samchain/econo-pairs-v1 huggingface dataset:
Although we have little control over the strength of the economic winds buffeting our economy, our framework of inflation targeting does, as I said in my first speech as Governor almost five years ago, provide a seaworthy vessel. We cannot avoid some volatility in the short run and it is important that everyone understands the limits to the ability of central banks to smooth the economy. But, by keeping our eye firmly on the need to keep inflation close to target in the medium term, we can reach the calmer waters of low inflation, steady growth and a better balanced economy. And our policy framework will, I hope, allow you not to be overwhelmed by the headlines and to focus on what really matters for our future prosperity – the successful running of your own businesses. 4  BIS Review 8/2008

3 Economic activity in both the euro area and the United Kingdom, Malta’s largest trading  1  Eurostat Statistics in Focus 31/2008. 2  Financial Times “The cogs are clogged ”, 16 February 2010. 3  IMF Update of World Economic Outlook, January 2010. BIS Review 50/2010  1  partners, declined by 4.1% and 4.9%, respectively. This contraction had inevitable consequences for labour markets, with unemployment increasing to levels not seen in decades. The combination of lower tax revenues and higher outlays arising from the operation of automatic stabilizers and fiscal stimulus programmes took their toll on public finances, with deficits in a number of countries rising close to, or even exceeding, double digit levels. The growth rate of these economies over the coming years will be constrained by the inevitable fiscal consolidation required to bring deficit and debt ratios back to sustainable levels. These recessionary headwinds inevitably took their toll on Malta’s open economy. The impact, however, proved less severe than might have been expected. The economy came out of the recession in the fourth quarter of 2009, after contracting for three consecutive quarters. On a seasonally adjusted basis, the peak-to-trough drop in GDP was around 3.0%, compared to 4.7% in the euro area. The relative resilience of the Maltese economy is attributable to four factors. First, membership of the euro area has enhanced its capacity to withstand external shocks.
The Rt Hon Sir Edward George: Changes in the financial services industry Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, at the 16th European Finance Convention, London, 6 December 2002. *  *  *  Mr Chairman, Ladies and Gentlemen. May I begin by congratulating you, Claudio - and your colleagues - on organising such a remarkable 16th European Finance Convention here in London, spread over the past five days. I don't think I've ever seen such a distinguished and comprehensive list of speakers - ranging from politicians, central bankers and financial regulators and representatives of the international financial institutions, as well as representatives of private sectoral and specialist financial services trade associations and experts from commercial companies - all assembled on one program. I gather that the attendance has not been all that it might have been during the week. But perhaps that's not surprising: anyone with the stamina to attend even half of your proceedings is certainly a chronic insomniac. But those who have been here will have been rewarded by knowing everything there is to know about the recent development and current state of the financial services industry and how it might evolve. And they still have to listen to me! But don't despair - it's the last lap - and I'll try to keep it short! You have certainly had a great deal to discuss.

Ravi Menon: Financial cooperation between China and Singapore Congratulatory remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the inauguration of ICBC Singapore RMB Clearing Bank, Singapore, 2 April 2013. *  *  *  Mr Jiang Jianqing, ICBC Chairman, Mr Dai Bing, distinguished guests, ladies and gentlemen, good morning. 1. I am happy to join you at this morning’s ceremony inaugurating the Industrial & Commercial Bank of China as the Renminbi clearing bank in Singapore. 2. Today’s event marks a key milestone in the financial cooperation between China and Singapore. It is the fruit of a strong and substantive collaboration between the Monetary Authority of Singapore and the People’s Bank of China. •  MAS extended Qualifying Full Bank (QFB) privileges to ICBC and Bank of China in October 2012 as part of the China-Singapore Free Trade Agreement. •  PBC then named ICBC Singapore as the RMB clearing bank in Singapore. •  Last month, MAS and PBC doubled the size of their bilateral currency swap facility from RMB150 billion to RMB300 billion. The scope of the swap facility was expanded to allow MAS to provide RMB liquidity to banks in Singapore. 3. Singapore is the first regional financial centre outside Greater China to have a RMB clearing bank. Offshore RMB activities in Singapore will be underpinned by the strong and growing trade flows between the region and China. •  Singapore’s bilateral trade with China exceeds $ billion.
The combination of complexity and manipulation has led to a loss of faith by investors in model outputs, and in particular risk weights, over the past few years. Surveys of investors suggest a fairly deep-seated scepticism about risk weights, with only a small fraction believing them trustworthy (Chart 9). From a low base, investor faith in these risk weights has continued to fall fast (Chart 10). These concerns appear to be reflected in the pricing of bank risk. Bank investors appear to have moved towards using simpler metrics, such as leverage ratios, when assessing capital adequacy. There is a positive correlation between banks’ leverage ratios and their market price-to-book ratios (Hoenig (2013)). No such correlation exists for banks’ regulatory capital ratios. Investors seem to have begun pricing the solvency risk they best understand. The lack of transparency about, and investor trust in, risk weights has important implications. For regulators, a lack of transparency can damage the power of market discipline in constraining risk-taking – so-called Pillar III of Basel. Or, put differently, the complexity of Pillar I of the Basel Tower (regulatory rules) risks emasculating Pillar III (market discipline). Pillar I has become Popeye’s forearm, Pillar III his bicep.3 For investors, uncertainty about banks’ true capital adequacy is priced. Where there is uncertainty, they will factor a premium into banks’ cost of capital. That may be one of the reasons many of the world’s largest banks have continued to trade at a discount to their equity book value.

