samchain/econo-pairs-v1 huggingface dataset:
Muhammad bin Ibrahim: Bankers as guardians of the financial system Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the AICB Graduation Ceremony 2018 "Bankers as Guardians of the Financial System", Kuala Lumpur, 12 May 2018. * * * Thank you for inviting me to speak at this commencement ceremony. I hope today marks a meaningful milestone for you in your journey as a banker. For those who will receive an AICB award today, congratulations! Do wear it with pride and keep up the good work. You make us proud. At last year’s ceremony, I pointed to the parallels between the conduct of the banking industry and the Hippocratic Oath. Behind the oath, to do no harm, are three principles bankers can learn: competence, character and the deep sense of calling. I will aim higher this year and outline the case for bankers as guardians of the financial system. As guardians, bankers are to exhibit professionalism, wisdom and agility. Guardians of public trust, a responsibility to safeguard integrity of the system Bankers have gained notoriety over the past few decades over their role in the Great Financial Crisis. Derogatory terms were used to insinuate excessive wealth, power and undue influence of bankers over the economy. This reflects everything that is wrong with the banking system. Reputation lost is not easy to regain. It is an uphill task to win back trust and confidence once it is lost. The spotlight on bankers is not entirely misguided.

Our strength can be seen from the current account surplus, a strong reserves position, low level of external indebtedness and strong capital buffers in the banking system. We expect these strong conditions to persist. As many of you here can testify, our financial system is resilient and robust. On numerous occasions over the past decade, we have been able to manage market volatility in our stride. To a large extent, this was due to the continuous measures taken over the years to develop our financial markets. Our market now is balanced, deep and liquid to provide the structural support for orderly market conditions. Conclusion Let me conclude with the wisdom of the great philosopher Socrates. He viewed that any state should be led by wise, noble and exemplary ‘guardians'. These guardians will “...unite themselves in philosophy and spirit and swiftness and strength...and they ought to be wise and efficient." As bankers and guardians, let us aspire to exemplify these traits; to pursue professionalism, agility and wisdom. Thank you and congratulations again to all the graduates. A bright and exciting future awaits you. 4/4  BIS central bankers' speeches
Ravi Menon: Singapore’s approach to the regulation of capital markets Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Thomson Reuters 2nd Pan-Asian Regulatory Summit, Singapore, 28 September 2011. *  *  *  What do capital markets do? Distinguished guests, ladies and gentlemen, good morning. And to all our guests from abroad, welcome to Singapore. Two thousand years ago, in ancient Rome, enterprises contracted with the government to build temples and collect taxes. The enterprises funded these ventures by selling ownership or equity stakes in the form of shares which were readily transferable among the Romans. Later, the Italian city states sourced for funds from their citizens in the form of bonds to finance wars, while merchants sought financing from individuals to procure better vessels for sailing over ever increasing distances. Over time, a market developed to enable holders of bonds and equities to sell their holdings to other interested buyers. Thus was born – what we now call – capital markets. Since those early days in Imperial Rome, capital markets have spread far and wide across the globe. But the fundamental function of capital markets has remained unchanged – to allocate capital to those who need it and transfer risk to those who are able to bear it.

  First, there is information asymmetry between issuers/intermediaries and investors, and investors may be unable to make informed judgments about financial products. BIS central bankers’ speeches  1    Second, there is a principal-agent problem, and intermediaries may not act in the best interests of their clients, be they investors or issuers.   Third, investors are sometimes prone to herding behavior, exaggerating price movements and thereby precipitating market instability.   Fourth, if issuers and intermediaries take on too much risk or liability that they cannot manage, there will be loss of confidence and market instability.   Fifth, critical infrastructure may fail, again leading to market instability. The purpose of regulating capital markets is to safeguard the interests of investors, ensure that risks are kept to an acceptable level, promote efficient price discovery, and maintain confidence in the market. In Singapore, the regulatory framework for capital markets is underpinned by the Securities and Futures Act (SFA) and the Financial Advisers Act (FAA). Consumers who invest in products or deal with entities that are regulated under this framework will enjoy the safeguards provided under these laws. Together, the SFA and FAA cover each of the four components in the capital markets ecosystem. Issuers – dissemination of material information Let me begin with issuers. A key tenet of capital market regulation is that relevant information is transmitted efficiently for price formation and discovery. Like most reputable regulators, MAS imposes stringent rules requiring issuers of securities to disclose and disseminate all material information.
We have little experience to go by in this area Would people use stablecoins to a limited extent, as one of a number of forms of money depending on convenience, in much the same way we use cash and commercial bank money now?15  Or would stable coins, or one particular stablecoin, become dominant, substituting for other forms of money not just for payments but also as a store of value? There is certainly the possibility with stablecoins linked to large technology and social media platforms, that it could become mainstream for people to move from holding all or much of the money now in ‘current accounts’ at banks to holding it in ‘stablecoin’ in virtual ‘wallets’ provided by non-banks. There is some experience of the ‘E money providers’ that create, issue and transfer electronic money that can be used for internet transactions. These are regulated and have to back the e-money they issue one for one with deposits in commercial banks. But while they are used by many, they have not become systemic. But they are relatively expensive for merchants and can be used only for internet transactions whereas stable-coin developers intend them to be used for all transactions. 15  10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  In such a world, and depending how and whether stablecoins were backed with other financial assets, the supply of credit to the real economy through the banking system could become weaker or indeed disappear.

