samchain/econo-pairs-v1 huggingface dataset:
For a small country like Singapore with limited human capital, the single agency model allows MAS to more effectively utilise available expertise and exploit synergies to achieve our objectives for the financial sector and wider economy. BIS central bankers’ speeches  1  And like the blending of British and tropical themes in the bungalows, bringing together central banking, integrated supervision, and developmental functions serves important practical purposes. First, being an integrated supervisor gives us better insights into the full range of activities that a financial institution engages in and hence facilitates more holistic financial supervision. Integrated supervision is consistent with the broad range of services that financial institutions provide as well as the blurring of distinctions across financial products that we see today. •  Banks offer their clients a suite of financial services, including investment and insurance products. •  Insurance companies offer financial planning solutions that incorporate elements of savings deposits and investments, in addition to protection. There are synergies across prudential regulation and market conduct regulation. Market conduct issues provide useful perspectives on the prudential safety and soundness of individual firms. How financial institutions treat their customers speaks a great deal about their corporate values, ethical standards, and quality of risk management and internal controls. Second, being a central bank and a financial regulator allows us to harness synergies between macroeconomic analysis and financial stability oversight.

The relevant risk for the SOMA portfolio instead has to do with movements in interest rates at different maturities. BIS central bankers’ speeches  5  controls. The interest paid on reserves can be thought of as the “funding cost” of the portfolio. Today, because short-term interest rates are low relative to longer-term interest rates, this mismatch produces a very elevated stream of net income. In particular, the SOMA portfolio has a weighted average coupon yield of about 3.5 percent, which, if applied to a $ trillion portfolio, produces about $ billion of income at an annualized rate. 14 In contrast, the annualized funding cost of the portfolio at this time is only around $ billion. This cost is relatively low because of the near-zero level of the interest rate paid on reserves. In addition, the private sector holds nearly $ trillion of currency, which are liabilities of the Federal Reserve that bear no interest. 15 Thus, the SOMA portfolio should produce a considerable amount of net income over the near term. 16 Beyond the near term, though, the income that will be produced by the SOMA portfolio is uncertain. If short-term interest rates were to rise, the funding cost of the portfolio would increase relative to the fairly steady yield earned on the assets held, reducing the amount of net income from the portfolio. In addition, if longer-term yields were to shift higher, the Federal Reserve could realize capital losses if it were to begin selling assets.
The proportion of households with debt-service ratios between 30% and 40% is now much smaller than it was in 2008. 6  BIS central bankers’ speeches  of their capital, funding and liquidity positions. But risky UK mortgage assets, along with UK commercial property, certainly damaged a number of UK institutions. One risk from an increase in household balance sheets due to house purchases being financed by ever increasing amounts of debt is that homeowners can’t repay the mortgage in times of stress. We saw this in the UK in the 1990s. But the main damage in the last crisis from high levels of UK households’ secured debt however did not come so much through bank losses or through the huge falls in house prices seen in other countries. Cushioned by the cuts in interest rates to effectively zero, QE, and stronger-than-expected employment levels12, UK households were largely able to maintain servicing their debt even though their real income was declining. Indeed they paid debt down to reduce the size of their balance sheets. But to do so, they cut back their consumption markedly, thus deepening and prolonging the recession. Real household consumption fell by 6% between end 2007 and 2009. This is an important if less well known risk from large household balance sheets. Even if they pay their mortgages households cut back consumption when house prices fall and uncertainty about future income increases.

