samchain/econo-pairs-v1 huggingface dataset:
Importantly, these cross-country differences tend be driven by younger firms, which are those that are most likely to supply radically innovative ideas.19 The same product and labour market reforms that would spur innovation and adoption would also support better reallocation. Employment protection legislation in particular is thought to significantly reduce the ability of innovative firms to attract resources.20 This is not an argument to lessen workers’ insurance against labour market risks, rather to shift the burden of that insurance away from firms and towards society more widely. This is where “flexicurity” type policies – active labour market policies, unemployment insurances – could play a greater role. Reallocation is also linked to several other policies, which cannot be covered in detail now. They include aligning insolvency regimes with best practice so that resources can be released more quickly: for a firm to be resolved takes less than six months in Ireland, for example, while in Slovakia it takes about four years.21 And they include channelling financing more effectively to innovative firms, where we also lag behind the US due to the fragmentation of venture capital within Europe.22 Indeed, this is now part of the wider agenda of the European Commission of building a capital market union.23 Why reforms are a necessary but not a sufficient condition for growth Let me finally say a word on the macroeconomic environment needed for structural reform to succeed. As I explained earlier, reforms produce both expansionary and contractionary forces in the short-term.

Efforts are now underway in a variety of contexts to try to secure better coordination in these various initiatives, but it has to be admitted that in an ideal world they would not be quite so clustered together. That said, I would be the first to acknowledge that Basel II requires heavy investment in risk management systems and IT infrastructure, as well as radical changes in the risk management culture at some banks. However, this is a healthy development. I suspect that banks would have in any case needed to make most of the so-called "Basel II-related" investment if they wanted to stay at the top of their game. By agreeing to accept banks' internal risk management systems as the basis for the calculation of regulatory capital requirements, the Basel Committee has provided a powerful incentive for banks to upgrade their risk management systems. But this is only what they otherwise would have needed to do to be able to compete with the best. There are, however, some quite specific challenges for Asian banks in using the more advanced approaches under Basel II. One of the most important is the availability of data. Historically, many Asian banks have not collected the data needed to develop the type of models needed for IRB purposes. Some are only now starting to do so, and it will be several years before they have sufficiently rich data that it can begin to inform their credit risk management processes.
Notwithstanding the challenges facing the global economy and the recent increase in market uncertainties, the ranks and fortunes of the wealthy are expected to continue growing rapidly.   Global wealth is assessed to have the potential to rise 50 percent over the next five years, spurred by a surging middle-class in the Asia-Pacific, Latin America, and Africa.   The Asia Pacific region in particular is forecast to have the highest projected compound annual growth rate of 11.4 percent for assets under management from 2010–2015. Eight of the twenty fastest-growing high net worth markets are in the Asia-Pacific. Wealth management – the Singapore advantage As John Rockefeller once asked “The only question with wealth is, what do you do with it?” Those of you who manage wealth have a key role to play. You are at the heart of this explosion of wealth in Asia and in serving the needs of your clients, you help to intermediate  1  Merrill Lynch – Capgemini World Wealth Reports and Global Private Banking and Wealth Management – The New Realities, by David Maude. Market defined in terms of individuals with financial wealth of more than $ million. 2  $ trillion as at end 2010 as compared to $ trillion as at end 2001 – ML-Capgemini World Wealth Reports. BIS central bankers’ speeches  1  this growing pool of wealth and put it to productive use. And Singapore has a compelling value proposition in helping to make this happen.

