samchain/econo-pairs-v1 huggingface dataset:
The deposit base of MFIs in a number of stressed countries strengthened further in January. The annual growth rate of loans (adjusted for loan sales and securitisation) to non-financial corporations stood at –1.5% in January, after –1.3% in December 2012. The annual growth in MFI loans to households moderated slightly to 0.5%, from 0.7% in December. To a large extent, subdued loan dynamics reflect the current stage of the business cycle, heightened credit risk and the ongoing adjustment of financial and non-financial sector balance sheets. At the same time, available information on the access to financing of non-financial corporates indicates tight credit conditions for small and medium-sized enterprises. In order to ensure adequate transmission of monetary policy to the financing conditions in euro area countries, it is essential to continue reducing fragmentation of euro area credit markets and strengthening the resilience of banks where needed. Decisive steps for establishing an integrated financial framework will help to accomplish this objective. The future Single Supervisory Mechanism (SSM) is one of the main building blocks, together with a Single Resolution Mechanism (SRM). Both are crucial elements for moving towards reintegrating the banking system. To sum up, the economic analysis indicates that price developments should remain in line with price stability over the medium term. A cross-check with the signals from the monetary analysis confirms this picture.

A stronger krone also dampens exports and reduces profitability in Norwegian business and industry. The effect on the exchange rate of a change in interest rates will vary as themes and sentiments shift in the foreign exchange market. The expectations channel: We believe that expectations play an important role when prices and wages are set. Expectations concerning future inflation and economic stability have considerable impact, not least in the foreign exchange market. Inflation expectations also influence wage demands and have an effect when companies adjust their prices. It is difficult to be precise about how expectations are formed. Confidence in the inflation target may provide an anchor. Past inflation rates may also influence what we think inflation will be in the future. There is thus an interaction between inflation expectations and inflation. If there is confidence in monetary policy, expected inflation in the medium term will be close to the inflation target. This contributes to stabilising inflation around the target. It is thus important for the central bank to ensure that households, companies, the social partners and financial market participants are confident that inflation will remain low and stable. Let me introduce the concepts of the “neutral rate” and the “long-term equilibrium rate”. Both should be seen as real rates, that is nominal interest rates adjusted for expected inflation. The neutral real interest rate is defined as the rate that does not in itself result in an increase or a reduction in price and cost inflation in the economy in the course of a business cycle.
At today’s oil price, it seems that virtually none of the new field developments planned on the Norwegian shelf can be realised at a profit. But cost calculations may change. Oil prices are not the only prices trending downwards. The cost level on the Norwegian shelf is also drifting down. This is perhaps best illustrated by developments in rig rates. The rates followed oil prices upwards, but have fallen in recent months. At the same time, oil companies are slashing costs. The development of the Johan Sverdrup field is now profitable even at oil prices around USD 30 per barrel. For the Castberg field development in the Barents Sea, the breakeven price has been reduced from more than USD 80 to below USD 45 per barrel. 3 Norway’s oil age is not over. Proven crude oil reserves are larger today than 10 years ago despite substantial sales over the period. 4 Our gas resources are even larger. So far, only a third of the estimated exploitable Norwegian gas resources have been produced. 5 Oil and gas prices will to a large extent determine the quantity that will be extracted. That is something we can do little about. What we can do is to optimise production efficiency on the Norwegian shelf as far as possible. There is still potential in this respect. Increased productivity and lower costs in the oil industry will contribute to sustaining activity on the Norwegian shelf, which will also benefit the oil service industry.

