samchain/econo-pairs-v1 huggingface dataset:
20.Let me be clear that this is not technology at any cost. We must fully understand the pros and cons of what these changes will mean to banks’ AML systems and controls. At the same time we cannot outsource this responsibility to technology firms. Some of you will know from our work with a Regtech firm specialising in testing screening systems that we expect banks to understand why a machine makes the recommendations it does. 21.Going forward, if we are going to address the challenges, we need to be ambitious. The HKMA plans to move in the coming months from a one-to-one type engagement in our Chatroom, to a many-to-many type engagement where banks, stored value facility (SVF) operators, technology specialists and the regulator come together to tackle AML pain points. This will initially target one or two challenges, but will aim to build momentum and turn the successes into mainstream AML solutions that contribute to effectiveness and efficiency. 22.But that perhaps is still not enough. New technology comes at the right time not only for the regulatees, but also for regulators. With the advice from technology experts, we will embark upon a study to enhance the timely retrieval and transmission of AML/CFT related information and data from banks and SVF operators in a digitalised and efficient way, as opposed to the old-fashioned way of regulatory returns and surveys.

The net zero challenge and the UK's role as a global financial hub The transition to a low emission world brings with it a unique set of risks – such as the risk of disorderly transitions away from emissions-intensive assets. Only the financial sector has the capability to marshal the vast sums of investment needed to help businesses and individuals structurally reduce emissions and move in an as orderly way as possible towards sustainable alternatives. The IEA expects that the world will need annual clean energy investment of $ trillion by the end of the decade to limit warming to 1.5oC2, while other recent studies have estimated that between $ trillion and $ trillion of cumulative investment will be required to meet global net-zero emissions by 2050.3 One of the key areas of COP27 is mobilising climate finance for developing countries. The UK's position as a global financial centre means it has a pivotal role to play in relation to the provision of sustainable finance to tackle climate change. This was strengthened further when the UK Government published its UK Green financing framework in June 2021 followed by the launch of the first green gilt issuance in September 2021 which raised £ billion and was the largest inaugural green bond issuance ever undertaken by a sovereign. Total green gilt issuance for the financial year 2021-22 raised a total of £ billion, and further green gilt issuance of £ billion is planned in 2022-23.
In the euro area, by contrast, the adoption of active budget policies ought to have been discouraged by the greater frequency of supply shocks. 20  Akkoyunlu, S., I. Neustadt and P. Zweifel (2008), Why Does the Amount of Income Redistribution Differ Between United States and Europe? The Janus Face of Switzerland, Working Paper by Zurich University’s Socio-Economic Institute, No 810. 21  It measures the variation in the budget balance, as a percentage of GDP, for a 1% variation in GDP. 22  See Table 9 in Girouard and André (op. cit.). 23  OECD (2008), Economic Outlook, No 83. 8  BIS Review 135/2008  3.4  Structural factors  I shall now discuss structural factors, which are political-cum-institutional, as well as more strictly economic in nature. 3.4.1  Political and institutional factors  In general terms, factors of a political and institutional nature offer greater assistance in understanding the differences in fiscal policy compared with monetary policy. In particular, there is a strand of political economy literature suggesting that the principle of a majority system as implemented in the US political system, together with more marked fiscal centralisation, tends to prevent minority interest groups from achieving the political power needed to foster greater redistribution of revenue. 24 A deep-seated tradition of stringent safeguards for private property and the legal system itself have further curbed redistribution trends in the US. Even the United States’ federal structure may have helped to restrict the role played by central government in budget policy.