In response, the international community has strengthened considerably the frameworks for anti-money laundering (AML) and counter financing of terrorism (CFT) and exchange of information on tax-related crimes. These developments will have implications for the wealth management industry globally. MAS is fully committed to safeguarding the integrity and reputation of Singapore as a clean financial centre:   One, we have a strong legal and regulatory framework on AML and CFT, in line with international standards.   Two, we have a rigorous regime of supervision to monitor compliance by financial institutions.   Three, we will strengthen cross-border co-operation to fight trans-national financial crime.   Four, we will step up vigilance against suspicious flows of funds arising from external developments. Let me give you an update on what MAS has done and will do in each of these areas. A robust legal and regulatory framework Singapore has a robust regulatory framework on AML/CFT. The key legislation is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA. The CDSA makes it a crime to engage in the money laundering of benefits from a total of 417 so-called predicate offences, ranging from criminal breach of trust, to dealing with property of terrorist and market manipulation. The CDSA makes the reporting of suspicious transactions mandatory for all persons who become aware of such transactions in the course of their work. MAS gives force to the CDSA by requiring all financial institutions in Singapore to have in place an effective AML/CFT framework.
Vítor Constâncio: Thomas Philippon’s contribution to macro-finance Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the ceremony awarding the Germán Bernácer Prize for Promoting Economic Research in Europe to Thomas Philippon, Madrid, 3 November 2014. *  *  *  I wish to thank Angela Maddaloni and Agnese Leonello, from the Directorate General Research, for their help in preparing this speech. Ladies and Gentlemen, I am delighted to be here today to award the 2013 Germán Bernácer Prize to Thomas Philippon, Professor of Finance at the Stern School of Business at New York University. Thomas Philippon is a renowned scholar with a wide-ranging research agenda, both theoretical and empirical. The numerous prizes he has won throughout his career, including “best paper” awards in several top journals, speak loudly about the academic quality of his contributions. Thomas’s research – being right at the intersection between macroeconomics and finance – is also highly policy-relevant, not least from a central banker’s perspective, as I will try to highlight today. In fact, many central banks and the ECB in particular have devoted considerable attention and actively contributed to the burgeoning literature on macro-finance. The financial crisis underscored the need for a better understanding of the linkages between the health of the financial sector and the performance of the real economy. Promoting economic research in this field is an essential step in the process of developing effective policies to ensure the stability of the financial sector and, ultimately, to foster economic growth.

Norman T L Chan: Reform and liberalisation in China – the positioning and future of Hong Kong Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Economic Summit 2015, Hong Kong, 1 December 2014. *  *  *  Ladies and Gentlemen, Hong Kong’s success story – borrowed time and borrowed place? 1. I am glad to be invited to address the Economic Summit 2015. This year’s theme is “Connectivity Breeds Opportunities” and “Breaking New Grounds for Economic and Trade Development”. I would like to share with you my views on Hong Kong’s positioning and prospect amidst the reform and opening up of Mainland China. I always believe that Hong Kong will be all the more prosperous as Mainland China continues to deepen its reform and open up further to the world. I do not subscribe to the view that our prosperity is built on borrowed time in a borrowed place. 2. There are some who think that time has changed and Hong Kong’s golden years are behind us. With China’s rise, Hong Kong will decline in its relative importance and relevance to the Mainland. Some also think that the Central Government will trigger a Plan B in favour of other Mainland cities to replace Hong Kong as its international financial centre if Hong Kong becomes unstable or is no longer reliable for whatever reasons.
Ultimately, the reforms were enacted, just as the then-vice president of the ECB predicted. But I believe it is fair to conclude that greater integration was a de facto prerequisite for the proper functioning of the euro, rather than a consequence of it. It was the crisis that made a compelling case for a common and reinforced banking supervision and resolution framework that would help break the bank-sovereign risk feedback loop.2 On one hand, in a context of banking crisis, the combination of State support to national banking systems and lower tax revenue exert pressure on public finances, impairing a country’s solvency. On the other, banks’ high exposure to their country’s sovereign debt compromises their own solvency, which may increase recapitalisation requirements. Memory can sometimes fail us, which is why I would like to stress the scale of that crisis. Offering some figures, Greece’s sovereign debt spread over the related benchmark was more than 1500 basis points in June 2011, while those of Portugal and Ireland were around 700 bp. As you know, the crisis hit Spain head on a year later in July 2012, with the market demanding more than 7% to finance us at 10 years.

We are also taking steps to rationalise the requirements that branches are subject to, including consideration of the removal of branch capital requirements as part of the Solvency II review, with the aim of limiting regulatory requirements to those required to deliver our objectives. We are, however, also conscious of the need to ensure a level playing field among all insurers operating in the UK – there can be no question of insurance branches being held to lower standards than insurers that are based here, which would distort competition and potentially increase the risks to PRA objectives. All insurers will be supervised proportionately based on their possible impact on safety and soundness and policyholder protection. We will assess our ability to rely on home state supervisory authorities, considering both their supervisory equivalence and level of co-operation with us, on an ongoing basis, and will take action as needed if we judge that we are unable to supervise a branch effectively. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  We have also been clear that some overseas insurers have UK liabilities that that represent too great a risk to PRA objectives, including the impact of branch failure on policyholders and Financial Services Compensation Scheme (FSCS) levy payers, to rely on branch supervision with its inherent limitations, even with strong co-operation from home state regulators.
In Norway, the Ministry of Finance performs an annual evaluation of the conduct of monetary policy in a separate report. Its assessment is partly based on a report by an independent expert group. The Governor of Norges Bank appears at a parliamentary hearing when the Standing Committee on Finance and Economic Affairs works on the report. The discussion concludes with a debate in the Storting. Advisory role With new and clearly defined economic policy tasks, Norges Bank stepped back somewhat as economic policy advisor. For example, the Bank has discontinued its annual assessment of fiscal policy in what was at the time labelled “budget letters”, and we rarely express our views on official reports regarding economic issues. Norges Bank is a consultative body for laws and regulations affecting the stability of the financial system. 43 Moreover, the Bank is obliged under the Act to inform the Ministry when in the opinion of the Bank, there is a need for measures related to monetary, credit or exchange rate policy to be taken by others than the Bank. 40  Helge Syrstad (2003): Sentralbankens uavhengighet [Central bank independence], Fagbokforlaget. 41  In a different context, professor Eivind Smith states another view that may be of importance: “It can be conceivably argued that independence [..] is possible only if the authority to appoint persons to the “independent” body is delegated to bodies other than those the appointees are supposed to be independent of.

