samchain/econo-pairs-v1 huggingface dataset:
The second challenge is maintaining high standards of credit underwriting and risk management in the face of more intense competition. It may be tempting for service  2  BIS Review 64/2008  providers to lower underwriting standards in order to compete for market share in the face of greater competitive pressures. In view of the severe consequences of the current global market turmoil that originated from poor underwriting standards in the US subprime market; this temptation should be resisted at all costs. Let me assure you that the Bank of Thailand, as prudential supervisor of banks, will remain vigilant to ensure that similar problems will not happen here. The third challenge is managing security risks associated with the use of new technology. Advances in IT and communications technology have enabled banks to provide faster, cheaper, and safer electronic banking services to an increasingly larger group of customers. However, proliferation of internet banking, mobile banking, and e-payment also increases the risks of IT fraud, network security breach, and identity theft, etc. If these risks are not properly managed, they could have severe financial and reputational consequences for the banks. In this regard, I urge banks to pay close attention to the best-practice guidance on IT and e-banking security risk management that we issued some time ago.

I would like to strongly urge banks and service providers to do your part in helping to raise the level of financial literacy of your customers, so that they are capable of making wellinformed decisions on the financial products they really need that will not inadvertently lead to problems for themselves or for the service providers later on. Ladies and Gentlemen, I would like to spend the next few minutes sharing with you what I see as some of the key challenges that the retail banking industry face, going forward. First, competition is likely to intensify further, both between banks themselves and with nonbanks. Banks will continue to diversify their sources of revenue by continuing to increase the share of consumer loans in their portfolios. An increasing number of middle-class customers – both wealthier and more financially educated – will be more demanding about the kind of financial products and services that they require. Higher competition and more demanding customers will drive service providers to become more customer-oriented in their product offerings in order to create some product differentiation and brand loyalty in the largely commoditized market. Competition will also likely drive service providers to seek new untapped opportunities which will increase the size of overall market. By virtually all international benchmarks – whether they be debt service or debt to income ratios – the average Thai household still has a relatively strong financial position. Thus, the challenge for service providers is to selectively target viable customer groups among the previously underserved segment.
We as a central bank also vested enormous efforts making many adjustments in data collection, production and communication process that helped us smoothing the pandemics effect on the production and dissemination of statistics. The pandemic in the initial phase tested the resilience of the statistical system, i.e., the ability to continue with timely supply of statistical data. But it also created demand pressures for new data that was not produced by the official statistics. Data on the epidemiological curve became highly needed as they are leading indicator on how the economy will evolve and how economic and social policies should be calibrated. At the same time, there has been growing demand for real-time high-frequency data on the economy, as many of the historical systematic linkages that policy decisions were based on were broken. For instance, we have been intensively using google mobility data during the lockdowns to assess the behaviour of consumers. We have also leveraged on the private sector data for payment card transactions, as an indicator to assess the personal consumption dynamics and its structure. Although highly useful, the abundance of data also poses a challenge for statisticians, as accentuated by the health crisis. As we go further down the road, the need for quick and granular data, for example on the changes of the economic behaviour of the agents, the longer term scarring to the economy, or the impact of the policy actions on economy will be a "must".

