samchain/econo-pairs-v1 huggingface dataset:
•  Financing new investment through state bonds could well prove inefficient and harmful for the Estonian economy as a whole, even if the investments are in good projects. The low unemployment and rapid wage rises that we see at the moment  2  BIS central bankers’ speeches  would cause a large part of the extra money gained from the emission of state bonds to be lost, as infrastructure projects would cost much more than before. Large state construction projects that can only be temporary in nature would also cause economic and social problems in Estonia, because once the large projects finish, a great number of those working on them would find themselves unemployed, having left jobs in other sectors. •  It must be understood that Estonia already profits from the purchases of bonds by the central banks of the euro area. Financial markets act as a series of communicating vessels, so that when interest rates in one area fall, the effect is passed on to other areas. The lower interest rates in the euro area mean that Estonian companies and households can borrow more cheaply, and were it necessary the Estonian state could also borrow more cheaply. If easier financing conditions spur on the European economy, Estonian exporters will be among the winners, and this is the goal towards which the bond purchase programme is striving.

The Estonian economy Looking more closely at the Estonian economy, it can be seen that the growth in Estonia in 2014 came primarily from the domestic market. •  Domestic consumption was lifted by rising employment, falling unemployment, and strong wage growth and a simultaneous fall in prices. The economy grew faster in 2014 than in 2013, but it should be remembered that no return to the growth rates seen in the boom years of the last decade is to be expected. •  It may be hard to get used to the idea of lower growth rates, but economic truths cannot be denied. The Estonian economy and Estonian demographics are in a different phase of development now, and long-term sustainable growth is notably lower at 3–4%. Consumer price inflation in Estonia fell below zero in June 2014 for the first time since the crisis. Four years ago prices fell across a wide range of goods and services, but last year the fall in prices was mainly caused by cheaper energy and food. Eesti Pank is not forecasting any rise in prices this year, but rising wages will put upward pressure on the prices of domestic goods and services. One reason for the rapidly rising labour costs has been the decline in the working age population, but faster growth in wages than in productivity could endanger the competitiveness of the Estonian economy in the longer term.
Norwegian monetary policy In the long term, a country’s exchange rate tends to move in line with developments in domestic price and cost inflation compared with other countries. If the level of prices in one country rises at a faster pace, that country’s currency will tend to depreciate to the same extent over time. Empirical evidence for these effects has been found for a number of countries, although the effects are relatively weak in  5  BIS Review 105/2000  the short term. However, substantial medium-term convergence in purchasing power parity has also been found between Norway and its trading partners.3 This means that higher inflation in Norway than in our trading partners has been followed by depreciation of the nominal exchange rate. This is reflected in the fact that the real krone exchange rate has been relatively stable over time. Movements in the krone exchange rate against the German mark over the past 30 years may serve to illustrate this. In the 1970s and 1980s interest rates were kept low, and they were politically determined. Price and cost inflation was generally higher than that of Norway’s trading partners. Frequent devaluations were used to redress the negative effects of high price and wage inflation on 3  See Akram (2000). BIS Review 105/2000  6  competitiveness. The average rate of increase in prices between 1973 and 1987 was almost 10% twice as high as the level in Germany.

