samchain/econo-pairs-v1 huggingface dataset:
Heng Swee Keat: International reform agenda – Singapore’s challenges Opening keynote address by Mr Heng Swee Keat, Managing Director of the Monetary Authority of Singapore (MAS), at the Asian Banker Summit, Singapore, 19 April 2010. *  *  *  Introduction 1. Good morning. It gives me great pleasure to join you today at this 11th Asian Banker Summit. 2. The inaugural Asian Banker Summit was held in Singapore about 10 years ago. At that time, Asia was staging a strong recovery from the financial crisis which shook the region in 1997. Today, we find ourselves at a similar inflection point. Emerging from the crisis 3. The worst of the global financial crisis appears to be over. Global financial conditions have since improved markedly and prospects for the world economy have brightened. Asia ex-Japan is leading the recovery, with its GDP already surpassing the precrisis level by nearly 8%. For the whole of 2010, the region is expected to grow by 8% over the previous year. The Singapore economy has rebounded strongly and is expected to grow by 7–9% this year. 4. While the immediate outlook is positive, we need to remain vigilant. The structural headwinds to growth in advanced economies remain. The transition from government-led stimulus to sustained private-sector driven growth may be more difficult in those economies which face rising sovereign debt levels.

At the same time, more and more conventional investors are also looking to diversify their portfolios into sukuk as a new asset class. So, issuing sukuk would enable fund-raisers to enjoy a wider and more diverse investor base. 20. Second, you would be able to diversify your funding sources. With the additional option of sukuk in your arsenal, you can choose to issue either conventional bonds or sukuk, depending on the pricing and liquidity in the market at the time of issuance. This would provide more flexibility and a more stable source of funding to fund-raisers, particularly at a time when the funding cost of sukuk is more attractive than that of conventional bonds or when there is difficulty in obtaining liquidity in certain markets. 21. Having said that, sukuk remain a relatively new product type in Hong Kong’s financial market. Some of you may have questions about the mechanics of sukuk, such as what would be suitable underlying assets, how to ensure Shariahcompliance, etc. Malaysia’s experience has clearly shown that there are readily available solutions to address these issues. In particular, while sukuk are assetbased, a number of different sukuk structures are available. So, for companies that do not have much fixed assets, some asset-light sukuk structures may be utilised to  BIS central bankers’ speeches  3  overcome issues concerning availability of tangible assets. I am certain that the experts present here today will be able to provide more guidance and address such questions in detail in later sessions. Concluding remarks 22.
And a lot is happening in the Bulk Purchase Annuities (BPA) market: pension scheme funding levels have greatly benefited from the rise in interest rates[2], and the UK insurance industry is preparing itself for record levels of bulk purchase annuity transfers[3]. De-risking corporates of their legacy defined benefit schemes brings substantial benefits to UK plc, and the additional capital insurers inject contributes to the security of pension scheme members. This structural shift in the provision of retirement income also gives insurers an increasingly important role as long term investors in the UK real economy. Insurers therefore need to balance the short term financial and reputational incentives to grow rapidly, with long term and enduring financial strength, to meet the long term needs of policyholders and the economy. I spoke to you last year about the conditions for long-term sustainable growth in the annuity sector. This year, in the face of considerable temptation to capture business opportunities, I will argue that  Page 3  BPA writers need to exercise moderation. In that vein, let me invite you to a not quite Epicurean three course feast. By way of starter, I will first reflect on recent BPA market developments and then move to our main course, which focuses on three areas: an expansion of risk appetites; a reliance on third party capacity; and greater interconnectivity with the wider financial system. These clearly call for effective governance, business and risk management.