More fundamentally, the main risks to the inflation outlook stem from potential second-round effects in wage and price-setting behaviour triggered by ongoing oil price rises. In this respect, it is essential that the social partners continue to meet their responsibilities. Against this background, we will continue to monitor inflation expectations very closely. Particular vigilance is required in order to ensure that longer-term inflation expectations remain well-anchored in the euro area. Turning to the monetary analysis, money and credit have continued to grow robustly in the euro area over the last few months, mainly driven by the prevailing low level of interest rates. In particular, the growth of mortgage borrowing remains very strong. In this context, price dynamics in housing markets need to be monitored closely. The liquidity situation in the euro area remains ample by all plausible measures, indicating risks to price stability over medium to longer horizons. In conclusion, oil price developments have again led to upward revisions of inflation projections for the year ahead. At the same time, medium-term domestic inflationary pressures still remain contained, while the balance of risks to the baseline inflation scenario is tilted to the upside. Cross-checking the economic analysis with the monetary analysis confirms the need for particular vigilance in order to keep medium-term inflation expectations firmly anchored at levels consistent with price stability. By achieving this, monetary policy is making a significant contribution towards economic growth and job creation in the euro area.
This is further supported by the key content of the sessions covering the critical issues to be deliberated by the stakeholders involved in AML/CFT. II. Emerging trends and risks of money laundering and terrorism financing  It is a permanent battle to put in place a robust AML/CFT regime that could effectively deter and detect serious offence by removing the economic incentives attached to the crime. There will be continuous and sustained attempts to out-maneuver the AML/CFT system. For this, let me share some thoughts with you on the second theme of this speech, which is on the emerging trends of money laundering and terrorism financing in this region. Today, while the purpose and criminal intent remains unchanged, i.e., to disguise illegal proceeds as legitimate assets, the launderers are now using more complex structures and sophisticated methods to launder money and circumvent the preventive measures that has been put in place. Allow me to share four examples as follows: 1. It is observed that instead of the simple structuring of transactions (or smurfing), recent cases have highlighted the increasing use of third parties to layer the proceeds of crime to distance them from its origins. The setting up of front shops and complex trust accounts using nominees are some of the common tools increasingly being used by the perpetrators;  2. As reflected in the FATF Strategic Surveillance Survey 2008, there is also an increasing trend of criminals leveraging on technology advancements to further their activities.

The 2018 task force on artificial intelligence led to the publication of a first report, and in turn to the launch of experiments with volunteer players, which shall continue in new forms next year. This work is a first step towards the publication of principles of governance for AI algorithms. The working group on remote customer identification led to a number of regulatory changes this year. We are now supporting ANSSI’s efforts to publish a framework so that these changes can be fully implemented. We have also set up two working groups with players from the crypto-asset sector. The first, which published its report last Wednesday, examines all anti-money laundering methods used by digital asset service providers: it highlights the potential of blockchain technology in transaction tracing, and sets out technical avenues for ensuring that electronic transfers meet the transparency requirements recommended by the FATF. The second aims to promote dialogue between digital asset service providers and banking players, to help cryptoasset entrepreneurs get access to the bank accounts and services that they need. II. The digital revolution in payments I would like to turn now to a subject that is closely linked to Fintechs: payments in the digital era. Innovations in the field of payments are disrupting the traditional split between central bank money and commercial bank money. People are using less and less cash, and therefore less and less central bank money, and more and more contactless payments.
Hence, Exter was successful in realizing two objectives in a single operation: price stability and banking system stability. While the broad objective of price stability remained unchanged over the years, the banking system stability was expanded to cover the entire financial system and, therefore, today, the central bank has been charged with the responsibility for maintaining financial system stability. Exter’s wish was that the new central bank would consolidate, under one umbrella, all financial operations which had been widely scattered at that time. Thus, the central bank was expected to encourage the public to make greater use of banks to keep their deposits and channel funds to the government securities market by building confidence in same. While submitting the draft bill on the central bank, Exter remarked that “good central banking is less good law than good practice”. What he meant by this is that a central bank should not rely solely on the legal powers given to it. The strict application of such legal powers sometimes leads to the destruction of sound market relationships. To make central bank policy more effective, it has to make its presence felt by others. Exter advised that it should be done “through the development of day-to-day relations of confidence and understanding between itself and various banking institutions than through the exercise of all of the powers given it” under the law.