In recent years we have attached importance to contributing to a transparent monetary policy. This is in keeping with trends in many other countries. Transparency promotes predictability in the behaviour of the central bank and helps diminish uncertainty for all participants in the economy. It is our hope that in this way the Norwegian economy will be less exposed to doubt and speculation concerning the setting of interest rates, with attendant greater stability in the formation of expectations and smoother movements in long-term interest rates. We aim to create a pattern of continuity and consistency in the implementation of monetary policy. Developments in financial indicators do not indicate that there is great uncertainty in the markets regarding developments in the internal and external value of the Norwegian krone. For instance, developments in bond yields show that the risk premium has been relatively stable in recent years. The pricing of the Norwegian krone in the options market indicates that substantial uncertainty with regard to movements in the value of the krone against the euro is not factored into the price of options. Norges Bank’s Executive Board engages in a broad discussion of monetary policy every six weeks. Any decisions concerning interest rate changes or other important changes in the use of monetary policy instruments are normally taken at these meetings. Monetary policy decisions made by the Executive Board (be they decisions to change key rates or to leave them unchanged) are announced in press releases at 2 pm on the day of the meeting.
The (lagged) effects of this rise in consumer prices are unlikely to have fully materialised as yet. In the context of the aforementioned prospects for strong economic growth in the euro area, the protracted rise in import price inflation in the past few months clearly gave rise to a greater danger of a spillover to domestic sources of inflation, such as, for instance, firms aiming at raising or restoring profit margins. These risks had to be counteracted. With our monetary policy we are contributing to the conditions for high, sustained, non-inflationary growth. Since November of last year, the Governing Council of the ECB has decided to raise interest rates by a total of 175 basis points. Admittedly, this is not negligible. Given the strong economic data, the continuously high level of confidence and the continued strong growth of money and credit, the increase in interest rates does not mean that the ECB has put the brakes on growth. Economic expansion in the euro area is now strong enough not to be hurt by a gradual adjustment of the monetary policy stance. The interest rate moves are providing a clear signal to market participants, social partners and policymakers that the ECB is determined to counter inflationary dangers in a timely fashion, and that the prospects for price stability in the euro area remain good. This is also of great importance for the longer-term potential of the euro.

David Carse: Environmental issues and their implications for financial institutions in Hong Kong  Keynote Speech by Mr David Carse, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Conference on Environmental Risk Management for Hong Kong Financial Institutions, held in Hong Kong on 29 November 2000. *  *  *  Ladies and gentlemen, I am pleased to be here to deliver the keynote speech for this conference on Environmental Risk Management for Hong Kong Financial Institutions. I congratulate the various organisers for putting together the conference, which I understand is the first of its kind to be held in Hong Kong. If so, it is long overdue. Environmental issues have come very much to the forefront of public awareness in Hong Kong in recent years, and cleaning up the environment has become one of the Government’s main preoccupations. There are all sorts of good reasons for wishing to do this, in terms of improving the quality of life and the long-term health and well-being of the people of Hong Kong. But there is also a growing recognition on the part of business, both here and elsewhere, that economic growth is inextricably linked with a healthy environment. At this year’s World Economic Forum in Davos, business leaders voted global climate change the most pressing issue facing the world’s business community. It is all the more disappointing therefore that last week’s UN summit conference in The Hague on climate change should have ended in failure.
Since 2007, many branches of foreign banks have become members of the Norwegian scheme to increase their deposit to loan ratio. This is not purely coincidental. The Norwegian scheme is probably slightly naïve in its design. As mentioned, the amount guaranteed is very high, and there has been a period without fee payments. At the same time, the competition for deposits has intensified at home and abroad. There is an element of moral hazard associated with any insurance scheme. In Norway, even depositors with very large deposits do not have to assess the financial strength of a bank. Our deposit guarantee scheme has a flypaper effect, and under the protection of the scheme the banks have bid up deposit rates to strengthen their liquidity. This will eventually have an effect on lending rates as well.

15  In a letter of 27 June 2008, the Ministry of Finance has asked the Financial Supervisory Authority of Norway to assess the need for regulatory revisions to the Norwegian Banks’ Guarantee Fund. BIS Review 110/2008  7  Conclusion The experience so far is that inflation targeting has provided a good basis for stabilising inflation and inflation expectations. Interest rate setting and interest rate forecasts have also contributed to stabilising output and employment and prices in property markets. In some areas, regulations and frameworks can result in amplifications of fluctuations in asset prices and credit flows. For example, tax subsidisation of homeownership can be a source of recurrent instability in house prices and credit. The turbulence in financial markets has prompted many countries to consider measures to improve regulation and the functioning of markets. In Norway, the authorities can also strengthen the work on preventing systemic risk. With our cross-border banks, broader Nordic cooperation, particularly between finance ministries and supervisory authorities, would be appropriate. But there is also work to be done at home. Norges Bank is proposing, for example, revisions to the Norwegian Banks’ Guarantee Fund with a view to reducing moral hazard. Thank you for your attention. 8  BIS Review 110/2008  BIS Review 110/2008  9  10  BIS Review 110/2008  BIS Review 110/2008  11  12  BIS Review 110/2008  BIS Review 110/2008  13  14  BIS Review 110/2008  BIS Review 110/2008  15  16  BIS Review 110/2008
Pending the enactment of the new legislation, the Central Bank too issued as far back as 2001, ‘Know Your Customer’ (KYC) guidelines to all banks and urged adherence when dealing with clients and counterparties. We cannot however be satisfied with the results because it is unlikely that terrorism activity in particular, on the scale that has been unleashed in Sri Lanka, could have taken place if these measures to combat terrorism financing and money laundering had in fact been effective. We believe, the measures introduced have only marginally deterred terrorism financing from delivering such ill-gotten funds to destabilize our country, particularly before 9/11/2001. As many know, Sri Lanka has been crying foul for many years about fund raising for terrorism, taking place in many countries, where the funds were used to procure and supply weapons to wage terrorist activity in our country. Sadly, our pleas were not taken too seriously. But the world took greater note of this scourge after 9/11/2001. Fortunately for us, post 9/11, anti money laundering and terrorism financing measures were pursued with vigour at international level and these processes have been evolving rapidly in recent years. The international community has witnessed the use of increasingly sophisticated methods to curtail the move of illicit funds through the financial systems across the globe. Sri Lanka, naturally, was keen to support this global effort and soon established a comprehensive legal and institutional framework for anti-money laundering and combating the financing of terrorism.