Philipp Hildebrand: Financial stability Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Institut des Hautes Etudes Commerciales de Lausanne, Lausanne, 16 September 2008. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  During the period of financial market turbulence, central banks have gone far with their interventions to stabilize the financial system, taking into account the high costs that can be imposed by a banking crisis onto the real economy. Central banks by themselves, however, cannot guarantee financial stability in the long term. In particular, we cannot exclude that their interventions create incentives for banks to be less cautious in the future. The first line of defence therefore consists of banks having sound risk management practices and holding appropriate levels of capital and liquidity. The Financial Stability Forum has made a series of recommendations in this respect. Given the size of the big Swiss banks in relation to our national economy, we should be especially prudent. For this reason, the Swiss National Bank supports the project undertaken by the Swiss Federal Banking Commission (SFBC) to strengthen capital adequacy requirements and to revise the liquidity requirements for the big banks. As the SFBC has pointed out on several occasions, these measures have to be implemented gradually – to ensure that banks have sufficient time to adapt. These measures will contribute to the solidity and credibility of the Swiss financial centre.
This is the so-called price channel. In particular, markets generally consider that the credit standing of a sovereign has direct implications for the creditworthiness of most private institutions within the jurisdiction of the sovereign itself. Thus, sovereign yields provide generally a floor to the funding conditions of the private sector. To the extent to which abrupt movements in yields carry the risk of spiralling off and leading to contagion, credit intermediation suffers and there is an impairment in the transmission of monetary policy. Second, government bonds usually provide a primary source of collateral, given that they are generally the most liquid asset class. This makes government bonds a prominent type of collateral in repurchase agreements. The disruption of sovereign debt markets hampers the functioning of the interbank repo market and reduces its liquidity. This leads to increased money market rates due to premia for liquidity risk, with an impact on the capacity of banks to provide credit to the real economy. This is the socalled liquidity channel. Third, changes in the valuation of bonds affect the behaviour of the financial and non-financial sectors via their impact on the strength of their balance sheet – this is the so-called balance sheet channel. For lenders, the lower capital base may mean that they can supply fewer loans to the economy. By contrast, borrowers see their creditworthiness reduced. This in turn limits their capacity to borrow.

Thus, emerging market central banks must be prepared for policy contingencies ahead. At the core, monetary policy must continue to safeguard price stability, while taking into account concerns about economic growth and financial stability. The Bank of Thailand, on our part, will do our best to steer the Thai economy and financial system through the global turbulences, to ensure the continued well-being of the Thai people in years ahead. Thank you. BIS central bankers’ speeches  1
13  Figure 3  Inflationary surprises by components (1) (percentage points)  2.0 2,0  Volatiles  Core  Total  1.5 1,5 1.0 1,0 0.5 0,5 0.0 0,0 -0.5 -0,5 Sep.21  Dec.21  Mar.22  Jun.22  Sep.22  Dec.22  Mar.23  (1) Cumulative surprises in respective MP reports. Sources: Central Bank of Chile and National Statistics Institute. Figure 4  Private consumption (*)  (index, 2018=100, original real series)  120  Current  Previous  Private consumption of goods and services (index, 2018=100, seasonally adjusted)  175  Private consumption Durable goods  115  150  Non-durable goods  110  Services 125  105 100  100  95 75  90 85  50 13 14 15 16 17 18 19 20 21 22  18  19  20  21  22  (*) For the fourth quarter of 2022 of the previous series, the annual change in the current series is used. Source: Central Bank of Chile.

12  Figure 2  Real exchange rate (RER) (1)(2) (average, 1986 average=100) RER 15-year average 122  250  115  200  108  Commodity prices (3) (index, 2010-2023 average=100) Metal index (5) Wheat (6) Oil (4) Copper  150  101  100  94  50  87 80 10  12  14  16  18  20  0  22  Transportation costs and supply chains  20  21  22  23  Cyclical component of aggregate margins  (st. deviation of historical average, monthly; percent of GDP, (percent, moving 3-month average) quarterly) Global supply chain pressure index (8) 4 Transportation cost (7)  0  4 2 0 3 -2 2 -4 1 -6  -2  0 -8  6 4 2  18  19  20  21  22  23  11 12 13 14 15 16 17 18 19 20 21 22  (1) March 2023 data is preliminary average of the month. (2) Average of the last 15 years. Corresponds to the period Mar.08-Feb.23 (3) Dashed vertical line marks statistical cutoff of December 2022 MP Report. (4) WTI-Brent average. (5) S&P GSCI industrial metals. (6) One-month futures price. (7) Calculated as difference between CIF and FOB imports. (8) For details, see Global Supply Chain Pressure Index by Fed NY. Sources: Central Bank of Chile, Barrero et al. (2023), Acevedo et al. (2023), and New York Federal Reserve.
Priority 4: Empowerment through consumer protection and education The fourth area relates to the greater empowerment of consumers through consumer protection and education. Both the financial service industry and the financial consumers have an important respective role for financial inclusion to transition to a higher level. Financial inclusion is best achieved when consumers are assured of fair treatment. In developing financial products by the service providers, of great importance is their professional and ethical conduct. Here, the role of the Board and senior management of such financial service providers need to set the right culture, policies and incentive systems that support fair and responsible business practices. Policies that promote responsible market conduct that is reinforced by transparent disclosure requirements will be important in advancing responsible financial inclusion. A key aspect of a successful financial inclusion agenda is also building financial capability of consumers so that they can meaningfully participate in the financial system. Financial education, as with other forms of education, is a powerful agent of empowerment. It empowers consumers with the knowledge, skills and tools to build, manage and protect their personal wealth. In Malaysia, efforts to systematically build financial capability among the population began almost twenty years ago, in 1996, when a National Savings Promotion Campaign was launched to enhance awareness on the importance of savings, including among school children. Since then, a more holistic and comprehensive consumer financial education programme for both children and adults has been implemented for more effective participation in the financial in the financial system.