Yves Mersch: Interview in Luxemburger Wort Interview with Mr Yves Mersch, Member of the Executive Board of the European Central Bank, in Luxemburger Wort, conducted by Mr Pierre Sorlut and Ms Barbara Tasch on 8 March and published on 14 March 2018. * * *  Mr Mersch, the Governing Council has not yet decided to raise the interest rate. When that happens, the debt-to-service ratio will increase and put pressure on households who took out loans to buy their houses. How big is the danger? Let me say first that the bigger the imbalances, the less the economy is prepared for a monetary policy change. Any change in the monetary policy stance is always a shock to the economy, positive or negative. It’s not in our mandate to consider the households of any particular country when we change the monetary policy stance. That includes Luxembourg. We set interest rates for the euro area as a whole. We are not yet ready at this stage to change interest rates. We first take the nonconventional measures towards the exit. Only then will we consider the conventional ones. Today, at our press conference, we confirmed that we’re confident with the path which is leading to our objective. The primary objective is price stability, which we have defined as an inflation rate of below, but close to, 2% in the medium term. Second, on some banks’ balance sheets, loans to the private sector are very substantial and in some there is a high concentration of mortgages.
But let me highlight one change. 2  BIS central bankers’ speeches  12 When banks first started their ML/TF risk assessments, the focus has largely been around processes to identify and deal with customers with high ML/TF risks. This level of risk assessment is necessary but insufficient now. Just as how a bank should look at the credit risk of its overall loan portfolio and not just of individual customers, ML/TF risk assessments can also benefit from the same approach. We will therefore require financial institutions to assess ML/TF risks at the institution level, to complement individual transaction level checks. This will in essence be the banking industry-equivalent of what the government has done in the NRA. There are several banks that already have such a practice in place, so this requirement will level-up the industry as a whole. 13 Other changes in our impending consultation document will include formalising the need to screen one’s customers, tightening the threshold for enhanced measures on cross-border wire transfers, and providing a risk-based approach for politically exposed persons. Details of these and other amendments will be laid out in the consultation paper. Overall, we do not expect the revisions to require major changes to existing processes, and I welcome your inputs during the consultation. An effective supervisory regime 14 However, even the best regulatory framework is futile, if it is not backed by effective supervision. As I have alluded, MAS’ supervisory approach is premised on “prevention is better than cure”.

26 The financial sector has always been a critical gatekeeper in the fight against ML/TF, hence it shoulders a great responsibility to ensure strong safeguards against potential criminal fund flows. The American philosopher and author Eric Hoffer once said that “we are prone to generalise the bad than the good. We assume that the bad is more potent and contagious”. In this case, I think it is a good idea not to be complacent. Some paranoia is not a bad thing. But let me emphasise that as a key financial centre, we are coming from a position of strength in combating ML/FT risks. We must remain so, by constantly addressing new or evolving vulnerabilities, in a manner consistent with FATF recommendations. 27 On this note, may I wish all of you a most fruitful and stimulating seminar. BIS central bankers’ speeches  5
It has taken Hong Kong many decades of untiring efforts to accomplish what we have today. There is a lot more that we need to do in order to maintain our niche when so many competing centres are trying very hard to catch up. To differentiate Hong Kong from its peers, we must maintain those qualities that are hard to copy and yet appeal to users and customers who can freely choose where to conduct their financial businesses. So what should we do? There are three layers of parameters that help shape behaviour and values. The first layer is what is prescribed in the statutes, regulations and rules, and with which compliance is compulsory. The second layer is set out normally in codes of conduct issued by the various professional or industry bodies. For example, the banking industry has, under the auspices of the HKAB and with the endorsement of the HKMA, promulgated a comprehensive code of banking conduct. Similarly, the TMA has also issued a code of conduct for its members. The third layer encompasses everything from what the society does in its civic education for children to what individual firms do in managing their business and the behaviour of their employees. Very often we see firms become overly aggressive in chasing profits by taking excessive risks or mistreating their customers.

