samchain/econo-pairs-v1 huggingface dataset:
Thomas Jordan: The challenges of the global economic crisis – can Switzerland master them? Summary of a speech by Mr Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank, on the occasion of a panel discussion at the Central Bank of the Republic of Austria, Vienna, 1 February 2011. The complete speech can be found in German on the Swiss National Bank’s website. *  *  *  Many countries are facing major economic challenges as a result of the financial and economic crisis. Which of these are of particular importance for Switzerland? And how can we tackle them? Switzerland is currently facing three key challenges. First, the crisis has shown that countries can encounter serious difficulties due to systemically important banks. Switzerland has two systemically important banks, in fact, these big banks are systemically important even at the global level. Thus for our country, in particular, it is essential that the stability of the financial system be sustainably reinforced. Second, the crisis has substantially changed the economic environment in which Switzerland – an economy with an extremely global orientation – operates. On the one hand, our country has to cope with the appreciation of the Swiss franc, particularly against the euro, which has come under pressure because of the sovereign debt crisis affecting certain European countries. On the other hand, the crisis has reinforced the shift in economic power towards the emerging economies.

22.02.2019  Banking Union: the challenge of going digital and being regulated Presentation of the PwC report Pablo Hernandez de Cos Governor  Let me begin by thanking PwC for their kind invitation to participate in this presentation of the Sixth Report on Banking Union. In recent years these reports have provided us with a detailed analysis of the challenges facing the Spanish financial sector as a result of having to adapt to regulatory changes and to the new institutional arrangements of Banking Union. And this against a background of far-reaching technological change, which has seen the emergence of new players (such as the fintech and the technological giants, the so-called bigtech). These agents are altering the competitive framework in some of the traditional business segments of banks. As on previous occasions, this year’s report is very complete and analyses key questions on new issues relating to regulation, to banking activity and to the environment banks face. Allow me to focus on two specific issues: the tasks outstanding regarding Banking Union and the technological challenge from a regulatory standpoint. These two issues are, moreover, interrelated. To successfully address the transformation imposed by the new competitive environment resulting from technological changes will probably require harnessing the opportunities of scale and specialisation that the integration of European financial markets offers. But to enable this process of integration it will be necessary first to remove the obstacles that continue today to block the way to the creation of Banking Union and the full Capital Markets Union.
The fall in house prices towards the end of 2006 and in 2007 resulted in rising defaults on mortgages, especially in the subprime segment. In 2007 and 2008, interest rates will  2  BIS Review 100/2007  increase for a substantial portion of the most recently granted subprime mortgages. This will probably result in a further rise in defaults on these mortgages. Housing starts have also declined considerably. The sharp fall in housing investment has reduced the annual rate of US economic growth by about ¾ percentage point on average over the past year and a half. Housing market developments in the US may result in a more sluggish trend in private consumption and may further amplify the tendency to slower growth in the US, which may spread to the global economy. At the moment, the spillover effects seem to have been moderate and downward revisions of growth estimates have been modest. In the US, more than half of total mortgage debt is securitised and sold to investment managers all over the world. This is one of the largest fixed income markets in the world and accounts in volume terms for almost 10 per cent of global securities debt. Subprime securitised issuance showed a sharp rise in 2004 and increased further in 2005. Estimates of subprime mortgages as a share of the total volume of securitised mortgages in the US are uncertain and vary from 12 to 18 per cent. In the chart, the share is 12 per cent, or USD 665 billion.