(2007), Convergence and Anchoring of Yield Curves in the Euro Area, ECB Working Paper No 817. 14  See Christiano, Motto and Rostagno (op. cit.). 15  See Bini Smaghi, L., Il paradosso dell’euro (2008), Rizzoli. 6  BIS Review 135/2008  whole to be less proactive and more regulation-based than in the United States, where discretionary powers are broader. I would like to begin by briefly analysing government budget’s two component parts, namely automatic stabilisers and discretional measures, in order to allow me to better examine the differences between European and US policies using the same model for interpretation as I used with monetary policy. 3.1  Automatic stabilisers and discretionary budget policies  The automatic stabilisers are the component of government expenditure and revenue that automatically varies with the economic cycle, without requiring any explicit decision on the part of governments. These mechanisms are the result of the social protection and welfare system, of the institutions underlying the labour market and of various components in the taxation and public expenditure system. They depend largely on political decisions and operate in an automatic and anti-cyclical fashion, in the sense that they reduce revenue and increase expenditure when the cycle slows down, and vice versa. As far as discretionary measures resulting from specific fiscal policy decisions are concerned, their usefulness as a an anti-cyclical tool has been a matter for debate for a long time now, both in the euro area and in the United States.
One way or another the imbalances in the world economy will be corrected. That is likely to go hand in hand with changes in exchange rates and other asset prices. Whether this will happen gradually or through a sharp adjustment is impossible to know. But those changes will have a major influence on the speed at which the economic see-saw in the UK will move back to balance. The message for policy is that it is important not to let domestic demand grow too rapidly for too long. The longer the correction is left, the sharper the required adjustment will be. The higher one end of the see-saw, the greater the subsequent lurch will be. The trade deficit cannot continue to widen indefinitely. Hence, at some point domestic demand will have to grow at below its sustainable trend level rather than significantly above as it has done now for some time - over 4% a year on average over the past four years. By acting preemptively, and trying to anticipate developments, the MPC has been able to maintain overall stability in the economy, but the sharp rise in sterling led to a lurch in the economic see-saw. In one of the most influential contributions to monetary policy in the post-war period, Milton Friedman wrote that the characteristic of most central banks was that “too late and too much has been the general practice”.

Less extreme is the euro zone, where, after a period of slow growth in the area as a whole, recovery is now well established. The internal imbalances in each country - differences between growth of domestic demand and the supply of output - are the mirror image of the external imbalances - current account surpluses and deficits. Widening imbalances are unlikely to be sustainable for long. But the extent to which they will be self-correcting, or will require policy adjustment, depends in large part on why they have arisen. This is my second question - why have the imbalances arisen? Sustained current account deficits can reflect profitable investment opportunities that exceed the supply of domestic savings so that it is necessary to borrow from abroad. And the most popular explanation of the recent rapid growth in domestic demand, especially in the US, is as the consequence of a rise in productivity growth, and investment opportunities, reflecting the so-called “new economy”. It has been pointed out by several economists, including Alan Greenspan and my colleague John Vickers, that an increase in trend productivity growth might increase demand by more than it raised supply initially, as firms invest in new technology and consumers anticipate higher future incomes and spend today out of this revised estimate of their “permanent” income. Hence new information technologies, because they raise  BIS Review 34/2000  2  potential future output in the economy, would add to demand today.
For their part, governments have become more concerned that trade and financial openness may create dependencies on third countries that increase vulnerability to geopolitical shocks. Accordingly, they have started to include geopolitical considerations in their economic decision-making, with policy initiatives that aim to limit such external vulnerabilities, for example, by encouraging the local production of strategic products such as semiconductors or by screening incoming foreign direct investment on grounds of national security. These issues are particularly important for the EU, given its high degree of trade and financial openness, which is larger than that of other geopolitical powers such as the United States or China. For example, in 2019 the share of foreign trade reached 54% of GDP in the euro area (up from 31% in 1999), which is double that of the US (26%), while the share of global value chain participation in trade is 20 percentage points higher in the euro area than in the United States. Likewise, the euro area is more financially open than the US, as measured by the stock of gross external assets and liabilities with respect to GDP. This openness has been a major advantage for Europe for many years and one of the main reasons for its prosperity. This openness has allowed the EU to benefit from lower import prices, larger export opportunities, more foreign competition, technology diffusion and, ultimately, productivity gains. But it has also become an element of vulnerability in a more volatile global geopolitical environment. This is currently evident in the EU's external energy dependence.

