samchain/econo-pairs-v1 huggingface dataset:
Ravi Menon: How Singapore manages its reserves Keynote speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the National Asset-Liability Management Europe Conference, Singapore, 13 March 2019. * * * Ladies and gentlemen, good morning. Singapore has official foreign reserves (OFR) of almost $ billion. In absolute terms, this is the eleventh highest stock of OFR in the world. As a percentage of GDP and on a per capita basis, it is the third highest in the world. Singapore’s OFR sit on the balance sheet of the Monetary Authority of Singapore (MAS), the central bank and integrated financial regulator. Besides the OFR, there are two other pots of national reserves in Singapore: The Government of Singapore Investment Corporation (GIC), a fund management company, manages on behalf of the Singapore Government a diverse portfolio of foreign assets – well in excess of $ billion. Temasek Holdings, an investment company wholly owned by the Singapore Government, holds equity stakes in a variety of domestic and foreign corporates, amounting to more than $ billion. This morning, let me try to answer three questions: What role do the reserves play? How are the reserves accumulated and managed? How are the OFR managed? Why does Singapore hold reserves? Singapore’s reserves serve three objectives: one, to serve as a buffer against crisis; two, to provide a stream of investment income to help finance part of the annual government budget; and three, to maintain confidence in Singapore’s exchange rate centred monetary policy.

They helped underpin confidence in Singapore in the throes of the Asian Financial Crisis. And during the Global Financial Crisis, the reserves were drawn down to finance a package of measures, to preserve jobs by subsidising employers’ wage bills and to help viable companies stay afloat by sharing the risk of bank lending. A second purpose of the reserves is to serve as an endowment. This purpose has grown in importance – and salience - in recent years. The income from investing the reserves provides an increasingly important source of revenue to fund government expenditure. The size of government in Singapore is small. Government spending – comprising both operating and development expenditure – is just about 16% of GDP. But tax and non-tax revenues are even lower, at 15% of GDP. In other words, Singapore runs a structural deficit on its primary fiscal balance. This is where the investment income from the reserves comes in. The Constitution of Singapore bars the government from borrowing to spend or to spend surpluses accumulated from previous terms of government. Instead, it allows the government to spend up to half of the expected long-term real returns from the net assets invested by MAS, GIC, and Temasek. This is known as the Net Investment Returns Contribution (NIRC). The NIRC is already the largest single contributor to revenues in the government budget, accounting for about one-fifth of revenues.
More focus is therefore needed on internal rating and valuation processes. Insurers need to ensure that they are meeting all the elements of the Prudent Person Principle in Solvency II. Finally, when these exposures deteriorate, it is important that insurers have the work-out expertise to mitigate the impact on value, as ultimately disposal is unlikely to be a straightforward option. Equity release mortgages  The illiquid asset category in which exposures have been growing most quickly is equity release mortgage lending. A typical equity release mortgage comprises an advance to a person sixty to eighty years old of 25-50% of the value of their home. Most borrowers do not pay interest which instead accrues over time, increasing the value of the debt. Assuming the borrower does not pre-pay the loan, the insurer is repaid from the proceeds of the house sale when the borrower either dies or moves into long-term care. Insurers guarantee that the amount of the loan cannot exceed the value of the house (the ‘no-negativeequity guarantee’). 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  To be clear, the PRA recognises the value of this product to consumers especially given the aging UK population with high levels of wealth concentrated in housing. £ trillion of £ trillion homeowner equity 3  in England belongs to people aged over 55 . Equity release mortgages give older people the opportunity to unlock this wealth as an alternative to moving into a cheaper house.

