samchain/econo-pairs-v1 huggingface dataset:
But there have also been downsides and one of these has been the new and increased opportunities for financial crime, particularly in a crossborder sense. 13. In particular, the externally orientated economy of Hong Kong means that geopolitical events, and the increasing complex global sanctions as a response to those events, continue to challenge the sanctions screening and compliance programmes of banks. The HKMA has identified sanctions compliance – in particular the risks emanating from DPRK – as a core supervisory priority in the year ahead, and I am glad that there is an opportunity for my colleague to share some of our work in this area in one of the panel discussions later today. 14. Now to be clear : the developments I mentioned have actually driven changes for good. And I can say without hesitation that financial institutions are undoubtedly more capable of 2/4  BIS central bankers' speeches  combatting ML/TF risks than they were 10 or 15 years ago. Let me illustrate. Over the past few years all of our banks have put in place an assessment of ML/TF risk across the institution which informs the design of AML/CFT controls – this helps to ensure resources are targeted towards areas of higher risk. The banking sector also continues to pull its weight in reporting suspicious transactions - last year we saw a 25% increase from 2016 in terms of STRs.

The volumes of goods and services traded and amount of currency handled by individual traders may seem small. However, they are collectively significant and have implications for the conduct of monetary policy. For instance, the World Bank estimates small-scale border trade in Southern Africa to be around $ billion. Other studies have estimated that small-scale cross-border trading accounts for about 42% of GDP in Sub-Saharan Africa. Ladies and gentlemen, it is for this reason that this roundtable symposium has been convened with the following objectives: 1. To stimulate broader interest in the topic of small scale cross border trade;  2. To initiate an inquiry into the design of a World Bank project aimed at fostering small scale trade and innovative cross-border payment services in Southern Africa; and  3. To look at the opportunities for providing cross-border money transmission services that benefit both small-scale trade and remittance transfers. It is anticipated that this roundtable symposium shall come up with a refined design of the World Bank project to be launched later in 2011 focusing on five countries in Southern Africa, namely: Angola, Malawi, Mozambique, South Africa, and Zambia. A draft copy of the project design has been circulated to you all. The project will aim at enhancing trade through lower transaction costs for trade payments and improved access to financial services for smallscale traders. The goal is to increase small value trade payments through formal channels and transition payments away from cash by improving competition and innovation in the market for trade related payment services.
The Bank is confident that the FSPB will continue to play an important role in supporting these efforts – including through its work to identify implementation challenges, develop solutions and introduce improvements to reflect emerging issues. The financial industry has demonstrated leadership in so many areas – surely none can be as important as leadership in something as fundamental as professional and ethical conduct. On that note, let me once again commend and congratulate the FSPB on this important, and certainly most relevant initiative. 3/3  BIS central bankers' speeches

Vítor Constâncio: Interview in the Financial Times Interview with Mr Vítor Constâncio, Vice-President of the European Central Bank, in the Financial Times, conducted by Ms Claire Jones on 11 May and published on 16 May 2018. * * *  People have become concerned about a slowdown in growth, and we’ve recently seen a poor print for core inflation, which is now just 0.7%. What can the ECB do if growth and inflation continue to disappoint? And is there a risk that you don’t have enough ammunition left for the next downturn if the journey to the exit of the non-standard measures is slower than you currently anticipate? First, let me say that I don’t consider that the slowdown is such an unexpected or serious matter. We knew there would be a deceleration of growth from 2018 onwards. Perhaps some indicators in the first month have been more disappointing than expected, but very slightly so. I still believe that we will have the kind of growth that is forecast in our staff projections, so I am not worried too much about that as long as there is no extraordinary international event that derails world growth. So it’s not an immediate question what the ECB could do next. But it is, of course, to be expected that some time down the road there will be another recession. There is this concern that perhaps, then, monetary policy, with its standard measures, would not have enough policy space to respond to that.
The Bank considered that this was due to temporary factors such as the direct effect of earlier reductions in the interest rate on housing costs and some adjustments of indirect taxes and subsidies. The temporary factors were considered to correspond to 0.5 per cent inflation in 1999 and 1 per cent in 2000. However, even taking into consideration the temporary transitional factors, inflation was expected to be less than two per cent in one or two years’ time. The interest rate was therefore reduced to 2.9 per cent, a bit less than the European Central Bank’s repo rate. This illustrates how the Riksbank works. Painstaking inflation forecasts are worked out. The adjustment of monetary policy to reach the inflation target takes place successively without the Bank glancing at monetary policy in other countries, except to the extent that their policies affect the Riksbank’s own inflation forecast. By publication of forecasts, minutes from meetings and taking into account the Riksbank’s explicitly declared objectives, the clients, the Swedish people, through the Riksdag, can evaluate the policies carried out. BIS Review 59/1999  8

