samchain/econo-pairs-v1 huggingface dataset:
Therefore, let us continue our cordial relationship with the financial institutions as we may make our influence felt more effectively through the enhancement of usual interactions with financial institutions rather than through exercising all of the Central Bank’s powers conferred under the Monetary Law Act. Members of financial institutions, we solicit your maximum attention to maintaining the stability of your own institution in order to ensure the overall stability in the financial system of the country. Honourable Minister and distinguished guests, our financial sector consolidation programme is a forward looking programme designed to monitor, identify and track the sources of systemic risk over time to ensure financial system stability. This programme will change the financial landscape of the country by transforming the financial institutions to be stronger and more resilient institutions, which can support the expected quantum leap of our economy. At the same time we encourage them to penetrate regional and global markets. In addition, we expect to develop a vibrant offshore financial market in Sri Lanka and a reputed arbitration centre in Colombo on financial sector issues. By 2020, we expect at least 3 domestic banks exceeding Rs. 2 trillion in asset base and at least 5 banks operating in regional markets, setting the stage to take the economy to the next level of development by 2030.

Singapore: Singapore consolidated its banks, leading to bigger and stronger banks whose interests were aligned to the long term interests of the economy. In early 2000, Singapore launched its bank consolidation process, together with the liberalisation of the banking industry. A major move in the local banking sector was the consolidation of the 6 local banking groups into the present 3 main local banking groups, thereby strengthening banks’ capabilities, building efficient management teams and enhancing operational effectiveness. This move strengthened the economic viability of all banks, and provided Singapore with better services and a competitive edge not only in the region but also in the global context. Thailand: In Thailand too, financial sector consolidation was initiated after the Asian financial crisis with the objective of improving the efficiency and transparency while reducing the number of smaller financial institutions. A restructuring package was introduced to consolidate the commercial banks and finance companies that were unable to recover by themselves. Further, competition and cost cutting have also been reasons that promoted consolidation. As the final outcome, the number of participants in Thailand’s banking sector is projected to shrink. Similar financial sector consolidation has been observed in several other Asian countries such as South Korea, Indonesia and the Philippines after the Asian financial crisis. This initiative has helped them to protect themselves from the recent global financial crisis that affected most of the Western world.
Institutions are admittedly not accustomed to drawing attention to their forecasts if they do not come completely true. But what are the explanations? It has transpired now that GDP grew last year by more than was forecast, and new national accounts data also show that the figure for 2004 was hugely underestimated. GDP growth then was 8.2%, the highest figure in Iceland since 1987, which was effectively a tax-free year [when Iceland moved onto a PAYE tax system]. Last year was eventful on the economic front. Private consumption grew at its fastest rate since 1987 and gross fixed capital formation faster than any year since 1971. Import growth has not been as brisk in any year since 1953 and the current account deficit broke previous records – although it should be added that as a result of income from soaring foreign asset holdings, Iceland’s net external position only deteriorated slightly. Real wages were at a peak, unemployment at a minimum and direct foreign inward investment ran at a massive level. This inflated picture must be seen in the light of the very robust economic growth in the previous year, 2004, and strong growth in 2003 as well. Besides these large movements, a structural change in the domestic credit market made much more capital available to mortgage borrowers. Higher disposable income and net wealth also contributed to making this a unique period in Icelandic economic history.

In the United Kingdom for instance, there is a Financial Inclusion Taskforce which is an independent body appointed to advise Her Majesty’s Treasury and to monitor and evaluate progress on its financial inclusion as well as oversee a 120 Million Pounds Financial inclusion Fund. A platform for collaboration between local governments and the financial institutions in the UK has been established in order to ensure that everyone has access to financial services and that such inclusion corresponds with the needs of local economic development. In other parts of Europe, the offer of basic banking accounts typically lies at the heart of many countries' efforts to increase financial inclusion and they are a common feature of economic policy in Europe. In Asia, this matter has also been dealt with in various ways. In India, the Reserve Bank of India issued guidelines (in 2006) by which banks are encouraged to enhance the level of financial inclusion in their areas of operation in a time-bound manner. In Malaysia, a Financial Sector Blueprint (2001-2010) has been used to guide interventions in the financial sector. However, financial inclusion is not an end in itself. Having a bank account, or an insurance coverage, does not mean an enhancement in the economic position or well being of a person. But it acts as a facilitator. In Zambia, following the launch in 2004 of the Financial Sector Development Plan (FSDP), a lot of work has been undertaken in addressing the weaknesses in the Zambian financial sector, including the level of financial access.
Freer flows of funds and closer financial ties within the region, after all, will provide much-needed support for investment activities and business dealings over the years to come. D.  Concluding remark  Ladies and Gentlemen, I would like to conclude my talk today by restating my firm belief in the promising future of the Thai economy, and stressing again the pressing need for the country to move forward to the long-term agenda of competitiveness and sustainable growth. In these days, once we get so used to reacting to new information in the marketplace, it does not take long before we get so involved in the battle scene that we might lose the long-term perspective. It also does not take long before we forget that meaningful upgrading takes a careful, deliberate planning to truly succeed and a considerable amount of time to unfold. Given many challenges at home and abroad, moving Thailand forward is sure to be an arduous task. As a non-crisis country this time, it is wise to stay vigilant since “good” time is still the time when bad loans are made and imbalances accumulate. It is much wiser, however, to also use this time to make a head start toward the brighter future. The world is moving toward greater speed and greater interconnectedness every second, and to thrive in such environment, a balanced mix of demand management and structural reforms is a prerequisite. They are entrance tickets to a safe, undisrupted trip on the road to prosperity over the years to come.

