samchain/econo-pairs-v1 huggingface dataset:
•  Fourth, lack of anti-money laundering practices in a bank may also affect it’s relationships with correspondent banks because reputable international banks would not want to be associated with banks that do not practice basic anti-money laundering techniques, and therefore be a threaten to their own operations. •  Fifth, money laundering compromises the corporate governance structure of banks. This is an area of concern especially among the small banks when it comes to deposit mobilisation and customer selection. Mr Chairman, the increasing integration of financial systems means that money launderers can now make use of the financial system to hide the proceeds of the illegal activities easily. Launderers are now able to quickly move illicit money between national jurisdictions, therefore complicating the task of tracing and confiscating these assets. Further, differences in money laundering legislation and in the implementation of international standards such as, know your customer regulations, customer identification and secrecy laws have led to regulatory arbitrage. This has worked to the advantage of money launderers because they can move the proceeds of their activities to less regulated territories where there are lax laws. Therefore, to avoid launderers from taking advantage of the weaknesses in the application of international law, many governments have decided to co-operate in order to combat money laundering. In this regard, the most notable international initiatives/responses to money laundering include: •  First, the Financial Action Task Force (FATF).

It goes with the grain of how banks are resolved, reinforcing the continuity of services which are critical to the real economy. It is predictable, with a clear framework of rules. It is proportionate, applying only above a clear size threshold. And it is efficient, allowing wholesale and investment business to prosper at a safe distance from retail and SME customers. Ring-fencing is a very substantial undertaking for the PRA, the FCA and the affected banks – but we are on track for implementation by 1 January 2019. Stability begins at home  Once these reforms are up and running, the core deposit-taking and payments services that must be continuously supplied to UK households and small firms will be protected in ring-fenced banks (RFBs). Groups operating across borders will also include non-ring-fenced banks (NRFBs) and will need to be resilient according to their global footprint. Resilience requires systemic capital buffers both at the domestic and global level. The domestic buffer applies to the RFB whereas any global buffer applies to the whole group. The RFB and NRFB shares of capital should provide sufficient resilience for each. So if the size of the domestic buffer risks leaving the rest of the group with too small a share to be resilient against shocks, we will increase the group’s buffer to 2  prevent this from happening . These complexities do not just flow from ring-fencing but from the international reach of many UK banking groups. We set their consolidated requirements as home supervisor.
Singapore banks also came under pressure from allegations that some banks may have been involved in financing corporations responsible for the forest fires. These allegations caused the public to question business practices of banks and damaged banks’ reputation to such a level that banks in Singapore promptly worked together on an industry guideline, committing to the public that they would develop policies and processes to limit negative externalities of their financing activities, especially in industries with elevated social and public risks such as agriculture and forestry. The third incident I want to highlight comes from the Thai financial sector. Over the past few years, heightened competition in the real estate sector along with rising property prices, had led to aggressive sales and promotional campaigns by property developers, attracting real as well as speculative buyers. Seeing opportunities in the sector, some banks significantly relaxed their lending standards for mortgage loans. Data revealed that as high as 25 percent of new mortgage and related loans originated in 2018 had loan-to-value ratio above 100 percent. Moreover, numbers of homebuyers were getting mortgage credit lines in amounts much higher than the underlying property purchasing values, essentially gaining the extra “cash-back” from their borrowing activities. This created perverse incentives for individuals to buy homes merely to earn the cash-back, for use on general spending.