And indeed – the financial crisis has led to a comprehensive response from regulators and policymakers across the world. Compared to the pre-crisis era, international banks will face: –  substantially higher capital requirements,  –  higher demands on the quality of capital,  –  a leverage ratio,  –  an international liquidity framework, with both short-term and structural liquidity requirements (I am proud to note that the Basel Committee, less than a week ago, published the final standard for the net stable funding ratio, NSFR), and  –  a regulatory framework for global systemically important banks (GSIBs). When you add to this work related to reducing RWA variability and disclosure, you end up with a pretty impressive list – a list that represents an unprecedented leap forward in terms of global banking regulation. So then, how do I see this? Do I claim to know how all these new rules will play out together? Am I confident that there will be no inconsistencies and contradictions? No, definitely not. We have every reason to be humble in this respect. Monitoring and assessing the effects of reforms will therefore be imperative. Will the reforms be costly for banks in the short term? Yes, they will. Will banks have to adjust their activities? Yes, a return to pre-crisis banking behaviour is neither appropriate nor viable. Do I therefore think that regulation has gone too far and that parts should be undone? No, not at all.
This will curb demand for labour and investment growth this year. Both in Northern Norway and in the rest of the country, the situation varies across business sectors. Distributive trades and enterprises supplying services to households are expanding as a result of high growth in private consumption. Production for the corporate market fell through 2003. Demand for services in this market segment will pick up in pace with increased output in manufacturing and other industries. Strong competition has resulted in substantial restructuring. In Norway and other countries, manufacturing production is being moved to countries with lower costs. This may continue. EU enlargement, with 10 new members from 1 May, may also increase competition in some industries, particularly in the service sector. Public procurement is subject to EU-wide tendering. This may imply heightened competition for the service sector in Norway and lead to further efficiency measures. Our regional network reports that demand growth is high in the construction industry in Northern Norway, primarily fuelled by public investment and the Snøhvit oil field project. Similarly, in Western Norway investment in shore-based facilities has generated a positive impetus to the construction industry. Activity in 2003 in the rest of the country has been held up by public investment projects. Information from our regional network indicates that construction activity has picked up markedly in most regions. In recent year, commercial property investment has accounted for more than a third of total investment in services and distributive trades.

In concrete terms, membership of the euro should bring more stability and prosperity. In this respect, the Monetary Union has already taken considerable steps towards integration. But a common internal market and a single monetary policy alone is not enough to achieve this in the long run. With stricter budgetary rules for euro area countries, a stability mechanism and banking union, the Monetary Union is in a considerably better position today that it was at the start of the crisis. But despite these steps towards integration we still can’t speak of a completed Monetary Union. To sit back now, given what has been achieved, would therefore be wrong. Developing the Monetary Union further is a permanent undertaking. As a matter of principle, the prosperity of each individual country in a monetary union always depends on the financial and economic policies of the other Member States. Member States find themselves, as it were, in a community with a shared destiny. All governments are therefore well advised if they take the other Member States into account and coordinate their policies where appropriate. Member States thus not only need a common monetary policy, they also profit when they share more sovereignty in other policy areas. When I talk about “sharing sovereignty”, this in no way means that Member States lose their independent decision-making authority, let alone their national identity. On the contrary, the more sovereignty Member States share, the more influence they can sometimes gain. Let me illustrate this with an example.
During 2013, consumer spending increased by 2.2%, while housing investment – which includes both the construction of new dwellings and the value added in the facilitation of housing transactions – rose by almost 10%. Together, these two factors accounted for around two thirds of the rise in activity, though note that is in line with their overall share in GDP. This pickup in household spending has not so far been driven in the main by faster growth in incomes: real household income after tax rose by just 1% in the year to 2013 Q3. Press reports sometimes characterise the rise in spending as being fuelled by borrowing and so destined to end in tears. This is not really the case. It is true that unsecured lending growth has picked up over the past year, but the pace of growth is still well below the levels prevailing during the pre-crisis period. And while there has been an expansion in gross mortgage lending accompanying higher housing activity, there is little sign that this has been used to release housing equity in order to finance higher consumer spending. The rise in spending has, though, been associated with a reduction in the fraction of income that is saved. This rose sharply in the aftermath of the collapse of Lehman Brothers as households responded to the increased uncertainty about income and job prospects by building up extra savings, or reducing their debts, as a precaution.

