samchain/econo-pairs-v1 huggingface dataset:
The problem arises in the case of people who are unable to move forward at the speed of the market. They become laggards and are left out. Hence, there should be a special strategy to bring them to the mainstream of economic life. The normal strategy that had been adopted to address this issue has been the introduction of safety nets to capture them before they make a free fall to the ground. The safety nets so introduced have taken different forms depending on the era or the country. About five decades ago, the safety nets took the form of providing outright grants to the poor people. The objective of the grants was to provide some relief to them, so that they could at least meet their food requirements. The weaknesses in this type of strategies are well known. It encourages poor people to remain in the safety net forever. They have no incentive to move out of the net, because moving out would mean their having to work hard for a living. If at least the basic requirement of food is provided free of charge, then why would anyone want to work for the same? Economists have long named this problem “moral hazard” problem. This problem simply says that, when one helps another, the person being helped does not have the incentive to adopt even the minimum safety measures. As a result, he increases the chance of the occurrence of the event which the helper desires to prevent.

2  BIS Review 48/2007  This was experimented in one of the development projects implemented by the Central Bank of Sri Lanka. In this particular project, bank financing was available for both micro and small businesses. One of the requirements of banks was the submission of a comprehensive business plan, acceptable to the banker, by the prospective micro-borrowers. But, none of the borrowers had the capacity to prepare them. As a result, the utilization of the moneys in the project became a problem. As a solution, it was decided to outsource the function to some business development consultants at a cost to the borrowers. Accordingly, a number of youth who had studied economics, business studies and accounting for the GCE Advanced Level were selected for training as business consultants. Then, they were appointed to provide consultancy services to potential entrepreneurs for a fee. The lending banks also paid a certain commission to them for services such as loan recovery and follow up work. The program worked well and a new generation of fee-based business consultants was developed by the project. At the end of the project, most of these consultants, having used their own expertise, started their own businesses. Another pertinent issue involved in microfinance delivery is how to reduce the transaction costs and make available the loans at the time they are needed by the borrowers. The transaction cost is simply the additional resources which a person has to spend, other than what is paid to the supplier, in order to complete a transaction.
Supervisors will have the responsibility to review firms’ compensation policies and structures with institutional and systemic risk in mind and, to apply corrective measures, such as higher capital requirements, to those firms that fail to implement sound compensation policies and practices. Supervisors would also have the ability to modify compensation structures in the case of firms that fail or require extraordinary public intervention. 33. As I already alluded to, supervisors should pay a major attention to financial firms’ governance. As it stands, prudential regulation to a large extent is build on trust in their ability to value, manage and control their risks. Supervisors should have the power to hold boards responsible for the performance of their institutions. They should ensure that boards and individual directors are sufficiently empowered and informed to understand and to respond appropriately to their risk taking policy. 34. In light of the crisis, proper liquidity risk management should also stand high in firms’ own agenda. In many respect, the recent crisis revealed wrong liquidity pricing and poor liquidity risk valuation by financial firms. There is ample evidence that in an environment of excess global liquidity prior to the recent crisis many financial institutions were led to (i) overestimate the liquidity of their assets, (ii) have overly optimistic assumptions on their ability to refinance, and (iii) ignore, or pay insufficient attention to, liquidity risks in their internal pricing processes. 35. One should never forget that liquidity has a price.