But the economic lessons of the past remain relevant. Openness comes with challenges. And as the world grows increasingly interconnected, these challenges will not only be more numerous, but they will also be more varied. Today, the Thai economy again faces challenges from the external front. The main challenge comes in the form of global financial imbalances; another challenge is the threat of high and variable oil prices. By global financial imbalances, I refer to the pattern of savings and investment allocation across the world. At the present, the US economy saves very little relative to its investment needs. Asian and oilproducing economies save more than their domestic investment opportunities. The European Union saves just enough. As a result, the US economy has been borrowing a large sum from Asia and oil producers. The magnitude of capital flows from the rest of the world to the US economy is not sustainable; it is a matter of time before the flows eventually reverse. And, in the process, the US  2  BIS Review 64/2007  dollar will depreciate against various currencies, including the Thai baht. The issue here is not only when the correction will take place, but how fast and how disruptive. Thailand, like many emerging market economies with small and shallow financial markets, is particularly vulnerable to fast-moving international capital. Such rapid movements of capital flows, if vastly out of line with the underlying economic fundamentals, can have negative impacts on the export or import sectors depending on the direction of exchange rate movement.
One of these reports is the IMF’s Executive Board’s assessment report of the Kingdom’s economic developments which indicated that the Saudi economy was prepared to encounter the global financial crisis due to its adoption of sound supervisory and regulatory frameworks and the prudent and macroeconomic policies followed over the preceding years. The Board commended the Kingdom for taking strong measures and increasing expenditure and for good management of the monetary policy. The Fund appraised the Kingdom’s efforts for maintaining the soundness of the banking system, improving the climate of credit and the positive economic outlook in general. It also supported the Kingdom’s plans for resuming expenditure at sustainable levels and the government’s effort aiming at slowing the growth of domestic consumption of oil products. BIS Review 128/2010  1  Custodian of the Two Holy Mosques, In pursuance of the government’s keenness to avoid the repercussions of the global financial crisis, the Supreme Economic Council held a meeting, chaired by your Majesty, on 16 Shawwal 1428H (16 October 2008) to discuss the global financial crisis and the way to curb its potential effects on the national economy and it called for taking a number of actions to face it.

The good news is that Malaysia's Financial Capability and Literacy Index score has improved since the last survey. But behind that index score are much more layered observations of our society's financial attitudes and behaviours. And they reveal that putting financial knowledge into the hands of individuals is just the start. Helping people use that knowledge wisely and effectively in order to bring about lasting changes in behaviour is the race that all of us here are running together - to help as many people as possible reach the finish line of their financial goals. More details on the results of the 2021 FCI Survey will be available in the upcoming publication of Bank Negara Malaysia's Financial Stability Review which will happen in the coming week. 4. For those of you who may not be familiar with the Financial Education Network, or FEN, we are an inter-agency platform of eight partner institutions that are committed to raising the level of financial literacy in Malaysia. In 2019, FEN developed a five-year National Strategy for Financial Literacy which is currently in its fourth year. 5. Let me take the opportunity to recap the aims of the National Strategy. They are to empower Malaysians to: first, save, manage and protect their money; second, plan ahead to secure a sustainable future; and third, protect against fraud and financial scams. 6. Fast forward four years, and these goals are as, if not more, relevant today.
As with changes in interest rates, it will take some time before we see the impact of our purchases feeding through into higher aggregate spending and inflation. However, there are some encouraging signs that the medicine is working. The growth of underlying broad money has picked up in recent months, especially relative to the weak growth rates we might otherwise have seen. Interest rates have fallen. Corporate bond spreads have declined substantially. And the amount of finance raised by companies in bond and equity markets is at record levels. Not all of these developments can be attributed solely to our actions. But I have no doubt that asset purchases have played an important role. At our policy meeting in August, the Monetary Policy Committee voted to maintain Bank Rate at 0.5% and to increase the scale of our asset purchase programme to £ billion. That level of Bank Rate and scale of asset purchases were maintained at the MPC meeting earlier this month. You may have notice that at our meeting in August there was a split vote amongst the Committee. A majority of the Committee – including myself – voted to increase the asset purchase programme to £ billion, whereas a minority preferred a larger expansion to £ billion. It is important not to make too much of this difference; all members were of the view that a further degree of monetary stimulus was needed to meet the inflation target.

A natural place to start would be with the “consumption boom”, which is often presumed to have preceded the bust. But in fact there was no such boom. Between the turn of this century and the onset of the financial crisis, consumer spending increased no faster than it had done, on average, over the past 40 years. 1 Moreover, the fraction of our national output consumed by households did not increase. The kernel of truth in the consumption boom story is that changes in the distribution of our national income meant that this stable growth of aggregate consumer spending was associated with a sharp decline in the household savings ratio. The proportion of income that households set aside fell from close to 10% in 1997 to a little over 2% ten years later. Although there was no spending boom, households were making less provision for the future. Where did all the debt go? But how does the absence of a spending boom fit with the headlines about the rise in debt. The big increase in household debt over the past decade is certainly not a myth. Household  1  Consumption growth was, however, unusually strong in the period 1996-2000. My colleague Andrew Sentance has stressed the importance of analysing trends in consumption over longer periods (eg Sentance 2007). 2  BIS Review 114/2009  debt as a proportion of income increased from 100% to 165% in the 10 years to 2007.
Not only has the UK economy behaved differently from its previous experience, it has also behaved differently from other countries. In the United States for example, the fall in employment relative to output has been larger than in the United Kingdom (Chart 8). Weak downwards pressure on inflation from the recession can only go so far in helping understand recent movements in inflation. It cannot explain why inflation has been rising recently. For that we need to look at a series of shocks to relative prices that have put temporary upwards pressure on CPI inflation. These shocks include the change in the VAT rate; changes in oil (and hence petrol) prices and changes in the prices of imports relative to domestic goods and services. 4  BIS Review 91/2010  Because inflation is measured as a 12-month rate, a change in the level of prices will impact on the inflation rate for a year. When the VAT rate was cut in December 2008, that pushed down the price level and the annual inflation rate. Although the precise timing and impact is uncertain, estimates from the ONS suggest it is likely to have reduced inflation by about ¾pp at that time. That effect would have fallen out of the inflation rate a year later. And when the VAT rate was restored in January 2010, the effect of that is likely to have pushed up on the price level and the inflation rate.

