamental elements, I would like to take this opportunity to share with you some of my thoughts on them. From time to time visitors from overseas come to see me and, during our conversations, the question of how Hong Kong has turned itself into a thriving and dynamic financial centre in Asia is often raised. It is not surprising that Hong Kong’s transformation from a trading port into an IFC within several decades has drawn a great deal of admiration as well as envy from neighbours within the region and beyond. This is because of the fact that an IFC will bring about much-desired economic growth, employment and prestige. So it is also not surprising that many cities in the region harbour ambitions of becoming international financial centres.

Among these firms it is common to find that they have a kind of incentive system that encourages and rewards excessive risk-taking and high sales-volume without regard to the interests of the firm or of the customers. Conclusion In my view, there is a lot that the boards and senior management of individual firms can do in ensuring that the corporate culture and incentive system encourage and nurture sound practices and appropriate values. The regulators and supervisors should also do their part to ensure that firms have in place a proper corporate governance framework. Professional and industry bodies should also play a key role in making sure that they promulgate suitable codes of conduct that define the standard of ethics and probity for their members. More importantly, professional and industry bodies should collaborate with supervisors to ensure that there is adequate policing and enforcement of the relevant codes governing ethics and conduct. Ladies and gentlemen, I would like to conclude my remarks by reiterating the importance of enhancing the power of the 3Cs, “Competence”, “Control” and “Culture”, if Hong Kong wishes to remain competitive as a world-class IFC. It is a difficult challenge, but competition is never easy. It will be a never-ending task as competition never ends. I am confident that if all the stakeholders share the same vision and work together to achieve the common goals, we can certainly make it. Thank you. BIS central bankers’ speeches  5
These two forces have created uncertainty and triggered a readjustment of portfolios to accommodate falling prices of financial assets and commodities, higher risk premiums and a generalized depreciation of emerging market currencies against the dollar. Overall, all these factors combined may have exacerbated the process of market adjustments, making it difficult to distinguish whether these are temporary or permanent in nature (figure 2). Although the aforesaid adjustments in the world are good news in the sense that they signal a transition towards a more balanced configuration of the global economy, for this year and next a less favorable international scenario for the Chilean economy is being configured. Accordingly, our growth projections for our trading partners are revised downwards, with higher credit costs and lower terms of trade than previously expected. The baseline scenario incorporates prices of $ and $ per pound for 2013 and 2014, respectively. This is quite lower than what we anticipated just a few months ago, when we projected prices of $ and $ per pound for those years. These elements add to the normalization that is being observed in domestic demand. Our economy is on a good standing to face the transition to this new configuration of the external scenario. The recent depreciation of the real exchange rate facilitates the adjustment of the Chilean economy, and monetary policy is available to make adjustments if required.

And the closure of the steelworks down the road a little over a year ago was a further blow to Teesside, with the loss of 2,200 jobs. 1  Yet it is not all doom and gloom. There are more people in work in the North-East today than at any time in its history. Over 48,000 more people have found jobs over the past 12 months. And the North-East alone has contributed 20% towards the overall fall in national unemployment over the last year. Or, if you like, the increase in employment over the last year is 7 times that at Nissan’s Sunderland plant alone. Despite the media headlines, the North-East has been one of the most dynamic areas of job creation in the country recently. Underpinning this above-average jobs performance has been above-average productivity growth in the region. So it is particularly appropriate to be here today at the Materials Processing Institute, which has been a global centre for research on the iron and steel industry since 1945. The Institute has contributed importantly to Teesside having a high concentration of high value-added industries, such as chemicals and processing, which have boosted jobs and productivity in the region. Today, I want today to discuss the economy, at both a national and regional level. I want to discuss what monetary policy can and, as importantly, cannot do to support the economy, nationally and regionally.
Headline inflation has been negative for quite some time, but could turn positive towards the later part of this year, barring large shocks to global oil prices or an unexpected decline in COE premiums. Our forecast for 2016 remains unchanged for CPI-All Items inflation at −1.0 to 0%. Headline inflation is expected to converge towards its historical average over the next couple of years. Monetary policy The progressive easing of monetary policy since January last year has been in line with weak underlying inflationary pressures. MAS has taken measured steps to reduce the slope of the nominal effective exchange rate band over the past 18 months. This has been validated by accumulating evidence of weakening inflationary pressures. In April 2016, MAS moved to a zero percent rate of appreciation for the Singapore dollar nominal effective exchange rate policy band. The current stance of monetary policy remains appropriate for overall macroeconomic conditions in 2016. MAS is monitoring global developments closely. Unless there is a marked deterioration in the global economy or significant shift to the inflation outlook, there is no need to change the monetary policy stance. The current stance will help ensure price stability in the medium term. Notwithstanding recent volatility in exchange rates, the nominal effective exchange rate of the Singapore dollar remains within the policy band. MAS’ exchange rate policy framework is sufficiently flexible to accommodate such heightened volatility in international financial markets. MAS stands ready to curb excessive volatility in the trade-weighted Singapore dollar.