The nature and quality of the financial services and the nature of the participation in the financial system is equally important. The poor are confronted with challenging circumstances, such as low and irregular income that makes monthly debtservicing difficult, or living in remote rural areas which have no financial services access points, or long working hours that prevent visiting bank branches within the conventional operational hours. As a result, many of the marginalised may have financial services made available to them, but it may not be at the needed conditions or quality that can provide the real promise of upward economic mobility. Access, therefore needs to be complemented by the quality of the financial services. Of importance is the innovation and design of consumer products which have characteristics  BIS central bankers’ speeches  1  that are linked to the goal of welfare improvements for the underserved. There is a greater need for features that are responsive to the constraints faced by those that have been marginalised. Flexible microfinance for the agricultural sector for example, addresses the cash flow mismatches between fixed repayments to banks and the irregular income flow of the farmers due to the seasonality of crops. A further innovation has also involved the creation of platforms for matching savers with those that need financing.
Although the latest statement by the Federal Reserve has attenuated the possibility of drastic changes, the risk is still present. On the other hand, there is the situation some emerging markets are enduring, where the macroeconomic scenario could be further complicated if their commodities continue to trade at low prices. This risk is most important for Latin America, as it compounds with complex economic and political factors. Furthermore, in several countries in the region, fiscal and current-account deficits persist, making the necessary adjustments more difficult and costly. This is not the case of Chile, where the policy framework has allowed for a timely macroeconomic adjustment in the last year and a half. And let’s not forget the geopolitical conflicts in the Middle East and parts of Europe, with which we have sadly lived for quite some time. In Europe, there is the Greek situation and the quirks that have characterized the agreements to finance the debt. On the positive side of risks, it could also happen that the recovery is stronger in the Eurozone, which could mean a stronger boost to the world economy and Chile. In addition, it is possible that the effects of the drop in the oil price is larger than projected and also that this price remains low for longer. Finally, there is still the risk associated to lower growth in China and its consequences on the price of copper. The state of the Chinese financial system and real estate sector continue to draw the most attention.

The earlier adjustment of the Chilean economy, in terms of both private expenditure and the monetary policy reaction, meant that for the larger part of 2014 our currency was one of the most depreciated globally. Subsequently, as the rest of the emerging economies entered a more marked adjustment cycle, those differences narrowed and the peso even appreciated in multilateral terms (figure 4). As of March, the real exchange rate is somewhat above its average for the last two decades (figure 5). Domestic activity has behaved as foreseen in December, although last year closed with somewhat higher growth than forecast in the previous Report: 1.9 percent. Revisions to earlier figures and a somewhat stronger fourth-quarter growth explain this result. Partial firstquarter figures continue to reveal moderate growth, but definitely better than the figures it showed since mid- 2014. On the demand side, there is no big news either with respect to the end of last year. Aside from specific factors, consumption and investment remain weak. Durable consumption and investment in machinery and equipment continue to grow at low or negative annual rates, albeit with some marginal stability. Anyway, it is worth noting the greater impulse from fiscal spending, particularly public investment, and the positive effect of the peso depreciation in the productive performance of some tradable sectors. The labor market continues to show more strength than previously foreseen. The unemployment rate, despite a marginal increase, is still low.
SPEECH DATE:  2020-03-03  SPEAKER:  Deputy Governor Anna Breman  VENUE:  Royal Swedish Academy of Engineering Sciences, Stockholm  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  How the Riksbank can contribute to climate policy1 I would like to start by extending a warm thank-you to Stockholm Resilience Centre, Stockholm Environment Institute, Kungliga Vetenskapsakademien, och Misum for arranging this seminar. Perhaps you recognise the expression Hinc robur et securitas. It is Latin for From here, strength and security. It is the Riksbank’s motto. It is on the Riksbank’s emblem and it has also be seen on some of our banknotes. I learnt this when I arrived at the Riksbank as a new Deputy Governor a few months ago and it stuck – from here, strength and security. As a new Deputy Governor, I feel a responsibility for preserving the Riksbank’s role as a guarantor of strength and security when the world around us is fraught with unease – unease over trade wars, unease over the coronavirus, and unease over climate change, to give a few examples. For a new Deputy Governor, it also becomes evident that those of us in the Executive Board make decisions that affect economic development for households and companies for several years to come. But the statistics we require to fully understand developments can sometimes be incomplete and forecasts are always very uncertain.