Second, credit conditions loosened substantially, supported by a sharp compression in perceived long-term risk-free rates, which was only unwound when markets began re-pricing in the risk of bank and sovereign default in the periphery (Chart 5). The decline in interest rates in the periphery in the pre-crisis period suggests that it was a case of capital being pushed into the periphery, rather than it being sucked in by a high rate of return as conventional analysis would suggest. The consequence of all this was an increase in demand in the periphery, much of it in construction, financed by borrowing from the core. This is illustrated in the contrasting experiences of Spain and Germany. Domestic demand in Spain consistently outstripped output growth pre-crisis, while the opposite was true in Germany (Chart 6). These growing external imbalances were accompanied by increasing internal imbalances, as the non-tradable sector in Spain expanded at the expense of the tradable sector, driving up unit labour costs in the former relative to the latter (Chart 7). That was not the case in Germany. 2 Restoring the euro area to strong and balanced growth requires dealing not only with the accumulated financial imbalances – the excessive banking and sovereign debts in the periphery – but also restoring competitiveness and rebalancing the structure of demand and production. On the face of it, that rebalancing is under way, with a narrowing in the current account deficits of the periphery.
Regulators and the banks that they oversee were largely working from home, so across the board we quickly adopted a pragmatic, risk-based approach to our AML/CFT supervision. 13. In Hong Kong, the collective response also included enhanced information sharing through public-private partnership, which resulted in six alerts on prevalent financial crime threats, including COVID-19 related frauds, being shared with the industry to help develop riskmitigating measures. As a further step to enhance the effectiveness of our efforts, the HKMA also provided guidance to improve the industry’s analytics capability through the use of technology to enhance data quality and intelligence. 14. Now, despite our success in tackling these immediate challenges of COVID-19, we must not lose sight of long-running issues that are constantly reshaping how AML work is being conducted. AML/CFT policymakers, in addition to tackling those immediate issues arising from the pandemic, should not lose sight of the crucial question of what various policy responses will mean for our future direction and forward-looking priorities. And given our assessment of evolving trends, what are the key challenges that we must expect to face in our global AML efforts as and when the pandemic hopefully fades? 15. As shown by recent experience, transforming the ways in which we approach the identification and disruption of ML/TF risks goes beyond simply implementing the standards set by the FATF – although such standards remain very important. The key question now is how can we take advantage of the lessons that we have learned in the past few years?

Hong Kong received a good FATF score card in 2019, but that only means that we are capable of doing more, sharing more, and contributing to better outcomes globally in a continuous manner. 19. Going forward, I believe that being adaptable in our implementation efforts will require changes in the way we do things. More specifically, while the pandemic continues to challenge all of us, I think it should be a catalyst for the wider adoption of latest technology, in the form of Regulatory Technology (Regtech), as well as more efficient and effective AML/CFT measures. Those I believe are also the views of David Lewis, Executive Secretary of the FATF who also said “As AML professionals, we all need to take more risks and stop just ticking the boxes.” I think he is referring to the much needed adaptability in our implementation efforts. The guidance from the FATF is reassuring in this regard, and this leads to my second point. The AML/CFT Regtech adoption is a journey for banks and we should begin to drive more effective outcomes in better leveraging that process. 20. We have seen in the past two years an increasing trend for regulators globally to call for, and through their actions, enable more innovation and flexibility in combatting money laundering and financial crime. That I think is a very welcome development. 21.
The threat of relocation of jobs to other countries, increased inward labour migration and increased imports of goods and services may contribute to somewhat more moderate wage growth during this upturn. It is also possible that the experience of the period 1998-2002, with high wage growth and sharp fluctuations in the krone exchange rate and interest rates, is still marking wage settlements. At the same time, the situation with an ample labour supply may also be reversing. Sickness absence is now on the increase, and the number of persons on disability benefit is still rising steadily. Other countries still provide us with a source of labour, but the supply is not sufficient to offset the considerable flows into benefit schemes when viewing the economy as a whole. As expected, it appears that wage growth will be somewhat higher in 2006 than in 2005. Historical experience shows that it is difficult for the social partners at the local and centralised levels to restrain wage growth when unemployment is low. A characteristic of the wage formation process in Norway has been that fairly long periods of moderate nominal pay increases and rising employment have culminated in a sharp rise in cost inflation – often as a result of working hour reforms – and a decline in employment. Developments in labour costs and the wage settlements in 1974 and 1975, 1986 and 1987 and in the period between 1998 and 2002 triggered a subsequent decline in output and employment.