We must avoid a self-reinforcing decline in output and employment and hence a decline that is more pronounced than necessary. But an increase in the spending of petroleum revenues should primarily be used to finance temporary measures that are easy to reverse. Fiscal policy must also take into consideration that lower oil prices will reduce the government’s spending capacity in the longer term. In recent years, we have sold large volumes of oil and gas at good prices. The transfers to the government’s savings account have been substantial. The picture is now quite different. If oil prices remain at today’s level, government revenues will fall sharply. The present value of future income can in that case be estimated at a fourth of today’s oil fund, the Government  BIS central bankers’ speeches  9  Pension Fund Global (GPFG). 6 That means that most of the government’s petroleum wealth may already have been deposited in the GPFG. The year 2015 may stand as the last year of net transfers to the GPFG. Already when the budget for 2016 was presented, there were prospects that the spending of oil revenues would exceed actual income from petroleum activities. 6  10  The estimate is based on impact calculations in the National Budget for 2016 (page 31) based on a long-term oil price of NOK 400 per barrel at constant 2016 NOK.
Admati and Hellwig (2013) provide a comprehensive and lucid account of the case for higher capital standards. Their argument centres on the fact that the impact of higher capital standards on banks’ overall cost of capital needs to take account of the lower risk that arises from this shift - the Modigliani-Miller offset (Modigliani and Miller (1958)). It needs also to distinguish between any private costs to banks from tighter regulation and the social benefits this confers, with the latter the key public policy yardstick. When it came to re-calibrating regulatory standards for capital and liquidity after the crisis, international regulators engaged in a detailed, quantitative exercise which sought to weigh these social costs and benefits of tighter regulation, drawing on existing empirical evidence. The Long-Term Economic Impact (LEI) study, published by the Basel Committee in 2010, is a useful starting point for discussion of the appropriate calibration of regulatory standards (BCBS (2010b)). The main conclusion from this work was that, under conservative assumptions about likely economic costs, there were positive economic benefits to society from a sizeable increase in the capital banks were required to maintain. The study did not settle on an optimal level of bank capital. But the results presented were consistent with societal benefits peaking at a Tier 1 risk-weighted capital ratio of between 16-19%.11 This is north of most global banks’ current capital ratios.

Chart 13 plots a measure of the leverage ratio for the UK and US banking systems over a long historical sweep,10 while Chart 14 plots a simple measure of the liquidity ratio for UK banks over the past half-century (see also Jordà et al (2017)). Both solvency and liquidity ratios have exhibited a long, downwards drift. Between the end of the  10  Chart 13 is not directly comparable with Chart 5 because it is based on a different definition of leverage and sample of banks. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  19th century and the troughs prior to the financial crisis, leverage ratios fell by around three quarters in the US and the UK. Liquid asset ratios among UK banks underwent an even larger fall in less than half the time. Given the scale of these falls, even with the regulatory reforms of the past decade, levels of capital and liquidity in the banking system are at levels significantly below those 100 and 50 years ago, respectively. On the face of it, this gives grounds for questioning whether even these revamped regulatory standards are sufficient to withstand likely future shocks. We should, however, probably be cautious about jumping too quickly to that conclusion. Over the past century, there has been significant change in the structure of the financial system, including in the structure, scale and scope of financial regulation and the safety net. Those changes could mean that simple, historical comparisons of regulatory standards are misleading.
And the continuing efforts of the banking sector also represent challenges of their own: banks filed over 68,000 or 90% of the suspicious transaction reports (STRs) with the JFIU in a year. And that is just the STRs: we all know what that means in terms of the massive amount of data that banks are monitoring, screening and analysing on an ongoing basis. 5. The more difficult part of the answer to my question therefore means looking forward and requires vision and – dare I say it – aspiration – because we know that FATF evaluations represent a snap shot. There are always new and emerging risks, to which the HKMA and banks have stayed vigilant and agile; criminals are also exploiting new technology and innovations to create terrible harm to consumers and the integrity of the financial system. Banks that play a frontline role in combating that harm, not only by applying preventive measures when on-boarding customers, but increasingly through the value of information they are able to extract and feed into the AML/CFT eco-system and the close cooperation with the LEAs and the HKMA in converting STRs and intelligence into actions like arrests and asset recovery. 6. This is the challenge we face so we’ve taken a step back from the FATF evaluation report and asked ourselves some potent questions: is our system working as well as we would like it to be? Are the supervisory tools and techniques we have been using for years still fit-forpurpose? 7.

