samchain/econo-pairs-v1 huggingface dataset:
Risk aversion is all very well for a time, but it doesn’t pay the rent! What we are now having to cope with are the economic consequences of the earlier financial disturbances. The inevitable counterpart of recession in much of the rest of the world is a sharp slowdown of net external demand – particularly for manufactures – in the industrial world. That has been reflected in growing weakness and falling business confidence in large parts of the manufacturing sector in both the United States and Europe. The prospective growth in world economic activity has already roughly halved – from its trend rate of about 4%. Unless this fall in net external demand is offset by sustained domestic demand growth in the industrial countries – unless, in other words, the industrial economies collectively accommodate the necessary improvement in the external current account position of the emerging countries, through a deterioration in their own current account positions – the prospects for world economic activity would be dismal. Happily, we start from a position of relatively low inflation throughout the industrial world and, faced with weakening external demand, we can afford to see higher offsetting domestic demand growth without jeopardising price stability. Indeed we need to see higher domestic demand growth than we otherwise would if overall demand is not to fall short of underlying supply capacity, and we need it, too, to offset the effects of weak world prices and of lower exchange rates in many emerging market producers on our own domestic price level.

Mohd Razif bin Abd Kadir: SME Credit Bureau in the financial landscape of Malaysia Keynote address by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the SME Credit Bureau Seminar, Kuala Lumpur, 27 May 2008. *  *  *  It gives me great pleasure to be here with you this morning. I would like to express my appreciation to the Credit Guarantee Corporation or CGC, for inviting me to deliver the keynote address. It is encouraging to see many financial institutions and small and medium enterprises (SMEs) in the audience. The Bureau is also Malaysia’s first, under a joint initiative of CGC and Dun and Bradstreet Malaysia Sdn. Bhd., a subsidiary of Dun and Bradstreet Corporation in the US, which has vast experience in establishing and operating credit bureaus globally. The development of a strong and dynamic SME sector is a priority on the national economic agenda. The reasons for this are clear when one considers that 99.2% of the total business establishments in Malaysia are SMEs. The SME sector currently employs about 5.6 million people, and contributes about 32% of gross domestic product. Given its economic potential, the Government has accorded significant emphasis to developing and strengthening the SME sector, to enhance its contribution to the economy. The Government took a major stride forward in June 2004 with the establishment of the National SME Development Council.
Checkout can be eliminated. The customer, not cash, will reign supreme. 8  In the UK, intangible investment rose above tangible investment in the early 2000s, and stood at 11% as a share of output in 2014 compared with 10% for tangible investment. Investment in intangibles also exceeded that in tangibles in the US, Sweden and Finland [on average over 1999-2003], but not in other European countries including German, Italy and Spain. See Haskel, J and Westlake, W (2017), ‘Capitalism Without Capital: The Rise of the Intangible Economy’, Princeton University Press; and Goodridge, P R, Haskel, J and Wallis, G (2016), ‘Accounting for the UK Productivity Puzzle: A Decomposition and Predictions’, Economica, Vol. 85, Issue 339. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  Second, RTGS is being re-configured to lower the excessive costs of cross-border payments. To this end, 9  two private PSPs joined earlier this year. In parallel, the Bank is working to connect RTGS and the systems run by other central banks. And we have just begun collaborating with the Bank of Canada, the Monetary Authority of Singapore and several private-sector firms to improve inter-bank cross-border payments, including initiatives based on distributed ledger. The potential returns are large. At present, cross-border payments can cost ten times more than domestic ones. 10  We estimate that in the UK alone there is scope to realise annual savings of over £ million.