These include critical thinking and analysis, problem-solving, and skills in self-management such as active learning, resilience, stress tolerance and flexibility. For any organisation to grow and sustain change, strong, wellrounded leadership is critical. Not all these aspects can be gained through formal learning alone. It has to be reinforced through robust on-the-job mentoring and organisational-wide coaching culture. Finally, culture is at the heart of any organisation’s ability to transform and remain relevant. Ron Kaufman once said that when you “convince people, you will win their minds. Inspire people and you will win their hearts”. For organisations seeking to transform and become more adaptive and innovative, culture change is often the most challenging part of the journey. Any attempt to drive transformation is unlikely to succeed if there is resistance to the call for action. 2/3  BIS central bankers' speeches  As an organisation, Bank Negara Malaysia has also had to assess and reflect on how we work, and consider better ways to instil the desired norms and corporate culture. What we have consciously nurtured over time has been a strong collaborative culture. What we want to keep getting better at is to be open to experimenting more, learning from mistakes quicker, and deepening our coaching and feedback culture. Our policy mandates are stress-tested internally by a work culture where colleagues are encouraged to speak up and challenge one another so that we reduce blind spots.
Given that inflation is anticipated to be below target for a large part of the coming two-year period, I think one can argue that there has been scope to lower the repo rate somewhat more than we have done recently. But I have, like my colleagues, decided against this. There are several reasons for that – interest rates do not always have to be changed when inflation prospects differ from the target. The reasons are that growth is currently firm. We believe that the problems in the labour market are chiefly due to structural factors; it is therefore likely that they would only be marginally affected by lower interest rates. Moreover, the demand for labour is expected to begin to rise during 2005-2006, Swedish monetary policy is already loose, real interest rates are low, household borrowing is increasing quickly and house prices are rising - and have been for a long time. Even lower rates could further fuel the willingness to borrow, entailing risks in the long term in the shape of a growing property bubble. In addition, if monetary policy is to try to fully offset the low import prices by driving up domestic prices, for example in the service sector, this could lead to a domestic inflation rate that would be difficult to stop if economic activity were to continue to develop strongly for a longer period and resource utilisation thereby to rise.

The economic downturn and unemployment which often follow when the bubble bursts will primarily affect the most vulnerable segment of the labour force and have very negative distributional effects. Monetary policy cannot and shall not steer price developments in the housing market or other asset markets, but a monetary policy that inspires confidence will curb wealth effects because the potential for the emergence of bubbles is reduced. Nominal stability is the best contribution monetary policy can make to the distribution of income and wealth. Interplay between economic policy components - the role of monetary policy The basis for achieving stable economic growth is created through a successful interplay between the various components of economic policy, ie between fiscal policy, monetary policy, the system for income settlements and other measures aimed at improving the functioning of the economy - often referred to as structural policy. The Norwegian economy is vulnerable to abrupt shifts in the global economy. We cannot fully shield ourselves against external shocks, but we can curb the effects to ensure that economic developments are optimal in the long term. Fiscal policy in Norway has had an important role in stabilising demand and production. The Petroleum Fund shelters the mainland economy from the effects of oil price fluctuations to some extent. Developments in the real economy are of importance to price and cost inflation and hence for Norges Bank’s setting of interest rates.
Due to favourable developments in prices for goods produced in Norway compared with prices for imported goods, our terms of trade have improved. The impact of the rise in oil and  2  BIS Review 107/2007  gas prices is particularly strong, but the terms-of-trade gains for the mainland economy have also been high. The labour market and the orientation of monetary policy Developments in recent years have paved the way for strong growth in employment, and the same applies today now that the cyclical upturn is in a mature phase. The labour market is tight. There have never before been so many vacancies in relation to the number of unemployed. Unemployment has fallen sharply in the past few quarters. The rate of decline and level of unemployment are reminiscent of two previous cyclical peaks, the one in the mid-1980s and the other that started in the late-1990s and continued into this decade. Both expansions culminated in a sharp rise in wage and cost inflation. While unemployment is now very low, the current upturn with high productivity growth and low growth in real wages has, from a corporate perspective, resulted in a reduction in employees’ share of corporate earnings. Historically, however, unemployment has been high when the wage share was low. What are the factors that can explain the current situation of both low unemployment and a low wage share? Developments in unemployment and the wage share have probably been influenced by a number of positive supply-side conditions.

