samchain/econo-pairs-v1 huggingface dataset:
That is partly because banks have been extremely conservative in the last twenty to thirty years because of the war situation and they did not lend aggressively. More recently we saw some of them becoming a little aggressive and they got a bit burned when agriculture  BIS central bankers’ speeches  1  was affected by the drought last year. Then you saw the big exposure to gold and pawning activities which also affected bank balance sheets slightly. Most of those problems I am glad to say, seem to be behind us. So the banking system looks in fairly good shape. Finance companies pose some concerns and. I think we have far too many of them. We were a bit too liberal in-terms of encouraging finance company growth in the last ten to fifteen years. As a consequence, today we are coping with some unusual situations in that sector. But there again, with some resolve and some out of the box thinking, we will be able to bring that sector also under control. So all in all, I think the financial system is responding favourably.

So the challenges are ahead of us. It is not easy to change mindsets. Remember, that a lot of people in this country, particularly those who work for the government have been used to a war situation. For most of their working lives, they have been living in a war economy. A war economy is very different from an economy at peace. That, in my view, is why you had a change of government this year and you have a new government, who is trying to win the peace. We won the war, but it was very difficult to win the peace. Why? Because our mindsets were stuck in the past. There was that concept of control. You had to control everything in the economy including prices. When I say prices, I mean the exchange rates, the interest rates, other prices which affect the functioning of the economy. That is all justifiable in a war situation. But when you come into a peace situation, where it is a normal functioning market economy, then you have to re-think, you have to get back to first principles, and reassess how the economy should work in a new dispensation.
Malaysia already has in place high quality physical infrastructure but considerably more is needed. Steps already being taken include the development of an efficient urban public transportation system, reliable and seamless broadband connectivity and energy efficiency-related infrastructure. This also needs to be reinforced by the  2  BIS Review 146/2010  transformation of the Government machinery to support the transition to a high value added economy. The final and fifth factor is the ability to effectively participate in the economic and financial integration with other emerging economies in particular with that of the region. Asia, in particular, offers immense opportunities for increased participation by Malaysia. Indeed, there is already rising investment into the region by Malaysian companies and this trend can be expected to continue over the medium term. This is particularly pronounced in the financial sector, where Malaysia’s domestic financial institutions are now increasingly having a greater presence in the region. Of importance, is that such ventures yield mutual benefit. There must also be value added to the countries concerned so as to ensure the sustainability of such ventures. II. Financial stability and potential risks in the financial system  Let me now turn to the financial system and financial stability. The Malaysian financial system has continued to perform well throughout 2010, with a high degree of resilience and stability even under the more challenging conditions. The capital positions of both the banking and the insurance sectors have remained stable, well above the regulatory requirements.

4 Alternative Reference Rates Committee, Second Report, March 2018. 5 Financial Conduct Authority, FCA Statement on LIBOR Panels, November 24, 2017. 6 4/5  BIS central bankers' speeches  6 Andrew Bailey, LIBOR: Preparing for the End. Speech at Securities Industry and Financial Market Association  LIBOR Transition Briefing, July 15, 2019. 7 Alternative Reference Rate Committee, The ARRC Selects a Broad Repo Rate as its Preferred Alternative  Reference Rate, June 22, 2017. 8 International Organization of Securities Commissions, Principles for Financial Benchmarks, Final Report, July  2013. 9 International Swaps and Derivatives Association, Interbank Offered Rate (IBOR) Fallbacks for 2006 ISDA  Definitions, May 16, 2019. 10 See the letter from the OSSG to the ISDA dated March 12, 2019. 11 See Alternative Reference Rate Committee, Fallback Contract Language. 12 See Margin and Capital Requirements for Covered Swap Entities. 13 See FASB Proposes Guidance to Assist in Transition Away from Interbank Offered Rates to New Reference  Rates, Financial Accounting Standards Board news release, September 5, 2019. 14 U.S. Securities and Exchange Commission, Staff Statement on LIBOR Transition, July 12, 2019. 15 Financial Stability Board, Overnight Risk-Free Rates: A User’s Guide, June 4, 2019. 16 Alternative Reference Rates Committee, Practical Implementation Checklist for SOFR Adoption, September  2019. 5/5  BIS central bankers' speeches
And, assuming that Hong Kong is by no means the only place where new ideas are being developed across the financing spectrum, I am led to the conclusion that there is little prospect of any immediate let-up in the pace of global product innovation in finance. That is a conclusion reached from merely observing what is at present happening in the financial world, but it does raise questions as to where in all of this lies the scope for extra value added and profit. If one assumes that the overall levels of savings and of investment demand in the economy are little affected by micro developments in the financial sector, then it follows that innovations, in order to be profitable, must be continually exploiting new arbitrage opportunities, new and more efficient ways of serving customers, and so on. One can understand how, over the years, the increased level of competition in finance, both within and between countries, as well as the communications revolution and the IT revolution, have provided the basis for extraordinary gains in efficiency. But will this trend continue? Indeed, can it? Might the financial sector now be encountering sharply diminishing returns from innovation, in which case much of the new effort put into designing new products would prove to be an expensive mistake? Or would it perhaps be more accurate to describe it as an expensive necessity, since, if you don’t do it, someone else will?