He believed “the policy was the one and only policy which ultimately would place the City and the country again on that eminence which it occupied before the war”. Such was his confidence that Norman mentioned only once, in passing, that “the policy” in question was to “attempt to regain the gold standard”, and he spent no time at all explaining what, apart from normalcy, would be achieved by it. Of course, this return to past certainties would eventually plunge the country into deflation and a deep recession. The old policy was not suited to the new normal and the UK was forced to abandon it a few years later. After all, what is normal when there are tectonic shifts? This dinner may look traditional, but its attendees have always recognised that the most longstanding and revered tradition of the City is its ability to anticipate, adapt to and accelerate change for the common good. That is why the UK’s financial system remains both a national asset and a global public good. Domestically, there are over 1 million financial services jobs, two-thirds outside London. Financial services run a trade surplus of 3% of GDP, while the rest of the economy runs a deficit almost twice as large. Last year, the UK financial system channelled £ billion in finance to UK businesses and helped 700,000 households to purchase homes. It provides pensions to 21 million people and insures the contents of 20 million homes.
For some LCBGs with sizeable capital market operations, the share of trading income accounted for nearly half of net operating income in 2006 and corresponded to more than 45% of their Tier 1 capital, as shown in the chart on the right of slide 10. Special Feature article A looks at the relationship between bank income diversity and systemic risk. It finds that a measure of systemic risk is positively correlated with bank size and the share of trading income, while it is negatively correlated with revenues from (traditional) interest income sources. 4  BIS Review 69/2007  Euro area insurance sector In the euro area insurance sector, there was a broad-based improvement in profitability in 2006 (see the chart on the left of slide 11). The positive assessment is further supported by the fact that the profitability of the weaker performers in 2005 also improved in 2006. Underlying this improvement was a strengthening of investment income, mainly owing to buoyant stock markets and higher interest rates. Moreover, favourable developments in the financial conditions of primary insurers and reinsurers in 2006, together with a greater focus on risk management and risk-adjusted prices, support a positive outlook for the euro area insurance sector as a whole. These positive developments continued to be priced into expected default frequencies (as shown in the chart on the right of slide 11). However, risks and challenges for the sector remain, as greater financial market risks could pose a challenge to the life insurance and non-life insurance sectors. 5.

As for interest rates,  BIS Review 11/2007  1  going forward, it is not yet certain whether the US long rates would need to rise in order to facilitate the financing of the US current account deficit. This would depend essentially on the relative ease with which the US deficit can be financed. So, I think we need to watch these developments closely because financial markets can adjust much more rapidly than the real side of the economy. Turning to the Thai economy. Last year, the economy showed considerable resilience, notwithstanding many adverse shocks affecting it, especially the higher oil price and political uncertainties at home. Growth, estimated at about 5 percent last year by the market, is satisfactory while the second round effects of the oil price increase on inflation were well contained. Overall, the economy's fundamentals remain sound with economic stability intact. Last year, monetary policy in Thailand was focused on limiting the second round effects of the oil price increase on inflation. That focus I think was well met. Policy rate has been held steady from midyear last year, and since then, inflation pressure looks to be moderating. Latest data show a further consolidation of inflation in December. So, under the current softening trend, baring no surprises on the oil price, there is also a possibility that, in Thailand too, inflation could be less of a policy concern this year. Under this scenario, therefore, there could be greater room for monetary policy to aim for a balance between growth and inflation.
In addition, pilot arrangements were introduced allowing offshore entities to use RMB to invest in the interbank bond market and the Mainland stock market.   A longer-term factor is China’s 12th Five-Year Plan, which was released in March last year. The Plan made clear that the wider use of RMB in cross-border transactions will be promoted as a matter of national policy. Where we are now? Taken together, those steps mean that the use of RMB for trade is today largely liberalised. Let me just illustrate that with a few figures:   In 2011, some RMB 2 trillion yuan, or 8% of the Mainland’s external trade and current account transactions, were settled in RMB.   The use of RMB for direct investments has also seen an encouraging start, amounting to some RMB 90 billion yuan for inward direct investments and RMB 20 billion yuan for outward direct investments in 2011.   As for portfolio investments, some 40 offshore institutions have been allowed to invest in the interbank bond market, within varying quotas. Meanwhile, some RMB 20 billion yuan have been invested in the stock market through the RMB Qualified Foreign Institutional Investor (QFII) scheme. As of course you know, over this period of liberalisation, a rapidly growing offshore RMB market has also emerged, centred in Hong Kong. The rising level of RMB trade flows to and from the Mainland has produced an expanding pool of RMB liquidity.

