samchain/econo-pairs-v1 huggingface dataset:
Although many Asian countries have significantly strengthened their financial systems, they still need to follow through with reforms in the financial and corporate sectors. Singapore’s financial system was lucky to emerge from the Asian crisis relatively unscathed. During the crisis, we undertook an extensive liberalisation program aimed at deepening and broadening capital markets, consolidating and upgrading the local banks, and enhancing Singapore’s position as an international financial centre. At the same time, we put in place a new supervisory framework to oversee financial institutions, shifting from one-size-fits-all regulation to more risk-based supervision. 4  BIS Review 33/2004  Our efforts have achieved encouraging results. Our debt market has grown three-fold since 1998 to reach $ billion in 2002, driven by growing demand in the region for debt financing. Our wealth management industry more than doubled in the same period, with total Assets Under Management growing from $ billion in 1998 to $ billion in 2002. In treasury activities, we have maintained our position as the fourth largest FX centre in the world, with an average daily trading volume of $ billion in 2003. The local banks have consolidated from seven into three banks that are larger and stronger, and are building up their regional footprints. In the recent Financial System Stability Assessment of Singapore, the IMF affirmed the robustness of Singapore’s financial system and the soundness of our legal, supervisory and institutional framework. We are heartened by these outcomes.

Monetary policy in Singapore is centred on the management of the exchange rate. As an international financial centre with open capital markets, we are exposed to large and sometimes, volatile capital flows. To facilitate the effective conduct of our monetary policy and to avoid large swings in our $ exchange rate, we have a policy of discouraging the internationalisation of the $ However, we recognised that the trade-off was a less vibrant capital market, particularly the debt market. So we have progressively relaxed the specific restrictions over the past six years, while maintaining the intent of the policy. The results have been positive. The non-internationalisation policy is now down to two basic safeguards to discourage speculation in the $ - banks may not lend $ to non-resident financial institutions in order to speculate on the $ and non-resident borrowers who raise $ through bank borrowings or on our capital markets must swap or convert these $ to foreign currencies before remitting them abroad. This stance remains appropriate, and continues to underpin the effective conduct of our monetary policy. Nevertheless, there is scope for further fine-tuning. We have decided that non-resident, non-financial issuers of $ bonds and equities will no longer be required to swap or convert their $ proceeds into foreign currencies before remitting abroad. Non-resident, financial issuers of bonds and equities will still have to do so. This will give the issuers greater flexibility in managing their $ funds.
Too often in the past, as on the fiftieth and sixtieth anniversaries of the Bretton Woods conference, the debate has simply faded away. But if the mission of the Fund is not examined and the institution revitalised, it  1  "Economic Developments in India-1946-1956", the Dadabhai Naoroji Memorial Prize Fund Lectures, delivered at Bombay, February 1957. 2  The Collected Writings of John Maynard Keynes, Volume XXVI, “Activities 1941-1946: Shaping thePost-War World”, p. 216. BIS Review 11/2006  1  could slip into obscurity. Just as in Savannah, the responsibility for the ideas and impetus for radical change lies firmly with all the shareholders around the world. It is encouraging that the Fund and member countries are putting forward concrete proposals for reform. But unless we consider the fundamental question of what the Fund is for, then any such suggestions risk being piecemeal and ineffective. That is the issue I want to discuss with you this afternoon, and I shall try to answer three questions. First, in what way is the world of today different from that of Bretton Woods? Second, what role, if any, do we want an international monetary institution to play in today’s world? Third, what changes are needed to enable the IMF to play that role? What has changed since Bretton Woods? Following the collapse of the Bretton Woods system in the early 1970s, the IMF came increasingly to be seen not as the guardian of the international monetary system but as the international lender of last resort.

