samchain/econo-pairs-v1 huggingface dataset:
By 2007, they had reached zero – bliss point for global capital market integration. Yet bliss was short-lived. 2007 proved to be a high-water mark. The onset of the financial crisis has resulted in significant capital market retrenchment as nation states have returned money home, placed regulatory ring-fences around assets and imposed restrictions on capital movement. Today, global capital market integration is back to levels last seen in 2000 and is still falling. This retrenchment reflects nervousness about the dark side of globalisation, its fragility and contagious cost. And this nervousness is not confined to capital flows; it has affected flows of goods, services and people too. That is why the World Trade Organisation’s (WTO) latest round of negotiations has been on-going for nearly 12 years. And it is why policy debates about immigration restrictions in a great many advanced economies are so vexed. These are attempts to turn the tide or at least stem the flood. The costs of a significant retreat in flows of capital, goods, services and people are difficult to quantify. They are not, however, difficult to imagine. We need only look back to the aftermath of the First World War for a case study. Then, trade barriers were erected, capital flows restricted, immigration controls imposed. What followed was not a halcyon period for the global social, economic and financial order. 4  BIS central bankers’ speeches  Reversing the rising tide of information would be an even more Canute-like task.

Lim, C H, Krznar, I, Lipinsky, F, Otani, A and Wu, X (2013), “The macroprudential framework: policy responsiveness and institutional arrangements”, IMF Working Paper, WP/13/166. Maddison, A (1995), “Monitoring the world economy, 1820 – 1992”, OECD Publishing. 12  BIS central bankers’ speeches  Newman, M E J (2005), “Power laws, Pareto distributions and Zipf’s law”, Contemporary Physics, Vol. 46, No. 5, pp. 323–351. Nier, E, Osinki, J, Jacome, L and Madrid, P (2011), “Institutional models for macroprudential policy”, IMF Staff Discussion Note, SDN/11/18. North, D (1981), “Structure and change in economic history”, W.W. Norton & Company. North, D (1991), “Institutions”, The Journal of Economic Perspective, Vol. 5, No.1, pp 97–112. Olson, M (1982), “The rise and decline of nations: economic growth, stagflation and social rigidities”, Yale University Press. Olson, M (1991), “Autocracy, democracy, and prosperity”. In Strategy and choice, edited by Zeckhauser, R J. Cambridge: MIT Press, pp. 131–57. Reinhart, C and Rogoff, K, (2009), “This time is different: eight centuries of financial crises” Princeton University Press. Sachs, J (2005), “The end of poverty: How we can make it happen in our lifetime”, Penguin. Simon, H A (1971), “Designing organizations for an information-rich world” in: Martin Greenberger, “Computers, Communication, and the Public Interest”, pp 38–52, John Hopkins Press. Smith, A (1759), “The theory of moral sentiments”, London: A. Millar. Veblen, T (1899), “The theory of the leisure class: an economic study of institutions”, Macmillan and Company, New York.
The LCR, together with individually set ‘Pillar 2 add-ons’ to address additional risks (including risks from margined derivatives and intraday volatility), set the UK minimum amount of high quality liquid assets (HQLA) that a bank is expected to hold in normal times. This minimum amount of HQLA constitutes what we call the quantitative individual liquidity guidance (ILG). 17. Bank of England Financial Stability Report, June 2018 18. For example, see PRA Supervisory Statement 24/15 'The PRA's approach to supervising liquidity and funding risks',  Page 13 Section 4 – Drawing down liquid asset buffers, June 2015 19. See Speech by Jon Cunliffe ‘Learning from the dash for cash – findings and next steps for margining practices’, February 2022; and Speech by Andrew Hauser ‘Seven Moments in Spring: Covid-19, financial markets and the Bank of England’s balance sheet operations’, June 2020 20. Speech by Andrew Hauser ‘Why central banks need new tools for dealing with market dysfunction’, January 2021 21. See Financial Stability Board (2021)  analysis on Covid-19 support measures. 22. BCBS (2021), ‘Early lessons from the Covid-19 pandemic on the Basel reforms’  , Implementation report. 23. For example, Gerba and Katsoulis (2021) show evidence for the period 2016-2020 that where banks were increasing LCRs, they reduced longer-term reverse repo lending against lower quality collateral. 24. BCBS (2021), ‘Early lessons from the Covid-19 pandemic on the Basel reforms’ 25. BIS (2022), ‘Market dysfunction and central bank tools’  , Implementation report. , Markets Committee Paper. 26.