Following the efforts made by the Central Bank of Sri Lanka, cheques/bank drafts are now being cleared on t+1 or t+2 in most parts of the country, and that has clearly enhanced access to finance through retail transactions. The receipt of remittances through non-bank sources or various money transfer systems has also been enhanced following  BIS Review 40/2008  5  countrywide IT and payment system advancements. In more recent years, therefore, financial exclusion in Sri Lanka has been greatly reduced. Initiatives for financial inclusion of women There are some initiatives taken, not only by Sri Lanka, but also in the South Asian region towards financial inclusion. By 2005, micro finance institutions covered at least 35mn of some 270mn people in the South Asian region and met around 15% of the overall credit requirements of low-income families. In Sri Lanka, the coverage is particularly high at 60%. The high outreach in Sri Lanka is based on an extensive network of community-based organizations that receive considerable government subsidies. Almost all rural financial institutions in Sri Lanka have provided easy access to women, particularly in the villages, estates and among fishing communities. Financial institutions that are directly involved in this area, are the licensed commercial banks, licensed specialized banks, micro finance institutions, cooperative rural banks, the SANASA Thrift and Credit Cooperative Movement, SEEDS and other non-governmental organizations.
Why macroprudential policy The conventional thinking pre-crisis was based on two assumptions: •  First, asset prices did not matter much. Central banks therefore focused on consumer prices and placed less emphasis on asset prices. •  Second, if risks in individual financial institutions were well controlled, the financial system as a whole would generally be safe. Regulators therefore focused on the safety and soundness of individual institutions and paid less heed to systemic risk. The collapse of the real estate markets in America and Europe, the breakout of the Global Financial Crisis, and the contagion of risk to seemingly sound financial institutions – against a backdrop of relative macroeconomic stability – showed both assumptions to be wrong. Thus was born macroprudential policy – which focused on the health of the financial system as a whole and its interactions with the macroeconomy, particularly developments in liquidity, leverage, and asset markets. In many emerging market economies, macroprudential policy has become an important complement to monetary policy to help secure economic and financial stability. In Singapore, the focus of macroprudential policy has been to promote sustainable asset prices. Asset prices matter for four reasons. First, volatile asset prices pose a risk to financial stability, especially when a run-up in asset prices is financed by easy credit and accompanied by a build-up in leverage in the economy. When asset prices correct, financial institutions’ vulnerability to default and loss increases. Second, asset price inflation is as distortionary as consumer price inflation.

The credibility provided by the inflation target is a prerequisite for monetary policy to be able to respond so aggressively to the fallout from the crisis. And with inflation being above target almost consistently over this period, it is hard to argue that monetary policymakers have somehow been fixated by inflation. But the forward guidance provided by the MPC makes that support explicit. The primary objective of monetary policy remains the 2% inflation target. The sanctity of that objective is guarded by the two price stability knockouts. But subject to those knockouts and the knockout pertaining to financial stability, our guidance clearly signals the Committee’s intention to maintain a highly stimulatory stance of policy until the economy returns to something closer to normality. Abstracting from the precise details of the thresholds and knockouts, the message to businesses and families should be clear. The MPC intends to keep interest rates low until we have seen a sustained period of strong growth, rising incomes and higher employment, as long as that does not pose risks to either price stability or financial stability. To be clear: that is no different to the approach underlying our policy over the past five years. But forward guidance provides a framework and a language in which that intention can be made plain. A closely related issue is the policy trade-off currently faced by the MPC.
In December last year, the People’s Bank of China and the Bank of Thailand concluded the bilateral local currency swap arrangements during the visit of Vice President Xi Jinping to Thailand. The Agreement provides for the exchange of respective local currency upto 70 billion yuan or 320 billion baht, to facilitate bilateral trade and investment. I believe this is a crucial role that the public sector can provide to give assurance to the private sector on the availability of their access to the yuan and the baht for their trade and investment needs. In addition, the Bank of Thailand received approval from the People’s Bank of China and China Securities Regulatory Commission to participate in the interbank bond market and securities market here in China. Our investment would allow our asset allocation and diversification to better reflect the increasingly important role of the yuan in international monetary system. Last but not least, I hope that the inauguration of our Beijing representative office will be more than just another success story. I truly hope that the spirit and friendship behind this long-standing relations and successes, nurtured earnestly over centuries, will continue to serve as solid foundations that will lead to even greater and closer future cooperation between our two nations. Let me end by thanking everyone for being an important part of this success. And, with Your Royal Highness’ permission, may I propose a toast to future success and cooperation as well as to your Royal Highness’s good health and prosperity. Thank you.

