samchain/econo-pairs-v1 huggingface dataset:
Distinguished Ladies and Gentlemen, the contribution of financial services to individual entrepreneurs as well as small and medium sized businesses cannot be over-emphasised. As you are no doubt aware, following the liberalization of the financial sector in the early 1990’s, the financial sector in Zambia has evolved rapidly spurred by increasing competition. Similarly, policies and the legal and regulatory frameworks have been developed to take into account the fast changing liberalised environment. These developments have resulted in a considerable increase in the number of banks and other financial service providers. Therefore, the banking sector has over the last few years, witnessed significant growth in consumer lending. As a matter of fact, on a sectoral basis the “personal loan” category has been the largest recipient of total credit in the recent years and accounted for 22% in November 2009. Small and Medium Enterprises have also significantly benefited from credit expansion. The resultant credit expansion has no doubt brought significant benefits to the economy as resources are increasingly channeled through to the lower end of the market. However, most of the credit extended by banks and microfinance institutions is targeted at individuals in formal employment or already established enterprises. Only an insignificant amount is extended to start-up initiatives or the informal sector. This has been exacerbated by the inability of entrepreneurs to articulate and sell bankable projects through robust business plans.

BIS Review 5/2010  1  In addition, it is common knowledge that Zambians prefer to be in formal employment rather than engage in entrepreneurial activities on a full time basis. The small number of educated Zambians engaging in entrepreneurial activities limits the scale of indigenous businesses as evidenced by the non participation of Zambians in major sectors of the economy like mining or manufacturing. It is however, important to realise that individual entrepreneurs as well as small and medium sized enterprises form the engine of economic and social development as they generate the much needed employment for our people. Hence the need to encourage all efforts aimed at stimulating entrepreneurship. Distinguished Invited Guests, our institutions of higher learning play an important role by molding and developing innovative and creative mindsets amongst our young people. With this belief in themselves, young people can be productive, take responsibility in their respective communities and ultimately drive our economy forward. We need to remind ourselves that Google was founded by students; Facebook was founded by a student; and even Microsoft was formed by Bill Gates as a student. Ladies and Gentlemen, let me assure you that the Bank of Zambia is committed to ensuring the availability of finance to viable entrepreneurs including small and medium sized businesses.
Regional economic corridors established has also expanded and transformed the Malaysian investment landscape to be more geographically diverse and extending the development throughout Malaysia. The emergence of new growth areas in Malaysia such as renewable energy (e.g. solar) and semiconductors in fast-growing segments such as automotive, medical devices and telecommunications, has enabled Malaysia to be plugged into the global supply chain. Investment in the manufacturing sector has moved towards higher value-added activities, shifting from basic production and assembly to producing goods which have advance applications such as in the automotive and healthcare sectors. As a country which is strategically located within close radius of two of the most populous economies in the world, China and India, Malaysia is centrally located in Asia, more broadly, and in ASEAN, in particular. With the conception of the ASEAN Economic Community (AEC), companies would benefit from the stronger economic inter linkages through greater cross  BIS central bankers’ speeches  3  border liberalisation and increased intra-ASEAN trade. Firms in this region will gain greater market access to 630 million people that are generating economic region that is worth USD2.4 trillion. The increasing importance of Asia in the global economy has raised international interest to better understand Asia – the economies, businesses and the people that comprise the region. On that note, I would like to mention that Bank Negara Malaysia has entered into a collaboration agreement with the Massachusetts Institute of Technology Sloan School of Management (MIT Sloan) to establish the Asia School of Business (ASB) in Kuala Lumpur.

