samchain/econo-pairs-v1 huggingface dataset:
An ongoing challenge is that the threats are ever evolving. The nature of illicit fund flows are varied and often cut across jurisdictions and economic sectors. In the case of money laundering (ML), the intention is to camouflage the origin of ill-gotten proceeds or property. Terrorist financing (TF) can be different in that the sources of such funding may be of proper or legal origins. The motivation is often to disguise the use of the funds. 6. Criminals can and will try to use increasingly sophisticated ways to “beat the system” to launder money or finance terrorism. It is very difficult to estimate the size of this problem given its opaque nature. There have been various estimates that the amount of money laundered each year is far in excess of $ trillion. In truth, no one really knows. What is more important is that globally, it is recognised that this is an important issue that affects us all. ML and TF threats undermine the confidence and stability of financial systems. There are also high social and political costs. 7. This is why at national levels, many countries including Singapore have taken holistic measures to address ML/TF risks. Besides a multitude of actions relating to laws, regulations, penalties and public awareness, specific tools also include the ability of regulators and law enforcement authorities to carry out risk surveillance, investigation and information exchanges. A number of international organisations and groupings, including the Financial Action Task Force (FATF), IMF, G20, OECD’s Global Forum on Tax, the Egmont Group etc.

This SupTech-Regtech linkage is targeted at driving adoption of technology for compliance and supervision efficiency and effectiveness. 33. A greater use of analytics to support our AML/CFT risk monitoring and supervision work will hence be a key priority in MAS. To illustrate, we expect to tap Hadoop-based Big Data system to build complex network models that are better able to identify and pick up subtle patterns in entity behaviours. In the future, we hope to rely more recent technologies such as Machine Learning, Deep Learning and Graphics Processing Unit (GPU) based computing, to deepen MAS’s financial surveillance and supervisory insights. I know that some of the major FIs are doing the same. Our Data Analytics Group will also look to establish a community of senior data 4/5  BIS central bankers' speeches  practitioners with the industry to support an exchange of views for mutual learning. 34. Let me conclude by reiterating why we take ML/TF threats so seriously. Singapore is an important global financial hub. Our financial centre is home to many FIs including a number of international firms. Many of them serve the region including in global business lines or in regional corporate functions. Our reputation is one of being a clean, trusted and efficient financial centre supported by a talented workforce and strong rule of law. This reputation has been built over the years and must be protected diligently. 35. With the rise in ML/TF risks globally, Singapore must be proactive in playing our part to combat these threats.
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.

In this pursuit, greater collaboration among the law enforcement agencies (LEAs) as well as between LEAs and the private sector is essential for us to efficiently and effectively connect and assess all relevant information, which will no doubt further strengthen our efforts to fight ML/TF/PF threats. In this respect, it is observed that the Public-Private Partnership (PPP) is gaining momentum and is fast becoming known as a key success factor for effective information sharing in the 1 the Joint Money Laundering Intelligence AML/CFT/CPF ecosystem. To quote some examples, Taskforce (JMLIT) established by the United Kingdom in 2016 has prompted a key shift in 1/3  BIS central bankers' speeches  addressing ML/TF threats. As of June 2020, JMLIT has completed over 750 cases and detected more than 5,000 suspected accounts linked to financial crimes. Similar achievement was also experienced by the Fintel Alliance in Australia where within the span of one year between 2018 to 2019, over 300 cases were successfully completed through the partnership. Other countries within the region have also followed suit – Hong Kong’s Fraud and Money Laundering Intelligence Taskforce (FMLIT) and Singapore’s Anti-Money Laundering and Countering the Financing of Terrorism Industry Partnership (ACIP). In Malaysia, the PPP is undertaken through the Financial Intelligence Network (MyFINet), which involves collaboration and information sharing between LEAs such as the Central Bank, Royal Malaysia Police and Malaysian Anti-Corruption Commission, and private sectors such as financial institutions.
Failure to make progress in these areas may sizably reduce the economic growth in the years to come. These areas include, but are by no means limited to road infrastructure, volume and quality of spending on research and development or business environment in Poland, as can be exemplified by an average of three years that it takes to claim one’s rights before courts in disputes between business entities. These weaknesses of the Polish economy are well known and it is also common knowledge what should be done to eliminate them. It is however not the weaknesses that I intend to discuss today, as I believe that there are other and much more serious areas of concern that significantly reduce Poland’s economic potential. Lack of reform in these areas may deprive Poland of the benefits brought by globalization. Today, I would like to outline two such problems: •  First, for many years there has been no common vision of Poland and no leadership that could inspire Poles to pursue this vision. •  Second, we may boast our world’s best IT specialists, but we are still well backward in terms of e-government – according to the Capgemini survey from June 2006 Poland ranks third from the bottom in the European Union 10 . Why do I believe the lack of vision, lack of leadership and Poland’s backwardness in e-government to be major weaknesses that diminish Poland’s possibility to capture the opportunities offered by the global economy?