Among these firms it is common to find that they have a kind of incentive system that encourages and rewards excessive risk-taking and high sales-volume without regard to the interests of the firm or of the customers. Conclusion In my view, there is a lot that the boards and senior management of individual firms can do in ensuring that the corporate culture and incentive system encourage and nurture sound practices and appropriate values. The regulators and supervisors should also do their part to ensure that firms have in place a proper corporate governance framework. Professional and industry bodies should also play a key role in making sure that they promulgate suitable codes of conduct that define the standard of ethics and probity for their members. More importantly, professional and industry bodies should collaborate with supervisors to ensure that there is adequate policing and enforcement of the relevant codes governing ethics and conduct. Ladies and gentlemen, I would like to conclude my remarks by reiterating the importance of enhancing the power of the 3Cs, “Competence”, “Control” and “Culture”, if Hong Kong wishes to remain competitive as a world-class IFC. It is a difficult challenge, but competition is never easy. It will be a never-ending task as competition never ends. I am confident that if all the stakeholders share the same vision and work together to achieve the common goals, we can certainly make it. Thank you. BIS central bankers’ speeches  5
Ladies and gentlemen, the current economic situation is comparable to the one in 2001 in the sense that the economy at both times has fully recovered from the crises, namely, the 2008 global crisis and the 1997 Asian crisis. However, in 2001, the Thai economy still operated at the level far below the potential level. At that time, stimulus policies which encouraged spending were suffice to lift the country demand to the level closer to the potential output. Thus, the economy prospered without exerting much pressure on inflation. The present situation, on a contrary, characterized by rising inflation, reflects that the economy’s capacity is operating near the potential level. An expansionary fiscal policy is therefore no longer necessary. The situation today is not about bringing the economy to the potential level because we are already at it, but rather, it is about how to increase this potential level of output which has to be done by improving the country’s productivity. Increasing productivity is a topic which has been discussed in many forums, nevertheless, let me stress again that to achieve such a goal, adequate investment in both physical capital and human capital are necessary. In this regard, there are several challenges for all parties. For the new government, there will likely be three fundamental challenges. 2  BIS central bankers’ speeches  First, the government must find the right balance between public consumption and investment. Over the last decade, government consumption has been gaining its share of the budget, while public investment growth was somewhat moderated.

Figure 13: Crude Oil (Brent) (USD/Barrel) 150  Crude Oil  130  110  90  70  07.08  05.08  03.08  01.08  11.07  09.07  07.07  05.07  03.07  01.07  50  Source: Bloomberg. 10  BIS Review 100/2008  Members of the Press and Dear Guests, Our revised forecasts envisage slightly higher food inflation in 2008 and 2009 compared to the April Inflation Report. Although unprocessed food prices followed a relatively favorable course, processed food inflation is likely to stay at high levels for while, given the elevated course of agricultural commodity prices. Against this backdrop, we have raised the assumptions for food inflation from 13 percent to 14 percent for the year 2008, and from 8 percent to 9 percent for the year 2009. These changes have led to an upward revision in our inflation forecasts by about 30 basis points, for both 2008 and 2009. The projections envisage gradually moderating food inflation throughout the forecast horizon. In this context, assumption for 2010 food inflation is 7 percent. According to the framework drawn so far, we now forecast inflation to be around 10.6 percent at the end of 2008. Under the assumption of a limited tightening towards the end of 2008, our medium term forecasts suggest that, with 70 percent probability, inflation will be between 5.9 and 9.3 percent (mid-point 7.6) at the end of 2009, and between 4 percent and 7.8 percent (mid-point 5.9) at the end of 2010 (Figure 14).
However, it must be noted that similar problems characterise the other extreme of the financial market, the corporate – or enterprises sector – as we call it in Albania. Bank of Albania surveys show that micro units face shortage of financial resources and have limited access to credit. Thus, more than 1/3 of respondent enterprises consider the low level of access to finance and the cost related to it as the main cause for not expanding the activity. These micro units, which are basically family-run businesses, have a greater need to cooperate with non-bank financial institutions, due to difficulties they have in fulfilling the requirements for collateral or detailed financial documentation, criteria that banks require. This is another argument that leads to the logical conclusion that, in addition to own capital and bank credit, these enterprises would benefit greatly from other segments of the financial market. The low level of financial inclusion of the population is another element that prevents the deepening and expansion of the financial market in Albania. Latest data from the World Development Indicators show that only 38% of adults have an account with a financial institution, while only 6% and 22% of adults have a credit card and a debit card, respectively. Financial inclusion may not be increased only through the banking system. The financial system, especially the capital market and the corporate securities market should play a significant role in increasing financial inclusion.