But is also makes the case for policymakers developing macroprudential instruments that could be used to lean against future credit booms and for making our financial system more resilient. If we could manage that, it might be the most significant extension in the overall international macro policy framework in a generation. Price stability, financial stability and sustainable growth. They need each other. 14  For example, see Reinhart C M and K S Rogoff (2009), “The Aftermath of Financial Crises”, American Economic Review: Papers and Proceedings 2009, 99:2, 466–472 and Hoggarth G and V Saporta (2001) “Costs of banking instability: some empirical evidence”, Bank of England Financial Stability Review, Issue 10, June. 10  BIS Review 21/2010  Charts Chart 1: UK GDP and sectoral output(a)  Chart 2: World industrial production Contribution to annualised quarterly industrial production growth (pp)  15 10 5 0 -5 -10 -15  High Income Countries Developing countries excl China China World Total  -20 -25 -30  2007Q1  2007Q3  2008Q1  2008Q3  2009Q1  2009Q3  (a) Chained-volume measures. GDP is at market prices. Indices of sectoral output are at basic prices. Source: World Bank  Chart 3: Business investment to GDP ratio(a)  Chart 4: Nominal GDP  (a) Chained-volume measures. Recessions are defined as two consecutive quarters of falling output (at constant market prices) estimated using the latest data. (a) At current market prices.
For example, large institutional investors, including sovereign wealth funds, have started to channel more funds to firms with sustainability commitments. Admittedly, the progress made on this front has been rather modest thus far, but it does have the potential to enable a wider range of stakeholders to determine the sustainability of finance and its role in facilitating sustainable economic growth. Conclusion I have not actually finished my story on the Challenger shuttle disaster at the beginning of my speech. After the harrowing accident, President Reagan formed the Rogers Commission to investigate the incident, and it was found that the accident could have been avoided entirely. The special commission reported that NASA’s organisational culture and decision-making processes were key contributing factors to the catastrophic event. NASA managers had been aware of the potentially fatal flaw in the O-rings since 1977, but did not respond appropriately. And on that fateful morning, warnings from engineers about the risks of launching in the low temperatures were met with contempt, and the superiors were not adequately notified of these technical concerns. Therein lies the importance of governance structures and how decisions are made. Governance influences decisions, and decisions shape outcomes. It is no different for financial governance. Be it financial decisions at the international or national level, public or private, corporates or financial institutions, households or individuals, sound financial governance is the bedrock of stable and robust economies.

Sukhdave Singh: Financial governance and economic growth Keynote address by Dr Sukhdave Singh, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Malaysian Economic Convention “Financial Governance and Economic Growth”, Kuala Lumpur, 28 September 2015. *  *  *  It is indeed an honour to be speaking to such a distinguished audience. It is also a great pleasure for me to be here this morning and join my colleagues in the Economics fraternity at this 2015 Malaysian Economic Convention. To begin, let me share with you a story. Twenty years ago, on 28 January 1986, the NASA space shuttle Challenger was launched. Seventy-three seconds into its flight, spectators were horrified as the space shuttle broke apart in a fiery display and disintegrated over the Atlantic Ocean. Seven astronauts died. The catastrophe was traced to the failure of a single O-ring – a simple seal at a joint on one of the rocket boosters. The O-ring failed due to the unusually cold temperatures on the morning of the launch. Relative to the highly sophisticated technologies involved in building and launching the shuttle, the O-ring was considered established technology, one with a patent history of 90 years by the time the Challenger was launched. It was as ironic as it was instructive that such a complex machine, incorporating the most advanced aerospace technology of its time, failed and combusted due to a component as trivial and basic as an O-ring.
The economy registered a growth rate of 5 percent in 2006, a respectable number, against the backdrop of external and internal disturbances. The recent slowdown in consumption and investment could be traced to the confidence factor. Political uncertainties and the unwarranted strengthening of the currency that prompted the introduction of reserve requirements on short-term capital inflows, together with the amendment of the Foreign Business Act that, unfortunately, happened successively within such a short period of time, all had a negative effect on consumer and business confidence. However, we believe that the momentum has not been lost, and uncertainties only postponed consumption and investment decisions. Evidently, retained earnings to total assets averaging over Q1-Q3 of 2006 was at 17.6 percent, higher than the average of 13.3 percent in 2005, while capacity utilization rose to 74.2 percent in 2006, indicating that further investment in production capacity should be in the pipeline. To sum up, while challenges abound, we have weathered them relatively well so far. This can be attributed to a fine combination of the economy's resiliency and appropriate policy stance. By appropriate policy stance, we refer to the “right” policy for the “right” reason at the “right” time. BIS Review 27/2007  1  Let's now turn to our monetary policy. Monetary policy's main objective is to maintain monetary stability. By this we mean price stability and confidence in the value of the currency. Thailand has adopted inflation targeting since May 2000.