Let me expand a little on these vulnerabilities: Repeated downward revisions to the economic outlook and accommodative monetary policy actions on both sides of the Atlantic have put downward pressure on global bond yields across the whole maturity spectrum. For the first time in history, large parts of the yield curve for many euro area sovereign bonds, in particular those issued by governments with high credit ratings, have entered negative territory. It is often said that low or negative interest rates inflate asset prices as investors search for yield and take on more credit and duration risk. Equity and corporate bond prices, for instance, have appreciated across the globe over the past decade as yields have followed a path of long-term decline. Abrupt corrections, especially in equity markets and markets for lower-rated bonds remain a risk, particularly in the face of high economic and political uncertainty. Low funding costs can encourage firms to increase their leverage, which might intensify vulnerabilities in the event of an economic downturn. This risk has increased as the economic outlook has worsened and the share of triple-B ratings has grown. Concerning the second vulnerability, in several countries debt in the public and/or nonfinancial private sectors is lingering at levels that are high by historical and international standards. This leaves public and private finances exposed to the risk of a sudden change in market sentiment or deteriorating macroeconomic conditions. Third, parts of the banking sector continue to exhibit weak performance.
For the duration of the Guarantee this should reduce the risk that a long period of externally generated inflation leads to more persistent domestic price and wage pressures, although the MPC agreed that risk remained material. At the September MPC we also noted further signs of continuing strength of domestically generated inflation, that the labour market remains tight and domestic costs and price pressures including from businesses are elevated. Against that backdrop our initial assessment of the demand impact of the Energy Price Guarantee was that household spending was likely to be less weak than projected in the August report over the first two years of the forecast, and all else equal, relative to that forecast, it would add to inflationary pressures in the medium term. Since summer 2021, I’ve been highlighting my concerns about the build-up of inflationary risks[7]. A key consideration in my assessment of the risks that above target inflation persists is what happens to inflation expectations. I have already described how short term inflation expectations may be impacting on the immediate outlook for earnings. These could in turn feed through into prices given the high share of wages in costs, particularly in the services sector. And the same could happen if the current inflationary environment companies attempt to protect or increase their margins. Because shorter term measures of inflation expectations tend to move with actual inflation policymakers tend to focus on longer term measures.

In the inter-war years, the NBR played a paramount role in Romania’s economic reconstruction. As for the present, it is difficult to provide a self-description. Government authorities and public opinion might be in a better position to do that. Within the space of only two decades, the Romanian society underwent major changes. The future generations will judge what we did well and what we did wrong. During all these years, however, particularly since the start of reintegration and reconnection with the European Union, I can assure you that the National Bank of Romania made good use of its institutional expertise and took full advantage of the experience acquired ever since its establishment. I would like to mention that the NBR would not have managed to successfully accomplish its most complex tasks without the substantial contribution of its employees, namely the human  BIS Review 114/2010  1  resources it has created itself: employees, experts, managers. This is the reason why I want to extend my heartfelt gratitude to both present and former members of this high performance team for its professional qualities and integrity, as well as for their contribution to developing and enhancing the prestige of this institution, to the benefit of Romania.
They basically have to do with the principles that monetary policy decision-makers have to choose between when productivity growth accelerates. One possibility, given that the economy is in equilibrium, is to let output growth exceed the potential rate for a time. This leads to a temporary fall in unemployment but the direct dampening effect is so strong that inflation can be held in the vicinity of the target. This alternative presumably requires an instrumental rate that is kept at a comparatively low level. The other possibility, given that the economy is benefiting from the rising productivity growth, is to let output growth match the new, higher potential rate. Unemployment is then unchanged and the direct dampening effect is left to work through so that inflation falls below the target without this having any consequences for monetary policy. The two alternatives thus amount to choosing a temporarily lower level of either unemployment or inflation, or a combination of the two, during the actual process of adjustment. Taken literally, the Riksbank’s rule of action tells us that a temporarily lower level of unemployment is not the "correct" choice. Monetary policy should instead be sufficiently stimulatory to keep inflation close to the target. In other words, the central bank should let the economy grow faster than the potential rate and pave the way for a temporary fall in unemployment. In this context, however, an unduly rigid interpretation of monetary policy’s rule of action can be risky. Let me explain why.

