samchain/econo-pairs-v1 huggingface dataset:
This, coupled with the higher remittance cost of 4.5% in Kota Kinabalu compared to other parts of Malaysia presents a unique opportunity to leverage on the Greenback project, to support the financial needs and goals of foreign workers here in Sabah; to increase the development impact of remittances to our neighbouring countries; and importantly, to make remittances generally more efficient for businesses and the population of Sabah itself. Even though this is the second champion city in Malaysia, we are not only looking to replicate our experience in Johor Bahru. Indeed, we acknowledge the different challenges and opportunities presented in Sabah, which is why an important and distinct focus for Greenback Kota Kinabalu will be the wider use of technology to deliver remittance solutions in Sabah. Here in Sabah, people still often need to travel a great distance to send money home. This is 1/3  BIS central bankers' speeches  costly, cumbersome and at times, risky – made even more challenging by Sabah’s geography and remoteness of some parts of the state. Technology offers new possibilities to overcome these difficulties, while significantly improving user convenience. Although remittances through electronic channels is not new, the take-up rate of electronic remittances has been relatively slow. In 2017, the share of electronic remittances accounted for only 12% of total remittances. This in turn has limited the potential to make remittance services much more efficient and accessible to our communities, including here in Sabah.

This is important because our collective efforts here today to improve overall welfare by providing more people and businesses with efficient access to remittance services will be severely set back if trust and confidence in the industry are eroded. When this happens, rules often have to be rewritten, the costs of compliance will increase, and the public is saddled with reduced 2/3  BIS central bankers' speeches  access and other burdens that result from the actions that have to be taken to protect the integrity of the system and manage risks to consumers. We must avoid this path, which will come at a heavy cost to communities and countries that depend on remittances. We have seen this in recent times with de-risking measures taken by financial institutions, and we still continue to see their effects in parts of the world. We must not expose our system to the same effects. In Kota Kinabalu, we also hope to build on Greenback activities to achieve greater financial inclusion of migrant workers and small businesses. For example, beyond remittances, suitable savings, payment and insurance products can help migrant workers make their earnings go further, facilitate access to goods and services, and provide protection for their families against financial hardship as a result of unforeseen events. For small businesses, electronic remittances can be harnessed to build transactional histories which can help improve their overall creditworthiness. This needs to be supported by a strong focus on financial education.
From a significant inflationary shock caused by the rise in oil and food prices to the effects of an unprecedented international financial crisis accompanied by a drop in output and a sharp reduction in inflation. Since mid-2007, the Chilean economy went through a process of significant increase in inflation, due to the sharp rise in commodity prices in world markets (figure 1). This rise was caused by supply and demand factors specific to those markets. Therefore, it was an adjustment of relative prices in foreign markets and not a generalized increase in domestic prices. The fact that it was an adjustment of relative prices made us not act with the strength that we would have if, for example, it had been a widespread increase in prices caused by a demand shock. In fact, the purpose of the increases in the monetary policy rate (MPR) applied in 2007 and early 2008 were to avoid the incubation of undesired second-round effects that  BIS Review 145/2009  1  might unreasonably prolong the inflationary impact of the shocks. Also, in that period we decided to begin a process of reserve accumulation consistent with the prevailing financial uncertainty and the evolution of the exchange rate. As from May of last year, the macroeconomic picture changed. Inflation rates began to show a fast and unexpected propagation of these shocks to other prices (figure 2). It could be argued that the Bank reacted too late.

