samchain/econo-pairs-v1 huggingface dataset:
On the few occasions when a foreign bank has run into difficulties, MAS has managed to ring-fence the banks' Singapore operations in time – as we did during the Asian crisis – so that Singapore depositors did not suffer losses. However, as we liberalise, foreign banks will gain market share. Local banks will also venture abroad. The safety and soundness of both local and foreign banks will increasingly be affected by factors beyond our control. We have seen how in other countries even well-run international banks supervised by highly-regarded authorities can nevertheless run into financial trouble. Even as we strengthen MAS supervision, we cannot expect our supervisors to always be in time to pre-empt any difficulties that the bank has not prepared itself for. No government can promise to bail out depositors whenever a bank runs into trouble. If a government did so, depositors would lose the incentive to seek out sound banks, and banks would lose the incentive to lend prudently, knowing that even if they run into trouble their downside risks will be absorbed by the government. This is what bankers call moral hazard. However, in the absence of a deposit insurance scheme, there will be an implicit expectation, both by depositors and banks, that if something goes wrong, particularly with a large bank, the government will be there to pick up the pieces. And should a mishap happen, the government may come under strong political pressure to do so. This can be destabilising.

This will allow us greater flexibility to ringfence the subsidiary, and minimise contagion arising from problems that may emanate from the bank's home market or global operations, especially where the home jurisdictions have laws which favour depositors in the parent bank over depositors in overseas branches. Subsidiarisation will not turn the subsidiary into a local bank. The foreign parent bank will in most cases own 100% of the subsidiary and want full control over its activities. MAS will continue to treat the subsidiary as a foreign bank, and will exempt it from a requirement placed on local banks to maintain a majority of Singapore citizens or permanent residents on their board of directors. 6  BIS Review 61/2001  MAS is studying this issue and will make a decision later this year. We would not be the only jurisdiction with a subsidiarisation requirement. Several reputable jurisdictions, such as Australia, the US, and Canada, go even further and require that in order to accept any retail deposits at all, foreign banks must incorporate locally and meet the minimum capital requirements imposed on locally incorporated banks. Deposit insurance We will study the need for a deposit insurance scheme in Singapore. Unlike most countries, Singapore does not have a deposit insurance scheme. In the past, sound management and conservative practice by the local banks, coupled with strict regulation and supervision by MAS, helped to avoid problems in our banking system.
You are all familiar with the challenges we face. But alone, none of you, none of us, would be able to find the perfect solution for regulating and supervising the financial system. No single person, no single institution and no single country has the perfect solution. We can and must learn from each other. And we can and must work together. 6/7  BIS central bankers' speeches  The banking union now allows us to do so – effectively and efficiently. Thank you for your attention. 1 Article 1 of the SSM Regulation (Council Regulation (EU) No 1024/2013). 7/7  BIS central bankers' speeches

From that vantage point, I will make four remarks: 1. Revenues for the twelve biggest European banks have grown, in aggregate, by 8.6% in 2010 (as compared, to 2.5% for the main US banks). As a result, European banks’ Core Tier 1 ratios stood at between 8.5% and 15.3% at the end of 2010 (corresponding numbers for US banks are between 8.4% and 13.3%). Our “universal banking model”, based on a diversity of activities and sources of income is proving its resilience. 2. Obviously there is a circular causality between government debt and the banking sector. Spreads on public debt naturally act as floors for the funding costs of banks. And, conversely, doubts about banks solvency create expectations of public support and deterioration in public finances. This gives rise to multiple equilibria where sudden shifts in confidence can be self fulfilling and create difficulties which, previously, did not exist. This process has been at work in a number of cases in the Euro area during the last year. 3. The main purpose of the stress tests is to break that circularity. Our first european tests encompassed 81 banks vs only 19 for the US. The basic exercise was sound and taken as such by analysts when it was published. Somehow clumsily, however, a few banks were added at the last moment, with only limited investigation, and these are precisely the banks which proved problematic afterwards, which undermined the credibility of the whole exercise. That mistake won’t be repeated. 4.
The government’s motive for saving resembles the motives underlying saving in pension funds and life insurance companies. Among the government’s saving vehicles, investments in the National Insurance Fund and the Government Petroleum Fund are best adapted to this motive for saving. For both funds, there is a clear division of responsibility between the manager and the government, with the Ministry of Finance as owner. In the case of the Petroleum Fund, Norges Bank’s mandate is to achieve the highest possible financial return in keeping with the strategy and risk limits established by the government. The Fund’s investments are distributed among many countries and spread among a large number of equities and bonds. At end-2000, the Fund had invested NOK 153 billion in about 1800 companies in 21 countries, while NOK 234 billion had been invested in bonds in 18 countries. All ownership interests are now less than 1 per cent of the companies’ total value. A turnaround in one country or a region, which in isolation may be pronounced, will not have a major effect on the total value of the Fund. The value of the Fund’s equity portfolio will therefore shadow developments in prices on international stock exchanges. There is a substantial element of risk diversification, although we are not immune to the risk associated with the uncertainty in global developments. Along the same lines, the return on bond investments will reflect international interest rate developments. The Government Petroleum Fund is built up through transfers of petroleum revenues that are not used domestically.

