samchain/econo-pairs-v1 huggingface dataset:
to promote price stability, it was granted full independence to use its instruments, its financial independence was ensured and legal requirements were made for transparency and accountability, along with other points. I think it is fair to say that the new Central Bank Act generated interest internationally, not least for the speed at which the legal review was made and the broad consensus achieved on the reforms. The Central Bank Act authorises the declaration of a numerical target for inflation, subject to the Prime Minister’s approval. This provision incorporates into law the policy introduced on March 27 this year when the monetary framework was changed and the flexible fixed exchange rate was replaced with an inflation target and floating exchange rate. Despite very detailed discussion of the framework changes and the fundamental principles of the new policy, the Bank has often noticed widespread misunderstandings. I shall therefore outline the broad principles of monetary policy. Inflation is a monetary phenomenon The Central Bank was assigned a specific inflation target in the joint declaration which it issued, with the Government, on March 27. This stipulated that the Bank should aim for a rate of inflation as close as possible to 2½%. Tolerance limits were also set, 1½% higher than the inflation target and 1½% lower. The inflation target was defined as the twelve-month rise in the CPI. If inflation exceeded the tolerance limits, the Bank would be obliged to bring it back within them as quickly as possible.

At the same time, national governance, control and security considerations must be addressed. A neutral platform and set of rules at the central bank for the direct settlement of all payment types is also in this context an obvious option which we are considering. For settlement of this kind in Norwegian kroner at Norges Bank, one may envisage a system either directly linked to Norges Bank’s settlement system (NBO) or by linking to TIPS, as Sweden is now planning. In the near future, we will begin a dialogue with industry representatives. Progress on further modernisation of the Norwegian infrastructure must now be a paramount consideration. Security and national governance and control If a business enterprise performs tasks that are critical to the functioning of society, policymakers need to assess the regulations and systems that are necessary to ensure adequate national governance and control. This issue gains in relevance when more and more of our critical infrastructure becomes a part of or is owned by global tech giants and payment companies. The operation of ICT systems has largely been outsourced. This presents a number of challenges. The private financial market infrastructure (FMI) owners in the payment system have reported to Norges Bank that it is difficult to obtain necessary ICT expertise to operate and maintain key functions. If ICT operation and maintenance are moved abroad, it may, in the short term, provide access to better and more secure solutions. But we must also consider the longterm consequences.
In addition to that, work has commenced on reviewing respective jurisdictions’ preferential tax regimes against the standards outlined, to combat harmful tax practices. The standar4, which forms one of the four BEPS minimum standards, will require authorities to step up on transparency and substance rules for geographically-mobile activities, such as financial services. It seeks, for one, to prohibit the shifting away of income into preferential tax regimes where businesses have little or no economic activity. Such international developments will directly influence IBFC’s business model going forward. The world that we live in, since the creation of offshore Labuan in the 1990s, has drastically changed. What was relevant then is no more relevant now. We have no choice but to change with it. It is an opportune time for us to review of the current tax framework for Labuan. The purpose of this review is not only to ensure alignment with international best practices, but to confirm the continued relevance of such incentives in catalysing new growth areas. Tax incentives for businesses which have become irrelevant should be rationalised. The allocation of any preferential tax treatment must be supported by clear value propositions that are systematically measured across the qualifying period. Businesses that enjoy tax incentives will be benchmarked against the performance indicators that quantify economics and financial benefits. This is not meant to be onerous. It is a necessary tool to ensure that the economy grows in an inclusive and sustainable way and the public policies implemented bear the intended benefits.