However, for a production increase brought about by adjustment in stocks to be durable, it must be supported by a lasting increase in demand. Household consumption continued to increase, but there was no upturn in investment. The imbalances in trade and industry in the USA were perhaps more tangible than many had anticipated. Bankruptcies and accounting scandals created further unease on the financial markets, which then fell at a rate reminiscent of the 1930s crisis. In Europe the signs of economic recovery mainly concerned more optimistic expectations; expectations which were not later realised. The largest euro economy, Germany, in particular proved to be in a poorer condition than anticipated. However, here it was not a question of imbalances like those in the USA, but structural problems, such as a high level of unemployment that had set in and weak public finances, which made it difficult to conduct an economic policy that would support the business climate. Furthermore, the expected supporting forces from the other side of the Atlantic for the export industry were weaker the expected. In Sweden, the slowdown during 2001 had a limited effect on unemployment. The Riksbank’s calculations at the beginning of 2002 indicated that resource utilisation was relatively strained. Economic policy had a stimulating effect on the economy, through lower taxes and higher transfers.
Monetary policy, the argument goes, must be directed at a wider set of goals than controlling consumer price inflation – a set of goals that includes the preservation of financial stability. Those who advocate using monetary policy to help preserve financial stability usually argue that preventing, or at least countering, asset price booms is the most effective means to that end. For a clear statement of this view see, for example, Wadhwani (2010). I want to make three points about this argument. First, that not all episodes of rapid asset price inflation – followed by substantial price falls – are disruptive to the wider economy. But when big asset price rises are accompanied by very sharp increases in debt they very frequently are followed by bad economic outcomes. Second, that monetary policy is not the most effective tool to prevent rapid and simultaneous build-ups in both debt and in asset prices. Third, that a much more direct and effective tool to counter a potentially dangerous  1  Inflation in the ten years from 1997 to 2007 never moved more than 1% from the Bank of England’s inflation target. 2  BIS Review 133/2010  build-up in debt is limits on the debt-to-asset ratios of financial institutions – that is limits to leverage, or capital requirements. Let me try to justify these three claims. Reinhart and Reinhart (2010) document the facts around the most serious economic dislocations in modern economic history.

Underlying forces that were created by the financial crisis and that would themselves keep inflation low have been offset by other factors that have kept inflation above target for much of the past year. These factors are well known but it is important not to forget the likely scale of their impact. Around one quarter of the goods that enter the basket for calculating the UK CPI are imported. The 25% depreciation seen since 2007 would – given that imported goods and services account for around a quarter of the consumer price basket – add a bit above 6% to the level of the CPI. Over a three-year-period that would generate 2% a year higher inflation. We have also seen the VAT rate cut and then increased. When the cut was having its largest impact on the annual rate of inflation last year the CPI inflation rate fell to 1.1%. The subsequent rise in VAT at the start of this year has helped push inflation back above the target by about the same amount. At the start of next year there will be another VAT rate increase – and that is likely to keep inflation above the target a bit longer. I am not blasé about that. That is why I said that I thought we face a risk in the UK of not doing enough to bear down on inflation. But there is also a risk of tightening monetary policy too soon.
If the use of fiscal policy in the past has not been optimised – and that is often the case, with fiscal policy often being used for political ends rather than as an economic tool – then it is likely that fiscal policy has not only been ineffective in creating the conditions for sustainable growth, but that the opportunity to use it to support growth has also become significantly narrower. This is indeed the place where many emerging and developed nations now find themselves. Today, we are seeing the limits of debt-fuelled growth. The world seems to need more and more debt to create less and less growth. That cannot go on. Debt has a role in supporting growth but over-dependence on it, and its misuse, has repeatedly resulted in bad outcomes. Therefore, we have to look at alternative means of creating more sustainable growth. One of those alternatives may be greater economic integration, regionally and globally. In fact, economic and financial integration, whether regional or global, has been occurring. As a result, it has become increasingly difficult for individual countries to determine their independent path to prosperity. While not downplaying the importance of keeping our house in order and the need to promote competitive and transparent economies, it is nevertheless  BIS central bankers’ speeches  1  obvious that the fates of economies are increasingly linked to those of others. Integration has its benefits and it has its costs.