Arthur Yuen: Welcome remarks - HKMA Anti-Money Laundering and Counter-Financing of Terrorism Regulatory Technology Forum Welcome remarks by Mr Arthur Yuen, Deputy Chief Executive of the Hong Kong Monetary Authority, at the HKMA Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) Regulatory Technology (RegTech) Forum (Excerpt), Hong Kong, 22 November 2019. * * * 1. First of all let me welcome you all to this AML/CFT Regtech Forum, which we intend to be the first in a series. 2. In particular let me thank everyone for the very positive response and participation of key stakeholders including the FinTech Association of Hong Kong, experts, academia, other regulators as well as our partners in government bureaux, Companies Registry, Joint Financial Intelligence Unit (JFIU), Law Enforcement Agencies (LEAs) and Hong Kong Association of Banks. 3. Let me start with a question that speaks to why we are all here today: how effective are we, really, in our important role in anti-money laundering and counter-terrorist financing? We all recognise the efforts of the banking sector over many years – and continuing today – in helping to combat money laundering and terrorist financing. This has recently been praised by the Financial Action Task Force (FATF), which gave us a very good score card in its Mutual Evaluation Report on Hong Kong. 4. But, despite the mutual evaluation result, no system is perfect and most of the challenges we face – money laundering from fraud, tax crimes and corruption to name but a few – are global in nature.
We must go on to the philosophy of transparency where offences and important financial ratios or numbers are publicised, and peer or investor pressure could be used to reduce the flow of resources to wrong-doers. Back to the Credit Bureau, of course, borrowers are very important in all this. Banks shouldn’t lend to bad borrowers, and banks that lend to bad borrowers are bad banks. But how can banks not lend to bad borrowers, if they don’t know who they are? There are, of course, alternative remedies, but the best instrument is to have an industry-wide Credit Bureau which keeps track of the credit standing of borrowers. This is not possible at present because the law does not allow you to disclose clients’ information. The Bank of Thailand has required that prospective borrowers and renewals must sign a form declaring that they will allow their credit standings to be disclosed, but this is a feeble alternative. It is very time consuming and argumentative, with all its consequences. A Credit Bureau Law should be quickly legislated, where, as a price for a better society, bad debtors can be identified. 1  BIS Review 108/2000  As to commercial banks, good governance should be put in place. Audit committees are now required. Independent directors, not voted upon by the major shareholders, are being encouraged. NPL, related lending and fines and penalties imposed must be disclosed by each bank at the end of every month, and are published in the BOT’s web.

M R Chatu Mongol Sonakul: Some ideas for the new government in Thailand  Statement by Mr M R Chatu Mongol Sonakul, Governor of the Bank of Thailand, at the British Chamber of Commerce, Bangkok, on 23 November 2000. *  *  *  Chairman of the British Chamber of Commerce and all the chambers here today, distinguished guests, and ladies and gentlemen. Good afternoon. Let me begin by saying that it behoves me, and I have to use that word as a career civil servant who has taken his duty righteously for the last 35 years, not to comment on the work of the present government especially during an election period. In any case what they have done is fast becoming history and we have to take it as facts. A datum from which we will have to operate. In my career, I have been unenthusiastic in commenting about history, and only study it with a view to creating the future rather than commenting on it. If I wanted to comment on history, I guess I would have continued my dual career as a university lecturer which ended abruptly after the first year of my working life, since I found the responsibility of turning up regularly on time every week for anything quite unbearable as well as preferring to be on the implementation side rather than a commentator or analyst.
These include: 1) Determining the appropriate long-term implementation framework for U.S. monetary policy, and 2) deciding whether the strategic framework underlying monetary policy decisions needs to be adjusted to mitigate the risks associated with getting pinned at the effective lower bound for short-term interest rates.9 For the first issue, I see two options: return to the “corridor”-type system that was in place prior to the financial crisis, or remain with the framework that has been in place since the crisis— namely, a “floor” system. In a corridor system, reserves in the banking system are scarce, and the federal funds rate is set by adjusting the supply of reserves through open market operations to balance demand and supply at the FOMC’s target range. In contrast, in a floor system, reserves are abundant, so that the interest rate the Federal Reserve pays on excess reserves, or IOER, is the primary tool used to control the federal funds rate. In my view, the case for retaining the current floor system is very compelling for a number of reasons. First, it is operationally much less complex than a corridor system.