Solvency II sets out how to estimate the premium needed to compensate for the risk that the borrower defaults or is downgraded, known as the Fundamental Spread. As an approximation, in equation form:  Matching Adjustment = Yield minus risk-free rate minus Fundamental Spread  The most important determinant of the Fundamental Spread is the credit rating of the asset. Broadly speaking, the higher the yield on an asset for a given credit rating, the bigger the Matching Adjustment. Earlier I showed that insurers were diversifying into illiquid assets because they offered wider spreads than bonds. Chart 7 is the same picture but with the split between the Matching Adjustment and Fundamental Spread added. Not only are the yields on illiquid assets wider but the majority of the additional spread is  being captured in the Matching Adjustment. UK insurers estimate the underlying credit quality of these  assets, reflected in the Fundamental Spread, to be similar or better than their corporate bond portfolios. So the shift into illiquid assets is giving insurers a double benefit: first wider spreads and second a bigger Matching Adjustment. This helps to explain their eagerness to increase their asset allocation towards illiquid assets. But why is the Matching Adjustment on illiquid assets larger than on corporate bonds? One possibility is that that the wider spreads are compensating other investors for the risk that they might need to sell into secondary markets that are less liquid than the corporate bond market.
To conclude this address that has already been rather too lengthy, I should just like to remove any ambiguity that may have arisen from the discussions that have intensified with the crisis. I do not think that it is in anyone's interest in the current period to weaken accounting conventions. Accurate, rigorous and fully transparent financial statements are the bedrock of financial activity. The aim of the work and discussions that have been actively pursued over the last few months and that will continue in the coming period is in fact both a modest and a difficult one. It is to ensure that accounting conventions fully reflect the reality of financial activities and are not overambitious. This undoubtedly means reviewing the role of fair value in the accounting treatment of financial instruments. Thank you for your attention. BIS Review 160/2008  3

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Shanghai and Singapore financial institutions can work together to encourage Chinese corporates to leverage the scheme and access direct financing for their BRI projects overseas. b. Second, the BRI also presents a good opportunity for promoting sustainable financing, given the potential negative environmental impact from unsustainable forms of infrastructure 2/3  BIS central bankers' speeches  development. China leapfrogged into top position as the largest issuer of green bonds globally in 20161. There is much that Singapore can learn from. To encourage green bond issuances, MAS introduced the Green Bond Grant Scheme in March of this year to offset the costs of external reviews required for issuing sustainability-oriented bonds. Together, Shanghai and Singapore can grow the global green bond market and play important roles in furthering sustainable financing. c . Third, there is also room for Shanghai and Singapore insurers to provide better insurance coverage of BRI projects. BRI projects can leverage insurance pools or consortiums to manage risk exposures of large-scale infrastructure projects. Shanghai and Singapore insurers can participate in regional insurance pools to provide more comprehensive coverage for a wider range of risks, while introducing new projects that would enhance the profitability of these insurance pools. 5 In the FinTech space, Shanghai and Singapore can collaborate in creating a conducive eco-system for FinTech companies and start-ups. The need for collaboration 1  arises from the fact that technology companies are dynamic and continually looking to internationalize their businesses.

Over time, we expect stronger governance within insurers to reinforce associations between financial reporting and fundamental economic factors, as intended by IFRS. In Malaysia, the finalisation of IFRS 17 is indeed timely in the light of current reforms being undertaken by Bank Negara Malaysia to further develop the domestic insurance market. This will see greater competition and complexity in the insurance sector, alongside a renewed impetus for growth through channel diversification and digitalisation. In this environment, the implementation of IFRS 17 will have an important role in improving the quality of information provided to the market on how these developments impact the performance of insurers, and in strengthening foundations for sound governance and risk management. This in turn will promote the effective functioning of insurance markets to serve the economy. Early preparation is key So then, where do we stand today? With less than two and a half years before the implementation date sets in, how prepared are insurers to implement IFRS 17? The answer is not encouraging. A recent survey published in January this year by a software firm covering some 240 insurance companies spread around the world, found that a startling 92% of insurers had yet to start putting solutions in place. Among those that have started, a vast majority are still only in the initial stages of planning.
At a global level, inflation was undershooting national inflation targets by almost 2 percentage points in January 2015.1  Chart 9: International inflation rates over time  Chart 8: Global CPI inflation Global PPP-weighted deviation of CPI inflation from target UK  Per cent  4 3  Higher than 5% Between 1% and 3% Below 0%  Between 3% and 5% Between 0% and 1%  Proportion of countries 100%  2 80%  1 0  60%  -1  40%  -2 2000  2003  2006  2009  2012  20%  -3 2015  0% 1961  Sources: Thomson Reuters Datastream, CEIC and Bank calculations. Notes: Global equates to approximately 70% of world PPP GDP; inflation targets fixed using 2014 targets and PPP-weighted according to share over time. 1  4  1971  1981  1991  2001  2011  Sources: Datastream and Bank calculations. Notes: Sample varies over time. Average sample sizes are: 30 countries between1960 and1980, 55 between 1980 and 2000 and 110 from 2000 onwards. See Carney (2015). BIS central bankers’ speeches  UK CPI inflation has closely followed global CPI trends since the crisis, with their correlation strikingly high at 0.8 – double its level pre-crisis. UK inflation currently stands at 0.3%, its lowest-ever recorded level. According to the MPC’s latest Inflation Report, it is more likely than not the UK will join those countries facing temporary deflation this year.