This very significant advance in terms of financial regulation should not obscure the progress that still needs to be made regarding the work underway, especially in the areas of market infrastructures (including for commodity markets), tighter regulation of activities included under the designation the “shadow banking system” and the behaviour of market players themselves. Once again, I underscore our collective responsibility, which is to ensure that all of the G-20 countries and, more widely, the international community as a whole apply international standards. Today’s discussions will be divided into four sessions. The first, chaired by Axel Weber, will examine the notion of disequilibrium after the crisis and will allow us to discuss the unpredictable evolution of global imbalances in the medium term, in the light of different assumptions concerning economic growth and savings trends in the different zones. Mario Draghi has agreed to chair the second session that will focus on questions related to supervision and coordination. As I have already said, the current context is characterised by the reform of global governance and regulation, a process given impetus by the G-20. Therefore, at this stage, it seems appropriate to explore topics such as the evolution of the role of international financial institutions and the accomplishments and future progress in harmonising global financial regulations. The third session, chaired by Michel Camdessus, should help us to gain further insight on what could, or should, be the role of central banks in a post-crisis environment.
The resulting lower real interest rates and easier financing conditions might well have exacerbated the accumulation of financial and real imbalances by supporting even bigger asset and credit bubbles and ultimately have led to a larger crisis as these bubbles burst. During the crisis, Monetary Union has also helped to contain cross-country heterogeneity in bank credit conditions and supported the availability of loans to the private sector. Not only have standard and non-standard monetary policy measures served to ease financial conditions on average, they have also helped to limit the dispersion of bank interest rates across countries. For example, the range of long-term rates on bank mortgage loans to households across euro area countries has been limited to around 1½ percentage points in recent years, which is similar to the dispersion seen at the end of 2006, before the crisis started. While the spreads between interest rates on bank loans to non-financial corporations in Greece and Portugal have increased by up to 2 percentage points over the euro area average, the equivalent spreads for Ireland and Spain have remained modest over the entire crisis period. 4  In 2009 and 2010, GDP growth equalled: –7.6% and –1.0%, respectively, in Ireland; –2.3% and –4.4% in Greece; and –2.6% and 0.8% in Portugal. These figures compare with GDP growth of –4.1% and 1.8% in the euro area as a whole.

2  BIS central bankers’ speeches  Subsequently, on 6 September 2011, we decided to introduce the minimum exchange rate as an exceptional and temporary measure. Through the minimum exchange rate, the massive overvaluation of the Swiss franc was partially corrected. In this way, the SNB countered the acute threat to the Swiss economy and the risk of a deflationary development. The minimum exchange rate served the Swiss economy well. It helped to see it through the turmoil of that period and bought some time so that the economy could adjust to the new conditions, at least to some extent. Production and employment recovered faster than in many other countries. Over the past two years, GDP has grown by approximately 2% on average. The Swiss economy is now better placed than it was in 2011. New parameters for the economy: assessment and outlook What is our current assessment of the economic outlook, given the changed situation? Before discontinuing the minimum exchange rate, the SNB was expecting growth of some 2% for this year as well. We now anticipate GDP growth of just under 1%. With the end of the minimum exchange rate, Switzerland faces more difficult times ahead. Overall, the Swiss franc is once again significantly overvalued. The sharp, and above all abrupt, appreciation of the Swiss franc represents a major challenge. Our economy has time and again demonstrated how adaptable and innovative it is, and it can certainly handle a gradual, longterm appreciation in the real exchange rate.
The established players also have an advantage in that their relationship with the customers gives rise to a certain lock-in effect, that is changing from one service supplier to another, for example from one bank to another, may entail certain costs for the customer. It may be the case that the local branch of the new bank is further from the customer’s home, the legal terms and conditions governing the payment services may be different, the customer service centre may be slower, the personnel may be less friendly and so on. Getting private individuals to change their bank has proved to be much more difficult than expected. The new alternative service must be better than the existing payment service by a broad margin in order to make changing from one service provider to another an attractive prospect. This affects what innovators will be able to charge for their new services, and thus reduces their incentives to launch such services. However, despite such difficulties, there are examples of very successful launches of innovative payment methods. One such example is the introduction of M-PESA in Kenya in 2007. M-PESA is a mobile payment service based on SMS and was launched by the leading mobile operator, Safaricom. One of the points here is that a large part of the population had mobile phones but not bank accounts. The mobile operator thus had a large, well-established circle of customers and thus an advantage.