And this is the new topic I would like to focus the second part of my speech today. In summary, there is evidence suggesting that banks may be overly reluctant to use their liquid asset buffers when facing liquidity pressures. This could have negative impacts on markets and the real economy, and means that central banks may need to intervene faster and to a greater extent than is desirable. But before I discuss liquidity buffers, let me summarise my most recent thinking on capital buffers and float a potential way forward. Impediments to capital buffer usability and policy implications We now have clear evidence that fear of breaching regulatory thresholds played a crucial role in affecting banks’ behaviours during the pandemic. Banks mostly did not need to use their buffers  Page 3  due to sizable support from authorities, but those which got nearer to regulatory buffers have reinforced their capital ratios to a greater extent. The importance of market stigma as a factor in banks’ reluctance to use buffers has been confirmed in many conversations I have had with bankers during the peak of the pandemic crisis and thereafter. It has also been reaffirmed by empirical evidence. [3] The evidence shows that firms’ reluctance to use their buffers can have a negative impact on lending. Firms which entered the pandemic with low capital headrooms, were more likely to constrain lending during the stress.
It may be of interest to this audience to know that trade finance has been a particular problem area and has attracted higher than average bad debt provisions. On the face of it, this seems strange since trade finance is normally seen as being short-term, self-liquidating and secured on the underlying goods. In practice, companies found it possible to obtain trade lines from a multiplicity of banks in excess of their underlying needs. In this situation, trade finance becomes in effect part of the general working capital of the company and can be siphoned off into the kind of speculative activities I have already described. In many cases, short-term trade finance financed long-term property developments in China. What lessons can be drawn from this? Banks should obviously have a thorough knowledge of their customers’ business and of their real funding needs. Banks should know what their lending is being used for and try to ascertain the borrowers’ facilities from other banks. 3  BIS Review 53/1999  However, in situations where banks are too anxious to lend, it is all too easy for the borrower to deny information to the banks and to play the banks off against one another. In granting credit, banks thus need to undertake proper financial review of their customers based on reliable information. Particular attention needs to be paid to cash flow and the ability to service debt in stress situations as well as normal conditions.

To be successful in this objective requires a number of factors to be in place at both the individual bank and sector levels. In individual banks, there must be an effective system of credit monitoring and loan classification to detect problem loans at an early stage and to enable corrective action to be taken as soon as possible. As I have already indicated, the shift from relationship banking and the unwillingness of borrowers to supply sufficient information have been hindering factors in Hong Kong in enabling banks to pick up early warning signals. Once problems have been detected, it may be sufficient in the early stages to leave the handling of these with the account officers. But when the problems are too deeprooted, there will usually be advantage in transferring problem loans to a dedicated loan recovery unit where specialist expertise attention can be devoted either to restructure the loans or to take recovery action and liquidate any collateral. This is the theory, but it is easier said that done to find loan recovery specialists when many bankers in the region have not experienced a prolonged period of economic decline. Outside experts, for example from the accounting firms, can help to fill some of the gap. But it is also essential that the banks build up their own resources and provide more training to their own staff on how to deal with problem loans.
Yet we have been, somehow, controlling, or we claimed to have been controlling, the monetary base ever since the linked exchange rate system was established in October 1983. 16. Even assuming that the definition of the monetary base is well understood, there is then the important question of how it should be controlled. Herein lies one of the most interesting subjects in monetary management and that is the choice between discretionary control with people making decisions, and automatic rule-based control with no discretionary decisions involved. Associated with this are considerations concerning, and possibly another choice between, flexibility in management and the credibility of the monetary system. Even the most professionally competent central banker can be wrong. A system that involves discretionary decisions is therefore subject to human errors of judgement that may undermine the credibility of the system, and some would go as far as to argue that this would eventually lead to failure of the system. On the other hand, an entirely rule-based system without any discretion is inflexible and may not serve the best interest of the community, even though short-term interests may sometimes be involved - witness the many calls for lowering interest rates even when the exchange rate is under pressure. 17. Another related conceptual issue that needs to be put across clearly is that the classical currency board system, as structured in the old colonial era, whilst still theoretically sound, has long become impracticable in coping with the complexities of modern finance.