A prolonged period of even lower interest rates would increase the risk that debt and asset prices will be driven up to levels that are unsustainable over time. We thus obtain a smoother interest rate path when we also give weight to the other two criteria. The criteria and loss function reflect the Bank’s reaction pattern in the period following the financial crisis. We are responding to new insight and lessons learned. The loss function is a mathematical illustration and must be regarded as a simplified representation of the more extensive assessments underlying interest rate decisions. Interest rate setting is based on the Executive Board’s assessment, not a model calculation. Mathematics and models can, however, clarify the alternatives. There is considerable uncertainty as to the effect of low interest rates over extended periods on risk-taking behaviour and the buildup of financial imbalances. 7 In this regard, we are in quite uncharted waters. How financial imbalances build up is not explicitly considered in the analytical apparatus. Work is in progress both in Norway and internationally to further develop the economic models used in monetary policy analysis. As we gain new insight and gather experience, our assessments of economic relationships may change. This will also influence the formulation of our models. 7  Monetary Policy Report 1/12, box on pages 15–16, Norges Bank, and “Norges Bank’s new monetary policy loss function – further discussion”, Snorre Evjen and Thea B. Kloster, Norges Bank Staff Memo 11/2012.
Some of the changes are unavoidable, for instance because of technological advances. Other changes are due to political choices and priorities. 1  See Sveriges Riksbank (2019). 2 In the United Kingdom, yields on 10-year real government bonds have fallen from 3.5 per cent on average in  1985-1999 to -0.9 per cent in 2010-2019. The development has been similar in other countries, including the United States and Sweden. 3 In Sweden, annual productivity growth has fallen from an average of 2.6 per cent a year in 1998–2007 to 1.0 per cent in 2010–2018. 2 [7]  But the structural changes affect the conditions for monetary policy. The low real interest rates have reduced the scope for monetary policy to manage economic fluctuations. Policy rates in many countries cannot be cut much from the current levels. The possibilities to push down interest rates with further quantitative easing are limited. If policy cannot be made more expansionary in other ways, the structural changes, combined with a normal economic downturn may lead to the economies getting stuck in a situation with unnecessarily low growth. 4  Fiscal policy will play a larger role in stabilisation policy In the debate, and especially internationally, many suggestions have been put forward on how to make monetary policy more expansionary with other means. There is talk of coordinating fiscal and monetary policy, “helicopter money”, “modern monetary theory” and the purchase of specific private assets.

Notes: Data for the United Kingdom and the United States are derived from nominal bond yields deflated using inflation swaps. The Germany/EA figures are based on nominal Bund yield deflated using euro-area inflation swaps (as a proxy for the euro-area risk free rate). The measure of inflation used is RPI for the United Kingdom and CPI for the United States and the euro area. Data are to close of business 9 February 2015. BIS central bankers’ speeches  25  Chart 15: Population growth Annual percentage change 3  2  2050  2040  2030  2020  2010  2000  1990  1980  1970  1960  1950  1940  1930  1920  1910  1900  1890  1880  1870  1860  1850  1840  1830  1  0  Source: United Nations population projections (http://esa.un.org/wpp/) for 1950 onwards; The Maddison-Project (http://www.ggdc.net/maddison/maddison-project/home.htm) prior to 1950. Chart 16: Business expenditure on Research & Development South Korea  Japan  China  United States  United Kingdom  France  R&D Expenditure as a % of GDP  3.5 3.0  Germany  2.5 2.0 1.5 1.0  1981  1985  1989  1993  1997  2001  2005  2009  2013  0.5  Source: OECD.
The third challenge is that we are currently living with genuine uncertainty. Who could have imagined in autumn 2019 that spring 2020 would turn out the way it did? * I would like to thank Mårten Löf, who has helped me with this speech. Moreover, I have received valuable comments from Charlotta Edler, Mattias Erlandsson, Rebecka Hallerby, Peter Kaplan and Marianne Sterner. 1 [6]  Monetary policy has pushed down market rates During the spring, the Riksbank has decided on a number of monetary policy measures. When financial markets do not function as normal, the credit supply in the economy is threatened. Here, I wish to highlight four measures that the Riksbank has implemented.1 The first has concerned buying government bonds, mortgage bonds and municipal bonds, as well as commercial paper for a total of SEK 300 billion. The Riksbank has, secondly, decide to give the banks the opportunity to borrow from the Riksbank so they can in turn offer loans to companies, SEK 500 billion has been allocated for this purpose. The third measure gives the banks the opportunity to borrow an unlimited amount from the Riksbank. And the fourth measure is the Riksbank's decision to lend up to 60 billion US dollars to banks that need foreign currency. These measures have two effects. They facilitate credit supply as the Riksbank in this way supplies more money to the financial system. When the volume of money increases, there is also downward pressure on market rates.