The installation of new equipment, which was judged necessary at the beginning of the year, is taking place only very gradually, in particular at small and medium-sized companies. Retail activity perked up considerably in May. Employment levels in industry showed little change, except for the automobile industry where cutbacks continued. They fell slightly in the building sector, whilst holding steady in the retail and market services sectors. Permanent staff levels showed no significant change, although certain companies - primarily those engaged in seasonal activities as in the food-processing industry - made increased use of temporary staff. BIS Review 66/1997
UK-specific factors also have had a particular effect on the price of long-dated UK government debt, which fell very sharply over a very short period, leading to dysfunction which, had it continued or worsened, would have been a material risk to UK financial stability. The Bank started intervening in this segment of the gilt market on 28 September, in a timelimited and temporary way. Because this is not a monetary policy operation – although it involves buying assets I think of it as an operation designed to buy time - I won’t say any more about it here[5]. Markets continue to be volatile and so extracting any signals from the noise is even more challenging than usual. One key consideration for the MPC at its upcoming meetings will be whether the recent repricing of UK assets reflects a changed assessment by markets of the UK macroeconomic policy mix between fiscal and monetary policy[6]. The extent to which that can be determined will depend on whether markets settle at a new level, which itself will depend in part on getting a clearer picture on fiscal policy and the fiscal outlook. Prospects for inflation What does all this add up to in terms of the overall impact on the economy and on inflation. An obvious starting point might be to look at the evolution of our forecasts over the last year in response to the four shocks I’ve highlighted and other developments.

It is particularly important that the standards are unambiguous about the values for the industry and its workforce. It would facilitate financial services practitioners to understand and embrace their professional obligations, and be held accountable for their own continuing professional development. Bank Negara Malaysia and the Securities Commission Malaysia believe that with its stature and global complexion, the FSPB is well positioned to lead efforts aimed at raising the bar of  BIS central bankers’ speeches  1  professional and ethical standards including continuous professional development for across the financial services industry, thereby strengthening confidence in the industry and affirming the industry’s commitment to better serve public interest. Its membership of eminent experts and financial practitioners from the United Kingdom, Europe, Australia and Asia provides a valuable global perspective that will enhance the relevance of the standards developed by the FSPB and their universal application. The establishment of FSPB also reflects the advancement and progress of the financial services industry in Malaysia and the vision of its members to embrace and promote globally acceptable and applicable standards of professionalism, human capital development and ethical behaviour that will provide the much needed clarity to the public and the industry on what is expected of financial services practitioners. Indeed, in moving forward, the emphasis on the development of human capital which includes elevating professionalism and ethical behaviour of financial services professionals is paramount. Today, professionalism, ethics and the quality of human capital have become key drivers and enablers of change in the financial services industry.
Information about future demand and supply levels ought to be reflected in the current price and in the prices of commodity futures. But the increases from Autumn 2010 onwards were largely unexpected, and have been a genuine surprise for our forecasts. For example, spot oil and gas prices have risen very substantially since their low points in 2009.2 Spot oil prices are well above the levels implied by futures prices at the time of the February Inflation Report (Chart 2). Gas futures prices have also moved markedly higher since then (Chart 3). Chart 2  Chart 3  Sterling oil prices(a)  Sterling gas prices(a)  Sources: Bloomberg, Thomson Reuters Datastream and Bank calculations. Sources: Bloomberg, Thomson Reuters Datastream and Bank calculations. (a) Futures prices for February and May are averages during the fifteen working days to 9 February and 4 May respectively. Each futures curve assumes that the sterling-dollar exchange rate remains constant at its average during those periods. (a) Futures prices for February and May are averages during the fifteen working days to 9 February and 4 May respectively. (b) One-day forward price of UK natural gas. (b) Brent forward prices for delivery in 10–21 days’ time converted into sterling. Third, we have been experiencing the ongoing effects of sterling’s fall during 2007 and 2008, when the nominal effective exchange rate fell by around 25% (Chart 4).