Our critics have told us that we should not have squeezed so hard on interest rates last October and that we should not have increased the cost of borrowing for business and for those who have to service their home mortgages. We should have introduced our measures to strengthen our monetary and financial systems earlier. We should not have departed from our free market policy and intervened in the stock and futures markets. That there was a lack of a “sense of crisis” in how we handled the situation. These are the more significant criticisms. 4. I can fully understand the sentiment behind these criticisms. The people of Hong Kong have been suffering the worst conditions we have had to face for many years. Even the most patient and understanding community will have grievances when the value of the assets they hold has been halved while they have to pay significantly higher interest costs for their liabilities. Furthermore, income has not been growing, and, for some, it has been shrinking. And, worse still, the probability that they may lose their jobs has doubled in the past year. 5. So, whatever the cause of this difficult situation, whether or not it arose from events outside the control of the authorities, it is considered, and rightly so, the responsibility of a caring government to do what it can to relieve these grievances. Refusal or reluctance to do so, even for very sound reasons in the larger long-term public interest, is not looked upon kindly.
In the absence of a consensus, however, strong leadership would be required in order to explain the need for hard measures to the population and to isolate vested interests standing in the way of the needed reforms. Whatever the approach adopted, maximizing the benefits of Malta’s participation in monetary union will require the removal of the remaining impediments to growth. In the public sector, fiscal consolidation must henceforth involve a greater emphasis on expenditure reduction, particularly in view of rising pressures caused by aging-related factors such as pension and health care costs, and on securing more “value for money” and greater accountability in the use of public funds. The provision of free public goods and services regardless of the beneficiary’s ability to pay needs to be reassessed as it leads to waste and to a higher tax burden, besides being inequitable. The same applies to subsidies, whether implicit or explicit. The resulting distortion of incentives and inefficiencies is both unsustainable and incompatible with the fiscal discipline required in a monetary union. An important contribution to enhancing the economy’s competitiveness can also be made by new forms of employment security and by further improvements in labour market flexibility. With regard to the former, there remains scope for more innovation in terms of employmentfriendly labour laws, labour market practices and social protection systems.

An Accenture survey revealed that aggregators account for 70% of new business premiums in the UK private automobile insurance market. Indeed, two product aggregators platforms are already operating within Bank Negara Malaysia’s Regulatory Sandbox. The Bank is reviewing the regulatory framework to enable the aggregators to operate by the end of this year. 1/5  BIS central bankers' speeches  These are headwinds that the industry has to tackle head-on, and like it or not, they will further intensify. While we cannot stop these changes, we can certainly choose how we respond to it. With challenges are opportunities. These can only be reaped through a combination of traits – greater proactiveness, a willingness to adapt and clear strategic thinking. I do not doubt that this is much harder than it sounds, but I believe a good place to start would be focusing on three priorities. Allow me to elaborate on each in turn. Technology that matters The vision for the life insurance and family takaful industry is to achieve a penetration rate of 75% of the Malaysian population. Within this, the takaful industry has set a 25% target to be achieved by 2020. For this to happen, it is crucial that the industry gets to grips with the shift in market demographics, especially where interactions with technological platforms are concerned. It is imperative that agents embrace technology. A 2017 study 1 by Bain & Company indicates that nearly 60% of insurance customers in Malaysia are digitally active.
In most cases, counterfeit notes managed to pass through because the victims were too busy and casual to check their currency notes properly. This is indeed unfortunate and certainly avoidable if we are a bit more vigilant and aware of some security features found in our currency. Our currency notes are designed to protect against any forms of counterfeiting from the most basic to the most sophisticated. However, even the best security features and technology that are available will not help unless members of the public are adequately educated on the basic security characteristics of our currency notes. The security features in our currency notes utilise the latest technology and have stood the test of time. For example, “Intaglio” or raised printing effect, one of the most well-known security element found in almost every currency in the world, have never been featured on any counterfeits generated by colour printers. If only the general public is aware and able to identify of this particular security feature, they should be able to detect ninety nine percent of counterfeits in Malaysia and the world over. Intaglio by no means is the only security feature. There are many more watermark, electrotype numeral, see-through register mark, windowed colour shifting security threads with texts, hologram stripe, gold patch, to name a few, are among the basic security features that we should know on our currency notes. All this features can be easily be verified or authenticated using the “FLTC” method, that is to Feel, Look, Tilt and Check without using sophisticated devices.