However, we should be aware that at one point in the future their contribution will be overwhelmed and we will need to take appropriate action on time in order to impede any reverse effects. In the policy design and decision making process under the current dynamic environment, the strengthening of analytical tools and the enhancement of knowledge on the policy nexus are extremely important. The interplay of monetary, fiscal and macro prudential policies is a quite new area, seeking for deeper research work to support the decision making process at the central banks and other policy makers, to provide appropriate advices and policy recommendation and therefore, to prevent from underlying risks. The aim of our conference is to contribute towards building knowledge and exchanging views on the policy nexus issue. Having in mind the quality of papers that are going to be presented today, I truly hope that we will make our contribution towards this aim. I wish you a successful conference and fruitful discussion! Thank you. 2  BIS central bankers’ speeches
Some signs of this can be discerned; the latest figures suggest a minor blow to households’ expectations of Sweden’s economy, though this has not yet affected their personal economic expectations. There has been some fall in the growth of business credits. Another channel for effects on the real economy is the banking system. A more cautious supply of bank credits could dampen economic activity. In this respect the international turbulence gives cause for concern. The tendency in the late summer for investors to move to assets that were regarded as generally secure - a flight to quality - has developed into a general aversion to holding risk, with investors fleeing instead to assets that are more liquid. The economic fundamentals in particular countries are currently playing little part in investment decisions. This has hit some Third World countries very hard. The financial system in Sweden is monitored very closely by the Riksbank. The available statistics suggest that, compared with many international banks, Swedish banks are in a better position, with lower exposures to countries hit by the crisis. The picture also seems to be relatively good as regards exposures to hedge funds. This low exposure is probably a consequence of the bank crisis in Sweden in the early 1990s. So the risk of a domestically generated credit crunch should be small. Weak currency Besides increased uncertainty and greater risks of weaker economic activity, developments since the September Report was written have involved downward pressure on the Swedish krona.

Joseph Yam: Competition and cooperation among global and regional financial centres Congratulatory remarks by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the ACI Asia – The Financial Markets Association, Hong Kong, 11 July 2008. *  *  *  Mr Wiebogen, Mr Tan, Ladies and Gentlemen, It is with great pleasure that I join you this evening to mark the inauguration of ACI Asia – The Financial Markets Association. On behalf of the Hong Kong Monetary Authority and the Hong Kong Special Administrative Region Government, I would like first to offer my congratulations to all those who have worked hard over the last couple of months on the establishment of ACI Asia. Special congratulations are also appropriate to Mr Wiebogen and Mr Tan for the foresight and leadership they have demonstrated in this initiative. Financial markets in the developed economies have been experiencing considerable stress. At the risk of oversimplifying it, the current financial turmoil can be attributed to financial innovation creating distortions in the financial system, including the compensation schemes for the innovative lot, to such an extent as to lead to a serious erosion of credit standards. It is at a time like this that everybody should be reminded of the importance of professionalism in finance, at all stages of financial intermediation.
As Paul Romer, a Stanford Economist, once said, ‘A crisis is a terrible thing to waste’. Thankfully, lessons from the GFC were not wasted. Central banks and financial regulators made great strides in building a more stable and resilient financial system. The regulatory reforms by the BCBS under Basel III regime not only refined the existing rules but also introduced wideranging measures which were earlier missing or inadequate. Thanks to these efforts, the old fault lines have been largely fixed. Capital adequacy regime has been enhanced, with higher and better quality capital. Additional capital conservation buffer and countercyclical capital buffer requirements have also been put in place to help banks maintain additional cushion and limit the buildup of systemic risk. Likewise, leverage ratio has been phased in as a backstop to CAR. On the liquidity front, Liquidity Coverage Ratio and Net Stable Funding Ratio have further strengthened banks’ capacity to withstand liquidity stress and to make their funding structure more stable. To address structural dimension of systemic risk, capital charge for SIFIs has been added, recovery and resolution regimes have been strengthened and safety nets have been improved. Of course, this list is not exhaustive. While the world has not seen a crisis similar to GFC to determine if these reforms have made the financial system resilient enough, there is sufficient evidence to suggest that our banks are considerably more stable than a decade ago.