7  For more information, see Britton, E, Fisher P, and Whitley J, “The Inflation Report projections: understanding the fan chart”, Bank of England Quarterly Bulletin, February 1998, pages 30–37. 6  BIS central bankers’ speeches
A number of studies have shown that countries, which are more open have a greater capacity to imitate technological progress. The capacity to renew regulatory frameworks and institutions to enable the country to embrace change is an important part of this openness. Obstacles to ideas, goods, services and production factors moving freely across borders have declined during the 1990s, partly thanks to our membership of the EU, and it is reasonable to assume that this has had a positive effect on factor productivity. For a small country like Sweden, internationalisation and increased international competition are expected to lead to particularly favourable productivity effects. Various measures indicate a marked increase in the degree of internationalisation in the Swedish economy. Both the import share and the export share have risen, which means that trade and the degree of specialisation have increased. Moreover, foreign direct investment in Sweden has multiplied and it is mainly direct investment from EU countries that has increased. Although the increasing international openness has been pronounced in Sweden with, for instance, a rise of 13 percentage points in the export share of GDP during the 1990s, there are several smaller countries that have shown an even more rapid increase in the equivalent figures. This reflects the globalised world in which we live, and does not reduce the significance of openness for the development of factor productivity. Internationalisation has thus contributed to ensuring that an increasing percentage of trade and industry is exposed to competition.

If the countries of the world deliver on the commitments made in the Paris Agreement, carbon taxes may be much higher than they are today. This may make our oil production less profitable, but it will strengthen the work on climate change. A large portion of government revenues from oil production has been transferred to the Government Pension Fund Global – the oil fund – which is invested widely in equities, bonds and real estate. This has provided for good returns and risk diversification. Interest rates worldwide have fallen to low levels in recent years. The prospect of continued moderate global growth means that interest rates may remain low ahead. The estimated expected real return on the oil fund has therefore been revised down and is now quite a bit lower than 4 percent. In December, Norges Bank advised the Ministry of Finance to increase the equity allocation in the fund.2 Historically, equities have produced higher returns than bonds, but the returns have also been more volatile. A lower return on bonds is the price we pay for dampening volatility in the fund’s value. In recent years bonds have become a more effective, but also more expensive, hedge against volatility. Both conditions suggest a somewhat lower allocation to bonds. Changes in the Norway’s overall petroleum wealth also warrant a lower allocation to bonds. Apart from the oil fund, this wealth consists of oil and gas still in the ground.
The single supervisory mechanism could be created through the transfer of prudential supervision attributes from national authorities to the ECB. In this context, a number of tasks such as consumer protection, fight against money laundering and supervision of banks based in non-EU countries remain at the national level. Meanwhile, the ECB takes the actual responsibility for supervising the banking system, being in charge of licensing credit institutions, ensuring compliance with capital, leverage and liquidity requirements and also supervising financial conglomerates on a consolidated basis. A gradual timetable was designed to smooth the transition to the new mechanism. Starting from 1 January 2013, the ECB may choose to take over the supervision of any credit institution in the banking union. A particular focus will be on the entities which have received or requested public funding. By 1 January 2014, all other banks should be under central supervision, with an earlier cut-off date (1 July 2013) for banks of major systemic importance. The successful implementation of the mechanism would hold considerable weight in restoring confidence and increasing transparency in banking supervision. However, a couple of downsides are worth mentioning: (i) voluntary participation of non-euro states in the banking union may result in the fragmentation of the EU single market into participating and non-participating countries, and (ii) there is still uncertainty regarding the role of these countries within the single supervisory institution. 6  BIS central bankers’ speeches  The question arises whether the decision to entrust the ECB with a banking supervision mandate was the appropriate choice.

