samchain/econo-pairs-v1 huggingface dataset:
He cared deeply for his staff’s welfare and, like any parent, was stern to those under him so that they may grow into the best versions of themselves. He treasured friendship and spoke of his close relationship with fellow central bankers as one of the “most satisfying things for a Governor”. This underpinned his unwavering commitment to harness the spirit of trust and cooperation amongst the regional and international central banking community amidst the rising crescendo of challenges confronting the global economy and financial system. He sowed the seeds for collaboration, such as through the establishment of the South East Asian Central Banks Centre (SEACEN). Governor Ismail Ali strove for perfection, yet he understood that neither economic assumption, ceteris paribus, nor econometric models can accurately predict this world. He said that “the central bank works in an uncertain world, with policy tools that are often not easily understood, and seeking to meet objectives of policy that are always broadly defined. With these uncertainties in an imperfect world, the central banker needs to have the serenity to accept what cannot be changed, the courage to change what cannot be accepted, and the wisdom to distinguish one from the other". As we sifted through the mementoes of Governor Ismail Ali for the book, we noticed that rarely were there pictures of him at the centre of attention; in most, he was at the side of a dignitary dispensing advice. I believe this aptly encapsulates his deep understanding of the role of a central bank.

In 1978, he told a group of central bankers that a central bank needs to earn the right to advise the government by winning the confidence and respect of the public. Earning this right is difficult, but once this is accomplished “a central bank would have the strongest guarantee for its independence and effectiveness, far stronger than any formal expression of central banking authority”. Yet, however independent a central bank is from the government, it cannot function in isolation. Fiscal and monetary policies are most effective when they are well coordinated. Further, in a world increasingly buffeted by protectionism and the risk of financial contagion, central banks 2/3  BIS central bankers' speeches  must cooperate with each other. Effective policy making today needs to have a global perspective as the fallout of policy failures often spread rapidly across borders. Cooperation at the national, regional and international levels, is necessary. This trust however, forms out of reliability, and reliability stems from competence. It is my firmest belief that the best way for us to honour the late Governor Ismail Ali is to carry on this vision – the vision of a central bank independent, competent and respected. Once again, I would like to thank everyone present for joining us in commemorating the centennial of Governor Ismail Ali’s birth. In particular, our heartfelt gratitude goes to Prime Minister, Tun Dr Siti Hasmah and family members of Governor Ismail Ali for your support and presence for today’s special occasion.
Working closely with the Commercial Affairs Department and the Attorney-General’s Chambers, MAS undertook a rigorous probe of these transactions which were part of a large, complex, cross-border money laundering scheme. Last year, I said that the findings on the 1MDB-related transactions that flowed through here had made a dent in our reputation as a clean and trusted financial centre. I believe we have begun the process of restoring that reputation. We have taken tough and unprecedented enforcement actions and sent an unequivocal message that MAS will not tolerate the criminal abuse of Singapore’s financial system. Just last month, we announced the completion of an intensive two-year long review of banks connected to 1MDB-related transactions known to-date. All in, we have closed 2 merchant banks and fined 8 banks nearly $ million – the heaviest aggregate financial penalties to-date. We have also issued prohibition orders (POs) against 4 individuals and served notices of intention to issue POs against 3 others for various regulatory breaches. MAS also issued lifetime bans, for the first time, against 2 of these individuals. MAS’ regulatory actions so far are based on what we know to-date. Thanks to excellent co-operation we have had with overseas jurisdictions, Singapore authorities were able to obtain good intelligence and piece together most of the significant flows from end to end. We have found nothing new in the latest filing by the US Department of Justice that warrants further action by us.