As a central bank governor, I would certainly welcome such a development. After all, the credibility of our monetary policy ultimately depends on whether the public believes that we match our words with our actions. BIS Review 55/2006  3
Default rates for consumer finance ABS and SME collateralised loan obligations have also remained low, well below 1%, throughout the worst financial and economic crisis we have experienced. As regards covered bonds, credit quality is ensured by a double recourse (on the underlying assets and on the issuer), which is in fact comparable with the double protection that exists in our standard repo operations. Overall, the decisions announced last week were taken with a view to underpinning the firm anchoring of medium to long-term inflation expectations, in line with our aim of maintaining inflation rates below, but close to, 2%. We expect the two purchase programmes to effectively complement the TLTROs in enhancing the functioning of the monetary policy transmission and in providing further monetary accommodation given that we have now reached the lower bound. The newly decided measures, together with the TLTROs, will have a sizeable impact on our balance sheet, which is expected to move towards the dimensions it used to have at the beginning of 2012, and the Governing Council stands ready to take further action if needed, in compliance with its mandate to maintain price stability. Conclusion Ladies and gentlemen, it is time for me to conclude. My bottom line is also my starting line. Investment is rightly said to be today’s demand and tomorrow’s supply. Yet investment in Europe is falling short. If we don’t manage to get investment going again, we will weaken the economy in the short run and undermine its prospects in the long run.

It is my hope that policy makers and financial service providers will utilise this information to develop strategies that will lead to the expansion and improvement of financial access for our people. BIS Review 115/2006  1  In Conclusion – May I emphasise that the nation is looking forward to the findings of the FinScope Zambia 2005 Survey which will help us fully understand the financial landscape in Zambia and therefore open up new market segments and allow us expand accessibility to financial services in Zambia necessary for reducing poverty. The report of the FinScope Zambia 2005 Survey will be posted to the Bank of Zambia website, www.boz.zm, for public information. Thank you. 2  BIS Review 115/2006
It is a non-statutory code, although compliance with it is expected of all AIs. It is monitored by the HKMA as part of its regular supervision, although, as I mentioned earlier, we have no formal, statutory mandate in this project. There is, I think, scope, as the Report advocates, for HKAB to take greater ownership of this code, particularly in the setting of standards – and in ensuring that these are high standards – and in monitoring and enforcing compliance. This would be consistent with the practice of banking associations in other jurisdictions, and it would be a logical development of HKAB’s role. A third area highlighted in the Consultant’s Report is consumer education in the field of banking services. This is a neglected subject in Hong Kong. The question of which organisation should take the lead in this is, of course, tied to the question of who should take on consumer protection. But, whatever the answer to the second question, it seems clear that HKAB would need to be involved in some form or another. This, in fact, reflects the practice among industry organisations in other jurisdictions, many of which have a strong tradition of producing plain-language factsheets, webpages and other resources on running personal finances, protecting one’s financial interests, and making the most of new forms of financial services. Moving away from the recommendations in the Consultant’s Report, there is, I think, a fourth area in which HKAB could become more involved. This is in the development of Hong Kong’s financial infrastructure.