In the United States, these rules were not applicable to SVB, as certain exemptions, introduced in 2019 under the proportionality principle, apply to banks that are considered to be less important, this concept being understood in a broad sense since it includes banks with a balance sheet total of up to USD 250 billion. - The post mortem analyses carried out and published by the FED suggest that, had SVB been subject to these rules, it would not have complied with the short-term liquidity ratio as defined by the Basel Committee. Moreover, SVB's heavy reliance on tech companies' deposits should have alerted its supervisor if the additional monitoring tools required by international standards had been put in place. The same FED analyses estimate that SVB's interest rate risk sensitivity was around 35% before the crisis, well above the 15% alert threshold set out in the international rules and supposed to trigger supervisory action. - Monitoring compliance with regulations calls for strict, intrusive and reactive supervision, which, according to the FED, was not the case. Let me reassure you on one point: the European situation is radically different. The Basel Committee's rules are applied in Europe in their entirety and to all banks. By the way, I would like to add that Europe is in the process of finalising the transposition into European law of the latest reinforcements of the Basel III agreements, ahead of the other major jurisdictions.
In my opinion, the leverage ratio is a welcome complement to the risk-based capital measure. The Basel Committee’s agreement means that we now have a common method for calculating the leverage ratio, which we did not have before. This is good. The agreement on the leverage ratio is therefore a major step forward. The regulations for the structural liquidity measure, the NSFR, complete Basel III The fourth measure in Basel III is thus the structural liquidity measure, the NSFR. The aim of the NSFR is to ensure that the banks fund their operations with sufficient long-term and stable funding so as to reduce the risk of being hit by funding and liquidity problems. The NSFR thus constitutes an important complement to the short-term LCR measure that aims to protect the banks when, in some sense, liquidity stress is already a fact. The NSFR is the component of the Basel III framework that has not yet been finalised. Finalising the regulations for the NSFR is one of the Committee’s most important priorities for 2014. This will in principle mark the completion of the work with the entire Basel III regulatory framework. As part of this work, the Committee recently published a revised proposal for the NSFR for stakeholders outside the Committee to comment on. In connection with this the Committee reiterated that it intends to introduce the NSFR as a quantitative requirement from 1 January 2018.

The MPC slashed Bank Rate as low as it has ever been in the Bank’s 320-year history. To bolster demand further, we then injected new money worth around a quarter of annual GDP through asset purchases. But despite the dosage, output is only now approaching its previous peak. This evening, I will reflect on some of the innovations in monetary policy that took place as a result of the crisis. Then I will look at some of the broader changes in the framework it prompted. Dealing with the crisis led central banks to innovate in several ways. In the first instance, this involved lending at longer tenors, against a wider range of collateral, and to a wider range of counterparties in order to keep financial markets functioning. For our part, as well as offering longer-term funding through our repo operations, we also introduced the Special Liquidity Scheme (SLS) enabling banks to borrow liquid Treasury Bills against their illiquid mortgagebacked securities. Later we introduced the Funding for Lending Scheme (FLS), providing banks with cheaper funding and a financial incentive to expand lending. Some of these facilities have since been made a permanent feature of our Sterling Monetary Framework. Others, such as the SLS and FLS, are by their nature temporary. More noteworthy from a monetary policy perspective, though, was the use of unconventional tools to inject further stimulus when policy rates approached their zero lower bound.
2/ – the operational framework: most Central Banks conduct monetary policy through changes in interest rates. Many do not pay close attention to monetary aggregates. The Eurosystem stands alone in developing a formal monetary analysis through its “second pillar”. At the very least, however, the crisis has shown that liquidity matters. The assumption of permanent liquidity allowed the shadow banking system to develop and proper. Excessive maturity transformation has fueled the growth in leverage. Liquidity premia were all but eliminated for a long period of time. It is legitimate question whether those evolutions have implications for monetary policy. Recent research tends to show that even small changes in policy rates could have had nonnegligible implications forcing some intermediaries to close leveraged positions and, potentially, to partially correct some financial imbalances. Those issues may still be relevant today when in face of uncertainty, liquidity provision remains important. This is why, even for monetary policy purposes, Central Banks should keep actively monitoring asset prices, credit flows and liquidity conditions. 3/ – a closely related question pertains to the transmission mechanism. Evidence tends to show that risk appetite tends to increase when interest rates stay low and liquidity is perceived as abundant. This is called the “risk taking channel” of monetary policy. Risk taking behaviors are amplified when monetary policy is permissive. Ultimately, this channel creates a link between the levels of interest rates and risk premia.