Second, when interest rates are at the zero lower bound, the risks of tightening a bit too early are likely to be considerably greater than the risks of tightening a bit too late. A premature tightening might lead to financial conditions that are too restrictive, resulting in a weaker economy and, in turn, an aborted lift-off. This would be problematic in that it would harm the Fed’s credibility and, more importantly, would be difficult to rectify. The U.S. experience during the Great Depression and the Japanese experience over the past two decades illustrate the risks of raising interest rates too soon, especially when inflation is running below the central bank’s objective. Finally, given the still high level of long-term unemployment and the outlook for inflation, there could be a significant benefit to allowing the economy to run “slightly hot” for a while in order to get those that have been unemployed for a long time working again. I believe this can be done without jeopardizing our price stability objective. If the long-term unemployed are not employed relatively soon, their job skills will erode further, reducing their long-term prospects for employment and, therefore, the productive capacity of the U.S. economy. This would be a very unfortunate outcome for them, their families and the country. Market expectations that lift-off will occur around mid-2015 seem reasonable to me.
The need to strengthen market infrastructures for credit default swaps (CDS) stems from the importance of CDS markets for overall financial stability, for three reasons. First, the systemic importance of CDS markets comes from the high degree of interconnectivity between CDS markets and credit and cash securities markets, the embedded financial leverage of CDS, and the significant level of CDS exposures in relation to the total assets and capital cushions of the banks involved. Second, the associated financial risks, for example when compared to interest rate and foreign exchange derivatives, are more difficult to manage. This stems from the greater underlying complexity and the correlations between different CDS exposures when market-wide strains occur. Third, specific risks to financial stability stem from the high degree of market concentration where very sizable financial risks are held by a small group of major market players. Therefore – as we have seen not only with the default of Lehman Brothers, but also the earlier near-defaults of Bear Stearns and AIG – the default of one major CDS counterparty can put these markets under very severe strain. A natural inference from our experiences during the current turmoil is, therefore, to improve the resilience of OTC derivatives markets through a more widespread adoption of central counterparty clearing or exchange trading.

Changes in the Swedish mortgage market Although no large-scale market for lending to the subprime sector has developed in Sweden, there have been a number of other changes in the Swedish housing market – changes that have affected and may continue to affect developments in household indebtedness and property prices. This year new rules were introduced regarding how much capital the banks must hold in relation to the assets linked to risks, which includes lending. These rules are called Basel II. The new capital adequacy rules will take into consideration the actual risk in lending to a better extent than the older version. As lending is considered to have a fairly low risk, it will enable the banks to hold less capital in relation to their lending. This entails a lower cost for the banks. Lower costs will enable the banks to cut their margins on lending rates and compete for loan volumes. The fact that the banks have been aware that this rule would be introduced has probably contributed to the institutions cutting their lending rates in advance. It is probably in turn the increased competition that has led to banks and mortgage institutions now allowing higher loan-to-value ratios. If one can borrow a larger amount with the same collateral, the need for a down payment declines. This makes it easier for households with good incomes but little wealth to enter the housing market. Typically, this often applies to younger households who do not already own their accommodation.