In addition to wanting to see firms that are adequately protected against cyber-attacks and prepared to respond should they occur, we are equally as concerned with the overall safety and soundness of the financial system – as a whole. No one firm or agency is going to come up with the one and only permanent solution or protection against cyber-attacks. I see how we approach cybersecurity similar to how we approached Y2K – I’m sure you all remember that. •  We need an approach that everyone agrees to adopt. •  We need to see more public/private partnerships in the development of that approach. •  We need to come together to identify the vulnerabilities that are shared and what needs to be done. •  We need to agree on a path forward and how we test it. •  We need to acknowledge that, unlike Y2K, this does not have an expiration date. Cybersecurity is a “new normal.” It is going to become part of our vocabulary in nearly every exam we conduct, conversation we have with senior management, and conversation about the future of financial services. To be successful, we have to agree that we have common goals; although we can approach them from different angles and think creatively about solutions, we should all be working toward understanding the threats we are facing. The threat landscape is shifting constantly, and we are all responsible for keeping up with the changes and adapting our controls accordingly.
This is especially important for the UK, which has the largest most internationally active and most complex financial sector in the EU. We are host to more foreign institutions than any other member state. As the Bank of England Deputy Governor with specific responsibility for Financial Stability, I can say that it is crucial that the single market for financial services is supported by a framework of common prudential rules that are fit for purpose and that are consistently applied. This is intrinsic to the ability of the Bank to deliver financial stability in the UK. The importance of this has been very powerfully and painfully underscored by the experience of recent years. Of course, this is true internationally, outside of the EU as well as inside. One of the clear lessons of the crisis is that we did not have strong enough global standards on prudential regulation to support the integration that had taken place in international capital markets and financial services. It is not my subject for today, but there has been a sea change since the crisis with a massive international reform programme to develop and implement prudential standards and regulatory co-operation. At the same time, however, we must not forget that while there can be very material spillover costs to other countries when things go badly wrong, the buck at the very end stops at the national level. We have strengthened the resilience of the financial system.

The rationale for this was brutally underlined in the euro crisis. The members of the euro share more than a single market. They share a currency, they share risk of the break up of that currency and they share a lender of last resort. With the creation of the European Stability Mechanism, they have begun to share a common backstop. At that level of integration, it is right to ask to what extent financial stability is ultimately primarily a national responsibility and where the buck should stop. The creation and full implementation of the Banking Union should in my view increase the financial stability of the currency union, thereby improving stability for everyone in the EU. It is, however, impossible to ignore the fact that to do so, the Banking Union must continue to develop the necessary backstops – painful though that may sometimes be. There are agreed plans to move further in this direction. It is important that they are implemented. To return to the history for a moment, one sees the need to find a balance between the single market and financial stability in the way in which Europe ultimately came to free movement of capital, with strong Treaty prohibitions on restrictions but within that – and within constraints – a recognition of the need for member states to be able to take the necessary action to defend stability including in relation to prudential supervision.
As both demand for premises and rent levels have remained relatively unchanged, it is therefore likely that the price upturns in recent years are due more to a decline in investors’ required rate of return. The required rate of return depends partly on the yields on long-term government bonds, as these function as a risk-free alternative to investment in property. The required rate of return also depends on how much investors demand in compensation for investing in higher risk assets, such as property, that is, what risk premium they demand. Interest on government bonds rose in total during the first quarter of the year. All other things being equal, t his should raise the required rate of return. However, over the past year the required rate of return has fallen. This could either be due to investors expecting rents to rise in future, or that they have demanded a lower risk premium. A lower risk premium is in itself not surprising. The risk premiums on a number of different assets have fallen around the world in recent years. But as for a number of other markets, there may be reason to wonder whether the low risk premium on office premises is reasonable. However, one must remember that property companies have had very strong profit growth in recent years. Unlike the crisis years, property companies currently have much better margins to manage some dampening of prices. I therefore do not believe at present that developments in the commercial property market comprise any threat to financial stability.

In the United States it is common that the bonds issued by institutions are tied to different parts of the credit portfolio, which have different risks. These types of instrument have been an attractive investment for many investors in recent years, as the return on more traditional investment instruments, such as government bonds, has been considered too low. The high demand for the higher risk parts of the portfolio, which includes subprime, have meant that the banks’ financing costs for the higher risk loans have declined in recent years. This may have encouraged the rapid growth in the subprime market in the United States. The US method of securitisation is very rare in the Swedish mortgage market. In Sweden, mortgages are traditionally financed through the institutions and banks  4  BIS Review 56/2007  issuing bonds with the total assets as collateral. If a Swedish bank were to have a larger percentage of loans with poorer credit ratings, it would mean that the total financing cost would rise. Although the market for subprime in Sweden is currently small, it is conceivable that it could grow with time. Essentially, this is a positive development as it enables more households to enter the housing market. More types of mortgage do not necessarily mean that credit management in mortgage institutions will deteriorate.