Within that limitation, the Exter Report has highlighted that “the greatest significance of the introduction of a Central Bank lies in the power of the bank consciously to influence the supply, availability and cost of money in Ceylon”. While this conscious action constitutes monetary policy, it differs from what a currency board does and even from a central bank’s creation of money through similar action by foreign exchange operations. Foreign exchange operations are compulsory and a central bank has no choice in that. When commercial banks offer foreign exchange to the central bank, it has to buy that exchange and issue local currency. But, a central bank’s credit creation through domestic operations is discretionary and voluntary. So, a central bank is in a position to regulate such money creation depending on the situation and the credit requirements of the economy. Hence, Exter did not expect the new central bank to have an open policy of creating money to finance the domestic operations. He wanted such operations to be conducted at the sole discretion of the bank. Exter also empowered the central bank to examine and supervise commercial banks in order to strengthen the banking system. Such powers would prevent banks from engaging in unsound practices, protect the depositors against bank failures and, with “lender of last resort” facility, provide liquidity in times of crises. Up to the establishment of the central bank, there was no any attempt at regulating commercial banks in Sri Lanka.
When new products are introduced, a price that is lower than the direct costs may, however, have a positive effect on efficiency. Since price affects demand, a low price can contribute to extensive use of the service at an early stage. This ensures that economies of scale and any positive network externalities are exploited at an early stage. By positive network externalities, we mean that the utility for each individual system user increases when additional users join the system. The system where the network externalities are probably strongest is the EFTPOS system (a system for card payments in electronic point-of-sale terminals). Here, increased card use leads to growth in the number of payment terminals which in turn provides the basis for increased card use. When the price is low, the indirect costs may be covered later by not reducing prices correspondingly when use increases and development costs have been repaid. As an alternative, the fixed costs must be covered by crosssubsidisation from other payment services or other types of services offered by banks. 2  BIS Review 66/2002  Both economies of scale and positive network externalities suggest that the number of producers of payment services will be limited and that they will use common standards. A single producer will ensure full exploitation of economies of scale, but at the same time, this producer would be able to charge monopoly prices. A single producer also implies a concentration of risk which may be undesirable.

Monetary discipline Unlike a fixed rate regime in which a national government can only issue currency if it can provide the backing (such as gold reserves), a floating rate regime allows national authorities to issue currency freely to suit their domestic needs. As we know, national central banks play a crucial role in controlling or influencing the supply of money. By changing interest rates or the price of money, central banks indirectly influence the expansion of credit and thus money  BIS central bankers’ speeches  1  supply. Good monetary discipline is clearly needed to ensure that money or credit expansion does not become out of control. The initial experience in the US with the fiat money regime was not at all successful or pleasant. There was runaway inflation, rising from 5.8% in 1970 to 11.2% in 1979, and, as a result, Paul Volcker of the Fed had to introduce drastic measures to combat inflation by pushing interest rates to as high as 19%. It is now widely accepted that the breakdown of monetary discipline will lead to financial chaos with huge shocks to macroeconomic and financial stability. After the recent Global Financial Crisis, we have come to realise how important it is to maintain the appropriate monetary discipline. It has been argued by many economists that one of the contributing factors leading to the Crisis was that the US policy interest rate was set too low for a prolonged period, which further fuelled credit growth and the housing bubble in the US.
Our experience is that changes in the Norwegian interest rate level only have a predictable effect on the krone exchange rate when the change in interest rates also contributes to stabilising inflation. However, the relationship between interest rates and price and cost developments is uncertain. The setting of interest rates thus requires the use of professional judgement and discretion. The basis for exercising discretion is subject to limitations, however. Should any doubt arise as to whether the interest rate is oriented towards nominal stability, this would trigger substantial capital movements. House prices and real interest rate after tax Index 160  140  Per cent  8 Real house price (left-hand scale)  4  120  0  100  -4  Real interest rate (right-hand scale)  80  -8 1980  1984  1988  1992  1996  2000  An inappropriate setting of interest rates could easily jeopardise financial stability in the domestic economy. The experience of Norway and other countries shows that credit and property markets can be very unstable. If interest rates are kept at too low a level for too long, credit demand will rise  BIS Review 14/2001  3  sharply, as we witnessed in the 1980s. At that time, rising property prices generated expectations of further price increases, which in turn led to rising credit demand. When the bubble burst, recession ensued with falling asset values, a debt crisis and a growing number of bankruptcies.