With a predictable monetary policy, market participants can react to new information in a way that contributes to stabilising developments in output and inflation. Norges Bank’s interest rate forecast satisfies two main criteria. First, the interest rate is set with a view to stabilising inflation close to the target in the medium term. The horizon will depend on disturbances to which the economy is exposed and the effects on the path for inflation and the real economy ahead. Second, the interest rate path provides a reasonable balance between the path for inflation and the path for capacity utilisation. In the assessment, it is taken into account that asset prices, such as property prices, equity prices and the krone exchange rate, can also influence the prospects for output, employment and inflation. The results of this trade-off are presented in the Monetary Policy Report in the form of a chart that presents central projections for the interest rate, inflation and capacity utilisation in the economy. Even though Norges Bank publishes an interest rate forecast, this does not mean that the interest rate will follow this precise path throughout the projection period. Forecasts of inflation, output, the interest rate and other variables are based on an assessment of the current situation and a perception of how the economy functions. Disturbances to the economy may result in changes in the forecasts. Data revisions imply that the current economic situation is not fully known. Our ambition must be to reduce uncertainty with regard to our own response pattern.
The agreement announced recently between five political parties concerning measures to strengthen the formal status of the Riksbank is therefore a good thing, even though it amounts in many respects to a codification of current practice. It is a clear demonstration that the political system supports a monetary policy that focuses on price stability consistently and over the long term. Increased confidence in the low inflation policy among economic agents implies greater opportunities of supporting economic activity in practice when the conditions for inflation so permit. Some voices in the public debate have chosen to see this as a move towards a monetary policy that is less democratic. Such an interpretation is comprehensible but no less misleading for that. It is the Riksdag, Sweden’s parliament, that lays down monetary policy’s objective and elects the governing board, which then appoints the members of the directorate for a term of six years. The proposed changes mean that the practical execution of the monetary  BIS Review 68/1997  -3-  policy objective as established by the Riksdag is entrusted to the Riksbank. We can concentrate on this task and build up the competence that is needed to do the job properly. At the same time there is less risk of monetary policy being influenced by various short-term considerations. One way of describing the consequences of the reform is to say that the delegation improves the conditions for attaining the objective of low inflation that the Riksdag has ordained.

When inflation fell back in the early 1990s it became apparent that the investments in real estate had been founded on unrealistic expectations that prices would continue to rise. The property market collapsed and credit institutions were hit by massive loan losses. The bank crisis accordingly accentuated the economic downturn in Sweden. BIS Review 68/1997  -2-  Inflation is also associated with an arbitrary redistribution of income and wealth, often contrary to the ambitions of distribution policy. Referring again to the 1980s, the chief losers from the inflationary economy at that time, with the resultant price fall, were probably not the property speculators but households whose bank savings were eroded by two-digit inflation and whose wages were only subsequently adjusted for inflation. Price stability is the Riksbank’s objective The reason why monetary policy is assigned the task of safeguarding the value of money is basically simple: by adopting an appropriate monetary stance the central bank can choose, or at least strongly influence, the rate of inflation. In the short run price increases are of course affected by many other factors such as the state of economic activity, the direction of fiscal policy, wage formation, etc. But in the long run inflation is a monetary phenomenon. By controlling the supply of money in a wide sense, in the long term the Riksbank can also govern movements in the value of money and in inflation. Interest rate management by the Riksbank cannot, on the other hand, generate economic growth and employment in the longer run.