Therefore, I believe that the cooperation will continue in the same spirit and will further advance through other forms of cooperation in various central banking areas. Concerning the NBRM, it is my pleasure to emphasize that with the ECB colleagues, we have jointly established the current progress of implementation of the recommendations from the Needs Assessment of the NBRM, and defined the follow-up steps. On this occasion, let me point out that the NBRM will remain committed to the implementation of the recommendations provided in the report, bearing in mind that many of them have already been incorporated in the NBRM Strategic Plan. Hence, the further support of the ECB and the Eurosystem in terms of experience and knowledge is of immense importance, as well as the assistance of our strategic partners, with whom we hope to continue working together on the implementation of the recommendations. Eventually, allow me to express my gratitude to the ECB and other central banks of the Eurosystem involved in the programme, as well as the hosts, hoping to have future opportunities to meet at similar event. BIS central bankers’ speeches  1
Advanced data analytics and machine learning are allowing them to analyse this data to derive much richer insights into customers’ financial needs. Incorporating big data into lending decisions, for example, can in fact help SMEs access finance more easily. 18. These first two forces - mobile connectivity and big data - have enabled the rise of platform ecosystems as a major new business model in finance. Armed with the goldmine of data generated by millions of connected users, these technology platforms are able to exploit huge network effects. They operate an ecosystem of diverse services, from retail to healthcare, savings to lending. They are providing integrated, end-to-end solutions, often customised to individual preferences. And the more users that engage with the platform ecosystems, and more extensively to meet their needs, the more data is generated. The platform ecosystems are using this competitive advantage to expand into new markets. 19. The march towards digitalisation is having a profound impact on consumers, who themselves have become a force for change. Younger or ‘digital-native’ consumers have come to expect the same lower costs, greater convenience and more customisation from financial services as they already obtain from other services, from online shopping to transport to food delivery. The days when transferring a bit of money involved taking a brisk walk to the bank’s branch during lunch hour are now a quaint memory. Embracing a Digital Future with Strong Anchors 20. The changes we are already seeing in banking will very likely accelerate in the next 10 years.

This is in fact going to be a growing challenge in much of Asia too. Finally, creating good jobs. In Singapore, the financial industry employs close to 200,000 people, most of them in relatively well-paying jobs. Technology will replace many tasks and even whole jobs in finance. But with proactive upgrading of skills to keep pace with new technologies, and with the continuing growth of our financial centre, we must and will provide good jobs in finance for many years into the future. How finance is being transformed 14. The digitalisation of finance is picking up pace, and will transform banking. 15. There are essentially three key forces driving this transformation: pervasive mobile internet access, the rise of big data, and the growth of platform ecosystems as a major new business 2/6  BIS central bankers' speeches  model in finance. The three forces are also reinforcing each other, and together transforming banking in more fundamental ways than we have seen before. 16. Smartphones and tablets are ubiquitous. Pervasive broadband access has coupled mobility with connectivity – so interaction is real-time and unconstrained by where you are. The smartphone is now our grocery store, our restaurant, our bank, and much more. 17. Second, big data. We have unprecedented computing power, coupled with cloud technologies that allows us to store and retrieve large volumes of information at low cost and ondemand. Firms are also gathering a lot more data from a wide variety of sources, including social media and e-commerce platforms.
At the same time, notwithstanding rate hikes in the US, mortgage rates in Singapore remain very low. The risk of a renewed unsustainable surge in property prices is not trivial. Second, investors continue to search for yield and safety in property markets across the world. Regional property markets have been buoyant and their respective authorities have, in the past six months, introduced further property cooling measures. For instance: - China, Hong Kong, South Korea, and New Zealand have tightened prudential requirements such as housing loan-to-value ratios and debt servicing ratios. - In Australia, New South Wales will be doubling the stamp duty surcharges for foreign investors. We must be vigilant that tightening measures elsewhere do not lead to spill-over of investor demand into the Singapore market. Easing the measures now would send a wrong signal. The calibrated adjustments by the government earlier this year do not signal the start of 4 / 10  BIS central bankers' speeches  an unwinding of the property cooling measures, as some commentators have suggested. MOF, MND, and MAS stated this very clearly in their joint announcement in March and this remains the position. The statement also said that the current Additional Buyer’s Stamp Duty (ABSD) rates and Loan-to-Value (LTV) limits would be retained. MAS has, on a few occasions, emphasised that the TDSR is a structural measure to ensure financial prudence and not a cyclical tool to be adjusted periodically. The adjustments in March were made for very specific reasons and purposes.