4 Moreover, even if a country is not today running a current account deficit or surplus, past flows of capital mean that domestic residents have assets and liabilities in a wide range of overseas countries. Countries now have asset positions quite distinct from their official reserves. The single most important difference between the old world and today's world is that in the former the financial position of a country was captured by the size of its current account surplus or deficit; now the financial position is best measured by the size and composition of its national balance sheet. The ratio of the sum of overseas assets and liabilities to GDP for major industrialised countries rose from around 70% in 1983 to around 250% in 2003. 5 The willingness to hold those assets and liabilities depends on expectations of the economic “fundamentals” such as productivity growth and demographic change. It also depends on expectations of future economic policy – both at home and abroad. If any of those expectations change, desired international investment positions will alter, possibly leading to sharp movements in asset prices and capital flows. News about economic fundamentals and about economic policy decisions leads to fluctuations in world inflation, output and employment. To understand the transmission mechanism requires a study of national balance sheets. They tell us three things. First, they tell us about the claims of one country on another. That will help to reveal how international capital flows respond to news.
Beyond augmenting our talent pool, foreigners living and working in Singapore enrich our culture and diversity. They help us to develop an even more cosmopolitan outlook, and keep our city state abuzz with vibrancy and energy. External linkages Besides restructuring our domestic economy, we also need to expand outwards, to invest in the region and ride on its growth. To do so, we need to expand our horizons, to understand more deeply the world around us, of which South Asia is a major focus of our interest. The Singapore Economic Development Board will be setting up an office in Mumbai. This will be its first office in India, to better service Indian companies which are looking at investing in Singapore and our region. More importantly, our companies also need to venture out of Singapore, to ride the growth of India. To better appreciate conditions and opportunities in India, Singapore plans to set up a South Asian Institute (SAI) later this year. The Institute will be part of the National University of Singapore. It will track economic and political developments in the subcontinent and collaborate with key institutes in India and elsewhere. The SAI will complement the work of the current East Asian Institute (EAI) and Institute of Southeast Asian Studies (ISEAS). Together, these institutes will provide us with a more comprehensive assessment of the region within a seven-hour flight radius, and so encourage more of our companies to venture abroad.

Lee Hsien Loong: Connecting India and Singapore Keynote address by Mr Lee Hsien Loong, Deputy Prime Minister of Singapore and Chairman of the Monetary Authority of Singapore, at the Standard Chartered Bank’s Singapore Conference, Mumbai, 16 January 2004. *  *  *  Introduction I am delighted to be here today to address the Standard Chartered Bank’s Singapore Conference. We stand on the threshold of a major transformation in Asia. With a combined population of 3 billion people, Asia is the largest and most promising region in the world today. It includes Japan, not fully recovered from its post-bubble malaise, but still the second largest economy in the world, with deep capabilities and advanced technology. It includes South Korea, which took painful measures to open up its economy and restructure its chaebol-centred industrial system. And it includes Southeast Asia, whose countries have put behind them the trauma of the Asian Financial Crisis, and are growing and attracting investments again. The biggest stories in Asia are China and India. It has been projected that China’s GDP could overtake Germany in the next four years, Japan by 2015, and the US by 2039. India too is opening up and growing strongly, and could become the 3rd largest economy in the world within 30 years. Globalisation plays a big part in Asia’s vitality. It has resulted in more Foreign Direct Investments (FDI) into Asia, and created jobs and prosperity for Asians.
But nested within these objectives is an instruction that our objectives are to be advanced by avoiding adverse effects on the stability of the UK financial system. In other words, although our work is primarily microprudential we have an important role to play in ensuring financial stability. What does this imply for how the PRA should take an interest in operational resilience? It implies that we are interested in operational resilience for its own sake, not just because its absence can have a financial consequence for firms. But we are interested only to the extent that it could have a negative impact on safety and soundness and/or the stability of the UK financial system. That is a fairly high bar. In practice this is likely to mean that we put more emphasis on operational resilience for larger firms doing activity whose disruption could have a financial stability impact. For smaller firms we are only strongly interested where something is going on that is big enough to threaten the firm’s safety and soundness. So for example: if you are a big bank you can expect us to take an interest in your ability to process payments; if you are an insurer with a large annuity book, we will want to know what the operational risks are to your ability to supply people’s retirement income; and if you are a smaller firm spending huge sums on a 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  major IT project, we will be interested in that.

