samchain/econo-pairs-v1 huggingface dataset:
Apart from the already mentioned rents issue, there are other apparently minor but certainly unhelpful matters, ranging from the difficulty of finding school places, opening a bank account and the time consuming effort to get an ID card. While home ownership in Malta remains among the highest in the EU, it is also evident that the changing fabric of society and economic factors are pushing some segments of the population to resort to the rental market. The continued rise in house prices reinforces this pattern. According to Eurostat, house prices rose at an annual rate of 5.6% in the first half of this year, following a 5.3% increase last year. The deflated measure has also picked up in the first half of this year. This acceleration suggests that although the issuance of permits for the construction of residential units continues at a brisk pace growth exceeded 30% last year and up to September this year - supply still falls short of the demand for housing. Continued increases in house prices risk rendering house ownership unaffordable for a wider segment of the population in a country accustomed to a very high rate of home ownership. Moreover, while overall risks to financial stability from real estate remain contained at the current juncture, an extension of recent trends may result in potential macro-financial imbalances. Page | 6  Dear colleagues, The year 2018 was a milestone date, marking the Central Bank of Malta’s fiftieth anniversary of its establishment and also the tenth anniversary of Malta joining the Eurosystem.

Zeti Akhtar Aziz: Brief remarks on managing financial instability and shocks in a globalising world Introductory remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Tun Ismail ali Chair Public Lecture, Kuala Lumpur, 6 February 2004. *  *  *  We are indeed honoured and privileged to have Dr. Yilmaz Akyüz, holder of the Tun Ismail Ali Chair in Monetary and Financial Economics at the University of Malaya, to speak to us today on “Managing Financial Instability and Shocks in a Globalizing World”. The Chair on Monetary and Financial Economics at the University of Malaya was established by Bank Negara Malaysia in recognition of the contributions of the late Tun Ismail bin Mohamed Ali, the first Malaysian Governor of Bank Negara Malaysia. It is our hope that this Chair would contribute to enhancing expertise and knowledge in the area of monetary and financial economics. Ladies and gentlemen, Let me make a few brief remarks on the topic of today’s lecture, based on our experience in managing the Malaysian economy. Uncertainty and instability are the defining feature of the international financial system today, as borders have become more porous, financial markets more integrated and as financial flows have surpassed trade flows as the dominant determinant of the international financial environment. Emerging market economies have become more vulnerable to international shocks which can have a significant adverse impact on the economy. Malaysia has approached this more challenging environment by increasing our own resilience and tolerance level to these shocks.
This includes presenting customers with sufficient options,  providing enough time and information for customers to evaluate available options, and helping them make informed decisions. 5/7  BIS central bankers' speeches  Communications to customers should also be tailored according to the sophistication of customer segments. To this end, banks should ensure that their staff are well trained to engage clients, and to handle transition issues that may arise. 21 To complement banks’ individual efforts, at the industry level, MAS, ABS and SC-  STS will work together with relevant industry associations and MoneySense to roll out industry-wide public education programmes on SORA products and markets later in the year. 22 For end-customers, you should work with your banks on a suitable pathway to reduce SOR exposures. We urge you to participate actively in various outreach events organised by SC-STS, and avail yourselves to the public resources that SC-STS will progressively be making available on transiting to SORA. E Concluding Remarks 23 Interest rate benchmark reform is an important priority and Singapore is very much a part of this global undertaking. The journey is complex and challenging. We have made good progress so far, thanks very much to the work of the SC-STS under Samuel’s leadership. But we are at a critical juncture. As market players know, liquidity begets liquidity. The sooner we take steps to front-load this change management process, the more likely we can create a virtuous cycle, which facilitates a smooth transition to SORA.