Third, we are working to expand the industry’s capacity to finance Asian companies’ international trade activities. Trade financing needs will grow as Asian companies expand and internationalise. We need innovative solutions to make trade finance an investible asset, so as to attract a broader pool of investors and provide banks the capacity to originate new trade finance lending. One such innovation is the Capital and Credit Risk Manager (CCRM), an electronic trading platform for trade finance assets. Launched just last month, with 16 financial institutions globally participating, the CCRM aims to enhance efficiency, improve transparency, and augment the risk management of trade finance assets distributed among financial institutions. If it is successful, it will help deepen the pool of trade financing available to companies. CREATING GOOD JOBS FOR SINGAPORE WORKFORCE Finally, beyond managing wealth, financing companies, providing insurance, and creating markets, the financial sector must create good jobs for our workforce. 8 / 10  BIS central bankers' speeches  In 2016, we saw a net increase of 2,800 financial sector jobs despite the slowdown in financial sector growth to 0.7% from 5.7% in 2015. Of course, this net figure masks much larger gross employment flows – of jobs created as well as jobs displaced. Let me talk about jobs displaced first, then jobs that are being created. Digitisation and automation are gathering pace and many global financial institutions have been downsizing and restructuring their operations.
But we cannot let this happen. We must reflect upon the  1  BOE’s Financial Stability Conjecture and Outlook, November 1999. 1  BIS Review 9/2000  lessons of the crisis and use them creatively to strengthen the economic systems, both domestically and internationally. This conference is timely. Macro modellers can use this opportunity to do some soul-searching. You can ask yourselves how macroeconometric modelling can facilitate good public policy in this post-Asian crisis era. For the critics and the sceptics, the Asian crisis is evidence that macro modelling has failed badly. For them, macro modelling is an old millstone in a new millennium. Perhaps resources should be freed up for more productive activities? However, the indications are that more and more central banks are embarking on projects to develop macro models of their economies. I take a sympathetic view, and not only because I am addressing a crowd comprised largely of economists and analysts. In my view, macro models can function as good navigational tools for the policymaker. But I must qualify that not all models fit the bill. How macro modelling can remain relevant to policymakers - five qualities I am no expert in the field and my comments today are solely from the point of view of a public policymaker. I believe that macro models must exhibit five qualities in order to be useful to policymakers. First and foremost, macro models must be responsive to structural changes in the economy.

It is rare for one model to be superior for all possible purposes: forecasting, policy making, conditional forecasts, testing hypotheses or investigating the effects of a previous policy change, for example. Different users will have different tastes, beliefs and needs and will prefer certain types of models.” I understand a number of central banks, including the Bank of England, have followed this path. I am sure that you will hear more of this later from the expert from the BOE himself. Such an approach is of course hugely taxing on resources and here in Asia, we could perhaps look upon it as a desirable goal to strive for. Finally, I also encourage a pragmatic approach. Here, I am referring to the practice of supplementing model output with sectoral analyses, survey data, market trends as well as value judgements. Modellers need to be aware of the limitations of their models. The complexities of the economy cannot be fully captured by a macroeconometric model, no matter how comprehensive its specifications. In particular, macro models cannot quantify variables such as panic, greed or the herd psychology of investors. As a result, even the predictions of the most sophisticated model have been thrown off by unexpected developments in the environment. This was clearly evidenced during the turmoil in international financial markets in August 1998, when the LTCM crisis unfolded. Conclusion The new Monetary Model of Singapore incorporates many of the new features and innovations in macro modelling.
1.4  Euro area membership: pros and cons for Iceland  According to the conventional economic theory of optimal currency areas (OCA theory; see Chapter 5), a given country is better suited for participation in a larger currency area the more its shocks are symmetric with shocks to the other countries in the currency area, the more open its economy is, the greater the share of trade is with the currency area, and the more flexible its labour market is. These OCA criteria centre on the balance between the cost of relinquishing monetary independence and the benefits of reduced transaction costs for trade (see also Chapter 6). If economic shocks hitting the candidate country and the currency area are symmetric, joint monetary policy will respond effectively to them, and a flexible exchange rate will not be needed as a shock absorber. The greater the share of external trade, the greater the benefits in lower transaction costs deriving from participation in a monetary union. At the same time, the effects of nominal exchange rate movements on the real economy will be less, particularly in small, open economies that price their exports in foreign currency and face given import prices in foreign currency. In other words, changes in the nominal exchange rate will have a smaller and more short-lived effect on the real  4  BIS central bankers’ speeches  exchange rate.