These include the announced merger of Deutsche Börse and NYSE, the sale of SIX Group’s Eurex-stake to Deutsche Börse and a move of trading volumes away from “national” quasimonopolies towards multilateral trading venues such as multilateral trading facilities (MTF). Some estimates indicate that as much as 25% of equity trading volumes are now handled by these new players. Because of such developments, in the Swiss Blue-Chip segment, SIX Swiss Exchange’s average market share declined from over 80% in 2009 to around 70% in 11 2010. Post-trade infrastructure is also under pressure to evolve. Notably, the Financial Stability Board recommends a wider adoption of Central Counterparties (CCPs) in the over-thecounter (OTC) derivatives markets. By mitigating counterparty risk, increasing transparency and limiting the likelihood of contagion in these complex markets, CCPs reduce systemic risk. Regulators in both the European Union and the United States are thus promoting increased use of CCPs. A second example, upon which I would like to dwell, is the European Central Bank’s (ECB) “TARGET2-Securities (T2S)” project, which has attracted much attention in the industry. For those of you who are unfamiliar with the initiative, it aims to establish a single venue where securities may be settled against the euro and possibly against other currencies, partially replacing the existing national settlement infrastructures.
The Federal Reserve and, to a lesser extent, the Bank of England have also used this instrument to signal their intention to provide a greater stimulus to the economy. Unconventional measures affecting the size and composition of the central bank’s balance sheet are also being extensively used. In the euro area, in October 2008, the ECB changed its liquidity management policy, implementing its main refinancing operations at a fixed rate with full allotment. In May 2009 it lengthened the average maturity period of monetary policy operations and set in train a purchase programme for covered bonds and other similar assets to reactivate this market segment. One year later, faced with the qualitative leap that the euro area sovereign debt crisis entailed, it introduced the Securities Market Programme. Under this programme it purchased, always on the secondary market, public debt of the countries where the tensions were disproportionately restricting the funding of their economies. Finally, when doubts over the viability of the euro reached critical levels in summer 2012, the ECB responded with an announcement that it would, within its mandate, do whatever was needed to save the euro. It designed a new securities purchase programme – the Outright Monetary Transactions Programme – which, though its use has not been necessary, has been instrumental in changing expectations in a favourable direction for market stability and normalisation. Conversely, in the United States, the changes in the Federal Reserve balance sheet have been linked to massive asset purchases as part of a standard quantitative easing programme.

In particular, the Bank for International Settlements had maintained since the early 2000s that, in specific circumstances, central bank conduct in the face of severe risks to financial stability would have to be pre-emptive and not only reactive. Simply put, the damage wielded by a financial crisis might be so great that some price stability slippage in the present would be  BIS central bankers’ speeches  1  warranted in exchange for preventing a future, more serious deviation that might prove more difficult and costly to reverse. The Bank for International Settlements also asserted that the combination of a price stabilityoriented monetary policy and a merely micro-prudential supervisory policy did not ensure the stability of the financial system as a whole. In this connection a third tool was needed: a macro-prudential supervisory policy. While it is still too early to draw all the economic policy lessons arising from our experience of this crisis, I believe certain necessary changes can be discerned. Among these, the need to pursue macro-prudential policies is one of the most evident implications. Macro-prudential policy The crisis has demonstrated that the previous combination of monetary policy and microprudential policy is insufficient both for shoring up the stability of the financial system as a whole and for ensuring, in the event of crisis, that the impact on the real economy is limited. To achieve these goals a macro-prudential policy is also needed, and it must be equipped with new objectives and instruments.
This process should lead to a more efficient allocation of finance within the global economy, but it will also call for the ability to adjust to structural changes in order for stable financial systems to be maintained. Today, I should like to outline the likely future development of the financial sector and of the financial markets in the euro area as envisaged by the European Central Bank (ECB). To this end, I shall first briefly discuss the impact of the introduction of the euro on domestic money markets. I shall then turn my attention to likely developments in the financial markets and in the banking system, before concluding with some remarks on how these likely developments might affect the stability and efficiency of the financial system in the euro area. Impact of the introduction of the euro on money markets Until the end of 1998 the various money markets of the euro area still displayed a certain number of distinctive features. However, following the changeover to the euro they were integrated swiftly and smoothly at the beginning of January 1999. A highly competitive single money market has already emerged in the euro area, as banks were well prepared for the changeover to the euro and the TARGET system has provided an efficient means of making cross-border payments. In particular, transaction volumes in money markets rapidly reached high levels while typical bid/ask spreads decreased almost immediately to very low levels. This indicates the depth and high degree of liquidity that the euro money market has already achieved.