In the case of Asia, the sharp devaluation and swift recovery in exports led the Asian economies to become addicted to large volume of export at low prices. And, in the case of Thailand, with little incentive to invest in research and development to raise the products’ value and enhance human capital, the average growth of labor productivity3 had trended down from the 1990s to 2000s. Ladies and gentlemen, This brings me to my third part on the lessons from the Asian financial crisis. I would like to offer three reflections that may not necessarily pertain to Europe but may provide food for thought for policymakers. First, conventional policy prescriptions may not be appropriate for unusual circumstances and there is no one-size-fits-all solution. Asia was a case in point of ill-timed austerity measures. Public sector debt in Thailand then was less than 15% of GDP; yet the policy prescription for Thailand was to tighten fiscal policy and maintain tight monetary policy, resulting in (interbank) interest rate rising from 10% at the beginning of 1997 to over 20% at the end of 1997. With large private external debt beyond the ability of the country to service, a way out should have been debt restructuring with international creditors to give the country a breathing space and avoid the painful shock from the sharp reversal in capital.
Looking more closely at the external dimension, an important characteristic that distinguishes us from other models, such as the one in Cyprus, is the fact that the international banking sector in Malta is only lightly linked to the domestic economy and to the remainder of the Maltese banking system. Meanwhile, unlike the situation in other countries, the core domestic banks have very low reliance on non-resident deposits. They operate along traditional lines, applying a prudent business model and, like the rest of the banking sector, carrying minimal exposure to securities issued in the distressed economies. The core domestic banks are highly capitalised, profitable and liquid, and the other categories of the banking sector are similarly robust. …in terms of interest rates, Malta needs to further align with its peers. Although various indicators place Malta with the stronger performing group, there is room for further improvement. Interest rates on loans to businesses are currently around 2% to 3% higher in Malta as compared with Germany, the Netherlands, Finland, Austria, and Luxembourg. In contrast, deposit rates offered by Maltese banks are broadly in line with those across the euro area, as shown in Chart 6. As a result, bank interest margins are higher in Malta, as shown in Chart 7. A closer alignment of margins with those of our peers appears to be warranted. The recently proposed Budget measure to conduct a review of bank charges to businesses makes sense.

Similarly, the level of unit labour costs is lower in Malta than in both the weaker and stronger groups, as will be discussed later. It is important that the public debate and the formulation of policy focus more closely on what is needed for Malta to remain aligned with the better performers. In the first two quarters of 2013, Malta’s GDP growth rate stood at 2.7%. Net exports have been the main source of expansion. The outlook is for stronger growth in 2014 as Malta continues to benefit from its competitiveness. The economy continues to diversify, creating high value added job opportunities. While some sectors have had to downsize, there has been a compensating expansion in other sectors, such as financial and other services. This is shown in Chart 4. An aspect that may go unnoticed is the role of the financial sector in the resilience of the Maltese economy and its alignment with the stronger group of countries. Financial soundness indicators confirm that Malta has a sound and robust banking sector. A three-way split of the banking sector distinguishes between the core domestic banks that are closely integrated with the domestic economy at one end and the international banks that conduct all  2  BIS central bankers’ speeches  their business abroad at the other end, along with a relatively small sector, the non-core domestic banks, in between, as shown in Chart 5.
(2) Up to 25 March 2008. Sources: Central Bank of Chile based on a sample of investment banks (IB), Consensus Forecast and International Monetary Fund. WTI oil price $  2008 (f)  2007  2009 (f)  Jan. MPR 93  Mar.08  Jan. MPR 88  Mar.08  DoE (11 mar) Deutsche Bank (07 mar) JP Morgan Chase (14 mar) Scotiabank (14 mar) Lehman Brothers (29 feb) Barclays (19 mar)  87 80 70 90  82 75 65 --  87  94 85 82 95 86 101  --  86 80 75 95 78 --  Goldman Sachs (04 mar) Merril Lynch (19 mar)  97 76  97 102  --  ---  IB's Mean (1)  83  90  74  83  97  97  --  --  Central Bank of Chile  Actual Mean (2)  72  (1) Excludes Goldman Sachs and Merrill Lynch. (2) Up to 24 March 2008. Sources: Central Bank of Chile based on a sample of investment banks (IB), Consensus Forecast and International Monetary Fund. We are in the presence of a significant relative price shock. The relative price of foodstuff and energy has changed in a number of countries. Given the persistency of these international relative prices changes, domestic prices are adjusting accordingly, giving the appropriate signals for resource reallocation. Chile is an interesting case in this respect.