Furthermore, because the U.S. labor force participation rate for prime age workers is low compared to many advanced economies, the labor market could conceivably improve even further before encountering significant resource constraints. That said, the Federal Reserve should not overstay its welcome. It is important to get monetary policy back to a neutral setting before the labor market becomes so tight that wages and prices begin to rise at a pace inconsistent with the FOMC’s 2 percent inflation objective. Our mandate from Congress is maximum sustainable employment and price stability—not simply a high level of employment at one point of the business cycle. With respect to how far the FOMC should go in removing monetary policy accommodation, two major issues stand out. First, what represents a neutral monetary policy setting? Second, under what circumstances would it be appropriate to move beyond neutral to a restrictive setting? Unfortunately, we do not also observe the neutral real (i.e., adjusted for inflation) short-term interest rate, or r*. There is a wide range of estimates at any time, and they evolve as the economic environment changes. For example, all else equal, continued buoyant financial conditions amid recent and anticipated future rate hikes imply that r* may be higher than previously estimated. A shift to a more stimulative fiscal policy could also imply a somewhat higher r*, at least temporarily. One’s view of the neutral rate may also be influenced by one’s assessment of the longer-term economic environment.
Squeezed margins are mainly a function of increased lending competition in core building society markets, both from existing large banks that are rebuilding their market shares, and from new “challenger” banks that are seeking to carve out their own competitive niches. Squeezed margins at building societies are exacerbated when pitted against the mutual pricing strategy many have adopted to protect members in an era of low rates – and so, building societies seek to source new lending that earns higher than average rates. This combination of circumstances is what led a number of societies to broaden their lending appetites in the mid-2000s. I do not intend today to re-hash the full set of warnings about lending quality, assessing affordability and undertaking new business lines that John Tiner, as CEO of the FSA, set out to attendees of the 2004 BSA conference – if you want to remind yourself, his speech is still available to read on the archived FSA website! 46  However, I would observe that part of the reason why only 44 societies are  attending this conference rather than the 60+ that came to its equivalent in 2004 lies in the fact that many of those societies were unaware of, or failed to control, the risks they were taking. As survivors, societies here today ought to be well aware of the warning signs, but I’m conscious that corporate memories can be shed surprisingly fast.

I particularly like this story because my very first job after university, here in London, involved sitting in Barings and trying to work out quite how much money Nick Leeson had lost. What then prompted such a critical article, almost exactly 100 years before I found myself involved in the clear-up after the Leeson episode? Barings, at this point, was responsible for about one quarter of the considerable funds flowing into Argentina – a very attractive investment at the time – and a man by the name of Revelstoke was pivotal to its success. He managed to secure the flotation of the Buenos Aires Water Supply and Drainage Company and, “with his propensity for double-or-quits, decided against the increasingly 3  common custom of having the issue fully underwritten” . The flotation flopped in 1888 and, to make matters worse, a combination of financial maladministration and political turmoil in Argentina left Barings over-exposed, with capital locked down in its various South American holdings. This, coupled with the policy of the Russian government of steadily withdrawing its large-scale deposits from the house, left Barings in a precarious position by 1890. Rumours began to circulate that the firm might not have any surplus left after payment of its liabilities.
He has done pioneering empirical and theoretical work across a remarkably broad field of topics. His main interests, however, lie in banking, corporate finance and economic development, and especially the role played by finance in economic development. In his paper entitled ʻFinancial dependence and growth’, co-authored with Luigi Zingales, he found evidence of a positive causality between the level of development of a country’s financial sector and income growth. According to Google Scholar, this paper has been cited more than 9,000 times. This is on a par with Milton Friedman’s influential 1967 presidential address to the American Economic Association on the concept of the natural rate of unemployment. Raghu’s trademark is his willingness to challenge the accepted wisdom of the day. The bestknown example of this took place at the Jackson Hole symposium in 2005. There he warned of an upcoming meltdown in the global financial system, with substantial negative consequences for the real economy. Three years later, the global financial crisis broke out. And it was largely caused by the very factors that he had identified. For Raghu, financial markets play an important role for economic growth in the long term. However, financial markets have a tendency to deviate from fundamental values. Financial regulation has therefore been a concern of his since well before the crisis. What are his recommendations in this regard? To be effective, regulation must avoid being procyclical, that is, over-regulating in a bust and de-regulating in a boom. Rather, regulation must be comprehensive and contingent. Consider two types of such regulation.

I would like to lay special emphasis on the importance of education reforms for the future of our country. The necessary balance should be established between the need for a qualified labor force in the Turkish economy and the human resources provided by our educational system. Within this context, I believe that the Specialized Vocational Centers Project, implemented with the collaboration of The Union of Chambers and Commodity Exchanges of Turkey and the relevant ministries, will accommodate a very important need in Turkey and I would like to congratulate everyone who has been involved in this project. Such projects will equip hundreds of thousands of young population with the qualifications required by the labor market, and will not only contribute to the increase of employment but also raise Turkey’s growth rate on a sustainable basis. One of the major concerns of the labor force market is the informal economy. The rate of informal employment in Turkey is 43 percent. Such illegal practices lead to unfair competition and reduce the productivity of the Turkish economy. One of the major causes of the informal economy is the high level of labor costs in Turkey. Of course, the risk of the employment loss that may emerge in the short-term as a result of the reduction of informal employment should be minimized. At this point, we consider the implementation of arrangements regarding the reduction of labor costs to be crucial.