Competition is a part of Hong Kong’s free market ethos. It is already strong in the banking sector here. We have witnessed it in particular – and occasionally with some concern – in the mortgage war and in the provision of credit card and other consumer services. Competition is being sharpened and stimulated by globalisation, which opens up hitherto restricted markets to businesses that are able to export their strengths, and by technological advance, which puts a premium on innovation and ingenuity. BIS Review 55/2001  1  For the economy as a whole, competition promotes efficiency in the allocation of resources and strength and flexibility in the face of change or crisis. In the banking sector, greater competition strengthens both individual banks, by forcing them to focus on their own core competence, and the banking system as a whole, by weeding out inefficiencies. For the consumer, competition promotes choice, quality and efficiency in products and services, and more reasonable costs. But competition, by its very nature, produces winners and losers. It also complicates the relationship between banks and customers, as services and fee structures become more complex and more sophisticated products proliferate. The general government policy on competition in Hong Kong is to adopt a sector-specific approach. We are not disposed to the idea of a general, overarching competition authority, since each sector of the economy has its own special needs and concerns.
Beyond a certain level, concentrations and other exposures to irreducible uncertainty simply make it impossible to say that any feasible level of capital is adequate to play the part it needs to in delivering policyholder protection. That is not a viable business model for a regulated financial firm and the remedy lies not in higher capital – which will do little if anything to address that irreducible lack of confidence in adequacy – but in restructuring the balance sheet and business model. A balanced approach I have discussed how capital requirements interact with other factors that vary across the sector and between firms – the strength of market discipline, the ladder of intervention, ease of exit – and also given an example of an important source of lack of resilience that cannot be remedied with capital: the susceptibility of balance sheet and enterprise risks to modelling. Arguments about the level of capital need to be rooted in these factors: it is not enough to assert that, if only we didn’t have to hold so much capital, our policies could be so much cheaper, we could supply so many more of them, and we could expand our investments. If only it were that simple. I recognise that there is an opportunity cost to higher regulatory capital: capital that supports the risks in existing business cannot also be used to support acquisitions or expansion into innovative fields. But price is not the same as value.

But of course the existence of this safety net blunts the policyholder incentive to distinguish between a high risk and a low risk insurer at the point of taking out a policy. Paradoxically the stronger the safety net, the stronger the other two regulatory pillars need to be to hold it up. The less the market and policyholders discipline a firm, the more the regulator needs to do it for them, including by policing financial standards. Pillar 2: intervention and risk management Pillar 2 contains a range of qualitative measures, but broadly speaking they can be divided into the ladder of intervention, and requirements for good risk management, including the prudent person principle. These are both intimately connected to how we define capital adequacy. The ladder of intervention is critical to preventing gambling for resurrection: it formalizes and defines the power to intervene before the interests of shareholders and policyholders diverge, in the same way that debt covenants protect creditors by giving them the ability to intervene in clearly defined circumstances under which their interests will diverge from those of the providers of equity capital. The role of regulatory capital in relation to the ladder is to buy time for that intervention.
Data from the Bank’s sterling money market data collection showed that in the first quarter of this year there were on average only 9 deposits a day underpinning 6 month sterling Libor, with a total daily value of £ million. This lack of transactions means that panel banks have to use their expert judgement to make their submissions. And this means they have become increasingly uncomfortable about doing so. And if those panel banks stop submitting, there is no Libor benchmark. Given the pervasive use of Libor historically, this creates a fragility at the heart of markets – that financial markets are reliant upon an unsustainable piece of infrastructure1. This financial stability risk is something the Financial Policy Committee has therefore been closely monitoring.2  The FCA has secured a breathing space to enable the transition, but only until end-2021. The best way to make the most of the timetable set for Libor to end is for markets to focus on transitioning away from it, to new risk free rates. For sterling markets, to the new risk free rate is SONIA, an overnight benchmark provided by the Bank and underpinned by transactions worth about 40 billion pounds a day. The need to transition is a critical one for all involved. We impressed this upon firms in our Dear CEO exercise; a key objective of which was to ensure Board level responsibility for transition.

Even if there are no unequivocal solutions, some measures are valid for several countries: raising the retirement age, eliminating early retirement incentives, reduction in replacement rates, integrating public pensions within a system which allows future payments to be financed so that the ageing of the population does not create imbalances between generations. Should men and women retire at the same age? This is a sensitive and important issue triggering a whole host of reactions and different points of view. Apparently, in accordance with current jurisprudence, I would say they should retire at the same age, as the European Court of Justice maintains that there should be no discrimination or distinction between men and women in any area. How urgent is pension reform? Extremely urgent, in all euro area countries. When we look at demographic trends, we tend to put it off as we are talking about long-term developments. It seems that the movement is slow and long, and that there is time. However, it is a complete illusion because it is an issue that has to be tackled as early as possible. The more radical left-wing and the unions are opposed to it and say that you are technocrats who only pay attention to numbers. As an important international leader, do you not believe that there are also social costs which need to be taken into consideration? We are, after all, talking about millions of people and all the weakest categories of the population. It is a crucial factor.