But while nearly all markets are subject to regulation, relatively little thought has been given over the past decade to how different markets matter to stability and, hence, about the role of the authorities in this area. 1  On that, see the Bank of England/FSA paper released last week on how banking supervision is being reformed in the UK in preparation for the establishment of the new Prudential Regulatory Authority. 2  See Tucker P M W “Macroprudential Policy: Building Financial Stability Institutions”, 2011 for a discussion of macroprudential regimes. 3  Bank of England Annual Report and Accounts 2010 pp 26–27. BIS central bankers’ speeches  1  Markets matter to stability in different ways As a provisional attempt at this, I think it might be helpful to distinguish between three types of market: infrastructural markets, intra-financial-system markets, and end-user markets. The first type is those markets that provide essential, quasi-infrastructural support to banking. The obvious example is the overnight wholesale money markets. They are effectively part of the payments system infrastructure. Banking, which is integral to the provision of all three core financial services, simply could not operate without these markets. They have long been, and will remain, of concern to central banks. I will not return to them today. The second category is intra-financial system markets (a slightly broader concept than inter-dealer markets). These markets determine the interlinkages amongst financial firms.
Another problem sometimes mentioned is that there may be difficulties in communication in the cases where the central bank has a different view from the market as to what constitutes a reasonable future development for the policy rate. 7 The forecasts for developments in the real economy and inflation that are published will under such circumstances not be the ones that the central bank believes to be the most likely and the value of the published forecast is therefore diminished. This is the same type of problem as with constant repo rate forecasts, although the problem is probably less on average over time. Most of these problems can be avoided if the central bank instead bases its inflation forecasts on its own forecast for the development of the policy rate. 8 However, the primary reason for publishing one’s own interest rate forecast is that it makes it easier for the central bank to steer expectations. With this assumption for the interest rate, the central bank can explain more clearly to the general public and the financial markets how it envisages future interest rate developments and how it reasons when making monetary policy decisions. The interest rate development that follows on from market expectations does not always give a good picture of all of the considerations a central bank must make when discussing what provides a reasonable development in interest rates.

“A desirable monetary policy is characterised by inflation under normal circumstances being close to the inflation target in a two-year time perspective while at the same time the paths for inflation and the real economy do not exhibit excessively large fluctuations.” Given this reasoning, I think it is possible to identify some important characteristics of a good interest rate path. Firstly, the interest rate should be set so that inflation remains close to the 2 per cent target. If inflation were to deviate from target from the start, we should normally choose a path for the repo rate that brings inflation back on target within two years. Moreover, this path should be chosen so that inflation is close to target even beyond the two-year horizon. This way of conducting monetary policy helps reduce uncertainty and anchor inflation expectations around the target. The interest rate should also be set to achieve as far as possible a stable, sustainable development in the real economy, as long as this is compatible with the price stability target. Let us say that the  11  See, for instance, Giavazzi, F., and F. S. Mishkin (2006). 12  See also Rudebusch, G.D. and J.C. Williams (2006). 13  See the box ”Uncertainty regarding future interest rate movements” in Inflation Report 2006:1 for some examples of how to produce such uncertainty intervals. 14  See the memorandum "Monetary policy in Sweden” which can be downloaded from the Riksbank’s website, www.riksbank.se or ordered as a printed document.
For this reason, it would make sense in my view for us to remain fully committed to developing and implementing effective macro-prudential policies, but at the same time not to blindly pin all our hopes on them. Ultimately the best defence against any conflicts between financial instability and unconventional monetary policy is for that policy to last for no longer than is strictly necessary. This means that we need to maintain the pace and volume of our interventions, as we have communicated, so that inflation rises back towards 2% as quickly as possible and that monetary policy can begin once more to normalise. But it also means something more: if interest rates are low because the natural rate is low, then for interest rates to rise back to more normal levels the natural rate will have to rise as well. And insofar as a low natural rate reflects weak investment demand caused by diminishing labour supply and low productivity growth, this may only be possible in a context of structural reforms aimed at boosting supply capacity. This brings me to the second risk of unconventional monetary policy: that it could in principle delays the very reforms that are necessary for monetary policy normalisation. Let me say upfront that the evidence we can see in the euro area at the moment suggests that this is not necessarily the case. Some countries have recently taken steps in the right direction – but more can and needs to be done.

My hope is that governments are recognising that accommodative monetary policy and low oil prices, rather than removing the need for reforms, creates the perfect environment to do them. Research suggests that reforms can be more costly in a weak macroeconomic environment and, in particular, when there are serious credit constraints. With our successful credit easing policy we are progressively removing each of those barriers. More generally, however, I would question how much monetary policy decisions should be based around reform incentives. Applying again the Tinbergen rule, this creates two objectives to be attained with one instrument – and just as for financial stability, in the current environment those objectives conflict. The ECB has to prioritise price stability rather than acting as the censor of governments. Euro area governments as a community must ensure that each economy meets the requirements of membership. And it is in this context that I and other ECB Executive Board members have recently called for a stronger Economic Union in the euro area with improved common governance of structural reforms. Conclusion Let me conclude. The diminishing price pressures over recent years have required the ECB to act forcefully and repeatedly to fulfil its mandate. This culminated in January 2015 with our decision to expand our asset purchase programme to stave off deflationary risks and stop the fall of inflation expectations. In doing so we have sent a strong signal that we will safeguard price stability no matter what. This is our mandate as enshrined in the Treaty.