On Tuesday I spoke about the role central banks have to play on climate change and that, far from representing an entirely new objective, the Bank of England’s work in this space sits firmly within the bounds of our mission to maintain monetary and financial stability.1 We have an important role to play, but it is governments, businesses, investors, and individuals that have the most difficult and impactful decisions to make in driving the transition to a net-zero economy. Today I want to build on those remarks to reflect on central banks’ climate-related work to date and to consider how it will need to evolve if we are going to continue to meet our remit. I will address this by talking about three main areas of our work: firstly, improving the understanding of climate-related financial risks across the financial system and macroeconomy; secondly, developing and embedding climate risk management in the financial firms that we regulate; and finally, seeking to achieve best practice through our operations as a central bank. I will begin with our work to understand climate risks across the broader financial system and the macroeconomy. The Network for Greening the Financial System (NGFS) has continued its pioneering work in this space, through the publication of climate scenarios that provide a common starting point for analysing risks to the system2, and the latest version of these scenarios is due to be published soon.
On the one hand, it needed to rapidly address the immediate financing needs of distressed countries, but at the same time it also recognised that the origins of the crisis had to be tackled through a comprehensive reform in economic governance in the Euro area. When Greece signalled that it needed financial support from its Euro area partners, the first financial programme for this country took the form of a bilateral loan agreement with its euro area partners, supplemented by aid from the IMF. It was clear at the outset that there was a need to establish a framework that could swiftly and efficiently respond to possible requests from other Member States. Thus, in May 2010 the European Financial Stability Facility (EFSF) was set up with a lending capacity backed by guarantees from the Member States of the euro area. As from July 2013, the EFSF will be replaced by a permanent framework, in the form of the European Stability Mechanism. 2  See I. Sarmas, “The Greek Financial Crisis from an Auditor’s Point of View”, World Class Performance Symposium 2011: Trust and accountability in public financial management, London, 17 March 2011. 3  See J. M. Gonzalez-Paramo, “The reform of the Stability and Growth Pact: an assessment”, Conference on “New Perspectives on Fiscal Sustainability”, Frankfurt, 13 October 2005.

Unprecedented demand, especially from developing countries, requires a rapid transition to secure and inclusive digital finance.1 The study points to a double digit increase in number and volume of fintech transactions, as well as  1/4  BIS - Central bankers' speeches  continuous increase of the client base. These trends have been underpinned by changes to the existing fintech products and launch of new ones. About 60% of the surveyed fintech companies reported launching new products as a response to changing behavior and demand of clients amidst pandemics. In addition, the fact that in the last decade banking industry was dealing with the legacy issues of the global financial crisis also provided bigger space for fintech firms, as non- regulated entities, to penetrate in financial business with consumer-centric solutions. This process was facilitated by the more favorable regulatory environment, i. e., falling regulatory barriers to entry for newcomers. Concerning the benefits, I think there is no doubt that Fintech can bring enormous benefits for customers, the financial system, and the overall economy. By enabling new players and business models to enter the market, Fintech has potential to increase competition, meet unfulfilled customer needs, reduce inefficiencies and transform financial services for good. These solutions come from Fintech's ability to unbundle traditional banking services such payments, maturity transformation, and risk sharing from banks, allowing these services to be performed by non-banks, i.e., fintech firms. Furthermore, fintech solutions can enhance data analysis, leading to more personalized products.
I shall therefore simply offer a few reflections that I hope will be relevant to the banking profession in Hong Kong. The first observation is that Hong Kong has, so far, escaped the worst. We have not experienced a collapse of our financial system, or a nationalisation of our major banks, or other forms of government intervention that will burden taxpayers for many years to come. In fact, our banking system has been resilient throughout the crisis, and the measures taken early on to reinforce confidence and ensure liquidity were effective and at minimal cost to the public purse. This is not an observation to be made with any sense of gloating or complacency. We all recall the intense anxiety of those days, and many in our community have suffered losses as a result of mistakes and mismanagement in other financial systems. Nevertheless, our well-capitalised banks have been well prepared for shock. Crisis management, particularly when public confidence momentarily came under strain, was effective. The generally cautious approach of our bankers, your refusal to get carried away by innovation, helped minimise the damage: this is a vindication of your reputation for prudence, and a great credit to Hong Kong's banking system. We also seem to have achieved a good balance in the relationship between the supervisor and the banking system. An excellent example of how that balance has contributed to banking stability is the 70% loan-to-value policy for residential mortgage lending by banks.