Norman T L Chan: Master’s degree 2009–2010 graduation ceremony Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at The Chinese University of Hong Kong master’s degree 2009–2010 graduation ceremony, Hong Kong, 17 December 2010. *  *  *  Professor Wong, Professor Lee, Faculty Members, Graduates, Ladies and Gentlemen, It is a great honour to be invited to speak at today’s Graduation Ceremony. I am so happy to see so many fine men and women graduating today. All of you have made well earned accomplishments that make your parents and families feel very proud. On this joyful day, it is clearly a time for celebrations and photograph-taking with families and friends. However, some of you may, when you have a few quiet moments of your own, ask yourselves these questions : What would I become in 10, 20 or 30 years’ time? Have I chosen the right field or career? What does it take to succeed and make a name in the society as so many of my CUHK seniors have done before me? These are very pertinent questions and certainly I did ask myself these questions when I attended my own graduation ceremony in the CUHK some 34 years ago. In talking about successful people, I am sure all of us have our own idols. But very few people will disagree with me if I refer to Bill Gates as a prime example of success.
In my view, these last two factors have probably pushed up the NAIRU by 0.5 to 1 percentage point on top of the about 1 percentage point effect of extended unemployment benefits, which is likely to be a temporary effect. Taken together, this suggests that the current NAIRU might be between 6 percent and 7 percent. Although undesirable, this rise should not create concern about the medium-term inflation outlook. First, even the higher estimate of NAIRU is still far below the current unemployment rate of 9 percent. Second, as discussed above, much of this rise is likely to be temporary rather than permanent. As the labor market improves, the extension of unemployment claims benefits will almost certainly be allowed to lapse. When this occurs, the NAIRU is likely to drop back to somewhere in the region of 5 percent to 6 percent. Third, some of the evidence that the NAIRU has increased is not particularly compelling. For example, the loop in the Beveridge curve that is evident now has been seen in past business  4  BIS central bankers’ speeches  cycles – cycles in which there was no persistent rise in the NAIRU. This strongly suggests that the rise in job mismatch has a cyclical component. Fourth, the 9 percent unemployment rate may understate the amount of labor market slack. That is because the labor participation rate has fallen sharply.

8  BIS central bankers’ speeches  Chart 1  BIS central bankers’ speeches  9  Chart 2  10  BIS central bankers’ speeches  Chart 3  BIS central bankers’ speeches  11  Chart 4  12  BIS central bankers’ speeches  Chart 5  BIS central bankers’ speeches  13  Chart 6  14  BIS central bankers’ speeches  Chart 7  BIS central bankers’ speeches  15  Chart 8  16  BIS central bankers’ speeches  Chart 9  BIS central bankers’ speeches  17  Chart 10  18  BIS central bankers’ speeches  Chart 11  BIS central bankers’ speeches  19  Chart 12  20  BIS central bankers’ speeches  Chart 13  BIS central bankers’ speeches  21  Chart 14  22  BIS central bankers’ speeches  Chart 15  BIS central bankers’ speeches  23  Chart 16  24  BIS central bankers’ speeches  Chart 17  BIS central bankers’ speeches  25  Chart 18  26  BIS central bankers’ speeches  Chart 19  BIS central bankers’ speeches  27  Chart 20  28  BIS central bankers’ speeches  Chart 21  BIS central bankers’ speeches  29  Chart 22  30  BIS central bankers’ speeches  Chart 23  BIS central bankers’ speeches  31  Chart 24  32  BIS central bankers’ speeches  Chart 25  BIS central bankers’ speeches  33  Chart 26  34  BIS central bankers’ speeches  Chart 27  BIS central bankers’ speeches  35  Chart 28  36  BIS central bankers’ speeches  Chart 29  BIS central bankers’ speeches  37  Chart 30  38  BIS central bankers’ speeches  Chart 31  BIS central bankers’ speeches  39
But there are grounds to continue to suspect that labour supply may be behaving differently to the past, to be cautious about moving to tighten monetary policy on the basis of falling unemployment alone and to wait for clearer signs of strength in pay growth. Even after adjusting for one off effects, pay growth is currently still some 2 percentage points below the pace consistent with achieving the inflation target in the medium term. That weakness in pay might go some way in explaining why inflation has been undershooting the MPC’s predictions of late. The instinct to be cautious about tightening monetary policy too early is further reinforced by the constraints that come with Bank Rate remaining close to its effective lower bound. We’ve now seen evidence of a slowing in UK growth, and prospects for the global economy have deteriorated. With the scope for tightening monetary policy substantial, but the scope for loosening it much more limited, the risk of a surprising pick-up in inflationary pressure may be more manageable than the risk of the expansion stalling and inflation dropping further. The latter risk, of course, has and will continue to become less acute the longer the expansion continues. But it remains, for me at least, a concern. Uncertainty remains, old puzzles are unresolved and new ones appear. That is the normal world of the forward looking monetary policy maker.