Christian Noyer: Current policy debate challenges – a euro area perspective Welcome address by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the 4th Bank of FranceDeutsche Bundesbank Macroeconomics and Finance Conference, Paris, 24 May 2013. *  *  *  Ladies and Gentlemen, dear colleagues, It is a great pleasure for me to speak in front of such a distinguished audience. As you might know, this is the fourth time that the Banque de France and the Deutsche Bundesbank have jointly organised a conference of this type. It is held every other year, alternately in Germany and in France. The fact that these two institutions sponsor an event of this nature sends a clear signal to the community of researchers: it illustrates the importance of research for the conduct of monetary policy. This is especially relevant at the current juncture as our understanding of the interactions between financial markets and the real economy remains incomplete. The work of outstanding quality presented during this conference could help influence the design and the conduct of monetary policy. The programme of this conference is very rich. It covers topical subjects that are of the utmost importance from the point of view of current policy debate. Let me take as an example the topic covered this morning: unconventional monetary policy, which have been my bread and butter as a member of the ECB Governing Council for the already six years.
It has contributed to our now being in a situation where household indebtedness and house prices have increased at a more rapid rate than can be regarded as sustainable in the long term. Our assessment at the monetary policy meeting in February was that a slightly earlier increase in the repo rate would reduce the risk of an abrupt adjustment in house prices and household indebtedness further ahead, which might have adverse consequences for both inflation and the real economy. One could say that, bearing this risk in mind, we discussed the appropriate timing of an interest rate increase that we anyway considered necessary with regard to the inflation target. I and my colleagues on the Executive Board of the Riksbank have pointed out in several different speeches that this procedure does not mean that we have introduced other objectives for monetary policy in addition to the price stability target and the aim to contribute to subduing fluctuations in the real economy. We expressed this quite clearly in the special document on monetary policy strategy we published prior to the summer. It therefore surprises me when I still see monetary policy described in some contests in a way that implies that we have other objectives besides price stability when making decisions on the repo rate.

FIDE Forum should continuously raise the bar on director performance by advocating best practices and providing support to its members in helping solve real problems confronting boards today. It should be a respected voice on important issues of corporate governance, an epitome of best practices of corporate Malaysia. Most importantly, it should build an enduring legacy for future leaders of financial institutions by representing within its collective membership the highest standards of integrity, professional conduct and intellectual integrity. Indeed, FIDE Forum’s success must surely be measured not only by how well it serves its current membership, but also by how it expands its reach and influence to attract new leaders of the highest calibre to the financial industry. In short, being a director of a financial institution signifies the embodiment of a person’s self-evident integrity and professionalism. In this endeavour, FIDE Forum and ICLIF need to work collaboratively and exploit the synergies between them. FIDE Forum should leverage on the expertise that has been built within ICLIF in the design and delivery of high quality leadership programs. Similarly, ICLIF should continuously seek to understand the current and future concerns of directors through FIDE Forum, and reflect on how its role in education can help address those concerns. These are mutually reinforcing perspectives. The Directors Register is a good example of this.
Urban Bäckström: The Swedish economy Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, to the Swedish Shareholders’ Association, Örebro, 30 October 2001 *  *  *  First a word of thanks for the invitation to come to Örebro and discuss matters to do with the Swedish economy with you. It is now a fortnight since the Riksbank presented this year’s third Inflation Report. Some more statistics have been published in the meanwhile but the information they contain does not point to anything particularly new. So today one can hardly arrive at an assessment of economic developments in Sweden one to two years ahead that differs all that much from the picture outlined in the Report. Those of you who want to know more about our assessment should consult the Riksbank’s website, www.riksbank.se. The whole Report can be downloaded, as can all the figures on which the tables and charts are based. Diagram 1:  The ”new economy” concept in Swedish media. (Number of hits) 250  217  200 150  87  100 50  26  8  0 1998  1999  2000  2001 Jan.Oct. Sources: Mediearkivet and Presstext. There are, however, a couple of questions concerning the Swedish economy and the outlook in the somewhat longer term that I should like to dwell on here today.