Only little more than 12% are in the form of government securities, whereas the rest, around 6.5%, are invested in investment or private pension funds, accounting for only 0.1% of total financial system assets. Statistics show that only a small number of companies operate in other segments of the financial sector, and their activity in terms of the Domestic Product or of the financial market remains insignificant. Regarding the above, we may logically conclude that the financial market architecture may not be considered complete yet. Financial instruments with long-term maturities are rare, whereas the short-term ones outside the banking system are apathetic and fragmented, in terms of both products and markets. An outcome of such a financial architecture is a kind of added pressure on the banking system, depriving the economy of other financing alternatives, beyond what the banks offer. This vacuum may not be filled with strained efforts by the banking system. It has been broadly accepted that each segment of the financial market plays a complementary rather than substituting role. I could mention a number of examples to illustrate my point, but for the moment I would rather not, as in the next panels these issues will be discussed in greater detail by other 2/4  BIS central bankers' speeches  colleagues and academics during the day. Overall, the above elaboration regards investment-related financial institutions and financial instruments.
Money must therefore also function as a store of value. The first coins to be struck, imprinted with the king’s mark as a guarantee of their weight, were produced in Lydia almost 2500 years ago – with the reverse bearing the mark of King Croesus. Since then, coins in a variety of metals have been widely used. The currency of Norway was directly linked to a metal for centuries, until the gold standard was abandoned in 1931. 1/9  BIS central bankers' speeches  Wealth in the form of silver and gold coins can – literally – be a heavy burden. The emergence of banknotes that could be exchanged for a specific monetary value in metal made it easier to manage large sums of money. A banknote is in reality a promissory note – an interest-free claim on the issuer. Its value depends on trust that the issuer will keep his word and that the banknote proves to have the promised value. The issue of banknotes by private entities was a fundamentally unstable system. The solution was to establish central banks in order to build abiding trust in the currency. The Swedish central bank, the Riksbank, the first central bank in history, was founded because the issue of banknotes by a private bank – Stockholms Banco – led to a banking crisis. The origins of the US Federal Reserve are similar: during the so-called “free banking” era, private banks could issue their own banknotes in various denominations.

However, the banks experienced repeated crises, and in 1913, the Federal Reserve was established to stabilise the private banking system. In the post-war years, the value of western currencies was pegged to gold under the Bretton Woods system: an ounce of gold was worth USD 35. All the other member countries – including Norge – agreed to peg their currencies at a fixed rate to the US dollar. The gold standard was abandoned by President Nixon during the Vietnam War, and the traditional fixed exchange rate system was terminated in 1971. The value of money is no longer linked to precious metals. Today, money is so-called fiat money. The term derives from the Latin “fiat”, meaning “let it become”. In his book Sapiens – A Brief History of Humankind, Yuval Noah Harari writes: “Trust is the raw material from which all types of money are minted”. And he goes on: “..., the fact that another person believes in cowry shells, or dollars, or electronic data, is enough to strengthen our own belief in them, […]. Christians and Muslims who could not agree on religious beliefs could nevertheless agree on a monetary belief, because whereas religion asks us to believe in something, money asks us to believe that other people believe in something.”3 Money has value because – and only because – everyone believes in its value. Money is minted from trust. But how is this possible? How can money retain stable value in a system exclusively based on belief and trust? First, money must be usable.