And unemployment has continued to come down at a much faster pace than was expected, dropping from 7.6% in the data that came out when I arrived in the Bank last November, to 6.0% in the latest data – a rate of decline not seen since the late 1980s. Around half a million people have been taken out of unemployment. That has to be good news. But, as always in economics, there is a cloud to the silver lining. Output has grown strongly over the past year but unemployment has dropped faster than output has grown. So though the UK economy is producing more, it is using even more  2  BIS central bankers’ speeches  people to produce it. In other words, productivity growth has not made even the modest recovery to 1%, half of its pre-crisis trend, that we forecast last November. It was negative over last year and has achieved only 0.5% growth over the past 4-quarters. This is around half the pace the MPC had expected, though it picked up a bit in the latest quarter. And, needless to say, the productivity puzzle remains a puzzle. Upward revisions to the official data for the immediate post crisis years have reduced the size of the puzzle a bit. But the level of UK productivity is 14% down relative to pre-crisis trend. So with productivity recovering very slowly and still growing well below the pre-crisis trend, it is looking less and less likely that that “lost” productivity will be recovered any time soon.
In the more optimistic case to which I subscribe, the productive capacity and potential wealth of the U.S. have not been permanently damaged and currently unused resources are still productive. Accordingly, in my opinion, monetary policy should be used more aggressively to increase aggregate demand. In time, a reduction in excessive risk aversion, supported by natural market forces would reestablish the fundamentals that previously supported stronger growth and full employment. In this way, large social losses would be mitigated. By stimulating aggregate demand, we can have “Morning in America, again” and our best days can still be ahead of us. 6  BIS central bankers’ speeches  But the clock is ticking – the longer we wait, the more likely it is that unutilized skills diminish to the point that more permanent damage takes hold. Challenge #3: monetary policy held back by zero lower bound By now, the third obstacle is quite well-known: the federal funds rate in the U.S. is currently constrained by the zero lower bound on interest rates. Given the economic scenario and inflation outlook I have discussed, were it possible, I would favor cutting the federal funds rate by several percentage points. But since the federal funds rate is already near zero now, that’s not an option. To date, the Fed’s policy-making committee, the FOMC, has used a number of nontraditional policy tools to impart greater financial accommodation. I have fully supported these policies. Today, however, I simply think we need to do more.