The tight monetary policy stance of the Central Bank as well as the relatively tight fiscal policy stance of the government, which were adopted with the aim of regaining macroeconomic stability, partly affected public and private investment spending that also contributed to low economic growth. Consumer price inflation increased, mainly due to high food prices associated with weather related domestic supply disruptions, revisions to indirect taxes and increased prices of imported commodities, making our efforts to anchor inflation expectations challenging. Despite the tight monetary policy stance maintained by the Central Bank, growth of monetary aggregates was high during most of 2017, before decelerating to envisaged levels towards the end of the year. Although we have seen signs of a firm recovery in exports with better prospects in key export markets and the flexible exchange rate policy of the Central Bank, the trade account continued to be affected by a largely weather induced increase in  import expenditure. The decline in workers’ remittances resulted in a reduction in the cushion against the widening trade deficit in the external current account. Although the fiscal sector has recorded notable improvements in terms of revenue collection, some slippage in the budget deficit is likely in 2017 mainly as a result of weather related fiscal costs and higher interest payments. This could have an adverse impact on achieving the envisaged fiscal consolidation path, while complicating the conduct of monetary and exchange rate policies.
What influences developments in the housing market? Norges Bank’s calculations show that high wage income has pushed up house prices. The contribution from interest rate changes has also been high in the past two years but has diminished somewhat recently. Interest rate changes have a strong and rapid impact. From 2004, housing starts were substantially as a result of high house prices, low interest rates and a favourable economic outlook. In Oslo in particular, housing starts have been high. A higher supply of dwellings will reduce pressures in the housing market. 4/6  When we increase the interest rate, we expect house prices to rise at a slower pace. Norges Bank increased the interest rate by ¼ percentage point last summer. Before this increase, banks’ mortgage rates fell, even though Norges Bank’s sight deposit rate remained unchanged. Stiff competition for mortgage loans and lower capital requirements for mortgage loans when the Basel II Accord comes into force may have contributed to this. In recent years, nominal long-term interest rates have fallen more than inflation. The real interest rate has declined. This may not only be an expression of economic conditions, but may also reflect a lower normal level for real interest rates. A lower normal real interest rate level will result in higher equilibrium prices for all capital goods, including houses, because the present value of future returns increases.

Table 3 Average ratings difference for UK banks and building societies(a) Mean  Max difference in sample  Min difference in sample  Large banks  2.67  12  1  Small banks  0.14  1  0  Large banks  2.78  10  1  Small banks  0.86  2  0  Large banks  4.67  7  3  Small banks  3.43  6  0  Large banks  3.37  10  2  Small banks  1.48  3  0  Category 2007  2008  2009  Average (2007–2009)  (a) The “Large” category includes HSBC, Barclays, RBS, Lloyds TSB, Alliance & Leicester and Bradford & Bingley (up to 2008), and Nationwide. The “Small” category includes building societies: Chelsea, Coventry, Leeds, Principality, Skipton, West Bromwich and Yorkshire. The ratings are year-end. Source: Moody’s and Bank calculations. 16  BIS Review 40/2010  Table 4 Estimated subsidy for UK banks and building societies £ and global banks $  Chart 1 Average assets relative to GDP of US commercial banks(a)  BIS Review 40/2010  17  Chart 2 Concentration of the US banking system(b)  Chart 3 Largest UK company’s assets in each sector relative to GDP  18  BIS Review 40/2010  BIS Review 40/2010  19
However, the exit from the current stance of monetary policy is quite different, in that it will have to be actively managed to ensure a smooth exit. I began the speech by noting that we face an extraordinary challenge with this exit, given the historic steps that have been taken with the Fed’s balance sheet. This challenge, which involves operating in uncharted territory along several dimensions, will inherently involve some uncertainties and risks. However, as I hope is clear from my remarks, the Federal Reserve’s efforts to date should minimize those risks. Indeed, I believe the Fed’s efforts have been prudent along a number of dimensions. As a first step, we have been careful to make sure we have an adequate set of tools. To that end, we have developed multiple tools that can be used for draining reserves, in order to ensure our capability to do so. Moreover, we have been testing those tools and will continue to take steps to ensure that we and the markets are prepared to use them in more significant volumes when needed. Developing the tools is not enough, though. As a second step, policymakers will need to formulate a strategy for using them in an appropriate manner to avoid any undesired outcomes for financial markets and the economy. The FOMC is actively engaged in determining that strategy, as indicated in the FOMC minutes from the January meeting.

Removing a portion of the excess reserves from the system ahead of increasing the rate paid on reserves is a cautious approach, as it should improve the Fed’s control of short-term interest rates when it comes time to tighten monetary policy. 4 To be sure, even at today’s reserve levels, we would expect the interest rate paid on excess reserves to exert considerable pull on other short-term interest rates such as the federal funds rate or repo rates. However, we are unsure of the exact relationship between these rates and believe that it is likely to be tighter when the banking system is not as saturated with liquidity as it is today. Thus, it may be prudent to remove some portion of excess reserves before raising the interest rate on reserves. Note that the policy tightening in this scenario will still likely be taking place in an environment of large excess reserve balances, and the main workhorse of the tightening cycle will still be the interest paid on reserves. However, the draining tools can be used to best ensure the success of that framework. Market conditions: at risk on exit? Finally, let me turn to conditions in financial markets and discuss whether there may be vulnerabilities related to the Fed’s exit from the current monetary policy stance. I think there are two potential areas of concern. The first potential concern is that the exit strategy could simply cause confusion among market participants, prompting volatility in asset prices.