Peter Praet: Have unconventional policies overstretched central bank independence? Challenges for accountability and transparency in the wake of the crisis Keynote address by Mr Peter Praet, Member of the Executive Board of the European Central Bank, at the "Symposium on Building the Financial System of the 21st Century: An Agenda for Europe and the United States", Frankfurt am Main, 29 March 2017. * * * I would like to thank Claus Brand for his contribution to this speech. Evolution in consensus on the role of central banks and central bank independence In the course of monetary history, consensus on the role of monetary policy and on the appropriate degree of independence of the central bank has fluctuated considerably. During major crises, the pendulum has tended to swing from one extreme to the other. In the heyday of the gold standard, i.e. the decades preceding World War I, there was a commonly accepted understanding of how to preserve monetary and financial stability. The gold standard provided what we call a “nominal anchor”. It effectively ensured central bank independence from other public policies by subjecting monetary policy to an automatic rule.1 At the same time, there was a clear understanding of the role of central banks as a lender of last resort. Under that regime, central banks enjoyed sufficient discretion to take effective action in the event of banking panics.
Cambodia is considered a small open economy, one which realized average GDP growth of about 10% from 2005 to 2008 and gradually increased the level of international reserves to a level which can ensure 3.8 months of imports. The financial system in Cambodia, which is dominated by the banking sector, is considered strong. This is reflected in figures from the end of 2007 which show that total banking assets increased by 53.6%, bank deposits rose by 59.4%, and loans to the private sector went up by 52%. However, with the global financial crisis that has affected most of the continents, Cambodia’s total banking assets declined a bit in the last quarter of 2008 and the economy is expected to have very little growth in 2009. The National Bank of Cambodia still manages its reserves in a conservative manner, with principle strategies prioritized by: first, safety; second, liquidity; and third, returns. This conservative strategy is appropriate in light of the current financial turmoil. But with gradual increases of reserves, one’s portfolio should be well diversified and reserve managers should have a solid risk management and analytical skills. Therefore, capacity building needs to be continuously strengthened. BIS is the best counterpart in capacity building for central banks, especially for the National Bank of Cambodia. Every year BIS provides on-site training to our reserve managers and I hope the BIS continue providing this kind of training and cooperation in the future.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, to the CBI, Institute of Directors, Leeds Chamber of Commerce and Yorkshire Forward at the Royal Armouries, Leeds, 21 October 2008. *  *  *  My first memories of Leeds are from a wet summer in 1958. I was ten years old, we lived on the moors above Hebden Bridge, and my father took me to my first Test Match –England against New Zealand at Headingley. It rained all day on both Thursday and Friday, and, when play started in mid-afternoon on Saturday, on a drying wicket New Zealand were bowled out by Laker and Lock for 67. So I became a slow bowler. I was taught to bowl – slow left arm – at Old Town primary school by the headmaster, Alfred Stephenson. During the morning break he would mark the wickets in chalk in the playground, and draw a small circle exactly on a length. If we could pitch the ball within that circle he would give us a farthing. As we improved, and the payout of farthings increased, the morning break became shorter and shorter – my first lesson in economic incentives, or what is known in the trade as “moral hazard”.
The other half seems to be explained by a significant diminishing of total factor productivity which is extremely surprising because it occurs precisely at the moment of powerful historical surge in science and technology. There we are at the heart of the conundrum. The conjecture I would propose is that, under certain circumstances, in a period of very rapid technological and structural changes, the more an economy is inflexible, the more it resists to these changes, to the extent that far from taking advantages of the acceleration in progress in technology its “Total factor productivity“ growth diminishes in comparison with what it was in the period preceding the surge of technology. In other words it seems that there is not only an “opportunity cost” for being inflexible in a period of very rapid technological change – i.e not seizing the new opportunities offered by the acceleration of changes - but also a “direct cost”, coming perhaps – and there lies the conjecture - from the fact that under the stress of accelerating changes the economy becomes even more inflexible and hostile to technological progress than in more “normal times”. The evolution of the “Total factor productivity” growth in Europe seems to confirm that phenomenon. From an average level of 1.3 % in the 80’s it diminished to an annual average of 1.1 % during the 90’s and 0.7 % between 2000 and 2004.