M R Chatu Mongol Sonakul: Corporate challenges in the new millennium Speech by M R Chatu Mongol Sonakul, Governor of the Bank of Thailand, at the Annual Business Awards Gala Dinner of the Netherlands-Thai Chamber of Commerce held in Bangkok, 17 May 2001. *  *  *  Your Excellencies, Distinguished Guests, Ladies and Gentlemen, First, let me thank Mr. Jan de Kam, President of the Netherlands-Thai Chamber of Commerce for inviting me to give the Keynote Address for this Annual Business Awards Gala Dinner, an occasion that exemplifies the co-operative relationship between the Netherlands and Thailand that dated back through time since 1602. At the time, the Dutch East India Company had already begun trading with the southern part of Siam through their main trading station in Batavia, Indonesia. Several years later, it opened its Ayutthaya trading post and became very influential during the reign of King Prasat-Thong. And indeed, one of the best historical accounts of the Ayutthaya Dynasty was written by a director of the Dutch East India Company in Siam, Mr. Jeremias van Vliet. Now in 2001, our co-operative relationship continues. Many prominent corporations of the Netherlands remain their presence in Thailand, including Philips, Shell (Royal Dutch), Unilever, Heineken, and ABN AMRO, only to name a few. By now, it is generally accepted that the tide of globalization is here to stay.
•  Clients will get the opportunity to stress-test their systems, assess the responsiveness of existing coverage to losses, and gain an appreciation of potential losses and the need for cyber insurance cover. Promote Asian demand Next, we want to promote insurance demand in Asia. Asia is already leading the world in premium growth. We seek to catalyse the development of insurance demand in the region via a three-pronged approach. First, enhancing cross-border access to regional markets. The ASEAN economies are working together on a comprehensive insurance liberalisation framework. •  We aspire to achieve substantial liberalisation by 2020 for all insurance sub-sectors, namely life insurance, non-life insurance, reinsurance and retrocession, insurance intermediation, and insurance auxiliary services. •  Insurers can expect to benefit from easier cross-border provision of services and substantial access across the ASEAN customer base from offices in any ASEAN member country. •  The framework is expected to be discussed at the ASEAN Finance Ministers’ Meeting next year. Second, increasing the pool of Asian risk data. Modelling and loss simulation are key tools to help insurers manage and price their exposures. Accurate and timely data are critical for risk models to predict the impact of a loss event. For example, to predict the vulnerability of an insured risk to catastrophes, a wide variety of data is required, such as geographic location,  BIS central bankers’ speeches  3  soil structures, rainfall, construction materials and urban density, just to name a few.