Even so, most things suggest that equity will continue to be a good vehicle for saving in the long term even if the trend rate of return is not as high as we saw in the 1980s and 1990s or as some foresaw a couple of years ago. References Bradford DeLong, J. and Summers, L., (2001), The ”New Economy”: Background, Questions, and Speculations, Federal Reserve Bank of Kansas City’s Economic Symposium, August, Jackson Hole, Wyoming. Brookes, M. and Zaki, W., (2000), Is the Internet Better than Electricity?, Global Economics Paper, No. 49, Goldman Sachs, July, London. D’Avolio, G., Gildor, E. and Shleifer, A., (2001), Technology, Information, Production and Market Efficiency, Federal Reserve Bank of Kansas City’s Economic Symposium, August, Jackson Hole, Wyoming. Frennberg, P. And Hansson, B., (1992), Swedish stocks, bonds, bills and inflation, Applied Financial Economics, Vol 2, pp79-86. Johansson, Ö., (1967), The gross domestic product of Sweden and its composition 1861-1955, Almqvist & Wiksell, Stockholm. Jungenfelt, K. G., (1966), Löneandelen och den ekonomiska utvecklingen, IUI, Almqvist & Wiksell, Uppsala. Schön, L., (2000), En modern svensk ekonomisk historia, SNS förlag, Borås. 6  BIS Review 90/2001  Shiller, R., (2000), Irrational exuberance, Princeton University Press, Chichester, West Sussex. Siegel, J., (1999), Stocks for the Long Run, McGraw Hill, New York. Åberg, Y., (1969), Produktion och produktivitet i Sverige 1861-1965, IUI, Almqvist & Wiksell, Uppsala. BIS Review 90/2001  7
In the same vein, automatic rules that are imposed ex ante might also be less risky in terms of potential unintended consequences. When new rules are implemented it is always hard to gauge what the impact will be because imposition of the rule not only changes the economics of borrowing and investing in a particular sector, but also changes expectations about what might happen in the future. When the rule is viewed as likely to be binding in the future – this seems more likely in the case of the ex post measures – it will be very hard to judge how economic agents will respond to a new measure. In this regard, I think back to the Carter administration and the imposition of credit controls to restrain inflation in 1980. Even though the credit controls were not expected to bind right  BIS central bankers’ speeches  3  away, the economy began to contract almost immediately as households and businesses rapidly adjusted their behavior to preserve some credit capacity. The response was a much more powerful downturn in economic activity than had been anticipated, which forced the Carter administration to scrap the credit controls because they worked too well in restraining economic activity. So I see some potential advantages of hardwired rules. But, I think this advantage needs to be set against the practical difficulty of figuring out what rules would need to be in place now to deal with all the potential financial stability excesses that could occur in the future.

That seems a very difficult task to work out in my opinion. It implies that such rules would need to be designed to treat broad issues, such as increases in financial system leverage or aggregate credit growth, rather than more limited sectoral issues. This may work well in some circumstances in which the financial excess is occurring broadly, but might not be very effective when the problem, while extreme, may be more narrowly based. Historical experience suggests that past bubbles in the United States that have threatened financial stability have taken many different forms and affected many different sectors of the economy. Often, the bubbles have occurred in response to some important innovation in the economy or the development of instruments that facilitated real estate lending to lowerquality borrowers. Examples of these include the development of the internet in the technology stock boom of the late 1990s, and subprime lending and mortgage securitization innovations prior to the financial crisis. These innovations, in turn, sparked changes in belief systems that turned out to be false – such as, the rise in home prices reinforced the view that housing is an excellent investment and that national home prices can never decline. When the assumption that widely supports a boom is revealed as false, the consequence is often a sharp reversal in behavior and prices as the boom deflates quickly. I think it is very hard to anticipate these episodes and put rules in place that would limit such excesses.