Eva Srejber: Financial markets in a globalised world Speech by Ms Eva Srejber, Second Deputy Governor of the Sveriges Riksbank, at the Swedish Mutual Fund Association, in Stockholm on 4 September 2001. *  *  *  I should like to begin by thanking you for the opportunity to participate in your conference on mutual fund investments in Europe. Mutual fund investment is now a very important part of the financial system, both at a national level and at a global level. I therefore intend to take this chance to discuss the significance of the financial system for economic development, using mutual fund investment as a basis, and to take up some of the problems connected with the way the system functions. Rapid transformation of the financial system Over the past few decades the financial system has been fundamentally transformed. Deregulation and technological achievements have made the Swedish financial sector part of a global network where the sun never sets. Those of us who work in this sector cannot have a limited local, or even regional, perspective. We have had to learn to live with the fact that events in countries such as Indonesia and Thailand can have a direct bearing on our operations. This is of course exciting, although it also makes our work more complicated. But that is the consequence of living in a globalised world. Swedish savers have adapted to this development on a large scale.
The strict regulation of the rental market also means, for instance, that households may feel forced to buy a home even at stages of their lives when ownership and a mortgage may entail taking a major risk. Although a mortgage is a longterm undertaking for both the borrower and the lender, the households mainly choose variable-rate mortgages; only around one percent choose fixed rates at maturities longer than five years. In addition, the banks largely fund their lending using mortgage bonds with maturities that are significantly shorter than the maturities of the loans.1 I see the specific aspects I have just listed as risk factors, even though arguments can easily be found for each aspect to explain why this particular one does not actually constitute a risk. For example, one can point out that the high level of household debt is offset by the high level of household saving and households having assets that are substantially larger than their debts, or that the low level of construction over several decades limits the scope for a fall in housing prices.2  1  In many countries, mortgages are amortised over periods of 20 to 40 years. This was also the case in Sweden a few decades ago, but it subsequently became increasingly common with interest-only loans. Over the past few years, a larger proportion of new mortgage borrowers have chosen to amortise their loans, but still at a slow rate.

They are regular companies, which lend to firms and households, financed by issuing bonds and short-term commercial paper (CP) rather than by taking deposits. It can be tempting for them to extract a term premium by increasing their maturity mismatch. Some did so during the boom years. In the US and UK during the crisis, alongside the CP market more generally, they were given access by central banks to what in effect were discount-window type liquidity-insurance facilities. It is not obvious to me that they should be regulated as commercial banks, as they do not provide monetary/payments services. But it is clear that this part of the credit system became fragile due to leverage and maturity mismatches. It relied on the CP market remaining open; and thus on money funds maintaining demand for corporate and finance-company CP; and, if that demand dried up, they relied on banks being able and willing to honour the committed lines that underpinned those CP programmes. But for too long and in too many countries, regulation did not adequately capture the associated credit and liquidity risk. The result was a shadow financing (or credit) system that was effectively dependent in adverse circumstances on the banking system, but without the banks being ready and able to support it through systematic stress. 4  There were warnings years ago; for example in Edwards F (1996), “The New Finance: Regulation and Financial Stability”, American Enterprise Institute.
Inflation would likely have been negative this year were it not for our measures. And according to the staff assessment, in the absence of our measures, it would be at least half of a percentage point lower next year and between 1/4 and 1/3 of a percentage point lower in 2017. So in assessing how to respond to the risks to price stability, the question we faced was not whether our tools worked – indeed, they are probably the dominant force spurring the recovery we see today. It was whether, in light of the evolution of those risks, the calibration of our policy was still sufficient. This is the question that the Governing Council addressed yesterday. On the real side of the economy, our assessment was that the recovery is ongoing and the economy remains resilient to volatility in the global economy. Domestic demand is replacing foreign demand as the engine of growth, and our outlook for the coming years is broadly unchanged. On the nominal side, however, we perceived that the downside risks to the inflation outlook had increased, especially given continued declines in oil prices and a large output gap. Without further monetary policy action, the date when inflation returns to our objective would once more have been pushed back. The Governing Council therefore decided that, to secure the path of inflation back towards 2%, the calibration of our existing monetary policy measures needed to be adjusted.