Av direktør N. Ryggs svar til professor Cassel” [The way and the will. An issue for which Norwegians alone are responsible. On Director Rygg’s response to Professor Cassel]. See also: Wilhelm Keilhau (1952): Den norske pengehistorie, [Norwegian monetary history] Aschehoug for a review of the discussion between Rygg and Cassel. 14  At that time, small savings played a key welfare function in society. See Francis Sejersted (1973): Ideal, teori og virkelighet. Nicolai Rygg og pengepolitikken i 1920-årene. [Ideals, theory and reality. Nicolai Rygg and monetary policy in the 1920s]. Cappelen. 4  BIS Review 154/2010  The government and the Storting left much of the responsibility for economic policy to Norges Bank. 15 The recommendation by the Standing Committee on Finance and Economic Affairs in the central bank’s annual report for 1924 reads as follows: “The majority finds that it does not possess the necessary knowledge of all the interacting factors which under these difficult circumstances must affect Norges Bank’s decisions to be able to perform a critical review of these decisions.” 16 In Berge Furre’s words, there was: “... general agreement on the goal – the gold krone – from the political right to the political left.” 17 After the value of the krone had been brought back to gold parity, the international crisis reached Norway. Starting in the US in 1929, it led to falling prices and wealth losses in all the western economies. The gold standard was an important channel of contagion.
In this same respect, in the case of households and non-financial corporations there are still some segments in a position of high financial fragility. For instance, in the case of companies, the smallest firms are more vulnerable to a scenario of declining revenues. But, moreover, in a crisis such as that at present where - as I have said - the pandemic is affecting different regions and sectors in differing ways, the downturn in institutions’ solvency will foreseeably depend on their degree of exposure to such firms. Third, the materialisation of losses in the credit portfolio as a result of the pandemic will directly affect bank profitability, as the preliminary results of significant situations for 2020 Q1 suggest. Profitability was already low before the outbreak of the crisis: as in most European economies, the profitability of Spanish financial institutions stood, on average, below the cost of capital last year. The crisis has meant that this spread has tended to widen. The COVID-19 crisis will adversely impact banks’ already modest profit-generating capacity. As in the case of solvency, it will affect different institutions differently depending on their business model and on the distribution of their exposures to the sectors and regions most affected by the pandemic. Moreover, the crisis has bolstered the prospect of the current scenario of low interest rates remaining in place.

In these cases, flexibility in the use of the labour input factor takes precedence over the desire to retain workers, as the human capital acquired in their job is relatively low. However, even once these differences in the productive structure have been taken into account, the proportion of temporary contracts is found to be greater in each sector taken individually. Turning to R&D, the experience of previous crises shows that, as with productive public investment, firms’ investments in innovation tend to be cut in times of uncertainty and financial difficulties, with the subsequent adverse impact on long-term growth.15 One of the factors behind this is that innovative firms encounter comparatively greater difficulties when accessing bank financing, as they tend to have a lower volume of tangible assets to secure their loans. As in the case of education, future public spending should pay special attention to this item because, far from worsening public debt, it contributes to improving it in the long term by raising potential growth, and the current crisis will also likely boost the ongoing digitalisation of the economy. 15  See P. López-García, J. M. Montero and E. Moral-Benito (2013), "Business Cycles and Investment in ProductivityEnhancing Activities: Evidence from Spanish Firms", Industry and Innovation, 20:7, pp. 611-636, and S. Baker, N. Bloom, S. Davis and S. Terry (2020), "COVID-induced economic uncertainty and its consequences", Voxeu. 39  Conclusion To conclude, we are facing a shock on an unprecedented scale.
This means I can now pay my utilities provider, telephone company, or plumber by simply scanning their QR code using my smart phone and keying in the amount to be transferred. Let me now move on to the second way in which Technology can benefit Finance – strengthening risk management. Risk management and compliance have become major cost drivers in financial institutions since the global financial crisis. Processes have become slower and more cumbersome. The answer does not lie in lowering regulatory requirements or risk management standards. We know from 2008 what that can lead to. Instead, financial institutions should harness technology to make risk management and compliance more efficient and effective. Technology can improve the efficiency of risk management. JP Morgan is using machine learning to review loan contracts. This reduces the review time from 360,000 man-hours to seconds. It also minimises human errors. OCBC Bank in Singapore is using machine learning to monitor customer transactions realtime and across multiple channels. This allows the bank to identify fraudulent fund transfers and take more timely actions to recover the funds. Technology can make risk management less passive and more predictive by harnessing the informational value of data. Ping An Insurance has developed a system that detects whether a banking customer is lying about the reason for borrowing money. It is based on subtle changes in customers’ facial expressions, with the analytical algorithm based on 30,000 videos of real lending cases. According to Ping An, this has helped to reduce credit losses by 60%.