But, of course, it would also entail lower risk for bank equity and bond investors, and surely it is risk-adjusted returns that matter. And it would also deliver lower risk to society more generally, which matters hugely. To be clear, we want banks and the financial sector more generally to thrive. The institution I come from believes in a market economy, in capitalism. The financial sector has played an enormous role in the development of modern economies. But a regime in which banks can thrive standing on your own feet would be a better market – for all of us. BIS Review 83/2009  9
Finally, regarding fiscal policy, it is assumed that the consistent framework outlined in the Medium Term Program (MTP) will be implemented and further enhanced by institutional and structural measures. In other words, it is assumed that no public price/tax adjustments would  14  BIS Review 31/2010  be made to lead to unpredictable volatilities in inflation and administered prices would be set in line with inflation targets over the next three years. Moreover, it is assumed that the fiscal stance will remain expansionary – but less so than in 2009 – throughout 2010, and subsequently fiscal tightening would be gradually adopted starting from 2011. In this respect, it is envisaged that the rising debt-to-GDP ratios would reverse their course steadily starting from 2011, and hence the risk premium would not display any significant changes throughout the forecast horizon. Distinguished Guests and Members of the Press, Against this background, assuming policy rates are kept constant for a long period followed by limited rises thereafter, with policy rates staying at single digits throughout the three-year forecast horizon, the medium-term forecasts suggest that, with 70 percent probability, inflation will be between 5.5 and 8.3 percent with a mid-point of 6.9 percent at end-2010; and between 3.4 and 7.0 percent with a mid-point of 5.2 percent by the end of 2011. Furthermore, inflation is expected to decline to 4.9 percent by the end of 2012 (Figure 34).

Taking into account the favorable developments in the credit markets and the moderate recovery in economic activity in the last quarter of 2009, the Monetary Policy Committee (MPC) slowed the pace of rate cuts, and finally decided to keep rates unchanged at the last two meetings. However, it was also noted that lingering problems across the global economy were still a concern and that uncertainties regarding the strength and durability of the recovery remain. Considering these factors, the MPC reiterated that it would be necessary to keep policy rates at low levels for a long period of time. At its January meeting, the MPC indicated that tax adjustments and base effects would cause inflation to rise significantly in the first two months of 2010 and afterwards remain above the target for some time. Noting that the underlying trend implied by core inflation indicators would remain at levels consistent with medium-term targets, the Committee emphasized that, given the levels of resource utilization, the state of labor markets, and global economic conditions, general pricing behavior would not be affected adversely by the temporary rise in inflation, and therefore, inflation would display a declining trend once the transitory factors taper off. Market yields have been broadly shaped by the monetary policy stance during the last quarter of 2009. This is particularly important as it demonstrates the increased effectiveness of monetary policy. Market interest rates slightly increased in October with rising perceptions that the policy rate cut cycle is coming to an end.
But such lending is well-collateralised, so low risk, and is always intended to be temporary: to overcome a one-off shock or to bridge to a more lasting solution. To discourage reliance on these operations, standard practice is to charge a penalty rate relative to market prices. These liquidity insurance operations are an integral part of the Sterling Monetary Framework which delivers our monetary policy objectives (See Fisher, 2009 for further details). The Bank of England does not have access to funds that could be used to sustain commercial lending operations. We do not have the power to raise tax, nor do we have significant retail deposits, nor the freedom to borrow in large scale in the wholesale markets for non-monetary purposes. 3 More generally, in a capitalist economy, it is private sector or, in some cases, national savings which ultimately fund the banking system. And it is the job of financial intermediaries to translate those savings efficiently into private sector spending. In contrast, the fiscal authorities (including national wealth funds where they exist) can access private sector funding via taxation or by borrowing in large scale. There are many instances throughout UK economic history where the government has intervened to support private markets, or indeed individual firms. There are well-known risks associated with such action, including the loss of public money and/or an inefficient allocation of capital in the economy. There are also substantial and well-known potential benefits if the intervention corrects a market failure or achieves a wider social objective.