Svein Gjedrem: Norwegian experiences in balancing economic development with macroeconomic stability - a historical perspective Speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the Norwegian Embassy, New Dehli, 21 March 2006. The  Charts in pdf-format can be found on the Norges Bank’s website. The speech does not contain assessments of the economic situation or the monetary stance. Please note that the text below may differ slightly from the actual presentation. *  *  *  Excellencies, Ladies and Gentlemen, It is a great honour to address you today on behalf of Norges Bank. The ties between Norway and India seem to be growing stronger, in spite of the geographical distance and vast differences between our two countries. Over the last few years, a number of Norwegian companies have entered the Indian market or strengthened their involvement in India. For example, the Norwegian oil and gas company Norsk Hydro reports that almost 300 000 hours of engineering services for the natural gas field Ormen Lange were supplied by Indian engineers, located in India. Last year, the Government Pension Fund made its first investments in the Indian stock market. By the end of 2005, the Fund had holdings in more than 70 Indian companies. There are also numerous cultural ties. This year, Norway is commemorating our most famous playwright Henrik Ibsen. A wide range of events is being arranged both in Norway and abroad.
Primary dealer history The pursuit of these objectives is reflected in the history of the Fed’s counterparty framework, of which the primary dealer system has long formed the foundation. But before I review that narrative, I must acknowledge that most of what I know about the history of primary dealers I’ve learned from Ken Garbade, who kindly introduced me tonight. Along with his superb analysis of the evolution of the Treasury market, exemplary work for the TMPG and critical contributions during the financial crisis, Ken has expertly researched more than 100 years of history concerning the financial institutions and trading practices that ultimately became the primary dealer system. Ken has published a staff report covering the early years of this system from the 1930s to the 1950s, and we expect to publish more of his research on primary dealers in the future.8 Looking back over the first century of the Fed’s history, we can see how our counterparty relationships have adapted over time in response to changing operational needs and the evolution of financial markets to create a system that is unique among the world’s leading central banks. Open market operations were first established by the Federal Reserve as a tool to control U.S. monetary conditions in 1922, in response to uncoordinated purchases of Treasury securities by different Reserve Banks interested in acquiring earning assets.

This expansion is a requirement of our business needs given the current size of our balance sheet, specifically the need to maintain appropriate control of short-term interest rates with abundant excess reserves in the  6  BIS central bankers’ speeches  banking system.13 Primary dealers, and entities of the type that are currently eligible to be primary dealers, which typically exhibit structural demand for cash financing to support inventories, are unlikely to satisfy this requirement. To the extent that the ongoing evolution of the structure of the Treasury market, including technological advancements and changing investor behavior, affects the role of primary dealers as market makers, it is important to analyze the implications for the Fed’s ability to meet its objectives. The primary dealer system has proven to be very effective for both the conduct of monetary policy and the issuance of Treasury debt. I am very confident that the existing counterparty framework – continuing to utilize primary dealers for traditional domestic policy open market operations, expanding to new counterparty types, as appropriate, for targeted operations to increase the effectiveness of domestic policy implementation, and maintaining relationships with a sufficient number of large market participants in the relevant foreign exchange markets for possible foreign exchange policy and investment operations – provides enormous capacity to implement a wide range of monetary policies. Moreover, we have demonstrated a commitment throughout our history to make any adjustments necessary to ensure a robust and effective operational framework.