BIS central bankers’ speeches  1  need to create stronger linkages in the vital areas of trade and investment, business as well as financial linkages. There are several ways to achieve this: 6. Firstly, the Asian Development Bank (ADB) has identified growing South-South economic linkages via trade and investment as a potential driver of global growth and emphasized the need for policymakers to further reduce barriers to trade and investment4. Trade between Asia, Middle East, Africa and Latin America has developed over the past two decades but still remains a relatively small 17% proportion of world trade. Asia’s share of total trade with the GCC grew from just 10% in 1980 to 36% in 20095. Having identified this as a priority area, ASEAN and GCC foreign ministers met in Singapore last year and agreed upon a Plan of Action to boost cooperation in trade and investment, among other areas. Islamic finance can potentially play a part in facilitating more trade between Asia and the Middle East with the involvement of more global and Islamic banks from both regions. 7. Secondly, the high level of savings and wealth accumulation in the GCC and Asia should also be mobilized by the financial sector and channeled towards more productive economic uses in both regions, especially to meet the demand for national infrastructure such as power plants, hospitals, roads and rail networks. The ADB Institute estimated that Asia will need $ trillion in infrastructure investment between 2010 and 2020.
The European Commission and the Economic and Financial Committee (EFC), which is the advisory arm of the EU Council of Economic and Finance Ministers, will also be involved, as will central banks and ministers of Member States outside the euro area. The latter, however, will act in a consultative capacity. At no point in the process, therefore, would the Central Bank of Malta or the government be able to establish the central parity rate, or modify it, on their own. This is standard procedure and statements suggesting otherwise are incorrect. Other than the central parity rate, there are two further decisions to be taken: the date of entry and the method of participation in ERM II. What about the date of entry in ERM II? Has this been decided? Although eligibility for entry in ERM II is not dependent on the fulfilment of a set of formal criteria, it is presumed that only Member States making progress in convergence can join the mechanism. Consequently, the formal application process for ERM II is normally preceded by an examination of the prospective applicant's economy. In Malta's case, an assessment was conducted earlier this year by the European Commission. The results will be discussed at a Eurogroup meeting in early April. Subject to a positive outcome, one would expect the Maltese authorities to make a formal application. If such an application is made, the Economic and Financial Committee would consider it during one of its subsequent meetings.

At such a meeting, Malta's method of participation in ERM II, including the central parity rate, would be agreed. The way would then be open to join the mechanism. ERM II is characterised by a standard fluctuation band of +/- 15 per cent per cent. How relevant do you expect such a band to be for Malta? The system allows so much flexibility to ease the burden of transformation and structural reforms in those Member States which still have a relatively long way to go before they reach average EU levels of development and whose exchange rate may not yet, therefore, have reached an equilibrium level. The standard band represents the maximum exchange rate flexibility that can be availed of, depending on individual country circumstances. The existence of the bands should not, therefore, give rise to the expectation that the exchange rate will automatically fluctuate to this extent. In the case of Malta, for example, the economy has already achieved a relatively high level of real and nominal convergence and one would, therefore, expect that the daily rate should remain close to the central parity rate. Indeed, given the crucial role that exchange rate stability plays in the highly open Maltese economy, and the significant credibility attained by the Maltese lira under the existing basket peg, the authorities would like to preserve the important positive effects of the current arrangement, namely exchange rate stability, during ERM II. Will participation in ERM II entail a change in the level of the lira/euro exchange rate?
Ensuring that Banks Continue to Serve the Real Economy While the effect of regulatory reforms on the broader economy has so far been benign, regulators must continue to pay close attention to the cumulative effects of various reforms and seek to minimise adverse consequences for the real economy. Let me highlight two areas that bear close watching: •  First, profitability in the banking sector. •  Second, distribution of credit to key segments of the economy. BIS central bankers’ speeches  3  Bank Profitability is Important for Bank Stability Let me start with bank profitability. Regulators are not in the business of ensuring profits for banks. But we have an interest in the profitability of banks for two reasons. First, banks need to be profitable in order to be strong. •  Retained earnings are one of the major sources of equity, which is in turn the highest quality capital held by banks. •  Healthy capital buffers in turn improve the resilience of banks against losses. Second, banks need to be profitable in order to be able to support the real economy. •  Banks have to earn a decent return on their credit intermediation role. •  A study by the Bank for International Settlements shows that banks with high capital ratios at the start of the Basel III process and strong profitability in the post-crisis years have tended to expand their lending more.

Conversely, unprofitable banks are a potential source of instability. •  Poor profitability and low retained earnings will inhibit banks in building up their capital buffers. •  Without sufficient capital buffers, banks may be less willing to lend, which may constrain the availability of financing to the economy. The Basel Committee is working hard at finetuning the Basel III capital rules: •  to reduce the variability in risk weighted assets applied by banks;  •  to revise the standardised approaches for credit and operational risk; and  •  to implement the leverage ratio. 4  BIS central bankers’ speeches  But in the course of adjusting the capital rules to better achieve these outcomes, it is important that the overall capital requirements on banks are not significantly increased. There is a real risk that overall capital requirements on banks could indeed increase significantly if we are not careful: •  if internal modelling for certain portfolios are completely removed; and  •  if risk weights and credit conversion factors under the revised standardised approach are calibrated too conservatively. We need to take a holistic perspective in this final stage of the Basel III capital reforms. •  In trying to get the design right, we must not end up making the overall level of capital requirements too high. •  In trying to get the micro calibrations right, we must not end up getting the macro settings wrong.