Along with the low demand of businesses and households, its performance reflects the selective and prudent behaviour of banks in lending. Regarding lending problems, the Bank of Albania deems that banking system’s balances are sound, sufficiently liquid, and well capitalised to comply with the economy’s demand for monetary assets. The positive position of its balances triggered the lending growth during the past years, while many countries in our region experienced contraction of lending. The banking system has reviewed and tightened lending standards during the last years; this behaviour to enhance the financial discipline of the economy is welcomed and shall positively support the long-term growth of Albania. On the other side, credit performance is increasingly experiencing the lack of demand, which is triggered by the consumers and businesses reluctance to carry out expenses and investments. Bank of Albania deems that, notwithstanding the cyclical situation of Albania’s economy, the perspectives on medium and long-term development remain positive. This is reflected by the interest of foreign investors to increase their exposure toward the Albanian economy. In particular, economy sectors related to exports, tourism and agriculture, which serves to the domestic and regional markets, provide unused development potentials. Bank of Albania deems that, within the sound business’ logic parameters, the Albanian entrepreneurs and consumers have room for a more active approach toward the growth of investments and their consumption. Financial markets showed low interest rate fluctuation and operated under sufficient liquidity terms in the second quarter of 2012.
A major part of a bank’s regulatory capital is held against credit risk. By contrast, securities houses invest primarily in liquid, marketable assets which can be readily sold, with illiquid assets typically a small BIS Review 21/1997  - 11 -  proportion of the total, generally 2% or so, and the bulk of a securities firm’s regulatory capital tends to be maintained for market risk purposes. It is therefore not obvious that we need to set the same detailed rules for banks and securities houses. That is not to say that we should entirely ignore differences in supervisory regimes, but rather that we should focus on areas where those differences are on a scale which seriously distorts competition. In other words, we should spend rather less of our time discussing risk weights, and rather more discussing risks. Globalisation and the Regulatory Response How far do these general principles, which I have discussed so far in relation to the UK, apply to regulatory structures in a global environment? One issue for supervisors is increasing globalisation. The biggest institutions now span 50 or more countries and may have 300 or more entities within the group. This is not new; globalisation in this sense has been a feature of banking certainly since the 1970s. What is rather newer is the way in which the firms are centralising the controls for all these far flung entities.

Since 1986, Review Teams have carried out focused visits to banks to evaluate the level of risk in an institution as well as the risk management systems in place to identify, monitor, and control these risks. And in 1995 we introduced a Traded Markets Team to focus on banks’ pre-processing models which can be recognised under the CAD (Capital Adequacy Directive) as well as sophisticated risk modelling techniques used by the banks to manage treasury activities. These teams spend on average about three days on banks’ premises, which may seem short, but the visits are highly focused, reflecting a great deal of work carried out in advance, not just between team members and the line supervisors of the bank in question but also by the bank itself in providing detailed answers to a series of questions. At the same time, the Bank has recognised the need to be more systematic in its approach to risk assessment and has announced its intention to introduce a more formal approach based on a common approach, known as the RATE model, to identify - using a series of qualitative and quantitative measures - the risks faced by the bank. RATE is an acronym for the three stages of the process: Risk Assessment, Tools of supervision and Evaluation. BIS Review 21/1997  -9-  In the future, by performing periodic risk assessments, we aim to gain a better understanding of the quality of management, the characteristics of the business and the risks the banks face.
Christian Noyer: The Euro area – challenges and responses Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at a breakfast for the Economic Club, New York, 18 April 2011. *  *  *  It is a great pleasure to be here today. It is also a privilege to address such a distinguished audience. I would like to take this opportunity to present my assessment of the situation in the euro area, particularly with respect to the difficulties we meet on sovereign debt. Three views on the sovereign crisis in Europe Broadly speaking, opinions and views expressed on the euro area by people outside the Eurozone, can be divided into three categories: hostility for, at least very few people, skepticism and support. First, outright hostility. It is unfortunately true that, in some circles, there is a spontaneous and deeply ingrained opposition to European integration. Since the euro is the most accomplished part of the integration project, it is only natural that it crystallizes those oppositions. Somber predictions about the imminent demise of the euro came predominantly from those deeply anti – European commentators. While those views, like all opinions, should be treated with respect, there is no point in trying to refute arguments which, in great part, are irrational and mainly reflect wishful thinking. Second, skepticism. It emanates mainly, but not only, from academic circles.

This is an essential element of robustness and, for outside investors, provides a strong guarantee of long term solvency. Its aggregate fiscal balance (with a 2010 deficit at 6,3% of GDP) is the most favorable of all advanced economies ( US is at 10,5%, UK at 9,6% and Japan at 7,7%). The same holds true for public debt which stands at 92% of GDP similar to 93% in the US versus 200% in Japan. But, of course, markets, and analysts do not look always at the euro area as a whole. Because fiscal policies remain national, they tend to assess separately the situation of public finances in each individual country. While most analysts would acknowledge the magnitude of the efforts undertaken, some tend to take a very pessimistic view about future outcomes. As I understand it, that pessimism can be articulated around two lines of argument. First, the amplitude of fiscal consolidation will negatively affect growth for a very long time making it impossible to service debt and leading unavoidably to some kind of restructuring. And second, this economic stagnation will trigger strong political reaction which, ultimately, would put the very existence of the euro area at risk. In short, the whole reasoning is based on the euro area, and more specifically, its periphery, being unable to return to normal growth anytime in the foreseeable future. This is a very dramatic assumption and it matters a lot because, as we all know, the dynamics of debt are extremely sensitive to forecasts about future growth.