Although it can probably be said that the credit expansion and house price trends have not yet had decisive significance in our interest rate decisions, they are factors that must be included in the equation. It is also important for the Riksbank to try to find a suitable balance between stabilising inflation and the real economy and also taking into account the consequences for financial stability. In the same way, fiscal policy must meet the requirements for long-term stability and sustainability in public finances, with the aid of budgetary targets and expenditure ceilings, which does not exclude consideration of the real economy. This allocation of roles has proved successful and we should therefore proceed with caution as regards making any drastic changes. My reply to the question of how roles should be allocated between fiscal policy and monetary policy is therefore; as they are now. The same conclusion has been reached in many other countries as well as in academic research. What is important in this context is that one realises that the Riksbank takes real consideration when formulating its monetary policy, to the extent it deems this to be wise. It is possible, however, that this is something we need to be clearer about. Can and should monetary policy and fiscal policy develop? In my opinion, one can of course say that both monetary policy and fiscal policy are constantly developing.
The world has in the past experienced lengthy periods of continuously positive annual growth: in the UK, for a remarkable 26 years after the Second World War and for 16 years during the Great Moderation starting in the late 1990s. As Chart 12 shows, however, these are extreme outliers in the distribution of expansions. The probability of an expansion lasting for longer than 10 years is, on past evidence, less than 10%. 5  Assuming these probabilities evolve according to a Bernoulli distribution – that is to say, the probability of a recession triggering shock occurring in one year is independent of the probability of a shock occurring in another year. This probability is calculated by looking at data on the frequency of negative annual growth rates. The cumulative probability is the probability that there will be at least one such shock over a given horizon. 6  Using conditional probabilities – for example, on starting in recession or expansion – does not dramatically alter these cumulative probabilities. BIS central bankers’ speeches  5  If a recession were to strike in the period ahead, a relevant question for monetary policy is how much room for manoeuvre might be necessary to cushion its effects. History can again offer some guide. Table 1 looks at loosening cycles in the UK, US, Germany and Japan in the period since 1970 and in the period since 1994. There has been considerable variation in the scale and duration of loosening cycles over time and across countries.

Yugoslavia, Mexico and Egypt had the advantage of being close to the critical export markets in the developed world. Honduras and Tanzania had precious metal deposits, as did several of the other Latin American and African countries. Singapore had nothing, was over-populated and had high unemployment. Many economists of the day predicted that countries in Latin America and Africa would outgrow over-populated, resource-scarce Asia. The outcome, however, was totally different. Living standards have barely risen in Honduras in the last 40 years, and have declined in Tanzania. Tito's Yugoslavia no longer exists. East Pakistan fought a war with West Pakistan and separated to become Bangladesh. Civil war and internal disorder tore up countries like Liberia, Ethiopia and Uganda. Singapore which was written off by pundits as being not viable without the Malaysian hinterland not only survived but thrived. Its GDP per capita increased more than six-fold, better than any of the other 15 countries represented in my class. Why have the growth experiences of individual countries been so disparate? Some of you might have watched the movie, "The Good, the Bad, and the Ugly", released, coincidentally, exactly 40 years ago. Set during the American Civil War, it was about three bandits who each held one clue to a hidden trove of gold coins. They did not trust each other, and wanted all the money for themselves. In the end, the "Good" bandit who put all the three clues together won.
Indeed, in recent times, especially in the aftermath of Asian crisis in late 1990s, we have seen several countries amending the laws governing their central banks. Such amendments have given them greater independence in the conduct of monetary policy. The current world trends have required the central banks to be transparent and accountable. This would be attained by ensuring a greater disclosure policy on their decisions. I have no doubt that today’s Seminar will lead to a healthy discussion and exchange of views on comparative policies among SEACEN member central banks and monetary authorities in selected areas of corporate governance. The first session will cover strategic planning process for central banks, for which a background paper has been prepared in consultation with the SEACEN Centre. I hope the paper will be a useful document to initiate fruitful discussion on the issue of strategic planning for central banks. In addition, Mr Gavin Bingham, Head of International Liaison, Bank for International Settlement, will present an overview of current issues and practices relating to this topic. I am confident that the participants would contribute with their country specific experiences on Central Bank Governance and specifically on their experiences with the formulation and implementation of Strategic Plans in the respective central banks. The second session will cover selected Central Bank Governance issues and will serve as a follow-up to the SEACEN-BIS Seminar on Central Bank Governance conducted in Langkawi, Malaysia in February 2004.