The council should comprise members who do not represent a political party, but a particular field of expertise: business, banking or economics.” One example of an existing body of this type is the Swedish Fiscal Policy Council, which was established in 2007 as an agency under the government. In the UK, an interim Office for Budget Responsibility (OBR) was recently set up. And in the euro area, the budgetary surveillance of the European Commission is referred to as the “preventive arm” of the Stability and Growth Pact. But, as highlighted by the commission itself: “In order to function effectively, it requires a common understanding of the economic and fiscal policy challenges in the European Union, and a strong political commitment to addressing them.” How to enforce a strong political commitment to address the fiscal bias is still very much an unresolved question. BIS Review 113/2010  7  The second question is how to secure adequate international coordination in both crisis prevention and crisis resolution. International coordination is important  As the chart shows, foreign banks’ share of the market in Norway is approximately 1/3. In some countries, foreign banks’ share of the market is higher or even 100%, with no domestic banks at all. Today a bank’s regulation is laid down and supervised by the authorities in the bank’s home country. When foreign banks’ share in a market is large, this challenges the concept of a level playing field insofar as national supervisory authorities do not coordinate their work.
The approach for the implementation of the action plans outlined  BIS Review 49/2005  1  in a Master Plan needs to be done in an iterative manner, taking into account the potential for change that may occur in both the domestic and external environment. The Master Plan will also identify the building blocks of the various parts of the financial sector that need to be put in place to provide the foundation on which further progress can be built. The Financial Master Plan thus provides the sequencing of priorities and identifies the key financial infrastructure that needs to be put in place before advancing forward. In some areas, the implementation can be simultaneous, while in others a more direct route can be taken to enable a more rapid pace of development. In designing and formulating the Master Plan, consideration needs to be given to the diversity of the member countries of the IDB. The member countries are at various stages of economic development, facing different economic and financial challenges, and with different development priorities. The Master Plan aims to highlight the approaches, templates and building blocks that can be adopted at the different stages in the development of a comprehensive Islamic financial system. A phasedapproach would provide the Master Plan with the flexibility to take into account the different stages of economic development of respective countries. While the starting points may differ, countries may adapt the approaches to their requirements and that is commensurate with their stage of development.

However, with clarity of vision on the ultimate goals that the financial system aims to achieve, we can, by our actions and initiatives taken today, help realize our vision of the future. The Master Plan in essence provides a common vision, and template for countries in developing the Islamic financial services industry. The vision and desired objective will to a large extent depend on the desired aspirations for the economy, expected the role of the financial sector in the economy, the stage of development of the economy and the financial sector and the degree of international integration with the rest of the world. The Master Plan will also serve as a key reference document to guide countries in charting an orderly development of the Islamic financial system. The broad strategies and action plans, with the necessary milestones that need to be pursued over the medium to long term to develop an Islamic financial system can then be identified. Within the defined parameters, countries have distinct options in determining the best course of action to achieve the envisaged country vision. Experiences of other member countries can be compiled to serve as references. It needs to be recognized however, while the Plan provides the strategic direction, the implementation needs to be managed with flexibility.
Direct pricing for payment services is much more widespread in Norwegian banks than in banks in most other countries. The price of the services is charged per transaction to the payer and the public may choose the services that cover their needs at the lowest possible price. Since the Act relating to Financial Agreements came into force on 1 July 2000, the float in the Norwegian payment system has been removed. Prices that reflect the relative differences in production costs have had a positive affect on efficiency in the payment system. The economic impact is so substantial that it is visible in the national accounts. The revised national accounts show that GDP growth and productivity growth in the 1990s have been considerably stronger than assumed earlier. The new figures show that annual productivity growth for mainland Norway was 2.4 per cent in the 1990s. Financial services, with annual productivity growth of 6.3 per cent in the 1990s, is the sector that contributed most to this increase. This contributed 0.2 percentage point of the rise in productivity for mainland Norway. This is partly because of a general increase in efficiency after the banking crisis, but is also because of sharp productivity growth in the payment system. The productivity growth is a result of more cost-effective production of various services as well as increased use of payment services with low production costs. As a result of banks’ direct pricing of payment services, the most cost-effective services have shown the strongest growth.

As it becomes clearer that the international environment really is improving, and that we really are seeing a sustained pick up in external demand, then we can look forward to better balanced and generally stronger growth in our own economy. That will in due course mean that domestic demand growth - and consumer demand growth in particular - will need to moderate if we are to avoid a build up of inflationary pressure. It's quite possible, even still quite likely, that the necessary moderation of consumer demand - and I emphasise the word moderation - will come about of its own accord. And that would be the best possible outcome for our own economy. But if consumer spending were not in due course to moderate of its own accord, and depending on the timing and the strength of the recovery abroad, we would clearly need at some point to consider raising interest rates to bring that moderation about. But for the time being, and whatever the precise numbers, the overall prospect for the British economy over the next couple of years is for output growth picking up to around trend and inflation to around target. And if that is indeed how things turn out, we will have weathered the international storm as well as anyone could reasonably have expected. BIS Review 23/2002  5
In this way the central bank will gradually bring inflation back to the target. In practice, inflation is allowed to vary in the short term in order to prevent unnecessary variations in the real economy. One final possibility would be to put sole weight on minimising output variability. One variant of this would be to minimise unemployment variability. Note that this policy does not improve the growth potential of the economy, only the fluctuations. Moreover, this would result in substantial inflation variability since the economy does not have a nominal anchor. This policy would not be sustainable in practice because it does not provide an answer as to how monetary policy should respond to unemployment that is driven by wages and costs. We would then be forgetting the experience of the 1970s and 1980s. Monetary policy credibility will also influence output and inflation variability. Current inflation pressures depend on expected future price changes. If economic agents feel confident that the central bank will stabilise inflation around the target, and their behaviour reflects this, inflation will move back to the target more quickly. Hence, the central bank must react less each time it wants to bring inflation back to the target. This also implies that output and employment must be reduced less in order to achieve a  2  See, for example, Svensson, Lars E. O. (2000): “Open-Economy Inflation Targeting”, Journal of International Economics, vol. 50, no. 1, pp. BIS Review 49/2002  5  3  given decline in inflation.