Muhammad bin Ibrahim: Malaysia’s “My Ringgit” mobile app and the use of ink staining technology for ATMs Keynote address by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launching of “My Ringgit” Mobile Application and Ink-Stain Technology, Kuala Lumpur, 11 May 2015. *  *  *  I wish to welcome you to this event, first to launch a mobile app My Ringgit which aims to provide members of public with a tool to obtain information on the security features of our currency; and second to launch an ink staining technology as an innovative solution or approach against any attacks on our ATMs. Malaysia has one the lowest counterfeit rates in the world. Indeed, if compared to developed economies. Malaysia’s counterfeit rate is 2 per million pieces compared to development economies which range between 48 to 100 pieces to a million. Our counterfeit rate is only a fraction of the rate experienced by these countries. Most counterfeits found in circulation in Malaysia were of low quality produced using colour printers without any security features. Empirically no counterfeit notes have ever passed through the sophisticated cash processing machines used by Bank Negara or financial institutions. This is because there is a spectrum of advanced security features embedded in our currency. Nevertheless, from time to time we keep hearing cases that the general public inadvertently receive counterfeit notes in the course of doing business.
As I see it, expected corporate profits and access to reasonable investment financing are vital for a process of transformation. Wage formation Let us now take a look at a period when wage formation was one factor behind a less successful transformation of the Swedish economy. When the industrialised economies began to recover after World War Two and international competition increased, partly because trade barriers were dismantled, it became increasingly necessary for Swedish firms to adjust their product range. The requirements resembled those that now seem to lie in the not too distant future. For much of that period the level of Swedish wage costs rose rapidly. This meant that corporate profitability was under pressure both from the increased international competition and for rising wage costs. To cope with this pressure, firms tried to cut production costs by means of rationalisation rather than by investing in new products. With diminishing profits, they lacked the new investment stimulus and the rapid renewal of the capital stock that the pressure for change called for. During a period of transformation, rationalisation is not enough; new developments are equally important. At first, most things still went well. The 1960s was a fantastic decade for growth. In time, however, the strategy proved to be defensive and stagnation set in in the 1970s. There are limits to growth through rationalisation. Without renewal, growth normally slows sooner or later. Compared with other countries, the trend rate of growth in Sweden did indeed turn downwards.

The financing of these companies accordingly imposes different requirements in markets for risk capital and loans. The US markets for risk capital appear to be more highly developed and more focused on the financing of high-risk projects than seems to be the case in Europe, where bank loans predominate and a larger proportion of financing goes to reliable, established firms. With the advent of the euro, the financial system in Europe may become more developed and, like its counterpart across the Atlantic, offer more alternative forms of financing. With a single currency in the euro area, the capital markets will gradually become more liquid and thereby more efficient. There will probably be more corporate financing with bonds and equity, forms of financing that are less common at present in Europe than in the United States. Signs of this are already evident. There is reason to make a deeper analysis of the financial system’s contribution to the changes that are needed in the Swedish economy. The introduction of a single currency may come to play a more important part in this transformation in that it influences the development of Europe’s financial system. This is an argument in the discussion about EMU that I have not encountered hitherto. Conclusion Sweden has already come a long way in utilising information technology. In order to reap the full benefit of this and go on enjoying the combination of high growth and low inflation, it is essential that the right driving forces and conditions are in place.
But, you might say, the behaviour of borrowers and lenders, whether rational or based on distorted expectations, ultimately depends on interest rates. Only if interest rates are low, can such a dynamic develop. Interest rates in turn are strongly influenced by central banks. In the last part of my speech I would like to address this argument, and discuss the question that has come back into focus since the financial crisis: What role do central banks play in the event of excesses and crises on the credit market? The fundamental task of central banks like the SNB is to ensure price stability, while taking due account of economic developments (cf. slide 17). The main instrument they use for this are key or reference interest rates. If, for example, the inflation rate threatens to fall too low, key rates are lowered. This has a positive impact on price development via various channels. 19 One of these is loans: An interest rate cut reduces borrowing costs and creates incentives for expanding the credit supply. This encourages investments and consumer expenditure and ultimately has a positive effect on price development, too. With their interest rate decisions, central banks therefore consciously influence lending practice. If, for price stability reasons, interest rates have to be kept low for a prolonged period, it is possible that over time there  18  SFBC (1998). 19  The literature distinguishes different channels through which monetary policy can impact on aggregate demand and thus inflation.

Arthur Yuen: Remarks Discussant´s remarks by Mr Arthur Yuen, Deputy Chief Executive of the Hong Kong Monetary Authority, at the AMPF 2021 and MAS-BIS Conference on Macro-Financial Stability Policy, 28 May 2021. * * *  Opening 1. It gives me great pleasure to share my views on Hong Kong’s experience in the use of macroprudential measures to safeguard financial stability. I am grateful to Mr (Robert) McCauley and Professor (Catherine) Schenk for their research efforts, and their recognition of the effectiveness of the macroprudential measures implemented by the Hong Kong Monetary Authority (HKMA) since the 1990s. The importance of macroprudential policies 2. Today’s discussion on macroprudential policies is timely considering recent market developments. The accommodative monetary policies adopted by major economies in response to the COVID-19 health crisis have provided renewed impetus to rising property and asset prices in many markets. How to rein in asset price inflation and prevent it from endangering financial stability in the event of an abrupt price adjustment is a topical issue within the central banking community. 3. As mentioned in Robert and Catherine’s joint paper, the HKMA’s macroprudential measures on mortgage lending were first introduced in 1991. They have helped Hong Kong weather several crises including the Asian Financial Crisis, during which property prices plunged by as much as 70% between 1997 and 2003. Being an early adopter, we are encouraged to see that macroprudential measures have gained wider international acceptance after the Global Financial Crisis (GFC).