Sunil Mendis: Central bank governance and how such governance is related to strategic planning in central banks Opening remarks by Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, at the 3rd SEACEN EXCO Seminar and Meeting, Colombo, 28-29 January 2005. *  *  *  Deputy Governors and Heads of Delegations of SEACEN member and observer countries, Mr Gavin Bingham, Head of International Liaison of BIS, Dr Subarjo Joyosumarto, Executive Director of the SEACEN Centre, distinguished invitees, ladies and gentlemen. It gives me great pleasure to inaugurate the 3rd SEACEN EXCO Meeting and Special Seminar to mark the Meeting. As a founder member of SEACEN, the Central Bank of Sri Lanka is honoured and delighted to host these two events in Colombo, Sri Lanka. On behalf of the Central Bank of Sri Lanka, I extend a warm welcome to all the delegates from the SEACEN member and observer countries, our special guests, and of course, the officials of the SEACEN Centre. The gathering of several distinguished Central Bankers today demonstrates the emphasis and importance placed by them on the need for co-operating with each other to resolve issues of mutual interest. We host these two events just a month after the deadly ‘Tsunami’ hit some of our countries causing unprecedented and unimaginable destructions to the life and property. We are still recovering from this severe blow. Tsunami, indeed, brought all of us even closer. Our thoughts and prayers are with those who lost their beloved ones, property and suffered injuries.
With today’s integrated capital markets, we will have a global trend with lower real interest rates. An individual country with a floating exchange rate may deviate from this trend in the short term, partly for cyclical reasons and partly  5  Ingves (2019), and Frohm and Ingves (2020). 6 See Lundvall (2020). 5 [25]  because global investors may demand a time-varying risk premium to invest there, but in the longer run the real interest rate in a small open economy will follow the global trend downwards. The challenge for monetary policy is that the low real interest rate limits the monetary policy scope to manage a severe recession by cutting the repo rate. The nominal interest rate cannot continue to be cut indefinitely – a negative repo rate makes it increasingly attractive to hold cash. Even if frictions in the banking system make it possible to have a weakly negative repo rate, it is not possible in practice to cut the repo rate indefinitely. The average repo rate is the total of the average real interest rate and the inflation target – the lower the real interest rate is, the lower the average repo rate is and thus there is less scope for interest rate cuts in a recession. Figure 3: Global real interest rates have fallen in the past 25 years  Note. Per cent. Source: Lundvall (2020). Increased indebtedness Parallel with the fall in real interest rates, indebtedness has increased in Sweden and in many other countries (see Figure 4).

Weak inflationary pressures and low 2 Over the period 1946-1971, this system, in practice, was very reminiscent of the gold standard, as many  countries had fixed exchange rates against the US dollar under the so-called Bretton Woods system and the United States had a link between the dollar and gold; see Jonung (2000). 3 See, for instance, Rogoff (1985). 4 It is difficult to obtain an overall picture of the actual development of the foreign currency reserves, as the Riksbank used different forward transactions as part of its management and these positions are not visible on the balance sheet. 3 [25]  resource utilisation led to interest rate cuts and vice versa. Even the reserve requirements that many other central banks around the world still use were set at zero way back in 1994, and have remained unchanged since then. Figure 1: Assets on the Riksbank’s balance sheet 1980-2019  Note. SEK billion. Annual data where the final observation is 2019. The broken line indicates corona-related measures. Source: The Riksbank  Figure 2: Liabilities on the Riksbank's balance sheet 1980-2019  Note. SEK billion. Annual data where the final observation is 2019. The broken line indicates corona-related measures. Source: The Riksbank  The communication when the inflation target was introduced was clear and successful – inflation expectations were gradually adapted down to the target of 2 per cent and wage formation functioned well when both employer and employee could assume that average inflation would be close to the target.