This is true for both cyber threats and climate change. A feature common to these risks is their wider impact through multiple entry points. Hence, the key to address both lies in sharing information and strengthening cooperation. If we are grappling with risks that transcend sectoral and national boundaries, so should our response. Thank you for your attention. 11/12/2019  Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬
In Scandinavia and the Benelux countries, the pressing need for economies of scale has forced major banks to look beyond their domestic markets for partnerships, and cross-border mergers have been common. In Singapore, the same thing is already happening in the telecommunications industry. The Government has decided to allow, and indeed to encourage, dominant local players like Singapore Telecom to go beyond foreign acquisitions, to seek foreign mergers. As Singapore banks increasingly confront the same imperative, we will have to consider exactly how far we are willing to trade off retaining a few Singaporean-controlled banks against the logic of globalisation. Conclusion The Asian crisis has led to a rethink of the consensus in favour of globalisation and free capital flows. The result has been to reaffirm the logic of globalisation, and the value of free markets and free trade. But it has also caused a more sober appreciation of the risks of international flows of capital, and clarified the necessary preconditions for countries to minimise the difficulties and reap the benefits from freer capital flows. Singapore’s experience in bringing our financial sector up to best practices during and after the crisis shows how complex and delicate a task it is, despite Singapore’s relatively strong starting point. It will be even more challenging for countries in less favourable circumstances, to find their way forward in post crisis Asia. In this quest, these countries deserve the full support of the international community. 9  BIS Review 76/2000

These effects can be achieved at the zero lower bound8 and in conditions of a debt overhang9. The key issue is therefore which set of forces dominates. And what matters here is not whether structural reforms are implemented, but how. This is where two further lessons of the crisis come in, which relate to our experience in Europe during the crisis: both the pace and the composition of reforms matter crucially for achieving positive effects in the shortterm. Why the pace of reforms matters Before the crisis there was an active debate about the appropriate pace of reform implementation, which had its origins in the liberalisation of Central and Eastern European economies in the 1990s. Some argued that reform was best conducted through a “big bang” approach, while others argued for more gradual reform implementation.10 More recently, studies of reform implementation had suggested that outcomes might be better if reforms were sequenced, with product market reforms preceding labour market reforms, so that lower mark-ups can support the purchasing power of households.11 There was also a political economy argument in favour of gradualism: as governments have a fixed amount of political capital, they would be most effective if they allocated their scarce resources to one set of reforms at a time. These arguments were however not always applicable to the euro area as, again, they lacked our specific context.
In the long run, inflation is a monetary phenomenon: it cannot happen without an (at least) accommodating expansion of the money supply. And we know from historical experience that more often than not the major source of any such inflationary increase in the money supply has been the direct financing of government by the central bank. Hungary has not been an exception to this general rule - rather its confirmation. And once inflation is established, interest rates go up. Except for very short periods, it is impossible to keep market interest rates below the rate of inflation: who would be ready to undertake financial savings the remuneration of which would imply a loss in real financial wealth? To try to keep interest rates low by monetary financing of the government is a self-defeating device. It may work for a few months, but would end up producing more inflation and higher, not lower, interest rates certainly higher nominal interest rates, but very likely also higher real rates. The simple reason for this is that people are not fools - at least not for a long time. Monetary financing of the government is therefore likely to combine two evils at the same time: inflation and high interest rates. BIS Review 16/1997  -4-  2. The accumulated and potential future losses of the NBH on account of its borrowings in foreign currency have been taken over by the government. This is a salutary cleaning-up operation which ought to have been carried out long ago.

Another much more dangerous conflict of interest could arise where the bank is capable of exercising a decisive shareholding power in another non-banking firm, of which it is at the same time a major creditor. This could have unacceptable consequences not only for the firm’s other shareholders but, if the practice became widespread, could even lead to structural distortions for entire industries. To avoid this happening, I would favour rather strict regulations. For instance, mutual funds managed by banks should either have limits on the equity participation in individual firms or not have access to the firm’s Board. The same should apply, a fortiori, to any bank’s direct and permanent equity participation in a non-banking firm - unless, perhaps, the bank remains just a shareholder (as if it were, say, a pension fund), without direct banking operations with the firm in question. 4. Under the last point, I already touched on one particular aspect of corporate governance, namely when a bank can play a decisive role in a non-banking firm’s life. But you will also have to face up to the reverse problem: when a non-banking firm becomes a bank’s key shareholder and could therefore potentially induce risk-taking by the bank in its favour, at the expense of the bank’s other shareholders or of its depositors or customers. This is a particularly acute danger in countries where there are not many non-bank institutional shareholders, where the defence of minority shareholders has no tradition and where depositors are not properly protected.