Being poor taxes the mind every bit as much as the wallet. It does not end there. Financial scarcity is also shown by MS to damage decision-making over time. The mind-absorbing effects of making ends meet can lead to an excessive focus on the present at the expense of the future – that is, financial insecurity generates impatience or myopia. This, too, can have damaging implications for life choices. As MS demonstrate, it may lead people to under-invest in education and skills and to over-borrow at high interest rates and short maturities. MS call this a scarcity or myopia trap. It is a trap because it is self-fulfilling. Scarcity generates myopia and myopia is the enemy of human capital accumulation. For individuals, this means that scarcity traps may, over time, create poverty (lack of income) or unemployment (lack of skills) traps. And at the level of the aggregate economy, it means that scarcity traps, by taxing human capital accumulation, may generate lower growth and productivity. Physical capital accumulation, such as research and development, also relies on patient decision-making. It requires a willingness to defer gratification, either on the part of managers of firms (for example, through lower salaries and bonuses) and/or shareholders in those firms (for example, through lower dividends and share buybacks). Unfortunately, the evidence suggests neither have found it easy to do so. Public companies suffer from “short-termism” (Kay (2012)).
Such considerations mean that it is essential that banks have a sound strategy and good systems of risk management. The main responsibility for this rests with the board of directors and with senior management, although the regulators also have a responsibility to check that they are doing their job properly. To assist us in that process, we have recently issued a guideline which sets out the standards which we expect the board of directors to observe. One important feature of the guideline is the need for a strong independent element on the board provided by non-executive directors who can bring a fresh perspective to strategic planning based on their expertise and outside experience. Having said that, non-executive directors with the right degree of independence and expertise are not easy to find. This is one of the main challenges in corporate governance in Asia. Although sound strategic direction from the top and good internal systems of control are the primary defences against increased risk, banks also need to make sure that they hold sufficient capital to support that risk. The present capital adequacy regime formulated by the Basel Committee has been in place since 1988. Although it has served its purpose well, it is showing signs of its age and needs to be 3  BIS Review 93/2000  replaced. The Committee is therefore proposing to introduce a new Capital Accord, the guiding principle of which is that it should be more risk-sensitive.

The stability of the banking sector has been further strengthened by the ongoing reforms and boosted both mergers and acquisitions and foreign bank participation to the sector. The volume of the banking sectors’ credits to non-financial sector rose by more than 70 percent in real terms and the sectors’ profits increased by a considerable amount since 2002; capital adequacy and loan quality of the sector also improved. As of today, efforts towards increasing the consistency of the legal framework with the EU, completion of the restructuring process and then privatization of the public banks and development of modern risk management are on the agenda. Distinguished Participants, Today we not only have a stronger banking sector, which forms a basis for macroeconomic stability, but we also see remarkable progress in the Turkish economy in general. With the stabilization program that was launched in May 2001, great progress toward macroeconomic stability was made, especially in the disinflation process and recovery in growth. As the inflation rate is regarded as a signal of the quality of economic management, the achievement in the inflation front in the Turkish economy is among the most significant examples of progress toward better macroeconomic fundamentals. Single digit inflation was reached after a period of more than thirty years of high and chronic inflation. Additionally, as inflation targets were attained in 2002, 2003 and 2004, and thanks to a sound communication policy, the public in general now believes in the determination of the policy makers to fight against inflation.
Sustainable lowering of lending rates by commercial banks should occur in the current environment of low inflation. Your Excellency, the next issue I would like to address is that of the appreciation of the Kwacha against major currencies. The appreciation has occurred mainly due to the higher supply of foreign exchange on the market than demand. The key factors underlying the increased foreign exchange supply include: •  increased copper output and exports as well as record high prices of the commodity. Copper exports volume has in recent years registered sustained growth, increasing from 353,000 metric tons in 2003 to 423,000 metric tons in 2005. The price of copper rose to US $ per tonne in December 2005 from US $ per tonne in December 2004. The price of copper has since increased sharply and had risen to over US $ per metric ton by May 2006,  •  increased non-traditional export earnings, from US $ million in 2003 to US $ million in 2005;  •  improved economic confidence following the attainment of the enhanced HIPC Initiative Completion Point in April 2005, which resulted in reduced external debt service obligations; and  •  increased foreign direct and portfolio investments, reflecting increased market confidence in the economy occasioned by the greatly improved prospects for the copper sector, the cancellation of the bulk of Zambia’s external debt, and anticipated continued commitment to implementation of prudent fiscal and monetary policies.