Nevertheless, in the case of the large international banks, the empirical evidence would seem to suggest that these institutions have long exceeded the size needed to make full use of these advantages. It should be noted that although the instrument of size restriction is far-reaching, it is by no means new in economic policy. For decades it has been one of the tools for preventing market dominance in the area of competition policy. Within the context of financial stability, the objective of such a measure would be to reduce risks to the stability of the banking and financial system, rather than to maintain competition. I would like to run through the last few points again briefly. In the short term, priority must be given to overcoming the crisis. However, in order to increase the stability of the financial system in the medium to long term, we consider a reform of the operational environment in the banking sector to be essential. We attach particular importance to alleviating the “too big to fail” problem. Apart from stricter rules for systemically important institutions, the SNB currently envisages two further options that it intends to examine – first, measures to facilitate the wind-down of large, international institutions and, second, direct and indirect measures to limit their size. The SNB will examine all of these in depth, in close collaboration with FINMA, alongside possible further options. There can be no more taboos, given our experiences of the last two years.
•  Use of microprudential tools for macroprudential purposes: The Committee will oversee preparations for the countercyclical buffer, as well as exchange information on the wider range of microprudential tools that have been used for macroprudential purposes (eg sectoral adjustments to risk weights, stress testing requirements, loanto-value limits or varying margin requirements). Concluding remarks Since the financial crisis, the Basel Committee has accomplished a great deal. But we still have work to do to complete the overhaul of the regulatory framework and fully factor in all of the lessons learned. We also need to see whether we have the balance right when it comes to simplicity and risk sensitivity. That work is going to keep the Committee busy for at least the next two years. But that is far from the end of it, because, as I have noted a number of times today, our policy work will not generate its full benefits if not implemented in a full, timely and consistent manner. So our implementation monitoring work is equally important. And then even when  6  BIS central bankers’ speeches  the new standards are implemented, we will need effective supervisors to ensure that they are adhered to. This is an area where the Committee has the potential to do much more, particularly once the policy pipeline begins to slow. In other words, the Basel Committee will continue to provide you with much to talk about – at this meeting and those in the future! BIS central bankers’ speeches  7

Third, technology has advanced enormously in terms of both the capacity as well as sophistication. Countries have benefited immensely from these developments and, as a result, wide choices are available to savers & investors, borrowers & lenders together with greater flexibility & efficiency in the allocation of capital. Many institutions have sprung up in both money and capital markets. Similarly, the financial world has become more complicated with closer interconnectedness within and between individual firms, institutions and markets. In the meantime, the regulatory authorities have begun to focus on the achievement of specific objectives and found that they have to react to action by the financial markets by putting breaks to halt the rapid expansion, which would otherwise threaten the stability objectives. So, they brought in financial regulations to deal with the situations. Unabated by the tightening of financial regulation, financial markets continued to grow rapidly and ended up in crises and the world has learnt many lessons from financial crises. The outcome of the Mexican crisis in 1994, the Russian crisis from 1992 to 1995 and the Asian crisis from 1997 to 1998 was the further tightening of financial regulations and introduction of new ones. They were more reactionary and intrusive after the Enron and World Com failures in the USA. The Sarbanes Oxley regulations, which are considered somewhat draconian have come to stay, but may be with modifications.