That estimate becomes very substantially smaller if we make less conservative assumptions and allow for several offsetting impacts from banks holding more capital. Specifically: 1. Allowing for a partial offset because as a bank holds more equity capital, its equity becomes less risky, and therefore requires a lower return. (A Modigliani-Miller effect – which I will assume is not zero but only 30% as big as it would be under perfect markets)  2. Allowing for the value to the government of the extra tax revenue received as a result of banks having more equity capital which is less tax sheltered than is debt. 10  BIS Review 133/2010  3. Allowing for a somewhat lower use of bank funding for investment than in the baseline. 4. Allowing for a lower sensitivity of investment and the capital stock to a rise in the cost of funds to non-financial firms. Table 2 shows how rapidly the estimated long-run economic cost of requiring higher bank capital falls as we sequentially allow for each of these offsets. I conclude from this that the long-run costs of having banks hold more capital is likely to be small – plausibly it is negligible. If that is so then the benefits of having much more robust banks would far exceed its costs. If it is right that the benefits of raising capital requirements to much higher levels far outweigh their economic cost, how we did we get into a situation that bank capital was so low relative to total assets?
Instead, it is important to analyze the loan growth in broader economic policy context where due consideration should be paid to the credibility of macroeconomic policies and the impact other policies may have on the incentive structure in the financial markets. As I stated earlier, the presence of Nordic banks in the Baltic market is, of course, a hugely important positive factor. Parent banks are sometimes considered to have an implicit responsibility for the stability of the banking systems in the Baltic countries. It is said that the Baltic banks are too small to fail. International experience lends support to this view, although the evidence is not always in one way. Hence, there are also potential risks. If parent banks are active in many countries of the region, a shock affecting exposure in one country may lead to a reduction in their exposure across the region. Build-up of exposures to common risk factors in a region may also increase the potential for contagion - a reduction in lending to countries not affected by a crisis. The potential for contagion is naturally higher in highly integrated economies. Another potential risk factor is the smallness of the banks in the Baltics combined with their high profitability. While the Nordic banks have high profitability in all of their markets, profitability in the Baltic market is especially high. As a result, the share of banking groups' assets in the Baltics is significantly lower than the share of profits banks make in this region.

The employment level and wage growth are generally good; economic expectations are high. A notable feature of the Nordic-Baltic markets is their high level of integration. Let's take the example of Estonia. Last year, Finland and Sweden accounted for about 40 percent of Estonian exports and 30 percent of imports. In the stock of FDI, the share of Sweden and Finland is about 75 percent. Cross-border financial integration is all but complete, with the market share of Nordic financial institutions accounting for 99 percent of bank loans and leasing. A long list of Nordic companies regards Estonia and the other Baltic countries as their home market. Therefore, many important business functions, for example liquidity and risk management, are increasingly run on a group-wide basis. Viewing the Baltic countries as a part of the home market, Nordic companies take a long-term business view. This lowers the risk of sudden slowdown or reversal of capital flows, often named as the main risk in the Baltic environment of strong credit growth and high current account deficits. A bit of history: entry of Nordic banks Of course this high degree of integration has been achieved over time. In the Baltic countries, today's level of economic and financial development was a distant dream as recently as 10 years ago. The fall in GDP bottomed out in mid-1990s. The following years have brought rapid output growth. In Estonia, for example, the level of real GDP has more than doubled.
To licence, supervise and regulate the activities of banks and financial institutions so as to promote the safe, sound and efficient operations and development of the financial system;  2. To promote efficient payment mechanisms;  3. To issue notes and coins to be legal tender in the Republic and regulate all matters relating to the currency of the Republic;  4. To act as banker and fiscal agent to the Republic;  5. To support the efficient operation of the exchange system; and  6. To act as adviser to the Government on matters relating to economic and monetary management. As Deputy Governor Administration, my work includes overseeing the Human Resources, Finance, ICT, Audit, Bank Secretariat (Legal, Board Secretarial and Public Relations), Procurement and Maintenance Services, and Security functions of the Bank. Prior to my appointment as Deputy Governor Administration, I was the Bank Secretary. This position entailed being the Chief Legal Advisor to the Bank, Secretary to the Board of Directors and in charge of the Bank’s Public Relations function. My first career was that of an Academic. I lectured Law at the University of Zambia. I then briefly joined the Securities and Exchange Commission as the Director of Licensing and Enforcement before moving to the Bank of Zambia.

To the degree that the public doubts that we will, current accommodation is reduced because expected future short-term rates, interest rate uncertainty and associated risk premiums all will be higher than they otherwise would be. Premature talk of exit strategies or assertions of inflation targets as ceilings only feed the perception that we are not committed to the low rates. And thus, I think we are seeing such added restraint today. 6  Woodford (2011). 7  Again, see Evans (2011). 8  Rogoff (1985). 6  BIS central bankers’ speeches  A proposed policy I believe that we can substantially ease the public’s concern that monetary policy will become restrictive in the near to medium term and, hence, reduce the restraint in expanding economic activity. This can be done by clearly spelling out in our policy statements the conditionality of our dual mandate responsibilities. What should such a statement look like? I think we should consider committing to keep short-term rates at zero until either the unemployment rate goes below 7 percent or the outlook for inflation over the medium term goes above 3 percent. Such policies should enable us to make progress toward our mandated goals. But if this progress is too slow, then we should move forward with increased purchases of longer-term securities. We might even consider a regime in which we reevaluate our progress toward our policy goals and the rate of purchase of such assets at every FOMC meeting. Let me note several aspects to this policy conditionality.