This cluster comprises the manufacturing, transport & storage, and wholesale services sectors. These activities comprise some 43% of the economy and, on average, contributed slightly over two-thirds of sequential GDP growth in Q4 2016 and Q1 2017. Electronics manufacturing firms expect business conditions to remain favourable in the next six months, albeit slightly slower than in H1 2017. MAS expects higher growth in this cluster to flow-through more broadly to the rest of the 2 / 10  BIS central bankers' speeches  economy and gain momentum over time. The modern services cluster recorded mixed outcomes over the last two quarters but is poised for higher growth in the second half of this year. This cluster, comprising financial, business, and ICT services, accounts for about 30% of GDP. Financial services saw a strong outturn in Q4 last year but a sequential pullback in Q1 this year, reflecting heightened political and geopolitical uncertainties globally which dampened investor sentiments. The performance of modern services is likely to improve as the global economy recovers and the upturn in the trade-related cluster raises business confidence and investments. The pickup in regional growth and trade should help anchor growth in lending and trade financing activities. Demand for ICT services will be boosted by government initiatives, as well as general IT deepening that is occurring in Singapore and the regional economies. The domestic-oriented cluster has had lacklustre growth and some segments are expected to remain weak.
Another subject for criticism has been the conditions attached to the loan programmes. This was the case not least in connection with the Asian crisis, when critics considered that the IMF’s economic policy stipulations were inappropriate and unduly harsh, being more likely to lessen instead of enhance the chances of a recovery. Once again, we can refer to Sweden’s problems in the early 1990s. When the fixed exchange rate had finally been abandoned in 1992, many argued that interest rates ought to be lowered both more quickly and further than was actually the case. I was one of them because I believed this was needed both for a quick end to the economic decline and to facilitate the consolidation of the government finances. In addition, it ought to aid a faster recovery in the banking sector. Others, including the Riksbank at that time, preferred a more cautious path in the hope that this would prevent a further weakening of the krona. Striking the right balance in these respects is difficult and even with hindsight we cannot be sure who was right. The problems in Asia were similar. Would it have been more appropriate to lower interest rates in order to avoid the failure of companies with loans in the domestic currency and the collapse of the banking system, or to stimulate demand to a greater extent so as to keep the economy going?

We therefore take our AML/CFT efforts very seriously, that include the surveillance and investigation work of our Financial Intelligence Unit in the Commercial Affairs Department. 5 In the last two years, more than 15 government agencies had come together to perform a comprehensive assessment of our ML/TF environment and the adequacy of measures. This culminated in a National Risk Assessment (NRA) report published in January. It is the first time that we have taken a consolidated and comprehensive look at the overall ML/TF risks to Singapore. What did we find? For one, the results largely validated the prevailing instinctive sense that high-risk sectors are primarily the cash intensive and internationally oriented ones, such as casinos and remittance agents. The NRA also revealed emerging risk areas  BIS central bankers’ speeches  1  like virtual currencies and large-value precious stones and metals dealings, and we are looking into addressing the potential risks associated with these sectors. 6 Put simply, the NRA has been a useful “health-check” of the ML/TF risks facing Singapore, by highlighting areas that warrant more resources and attention. As with the importance of having regular medical “health-checks”, we intend to update the risk review regularly, every two to three years, to ensure that our understanding of Singapore’s ML/TF risks is current and accurate. 7 A better understanding of risks should also translate into more targeted mitigation measures.
The reason we focus on inflation 1-2 years ahead is because monetary policy affects the economy and inflation with a certain time lag. This approach has served us well over the decade during which we have conducted monetary policy with an inflation target. Since the target was adopted, inflation has by and large averaged 2 per cent. At the same time, we have experienced better general economic progress than during the two preceding decades. The clear target coupled with our mode of action has also helped to make the Riksbank’s policy accessible to both the public and the financial markets. Inflation expectations have been anchored fairly stably around our target and it has been possible to predict our actions rather well. Nevertheless, there is cause to underline that we do not run on autopilot and mechanically change the repo rate in relation to our inflation forecasts. There may be reasons for us to wait before taking a decision in order to be able to perform more in-depth analysis or obtain more information. There may also be reason to take into account additional aspects in our decision rather than just inflation 1-2 years ahead. Such aspects could include how the economy in general would be affected, inflation in both a longer- and shorter-term perspective and the impact on financial stability. But it is important to have a framework that is as explicit as possible, with clearly defined and stated objectives. In this way, everyone can follow our line of reasoning, question it and comment on it.