In 2006, a single digit inflation level was attained. Although inflation rose to double digit levels at the end of 2008 owing to the effects of the global economic crisis, we have since seen it return to single digit levels;  iii. The financial sector has also recorded tremendous growth since the commencement of liberal economic and financial policies in the early 1990s; and  iv. Equally, positive developments have been registered in the payment systems. I must caution, though. that sustaining macroeconomic stability remains a key challenge in the face of limited resources, infrastructure and financial inclusion. Ladies and gentlemen, as you participate in this workshop, allow me to underscore the importance, we in Senior Management attach to capacity building programmes for all Bank employees. I am reliably informed that during the workshop you will cover a number of important topics including the following: i.  Self awareness;  ii. Time management;  iii. Action or goals required to achieve a vision;  iv. Emotional intelligence and values;  v.  Power to take action; and  vi. Ability to manage direction successfully. BIS Review 107/2010  1  I am fully aware that some of the topics that you will be dealing with may not be entirely new to you, but I firmly believe that they may be necessary for purposes of reinforcing what you already know. You are all therefore implored to take keen interest in all the topics if you are to realise the full benefit of the workshop.
For instance, the work by Cúrdia and Woodford (2010) has provided an important advancement by introducing central bank balance sheet considerations into the New-Keynesian framework. Corsetti et al. (2012) complemented this with interlinkages between the sovereign and the real economy. Moreover, many new modelling approaches now account for liquidity and credit constraints in macroeconomic models. 9 Still, the links and the channels between the financial sector, the real economy and their ultimate impact on output and inflation still leaves many questions open. This is for central bankers and academics to work on in the years to come. Second, as you know, our two-pillar monetary policy strategy foresees that we take into account monetary and credit developments – particularly to ensure a medium- to long-run orientation. Over time monetary analysis at the ECB has been continuously refined and deepened. In the crisis it was crucial to better gauge short-term risks from financial flows and imbalances. And also in the future, its scope and methodology needs to be kept continuously updated. In particular, the analysis should encompass not only a detailed understanding of banks’ behaviour, but also developments in the shadow banking sector as provider of private sector liquidity. 10 In order to conduct these types of analyses detailed data on financial intermediaries and their transactions is crucial. And third, a flexible framework to implement monetary policy has allowed us to react swiftly to the instabilities during the crisis.

In addition, the SMP had unintended side effects such as a perceived preferred creditor status of the ECB vis-à-vis other creditors. The Governing Council therefore decided last Thursday to terminate the SMP. Nevertheless, the current situation in sovereign bond markets continues to be characterised by a)  heightened aversion of non-resident investors to hold sovereign bonds of some euro area countries,  b)  extreme illiquidity and yield volatility in these bond markets and  c)  widespread concerns over redenomination risks. This all reflects a general fragmentation in financial markets; but excessively high and volatile risk premia hinder the effective working of monetary policy. In this environment, monetary policy signals do not reach all parts of the euro area in the same way. In light of these continued severe malfunctionings and to counter the risks of redenomination, last Thursday the Governing Council established Outright Monetary Transactions – or OMT – as an additional monetary policy tool. The OMT is introduced to contribute in safeguarding the monetary policy transmission mechanism to the entire euro area to ensure the singleness of monetary policy. The OMT is in no way a substitute for continued efforts in structural reforms and fiscal consolidation on the side of governments. They are essential steps to regain trust and to ensure the sustainability of the euro area in the long-run. This is also the reason why strict and effective conditionality and adherence to an appropriate EFSF or – later hopefully – ESM programme is a necessary condition to activate the OMT purchases.