A Bank of Zambia review of interest rates determination in 2003, nonetheless, showed that the key determinants of commercial banks’ interest rates, particularly the lending rate, were the yield rates on Government securities, level of statutory reserve requirements, inflation, weak policy credibility and high default risks on loans obtained. To enhance the role of the market in the determination of exchange rates, the Interbank Foreign Exchange Market (IFEM) trading system was introduced in July 2003. The entrenchment of the IFEM trading system has been characterised by increased interbank foreign exchange liquidity flows, particularly from mineral exporters. The financial sector reforms were aimed at improving the efficiency and intermediation of the banking system and also at enhancing competition amongst the players. The reforms entailed opening up entry of participants into the banking sector. With the liberalisation of the financial sector, several bank and non-bank financial institutions were established. The financial sector has expanded remarkably over time and the services provided have been improved. •  The number of commercial banks has more than doubled to 13 from 4 banks prior to 1990. Currently, the banking system is made up of the Bank of Zambia, which is the central bank, and 13 commercial banks, with a branch network of 159 as at end-December 2005 compared to 123 in 1990. •  Commercial banks have improved the range of products offered to customers, in line with global innovations. These include Automated Teller Machines (ATMs), foreign exchange accounts, Visa, mortgages, and leasing services.
In 2018 we were one of the first organisations to conduct a special Cognitive Diversity Survey to gain a better understanding of how our colleagues feel about working at the Bank. The survey measured seven inclusivity metrics including interpersonal interactions, flexible working, communication with leaders as well as recruitment and promotion, and results are cut across twelve different aspects of diversity. Our results indicate colleagues are generally positive about inclusiveness at the Bank on every metric measured by the survey. And 80% of colleagues in our annual employee survey reported they think the Bank takes diversity seriously, 7 percentage points higher than the UK average. And 87% of Bank colleagues say they are treated with respect as an individual, 6 percentage points higher than the UK average. 1  See also my letter to Nicky Morgan, Chair of the Treasury Select Committee, on 4 July 2018. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  Let me now turn specifically to ethnic diversity at the Bank. Investing in ethnicity2 Our diversity and inclusion strategy has had a positive impact on BAME diversity at the Bank of England. Since we implemented name-blind recruitment processes in March 2018 around one quarter of all recruitment offers (internal and external) have been to declared BAME candidates. But there is scope for further improvement. The turnover rate of declared BAME colleagues is higher than that for the Bank as a whole – 9.2% compared with 7.5% as of January 2019.

Research on central bank committee design shows that diverse decision‐making bodies benefit from:   Having a clearly defined policy objective;    Having relatively small policy committees, with external members;    Publishing policy decisions, and;    Allowing for external scrutiny. How the Bank of England is becoming more diverse Five years ago we made Diverse and Talented one of four pillars of our strategic plan. Our aim was not just to increase diversity; but also to choose inclusion. Inclusion unlocks the true value of an organisation’s diversity. Only through inclusion can people realise their full potential. That’s why the Bank is focussing on building a culture that values diverse ideas, encourages open debate, and empowers people at all levels to take initiative. Our strategy has three elements:   Inclusive recruitment,    Inclusive culture, and    Inclusive communications. First, inclusive recruitment We are fishing from a larger pond. In recent years our graduates have come from 40 different universities, a six-fold increase in the past decade. Of our 2019 intake, due to join us in September, 46% of graduates are female and 39% are declared BAME students. This compares to a BAME share of 20% five years ago. To support diverse recruitment at all levels our managers are now required to undertake unconscious bias training. We use anonymous CVs for internal and external recruitment and strive for balanced shortlists and interview panels.