Trade value between our two countries has grown tremendously over the last decade. With the highest growth recorded among our major trading partners, China has now become Thailand’s largest export destination and the second largest trading partner. For more than 30 years, Thai businessmen have invested in China and I understand that we are the first of the ASEAN countries to invest in China. Chinese investment in Thailand has also increased significantly and China is now the fourth largest foreign investor in Thailand. Thai commercial banks have long had a presence in China to better respond to the needs of their customers in China, namely Bangkok Bank, Kasikorn Bank, and Krung Thai Bank. Likewise, Bank of China and ICBC, the two largest Chinese banks, are already operating in Thailand. In addition to these bilateral relations, our cooperative spirit has also extended to the multilateral frameworks. Please allow me to name just a few important ones. related to the economic and financial cooperation. The first is the ASEAN, China, Japan and Korea or ASEAN+3. Significant achievements under this forum include the Chiang Mai Initiative Multilateralization which pool resources within the region to safeguard against risks and volatilities, and the setting up of the ASEAN+3 Macroeconomic and Research Office or AMRO to act as a surveillance unit for the region.
The working group on scenario analysis has produced some really useful guidance and tools that should be useful both to financial firms and to businesses.10  Next steps  It is critical that financial firms recognise now that the race to net zero has started. Indeed many have.11  9  See Climate Biennial Exploratory Scenario. See Climate Financial Risk Forum. The Glasgow Financial Alliance for Net Zero includes 87 asset managers representing $ trillion in assets under management; 43 banks with $ trillion in assets; and 58 asset owners with $ trillion in assets under management. 10 11  In support of their ambitions, and consistent with our expectations, they need to run climate scenarios as part of business as usual risk management and embed climate risk management within day-to-day decision-making. Time is running out. Perfection tomorrow cannot be the enemy of progress today. We also need experts from academia, think tanks and consultancies to fill in the blanks, helping turn the high-level into ground-level decision-useful material. A lot of promising work is already happening – including NGFS-led work to increase the sectoral granularity of risks and to quantify the impacts from flooding and tropical cyclones. But more research is needed. I will highlight three areas in particular:   What are the implications of government policy design on the transition, particularly on jobs, productivity, prices and different sectors of the economy?

Our latest economic modelling suggests that reaching net zero, if the transition is managed well, might have a small or negligible effect on economic aggregates such as GDP, unemployment and inflation [figure 7]. Indeed depending on what investment means for productivity, there is a chance the transition could prove positive overall. However, these costs depend crucially on whether the transition follows an orderly or disorderly path. Emission reductions may not follow a straight line as shown in many scenarios. It takes time for policy to work and policy adjustments will also be needed along the way. There may be higher investment uncertainty. Markets will not allocate capital perfectly, and without certainty about policy and technological outcomes, there may be bumps in the road as they absorb news about our path. In the NGFS we explicitly capture some of these transmission channels in our disorderly scenarios, for example by modelling delays in policy action and policy fragmentation across countries and sectors. They result in much higher impacts, particularly in countries with greater dependence on fossil fuel consumption or exports. This work underlines that central banks and supervisors, and the financial firms and system that we oversee, need to be prepared for a range of outcomes. But it also underlines that early action brings lower risks. 7  Preliminary analysis for the updated NGFS Climate Scenarios. Third, the impacts from physical risks will be significant.
Muhammad bin Ibrahim: Pilot platform for cross-border investment and settlement of debt securities Remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the press conference for the launch of the pilot platform for cross-border investment and settlement of debt securities, jointly with the Hong Kong Monetary Authority and Euroclear Bank, Hong Kong, 13 March 2012. *  *  *  The world as we know is changing. Many aspects of how the global financial landscape will change have been discussed. One key area of focus has been the uneven growth momentum across the world, which is expected to persist for some time, and this development will have an impact on the trends and direction of the flows of trade and capital across the world. In essence, the nature of trade and capital flows will be significantly different from what we have experienced in the past decades; gross capital flows from across the globe between the east and the west, the north and the south, will be larger in size and more robust, going forward. These developments may pose risk in particular, to open economies like Malaysia and Hong Kong. A key safeguard to manage the risks that may arise from this transformation would be by strengthening our financial systems, to further develop the capital markets and to strengthen the regulatory and supervisory frameworks. In the Asian region, accentuating this global transformation are the rapid regional economic and financial integration and the expansion of domestic demand.

5 / 15  BIS central bankers' speeches  Policymakers have indicated that they want the portfolio’s size to decline “in the background,” and that the federal funds rate be the primary instrument of monetary policy. Rapid portfolio runoff could lead market participants to overestimate the total decline that will occur in the Federal Reserve’s securities holdings, and thereby accelerate the rise in term or mortgage risk premia associated with balance sheet normalization. This could complicate policymakers’ economic forecasting and make it more challenging to determine and communicate the appropriate monetary policy stance. The FOMC’s plan addresses these concerns about gradualism in two ways. First, it begins at a low rate of redemption, increases this slowly and in small amounts, and then continues at a specified maximal rate of runoff. These amounts should result in transitions that are within the market’s capability to absorb. Second, because the plan explicitly and numerically communicated the FOMC’s plans, it should promote stability in market estimates for the future size of the balance sheet, and confidence that the FOMC will not unintentionally create market stress. Predictability The second goal is to provide the public with a degree of certainty that, as the Federal Reserve reduces reinvestment, the market will not be asked to absorb securities at a speed that unexpectedly changes in a significant way. I’ve already discussed why it is important that the flow of securities back into the market be gradual.
Those dynamics obviously have a direct impact on financial stability. Financial fragility comes out of excessive leverage and maturity transformation, fueling asset price increases. And, conversely, liquidity shocks and deleveraging are the symptoms and channels behind financial crises. As importantly, and less recognized until recently, those dynamics also have a major impact on the transmission mechanism of monetary policy. The functioning of the credit channel, but also the interest rate channel depend on financial intermediaries being able to fund themselves and arbitrage across different market segments, instruments and maturities. Dysfunctional credit markets were a major reason why Central Banks embarked into exceptional liquidity provision, credit easing and asset purchases. One important point, here, is that the same dynamics affect both financial stability, on the one hand, and monetary transmission channels, on the other. Now, presumably, any macro prudential policy would try and influence the evolution of maturity transformation and leverage. By doing so, however, it would also have a monetary impact. And, conversely, changing the monetary stance, by moving policy rates, also may have an influence on financial stability. The relative strength of those influences is not empirically known. Those of us who would use monetary policy with a financial stability objective implicitly assume that leverage and maturity transformation are very sensitive to interest rates. I am not sure this is true.