For inflation in the years ahead, it is of course important that there are some unutilised resources to begin with. So what can we expect in terms of inflation developments? In this respect, the outlook has gradually undergone a number of more marked changes since the end of the autumn. Principally, as a result of lower expected increases in wage costs and better productivity growth, unit labour costs are expected today compared with in December to grow a number of tenths slower in the years ahead. Normally, there are few factors that are more significant for inflation a few years ahead than unit labour costs. In addition, international price pressure is muted. Against this background, most factors suggest that inflation in the next two years will be below the Riksbank’s target. Also with regard to the various risks to economic activity and inflation, I believe there is cause to reason somewhat differently than in December. As the economic upswing is gradually confirmed, the risk of a setback in the coming two years will diminish. Correspondingly, the probability that economic activity could prove unexpectedly positive and that the upswing will be quicker than anticipated is also likely to increase. However, this does not mean that there are no downside risks whatsoever in the short term. One such risk is that the weak labour market in the US or in Sweden - confirmed by the latest data - will worry households and dampen their consumption.
This very significant advance in terms of financial regulation should not obscure the progress that still needs to be made regarding the work underway, especially in the areas of market infrastructures (including for commodity markets), tighter regulation of activities included under the designation the “shadow banking system” and the behaviour of market players themselves. Once again, I underscore our collective responsibility, which is to ensure that all of the G-20 countries and, more widely, the international community as a whole apply international standards. Today’s discussions will be divided into four sessions. The first, chaired by Axel Weber, will examine the notion of disequilibrium after the crisis and will allow us to discuss the unpredictable evolution of global imbalances in the medium term, in the light of different assumptions concerning economic growth and savings trends in the different zones. Mario Draghi has agreed to chair the second session that will focus on questions related to supervision and coordination. As I have already said, the current context is characterised by the reform of global governance and regulation, a process given impetus by the G-20. Therefore, at this stage, it seems appropriate to explore topics such as the evolution of the role of international financial institutions and the accomplishments and future progress in harmonising global financial regulations. The third session, chaired by Michel Camdessus, should help us to gain further insight on what could, or should, be the role of central banks in a post-crisis environment.

Ambitious, of course, as it involves countries making explicit commitments on measures to be taken and discussing the outcomes with their peers, as part of what is known in G-20 jargon as the Mutual Assessment Process (MAP). Under the Korean presidency, whose efficacy and vision I would like to praise, an initial exercise resulted, in late 2010 in Seoul, in the adoption of a detailed country-by-country action plan and the commitment to tackle more specifically the global imbalances identified by the indicative guidelines. Far from me the idea of underplaying the difficulty of the exercise but the progress made so far is not inconsiderable and in this regard I am happy that the Ministers and Governors meeting in February in Paris resulted in agreement on a set of benchmark indicators. The second component concerns financial regulation. It is very clear that, in this area, we are past the stage of proposals and are now mainly concerned with consolidating the agreements approved by the Heads of State and Government in Seoul, especially the Basel III framework. The agreement that we achieved in 2010 made it possible to reconcile the need for far-reaching reforms with the need to reduce uncertainty relating to regulatory changes. Implementing these reforms in a harmonised framework capable of ensuring a genuine level playing field is now the crucial challenge, both from the point of view of our collective credibility and the overall effectiveness of the new mechanism.
During 2004 the banking system assets were raised by Lek 52.8 billion (or 14.1 percent), about Lek 18.5 billion more than the growth of assets evidenced over 2003. Year 2004 underwent a significant rise in lending activity, with a growth rate of 38 percent (or Lek 19.3 billion) at end of 2004, compared to 30.5 percent at end of 2003. Therefore, lending rose to 16.4 percent of total assets of the system at end of 2004, from 13.5 percent in the same period of 2003. Lending quality indicator (problem loans to credit balance ratio) is estimated at 4.2 percent, from 4.6 percent at end of 2003. The lowest level of this indicator highlights improvement in lending quality and limited banking system exposure to credit risk. Downward trend of capital adequacy ratio during 2004 was due to a better exploitation of banks’ capacities in terms of extending in riskier investments. During 2004 the supervision process, trying to be proactive and continuous, had on its focus the risk assessment of banks’ activity. Following up the requirements of Supervision Development Plan, the document on “Operative Supervision Policy” was drafted and approved, prescribing banks’ supervision principles. In view of this policy, the supervision cycle for banks that present less concern to supervision is lengthened from 12 months to 18 months, whereas for problematic banks it is reduced to 6 months.