Last year, AFIN launched the API eXchange – the world’s first cross-border, open architecture platform to enhance financial inclusion. The API eXchange is a cloud-based platform that does two things: It is a marketplace, enabling financial institutions to discover and connect with FinTech partners through APIs on a globally curated platform. It also provides a sandbox environment for financial institutions and FinTech firms to design and test cross-border solutions. I have spoken so far of how the two musketeers – Finance and Technology – can and must come together to bring value and convenience to customers. But for consumers to be part of this ecosystem, there needs to be Trust – the third musketeer. Trust – the Musketeer who Binds Consumers to Finance Trust is similar to Aramis, the third musketeer who is faithful and values friendship. Trust is a key attribute for the success of a financial ecosystem. It is a shared responsibility among all the actors in the ecosystem. Banks in particular must be trustworthy so that customers have faith that their money and 7 / 10  BIS central bankers' speeches  data are safe with them. As Finance adopts more Technology, it must pay close attention to three risks, so as to maintain the Trust of consumers. First, cyber risk. As more financial services move online and collaboration among banks and technology companies becomes more pervasive, a growing risk that financial institutions are facing is in cyber space. The frequency, scale, and complexity of cyber-attacks are mounting.
While he has moved on to new challenges as head of the Public Company Accounting Oversight Board in Washington, the U.S. delegation to the Basel Committee remains in excellent hands. The hard work of leaders such as Roger Ferguson, the Vice Chairman of the Federal Reserve, and Jerry Hawke, the U.S. Comptroller of the Currency, and of other U.S. supervisors in the negotiations, has strengthened the quality of the capital rules. They have helped ensure that the New Accord will be flexible, forward-looking, and fit for the service of twenty-first century banking. Basel II: a blend of reinforcing policy approaches The long-term objective of fostering greater financial stability led to our decision to supplement the revised minimum capital requirements, which constitute the first pillar of the New Accord, with two equally important pillars. Although this may be an oversimplification, one could argue that each of the three pillars can be viewed as representing a different policy approach for a regulatory/supervisory framework. The first pillar emphasises the adoption of uniform rules. The second pillar relies more on the use of discretion in setting requirements for individual banks. And the third pillar can be expressive of a market-based approach. Each of these choices individually considered has its merits, but also certain downsides. The point I want to make is that the risk/reward features of each of the three options - rules, discretion and market discipline - have their own particularities and are not totally correlated.

Alberto G Musalem: Why focus on culture? Remarks by Mr Alberto G Musalem, Executive Vice President of the Integrated Policy Analysis Group of the Federal Reserve Bank of New York, at the Institute of Law and Finance conference “Towards a New Age of Responsibility in Banking and Finance: Getting the Culture and the Ethics Right”, Goethe-University, Frankfurt am Main, 23 November 2015. *  *  *  Thank you to the Institute for Law and Finance for the invitation to speak here today. It is a pleasure to be at Goethe University. The New York Fed has, for the last two years, been part of an international dialogue on the reform of culture in the financial services industry. Why culture? Let’s begin with the following hypothesis: environment drives conduct. What each of us learned from our parents governs some of our behavior, but not nearly as much as any of us who are parents would like to believe. Place ordinary people in a bad environment, and bad things tend to happen. That said, place someone in a good environment, and good things tend to happen. This is just part of being human. We observe and adapt. Before continuing, I would like to clarify that the views I express today are my own and may not reflect the views of the Federal Reserve Bank of New York or the Federal Reserve System. Part of any organization’s environment is its culture.