However, the industry must lose no time in tackling the restructuring that is needed, particularly in the traditional segments. In the area of alternative products, Switzerland has admittedly been successful in the fund of funds business. It is to be hoped that its financial industry will build on this success and become even more of a centre of excellence for alternative investments too. BIS Review 24/2006  1
Transparency requires me to record, in this genealogy, that one of the founding Houses of the Accepting Houses Committee back in 1914 was Cunliffe Bros, whose founder was actually Governor of the Bank of England at the time. Transparency however also requires me to make clear that he was no relation. I do, however, feel a little sense of eponymous history in speaking here tonight. Financial markets of course have changed greatly since Cunliffe Bros, with half a million pounds of capital, was a force in the City. I want to look today briefly at how financial markets have grown worldwide, why they are subject to strong pressures to cluster activities in key centres and how this has affected the concentration of financial services in the UK – or as it is often, and misleadingly described, in London. 2  I also want to touch on two of the fundamental challenges faced by financial markets and the institutions that support them – maintaining, or some would say, restoring their ‘social license’ and managing systemic risk. And finally, given that this is the Association for Financial Markets in Europe, I will touch briefly on one or two possible implications for European capital markets of the UK’s exit from the European Union. In passing, I will say a little about how the Bank sees these issues. Our role and responsibilities have evolved as markets have evolved.

The issue, amidst the challenging global financial markets, was highly successful, attracting significant interest from a wide investor base with Asia accounting for 60 percent of the issue. The combined size of the Petronas global sukuk and conventional bond issuances amounting to 4.5 billion US dollars is the largest global issuance in Asia (excluding Japan) for the year. The brief time-to-market for the issuance of the US dollar Petronas sukuk and bond took approximately one month, from structuring the instrument and date of submission to the authorities, to book building and the issuance date – reflecting the efficiency of the Malaysian market. Prior to this, Malaysia has also seen wide ranging ringgit-denominated issuances by nonresident issuers. Multi-nationals, foreign corporations and Multilateral agencies such as the International Finance Corporation, International Bank for Reconstruction and Development, and the Islamic Development Bank have successfully issued sukuk in Malaysia. All these issuances garnered overwhelming response from resident and non-resident investors as reflected by the oversubscription of these sukuk issuances. The liquidity and tradability of these ringgit issuances have been supported by the diverse range of players in the domestic Islamic financial system and the increasing demand from foreign investors. The establishment of CMH marks a further milestone in the development of the Islamic financial system under the MIFC initiative, sustaining the continued evolution and the development of Islamic finance.
Our study shows that the unit cost for cheque processing by banks has increased from RM3 in 2011 to RM4 in 2016, and is estimated to be about RM6 by 2020. At around 120 million cheques currently, this translates into an enormous cost of around RM480 million, a sheer wastage to the economy. It is also costly for businesses to handle cheques. We estimate an average processing cost of about RM6.80 per cheque due to expenses incurred on delivering, depositing, reconciling and handling of returned cheques. On the contrary, the cost of processing an Interbank GIRO and Instant Transfer (IBFT) are around 30 sen per transaction. Such unit cost is likely to decline further due to economies of scale as e-payment adoption gains further traction. In Scandinavian countries, higher cost has been the one of the key factors that drove the cheque volume to a negligible level. Denmark, for example, turned off its interbank cheque clearing system on 1 January 2017 once cheque usage was widely displaced by electronic fund transfers and debit cards. In the case of Malaysia, we estimate that at the current rate of decline, it will take us about 27 years before cheques can be reduced to a negligible level of 0.1 per capita, with an estimated cost to the banking and business community of about RM12.9 billion. This is a huge amount of prodigality.