I shall now go on to briefly describe how the repo rate forecast is produced. How is the repo rate path determined? The publication of our repo rate forecasts makes greater demands than previously on the internal preparation work. The new method of working requires a greater interaction between the staff and the Executive Board, and the Board members are involved at an earlier stage of the process. This is made easier by members of the Executive Board being full-time employees and not merely being called together for monetary policy meetings. So what does the practical work leading to the published repo rate path actually entail? The monetary policy decision-making process normally follows an established preparatory process. 4 During a number of weeks employees in the Monetary Policy Department prepare draft forecasts for economic developments, including the repo rate. After this there are meetings together with the Executive Board of the Riksbank, and a main scenario for economic developments, including the repo rate, is drawn up. Of course, the main scenario is based on a combination of model-based forecasts and assessments. 3  See Lars E.O. Svensson, “Policy expectations and policy evaluations: the role of transparency and communication”, Economic Review 2010:1, Sveriges Riksbank. 4  For a more detailed description of the preparatory work prior to the monetary policy decisions, see Kerstin Hallsten and Sara Tägtström (2009): “The decision-making process – how the Executive Board of the Riksbank decides on the repo rate,” Economic Review 2009:1, Sveriges Riksbank.
However, in a highly volatile environment, the war is affecting the cost of these goods on global markets, irrespective of their origin. In particular, the rise in energy prices has significant effects on the cost of the household consumption basket and on firms’ costs of production. Also, the war itself could ultimately hamper the supply of some of these goods, which would obviously tend to have a large impact on prices and economic activity. The European authorities have formally announced their intention to reduce structural energy dependence on Russia, but clearly this is not something that can be achieved in the short term. The surge in inflationary pressures apparent in the March data partly reflects the increase in commodity prices associated with the war, but also the delayed effects of the acceleration in intermediate costs in the preceding months on the prices of other goods and services, and the scarcity of certain products as a result of the road hauliers’ strike. The impact of the increase in energy costs is highly uneven across groups of agents. In the case of households, those with low incomes are most affected. In the case of productive sectors, the impact is naturally greater on the more energy-intensive ones. A second channel, that is also very significant, is the impact of the war on household and business confidence, given the extraordinary uncertainty surrounding the duration and course of the war.

11 But the proposal presented by the committee still entailed a fairly unclear allocation of responsibility and the Riksbank assessed in its consultation response that this could lead to uncertainty over who should take action and thus weaken decisiveness too far. 12 We advocated that responsibility should be given to one decision-making body with a clear responsibility for macroprudential policy. A few weeks ago, the Government came to a decision. 13 Many details still remain to be decided, and it will take some time still before a complete framework is in place. But it is clear that Finansinspektionen (the Swedish Financial Supervisory Authority) will have the overall responsibility for macroprudential tools. The Riksbank will be part of a financial stability council that also includes the Government, Finansinspektionen and the National Debt Office. The council is to identify risks and discuss measures, but it should function as a discussion forum and not give explicit recommendations. The most important thing is that the uncertainty surrounding the allocation of responsibility has now been resolved in that it has been made clear and that responsibility will rest with one authority. I do not believe that the institutional set-up is otherwise of absolutely critical importance – within reasonable boundaries. Various solutions may very well prove to function equally well in practice and provide equally good economic development. Ultimately, it remains to be seen how things work out – “the proof of the pudding is in the eating”.
This call is more than merely a short-lived fashion. There are two especially valid reasons for the formerly rather reserved central banks to communicate openly and in good time. For one thing, transparency - in particular, ex post transparency - is an indispensable precondition for accountability and thus also a necessary correlative to independence. Beyond this, transparency is an effective means of gaining the confidence of the public and the markets. Central banks depend much more on this confidence in fulfilling their mandate than other institutions. For another, the increased significance attached to transparency derives from the central role played by expectations, also in macroeconomic processes. If the efficiency of forming expectations in the financial markets and in the real sector can be improved with greater transparency, this serves to enhance the productivity of an economy. Transparency, however, should be optimised rather than maximised. Individual demands can occasionally be quite unrealistic. In my view, this even applies to ex post transparency, which is basically less problematic. Accordingly, I do not see any merit in the popular practice which has gained ground in various countries to publish the minutes of board meetings. Board members, too, are only human. Like anyone else, they respond to incentives. My fear is that publication will lead to a certain amount of window talk and probably also to critical discussions being held outside the recorded meetings.

Upturn cut short by sovereign debt problems in 2011–2012 An effect of the severe crisis of 2008 was a shutdown in global trade, which brought the Swedish economy to a sudden halt. To support the economy, the Riksbank quickly lowered the repo rate to a, at the time, historically low level of 0.25 per cent. Around the world, other central banks and governments made herculean efforts to kick-start the financial system and reverse the trend. As the situation on the credit markets improved and global trade picked up, the recovery occurred more rapidly than expected in Sweden. From mid-2010, the Riksbank began raising the repo rate towards a more normal level. But during 2011, the recovery stuttered when unease linked to the problems of heavily burdened public finances in several European countries started to affect the credit markets to an ever-increasing degree. Measures by institutions such as the EU and the ECB helped to stabilise the situation, but weak confidence and low demand among households and companies subdued European developments. This, in turn, led to a slowdown in Swedish economic activity, despite relatively high domestic demand. GDP fell again in 2012 and the Riksbank lowered the repo rate in a number of steps. Focus on inflation and maintaining confidence in the inflation target has produced results Something which provoked head-scratching around the world during these years was that inflation remained at a relatively high level to begin with, despite the major economic slowdown after 2008.