The scale of the floods and the knock-on effects of natural catastrophes on global supply chains came as a rude surprise. The floods damaged more than 7000 industrial and manufacturing plants in 40 separate provinces. This affected countries with significant manufacturing capabilities in Thailand, most notably Japan. The majority of the insurance losses therefore came not from property damage, but from business interruption claims arising from the disruption to manufacturing and supply chains. It is therefore important that insurers have senior experts in the region who understand Asia’s multi-faceted and inter-connected risks. This will enable the industry to better price and underwrite regional risks, and achieve sustained growth. MAS will seek to increase the depth of expertise in Singapore by continuing to work with existing players to build up their specialty and reinsurance underwriting and broking capabilities as well as expand their regional hubs. MAS will also seek to increase breadth in the industry by promoting growth in emerging business lines, such as cyber risks. Lack of data is a key hurdle for cyber insurance in Asia. MAS is working with industry to create a test-bed for cyber risks where insurers and potential clients can come together to simulate loss events. •  Cyber insurers will be able to generate sets of valuable loss data and raise awareness about the value of specialty cyber insurance cover.
I know many of you have come here today to hear more about how to tap into this rapidly developing market to finance your business in the future. Now of course, as a global hub, it does not mean that all offshore RMB businesses are to be conducted only in Hong Kong. Quite the contrary. As RMB becomes more widely used and accepted by trading companies and investors worldwide, it is natural to see financial institutions providing RMB services to meet the demand of their customers. That said, even as its role evolves over time in line with market changes, we do see Hong Kong continuing to be an ideal place for companies to conduct their RMB banking and financing activities. In addition, Hong Kong will develop its ability as a RMB hub to serve a growing network of financial institutions around the world. And in this last respect we are seeing real signs of development. More foreign banks are either choosing to have a base in Hong Kong or are using RMB correspondent banking services provided by banks in Hong Kong. As of the end of March 2012, there were close to 200 banks participating in Hong Kong’s RMB clearing platform. Of these, 170 are foreign-owned or located overseas. At the same time, over 1,100 RMB correspondent accounts were maintained by overseas banks with banks in Hong Kong.

Against this backdrop, Hong  BIS central bankers’ speeches  3  Kong is well-placed to serve as a key commercial and financial gateway, continuing to facilitate trade as it expands and is increasingly conducted in RMB. Through its long history as an international financial centre, Hong Kong has built up the necessary infrastructure to support a growing RMB market. Indeed, Hong Kong has been steadily gearing up its capability to handle RMB servicing since it started back in 2004. This is what has enabled Hong Kong to become a global hub for offshore RMB businesses. Hong Kong today provides the largest and most effective platform for the complete range of RMB transactions, from banking and financing to asset management, at both customer and wholesale levels. Just to give an illustration of Hong Kong’s status as a global RMB hub, consider its recent record:   RMB deposits in Hong Kong, including Certificates of Deposits, grew by a factor of ten between end-2009 and March 2012, from around RMB 60 billion to over RMB 660 billion yuan.   RMB trade settlement transactions handled by banks in Hong Kong has also increased phenomenally, from less than RMB 2 billion yuan in 2009 to nearly RMB 2 trillion yuan in 2011.   Over the same two-year period, the Hong Kong RMB dim-sum bond market has seen issuances growing from RMB 16 billion to RMB 108 billion yuan.
But what if we take banks as a whole? The answer is that banks create deposits when they extend loans to their customers. When a bank grants a loan, money that did not exist before is credited to the customer’s account. The bank does not have to find someone who wants to save before it can make a loan. The bank creates its own funding in the act of lending. Banks thereby also create the money we all use. No other financial firm can do that.5 Non-bank financial institutions must hold deposits in a bank for them to be able to pay another party. Almost all the money we spend daily is deposit money created by a bank. There is little likelihood that many customers will withdraw large amounts simultaneously. Banks can therefore create far more deposits than they can pay out at the same time.6 But a bank cannot extend loans and create deposits without limitations. First, it must assess the customer’s debt-servicing capacity, ie credit risk. Second, the bank must assess the degree of liquidity risk associated with lending long and creating deposits that customers can withdraw at any time. Third, it must comply with statutory rules. Banks’ willingness to assume some degree of liquidity risk is a public good. In its absence, we would have less access to long-term loans and money in the form of bank deposits. On the other hand, too much liquidity risk entails a risk of instability and crises like the one we experienced in 2008.

FinTech companies and tech giants can take market shares from established banks. This can result in sweeping changes in market structure. But this does not mean that banks will become obsolete. The services offered by the new participants and the new means of payment I have discussed so far are based on our current monetary system. What is lent and saved will still be Norwegian kroner created by regulated banks. Will cryptocurrencies give rise to a new financial system? Chart: Cryptocurrencies – another kind of money A more radical scenario is that cryptocurrencies not pegged to the krone gain a larger role in the monetary system. Cryptocurrencies are characterised by decentralised settlement, without the need for a central counterparty that must be trusted by all. Ownership of funds is determined by access to cryptographic keys and not title to a bank account. This technology can make money programmable so that it can be used in so-called “smart contracts”. In some cases, such as for Bitcoin, the system limits the total quantity of money that can be created. Bitcoin, is an example of a cryptocurrency without a fixed exchange rate against anything else, which could entail wide swings against other currencies. But a growing array of “stablecoins” are also being launched, which are intended to have a fixed exchange rate against a country’s bank money. An example is Diem, whose backers include Facebook and which will exist in several versions, each pegged to its main currency.