Petroleum investment has increased considerably in recent years, but is projected to fall somewhat towards the end of 2009. According to the petroleum investment intentions survey from Statistics Norway, petroleum investment will remain high in 2010. Exploration and production spending appear to be increasing markedly, but the increase will to some extent be offset by reduced spending on goods and services for field development and fields in operation. The change in investment composition will contribute to reducing demand for goods and services from the Norwegian supplier industry. Several investment projects are planned on the Norwegian continental shelf for the coming years. There are indications that some of the planned investments will require an oil price of around USD 70 per barrel to be profitable. Our projections are based on a rise in the oil price in line with oil futures prices. These prices suggest that the oil price in 2010 and 2011 will be USD 5-10 above the current level. Petroleum investment is therefore projected to be high in the period 2010-2012. Should the global growth outlook deteriorate again, the price of oil may fall markedly. This might lead to a decline in oil investment and also have an adverse impact on the wider Norwegian economy. On the other hand, a fall in oil prices normally results in a depreciation of the krone. Should the krone depreciate for an extended period, inflation may become too high.
The financial support through the banks’ credit market during the crisis years has been moderate, but permanent, therefore supporting the economic recovery of the economy. Anyway, in May 2013, the annual credit growth was 3.7%, pointing to a gradually slowing pace during 2012 and first half of 2013. Possible reasons for such trends in the credit market are: effects of financial deleverage process of foreign parent banks, banks’ deteriorating risk perceptions against the backdrop of still anemic economic activity and uncertainty regarding the global environment, and the present (though moderate) increase of credit risk in the system, as well as the potential. The NPL ratio reached 11.4% in the first quarter of 2013 being one the main challenges for the banking system that is closely monitored by the NBRM. Still, it is among the lowest in the group of the EU candidate countries. Regarding the future prospects for credit flows it can be noted that stable funding sources (loan-deposit coverage ratio of around 90%), strong liquidity position, and capital adequacy ratio continuously being twice as high than the minimum required, point to room for further increase of lending in the domestic economy. The improvement of the banking sector regulation in view of further implementation of the Basle and EU standards will remain being a high priority on the agenda in this field.

Further improvement of our statistics, bringing it closer to the EU requirements, remains one of the key priorities of the central bank. Just to summarize, in view of the global environment, the current macroeconomic performances of the Macedonian economy are relatively favorable. Anyway, just like in the previous years, the risks are still present and they are related to the expected recovery of the external demand, the sentiment on the global financial markets and the world prices development. Continuation with the structural reforms is a key in eliminating structural bottlenecks and paving a way for sustainable growth and faster EU integration process. The NBRM will continue with regular monitoring and analysis of the developments in the economy and remain prepared, if necessary, to undertake appropriate measures to preserve macroeconomic stability. BIS central bankers’ speeches  3
We believe the systemic importance of the payments infrastructure means that central banks and system participants have a common interest in acting together to address the evolving risks. Let me identify some of the major priorities we see in this area that require further collaboration. Higher standards for the core of the system During the past few years, central banks and securities commissioners have developed new standards for the design, operation, and oversight of payments and securities settlement systems. These new standards have been proposed for incorporation in the Federal Reserve’s Policy Statement on Payments System Risks. We are in the process of working, together with other U.S. supervisory and regulatory agencies, to assess the extent to which the affected U.S. systems meet these new standards. We feel that it is especially important for the entities that form the heart of payments and settlement systems to work toward higher standards for safety and soundness and operational resilience. Given the increased scale of activity handled by these entities, the greater concentration among the major participants, and the increased exposure to cross-border activity, these systems today need to meet a more exacting set of standards, and of course this is also true for entities that are less systemically important. More specifically, we would like to see a greater focus on strengthening risk management practices and ensuring that the financial resources of system operators are adequate to deal with the risks to which they are exposed.

Mr. Chairman, in good times, we normally take the stability and integrity of our systems for granted. Perhaps one of the key lessons from the current crisis is that we should never, ever, take stability and integrity as being “given” conditions, in the future. But, let’s remember that memories are short. This global crisis will almost certainly be forgotten in a few years time. It is also likely that if we enjoy a strong run of growth and prosperity for a few years, our minds too will probably dismiss thoughts of destability. Today’s grim discussions would then be relegated to the drab background, and in its place, the glitz and glamour of fast growth, handsome profits, stunning incentives, and fabulous wealth would reign supreme. Unfortunately, Mr. Chairman, if and when that happens, the world would unconsciously drift into the danger zone yet again. Needless to say, if we do not want such an eventuality to take place, the price would be intense vigilance on the part of the regulators, governments, media and the academia. I know that is going to be tough, but in the interest of all stakeholders, I sincerely hope it works and that the academia, governments, media and regulators would face up to that challenge.