Therefore, in order to ensure that the MFI sector grows in a sustainable manner and to protect public deposits, the BoZ developed the Banking and Financial Services “Microfinance Regulations” which came into effect on 31 January 2006. The Regulations were aimed at strengthening the sector and ensuring accountability and transparency in operations and providing effective smooth integration of the sector into the mainstream financial sector. Honourable Minister, distinguished ladies and gentlemen, at the time of the coming into effect of the Microfinance Regulations, there were only three microfinance institutions licensed by the Bank of Zambia. Today, the number of licensed microfinance institutions has increased to thirteen. This number is expected to increase further in light of the additional applications that are currently being considered. Ladies and Gentlemen, it is pleasing to see the extent to which commercial banks are working at providing financial services to the medium and small scale entrepreneurs. This is so because such financial inclusion is bound to lead to wealth creation. It is imperative that commercial banks, in providing financial services, ensure that the projects they are supporting are financially viable. The role of the commercial bank, in this regard, goes beyond sifting out unviable projects and providing finance for the best projects. As Bank of Zambia, we are pleased to see that the private sector, especially banks, are now taking steps to partner with Government in working towards reduction of poverty through increased provision of financial services to a wider clientele.
In such contest bank of Albania has been working together with important Albanian institutions, first and foremost with fiscal authorities, different European Central Banks, international financial advisories and academia to identify the new regime of monetary policy. The new regime must be efficient in the light of recent changes in financial markets and most importantly must provide good anchors for monetary policy and its sovereignty. Please allow me to briefly describe the major characteristics of what we think will become the new regime. A. Monetary policy regime  As I already mentioned we have been working on the new regime for more than two years. During this period we have been tossing ideas and scrupulously studying the details of a fully fledged inflation targeting regime. As you might well understand, we are getting ready to launch the new regime at the beginning of 2009. Our analyses show that, considering the current features and expected developments of the financial markets, inflation targeting provides the best policy choice for the future. A relatively long history of low and stable inflation, efficient monetary policy, sound banking system, free floating exchange rate, fiscal consolidation and last but not the least a suitable and reliable institutional framework, are important factors that have convinced us on the potential success of inflation targeting regime. 4  BIS Review 119/2007  B. Institutional framework  The harmonization of monetary and fiscal policy will continue to be a challenge.

Indeed, since we announced a combination of unconventional measures to provide additional monetary policy accommodation in June 2014, financial conditions have eased considerably. Risk-free interest rates have shifted downward at all maturities (Chart 1), reducing the basis 1 / 12  BIS central bankers' speeches  used by banks and financial markets in determining financing conditions. Chart 1: EONIA forward curves estimated from OIS (percentages per annum)  This has been reflected in the sizeable reduction in bank lending rates for euro area non-financial corporations (NFCs) and households since June 2014 – which have declined by around 130 basis points and 110 basis points, respectively – as well as in the decline of NFCs’ cost of market-based debt financing (Chart 2). Chart 2: Nominal cost of debt financing for euro area NFCs by component (percentages per annum)  2 / 12  BIS central bankers' speeches  NFCs have also benefited from an increasingly diversified financing structure, with debt securities issuance and other forms of market-based financing substituting for bank-based sources of financing (Chart 3 and Chart 4).
One obvious reason for this is that macroprudential policy is not yet in place in many countries and where there is a macroprudential policy, it has often not yet been put into practice – it is quite simply too new and untested.25 The policy rate is thus as yet one of few instruments available for practical use. 22  See, for example, Nyberg (2005), Ingves (2007) and Heikensten (2008). 23  See, for example, Mishkin (2007) and Cagliarini, Kent and Stevens (2010). 24  See, for example, the Committee on International Economic Policy and Reform (2011) and Mishkin (2011). 25  Woodford (2012), who develops a theoretical model for how financial stability considerations can be incorporated into inflation targeting, notes for instance: ”[I]t cannot be claimed that such tools already exist and  10  BIS central bankers’ speeches  But there is also an international discussion on whether the policy rate will have a role to play even when macroprudential policy is in place.26 One reason is that it may very well prove difficult to design a system for macroprudential policy that functions sufficiently well and which inventive market participants are unable to circumvent. The policy rate is a blunt instrument, as it has a broad impact on the economy. But at the same time, this may be a strength compared with macroprudential tools, simply because it is difficult to "circumvent" a policy rate increase.

But the fact of the matter is that hardly any far-reaching reforms such as those being drawn up for credit markets have been proposed. Those interested in this viewpoint should read the latest speech by Fernando Restoy, the vice-chairman of the CNMV (Spanish National Securities Market Commission). In it he suggests certain areas in which the regulation of these markets could be improved. I’m going to adopt a less ambitious approach, focusing on describing market behaviour from the standpoint of a country such as ours, which in recent months has had to tackle a lack of investor confidence. What have we learned from the behaviour of the debt markets in this second phase of the crisis? Perhaps one of the key lessons is that markets are capable of identifying certain structural problems which, for whatever reason, may affect an economy’s solvency. And this is why markets can offer us economic policy pointers, of interest not only to them but also to us. Restoring health to public finances, reforms to boost growth and reduce unemployment, the restructuring of our banking systems so they are positioned to promote growth when credit demand picks up, etc. are all pieces of advice of benefit to us and which are worth following. Admittedly, some may say, markets issue warnings. But they usually do so belatedly. And this is true.