The foundations for a fiscal compact have been laid – a suggestion presented before the plenary of the European Parliament at the ECB hearing on our annual report at the beginning of this month. It has been agreed that the annual structural deficit should not exceed 0.5% of nominal GDP. Euro area Member States will implement such a rule in their national legal frameworks at a constitutional level. The objective is to avoid excessive deficits before they arise, rather than  2  BIS central bankers’ speeches  trying to control them after they have emerged. An automatic correction mechanism is also foreseen in case of deviation. Moreover, the leaders agreed on a numerical benchmark for annual debt reduction to bring down debt levels. Sanctions will also apply automatically to euro area Member States in breach of the 3% reference value for deficits. The European Court of Justice may be asked to verify the implementation of these rules at national level. The new fiscal compact is an essential signal, showing a clear trajectory for the future evolution of the euro area. It frames expectations of both citizens and financial markets. Enshrining strict rules in primary legislation, making them enforceable by the European Court of Justice: all of this should contribute to making public finances in the euro area credibly robust. The ECB welcomes this outcome.
4 [19]  We then expanded our monetary policy measures: On the one hand, we lowered the repo rate below what was previously considered the lower bound of zero, and on the other hand we purchased government bonds (thus using quantitative easing). As the financial markets were functioning normally, the measures had the desired impact on the interest rates charged to households and companies. After some time, inflation began to rise toward the target. Toward the end of 2017, we envisaged policy rate increases and a gradual normalisation of monetary policy.10 The strategy followed the "reinvestment-rate increase-QT" approach, which meant that the Riksbank would first start a reinvestment phase – keeping the holding at a constant level by reinvesting maturing bonds. After that, when monetary policy was to gradually become less expansionary, the repo rate would be raised slowly, while the reinvestment phase would continue. When the repo rate had been raised to a level at an acceptable distance from the lower bound, the reinvestments would be tapered or terminated, so that the holding would decrease when the bonds matured, i.e. what we call QT today. As you can see, the 'exit strategy' in Figure 5 follows this pattern very well. But, as you know, we did not get very far in the process of normalisation. The repo rate was raised twice in December 2018 and December 2019 to zero per cent, and the holding of government bonds remained in principle at the same level as before.