2  BIS central bankers’ speeches    Second, monetary policy is about setting interest rates, but also involves observing and analyzing leverage and liquidity. Monetary aggregates as well as the volume and modalities of maturity transformation reveal very useful information on the transmission mechanism. This is actually the conventional wisdom within the Eurosystem, through the use of the second pillar. Although less acceptable outside the euro area, I conjecture that the lessons of the crisis will trigger some rethinking here and there.   Finally, the debate on whether monetary policy should also aim at financial stability must give more consideration to the awkward interaction between instruments and the diversity of accountability regimes. Both create the potential for additional confusion about the ultimate objectives of each policy. It seems to me that most of the discussions are conducted under the implicit assumption that price stability will be as easy to maintain in the next decade as it was in the past. So, there would not be much to lose in “diverting” some of the power and credibility of monetary policy to seeking financial stability. It is very clear that this assumption is severely tested, perhaps sooner than we thought. It will be important, in this environment, to maintain clarity of purpose and robustness in institutional arrangements in order to limit the risk of weakening the benefits of Central Bank independence, which were so hardly won over the last decades. BIS central bankers’ speeches  3
(Chart 3: Current account for selected countries) A lack of fiscal discipline is not the only factor behind the relatively high interest burden facing Greece, Portugal, Spain and Italy. Public deficits rose in tandem with a fall in private saving. Countries lived beyond their means and accumulated current account deficits and substantial debt while their debt-servicing capacity weakened. The result is a deterioration in their creditworthiness. (Chart 4: Current account and fertility rate) The combination of large deficits and growing demographic problems is particularly challenging, as is the case for southern European countries where fertility rates are well below the replacement rate and lower than the average for advanced countries. The demographic challenge will be even greater ahead. In some of the countries the number of pensioners will be close to the number of economically active. The basis for economic growth is thus weakened. The burden of rising debt and pension payments will be heavier. Financial markets are already now demanding a high interest rate on loans to troubled countries. It takes a long time to reverse demographic trends. The ideals associated with fertility from the mythologies of Aphrodite and Venus might provide some impetus – not only in Mediterranean countries, but in most OECD countries. Financial incentives would probably be more effective, however. Norway, with favourable support schemes for families with children, has a relatively high birth rate. In other European countries, there is a risk that these hard times will exacerbate the demographic challenge.

Furthermore, external conditions are not likely to help push up inflation in Norway in the period ahead. Many countries are facing the prospect of stagnation or decline, and the rise in prices for imported goods is low. Our objective is inflation of close to 2.5 percent over time. Inflation will be brought up gradually, but not so rapidly as to generate imbalances in the economy. Under the current outlook, it will likely take several years before inflation is back on target. New measures to promote financial stability There is an inscription on Åmodt Bridge here in Oslo– “100 mand kan jeg bære, men svigter under taktfast marsch” [A hundred men I can bear, unless in step they march]. Bridge designers have long known that when a large number march across a bridge in step, selfreinforcing oscillations can arise, causing the bridgeheads to collapse. Likewise, financial market participants can trigger self-reinforcing economic fluctuations. During upturns, banks tend to vie with one another to lend. House prices and other property prices rise, fuelling credit growth. Risks and vulnerabilities in the financial system increase. In downturns, credit lines are tightened, and households and enterprises face stricter credit standards. When financial market participants march in step, fluctuations in the economy are amplified – potentially forming bubbles that burst. The events of autumn 2008 were a reminder of this. As long as the music is playing, individual banks will be tempted to get up and dance.