The economic crisis that began in 1997 represents the latest national challenge. True to historic form, Korea has responded decisively and vigorously to that challenge, with the Bank of Korea playing a critical role in the overall effort. A strong case can be made that, of all the countries affected by the broader crisis in the emerging markets, Korea has gone furthest to repair the damage and institute underlying reforms to prevent future crises. That said, in Korea and elsewhere, the recovery is not yet complete, and more remains to be done. The depth, breadth and rapidity of economic and technological developments of the last several years clearly underscore the increasingly international nature of policy challenges, and the dramatic transformation of the international financial landscape. The intensified integration of markets - reflecting the globalization of capital, production and labor - has increased the risk of contagion, making it virtually impossible for any country that wants to be part of the global trading system to insulate itself from external forces. The crisis and the recognition that we have entered a new environment have set in motion a range of efforts dedicated to building a new international financial architecture. My remarks today will focus on what I believe can be done, from my perspective, to enhance domestic financial resiliency, within the context of these international efforts, and particularly on two essential building blocks: a strong financial system and a sound and stable macroeconomic environment.
It is not so much that the top management of banks consciously swing for the fences, but rather that wholesale credit may be systematically too cheap for banks, and perhaps other intermediaries too, unless the usual market disciplines of failure can apply. The international community is, rightly, increasingly focused on this. And, in particular, it is good news that the G20 Finance Ministers and Governors have asked the Financial Stability Board to pursue it. To quote the theme of this conference, “TBTF” is probably the definitive Cross-Roads issue. Central bank liquidity insurance: discount window lending against wide collateral I shall begin with the central banker’s role as lender of last resort, the one area where there was quite a lot of thinking ahead of this current crisis. Even so, one of the things many central banks, including the Bank of England, confronted over the past two years or so was that, when conditions are bad enough, the central bank will inevitably lend to solvent and viable firms against a very wide range of collateral. Since we will end up doing so, it is wise to acknowledge that in advance. But, crucially, it is also wise to set the terms so as to avoid subsidising or encouraging imprudent liquidity management by firms in normal circumstances. That is one of the principles which underpin the Bank of England’s own new, permanent liquidity facilities introduced just over a year ago. The other principles are that: •  Our liquidity insurance should absolutely not cut across monetary policy.

And the trigger for conversion from debt into equity could be at a margin of comfort away from true catastrophe; say, a percentage point or so above the minimum regulatory capital ratio. Of course, this would entail a structural shift over time in investment portfolios. But the system might be able to manage that adjustment. After all, it managed the all together less desirable adjustment to the development of the existing hybrid capital markets. But demand for contingent capital is, inevitably, uncertain at this stage. As are the terms on which it will be provided. We welcome the growing private sector focus on this. 4  King Mervyn A. (2009), “Speech by Mervyn King, Governor” to Scottish Business Organisations, Edinburgh, October 2009. See also Tucker P M W (2009a), “Remarks by Paul Tucker”, Panel session at the Turner Review Conference, London, March 2009 (pp. 5) and Tucker P M W (2009b), “The repertoire of official sector interventions in the financial system: last resort lending, market-making, and capital”, Bank of Japan’s 2009 International Conference, Tokyo, May 2009 (pp. 19). In the academic community, the idea was aired in “An Expedited Resolution Mechanism for Distressed Financial Firms: Regulatory Hybrid Securities”, Squam Lake Working Group on Financial Regulation, April 2009, Council on Foreign Relations. Dudley, William C. (2009) “Remarks by William Dudley” at the Institute of International Bankers Membership Luncheon, New York City, October 2009.