The channels of this penetration were similar to those observable today – through Bulgarians studying in Belgium, France and Switzerland, and through trading in goods. These initial contacts had a very strong impact on the subsequent formation of the modern Bulgarian State and its institutions. The Bulgarian National Bank, being the first public institution established after the restoration of the independent Bulgarian State, was strongly influenced by the economic and cultural relations with the Francophonian world already established. On the day of founding of the BNB on January 25, 1879, its capital was subscribed in French Francs. The subsequent reforms of the Central Bank, the Ministry of Finance and the financial system in the country drew on the experience of Belgium and Switzerland, as well as on the knowledge and expertise of a great number of French advisors. The Francophonian movement in the period after the restoration of the Bulgarian State until the beginning of the World War II was further strengthened and expanded by the great number of Bulgarians who studied in Belgium, France and Switzerland. Especially telling of the scale of this process is the number of the senior managing officers in the area of finance and banking who graduated in countries from the Francophonian world. Of the sixteen Governors of the Bulgarian National Bank who managed it during the period from its foundation to the Second World War, eight received their higher education in economics, political science and law in Belgium, France and Switzerland, or specialised there.
The challenge to monetary policy is how the interest rate should be set ahead in order to prevent disturbances both to inflation and economic growth. As a general rule, central banks influence the shortest money market rates via the policy rate. However, economic agents’ consumption and investment decisions depend more on their interest rate expectations. Hence, monetary policy functions primarily by influencing expectations regarding future interest rates. Economic agents therefore need to understand the central bank’s intentions in its interest-rate setting. In the November 2005 Inflation Report, Norges Bank published its own forecast for the interest rate for the first time. The aim is to enhance the predictability of monetary policy. With a predictable monetary policy, market participants can react to new information in a way that contributes to stabilising developments in output and inflation. Norges Bank’s interest rate forecast is based on seeking to achieve an interest rate path that provides a reasonable balance between the objective of stabilising inflation at target and the objective of stabilising developments in output and employment within a reasonable time horizon, normally 1 - 3 years. Interest-rate setting is also assessed in the light of developments in property prices and credit. Norges Bank forecasts inflation, output and the interest rate simultaneously. There is considerable uncertainty associated with the estimates of capacity utilisation in the economy (the output gap), and there is no simple relationship between developments in capacity utilisation and developments in inflation.

The extra margin is well named because there’s real value for a firm in being able to choose when to invest. Able to pick its moment, the firm can go ahead with an investment project when there’s good news about future returns – and, equally, avoid committing itself when there’s a risk the investment will make a loss. 3  Abel (1983) points out that, for given capital, a firm’s profits are a convex function of the price of its product: they rise more in response to a given increase in the price than they decline as a result of the same-sized fall. This means that uncertainty about future prices actually raises expected profits, and therefore the incentive to invest. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  In fact, it turns out that these downside risks are the more important determinant of the decision. The reason is that, as long as it doesn’t take long to implement an investment, the firm can always respond to good news as and when it comes through. It has the same exposure to upside risks whether it invests in advance of good news or in response to it. What it can’t do, however, is to undo an investment it’s already made if it subsequently gets bad news about future returns. The real value of waiting is that, if things do take a turn for the worse, the firm will have avoided the resulting losses.
John C Williams: The economy in the time of coronavirus Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Buffalo Niagara Partnership, the Greater Rochester Chamber of Commerce, and CenterState CEO, 21 May 2020. * * * As prepared for delivery  Introduction It’s a pleasure to be able to join you all from my apartment in Manhattan. I sincerely look forward to the day when we can again meet in person. In a short period, our lives have changed in unimaginable ways: things that we took for granted— like eating at a restaurant, or going to a movie—are no longer possible in many places. For the first time in our lifetimes, governments around the world have had to take the extraordinary action of shutting their economies down. Those workers who continue to deliver essential services face very real risks, and my deep gratitude is with all those working in hospitals, law enforcement, transportation, and grocery stores. All essential workers have the thanks of everyone at the New York Fed. What started as a healthcare crisis has had profound consequences for the U.S. and global economies. We all know the incredible strain that New York City has been under, with numerous patients still being diagnosed with COVID-19 on a daily basis. But Upstate New York has also been deeply affected—not just by the spread of the virus, but also by the profound economic fallout.

There is no mechanical link between any piece of data and inflation – despite the impression often created by newspaper headlines. Policy cannot be set by a simple scorecard. There is no substitute for asking the question “why?” One of the achievements of Alan Greenspan during his time as Chairman of the Federal Reserve Board was his recognition that when output growth picked up in the United States in the late 1990s it reflected an increase in supply capacity as productivity growth rose in the wake of the application of IT to business processes generally. This “supply shock” meant that output could expand faster without generating inflation. “Spotting the shock” is a perpetual challenge for us. The shocks we have identified are the reasons we raised Bank Rate four times over the past year. We spotted them by asking three questions, all beginning with “why”. So let me give you those questions and our answers. The first question is why total output has grown steadily at an annualised rate of around 3% for 18 months – the longest run of stable output growth since 1997 and much stronger than most commentators anticipated, even though interest rates and the sterling exchange rate have risen. And why are business surveys even more upbeat? Notwithstanding a slowdown in the United States, the world economy, especially the euro area, our largest export market, has been surprisingly buoyant. World GDP growth over the past three years has averaged over 5% a year, the strongest such period since the late 1960s.