samchain/econo-pairs-v1 huggingface dataset:
In addition, China plans to launch its international payment system, known as CIPS, in 2014. The development of a single centralised cross-border RMB payments infrastructure also augurs well for market efficiency and standardised practices for RMB payments across the region. 3  4  CNBC, 17 Jan 2013. “China’s outbound investment leaps to record high in December”. BIS central bankers’ speeches  Singapore’s role as an offshore RMB market 32. As an international trading and financial centre, Singapore will seek to support the growth of a resilient offshore RMB market in the Asian region by: i. Building RMB liquidity;  ii. Enhancing access to RMB for funding and investment purposes; and  iii. Integrating the offshore RMB with existing Asian local currency markets. 33. Firstly, Singapore can leverage on its strengths as a key wholesale funding centre to increase liquidity and circulation of the RMB in Asia. We are already seeing good growth in RMB deposits, both non-bank and interbank. We are also one of the largest centres for RMB payments outside Hong Kong. As a major regional funding centre, Singapore has traditionally supported the liquidity of the Asian markets and can partner China in promoting sustainable offshore use of the RMB. 34. In February this year, ICBC Singapore was appointed by the People’s Bank of China (PBC) as the RMB clearing bank in Singapore. The RMB clearing bank will be an important channel for RMB liquidity to circulate between China to Singapore. 35.

The financial industry in Singapore has good expertise in developing FX and derivatives instruments, with several emerging Asian FX teams based here. It is well equipped to develop customised offshore RMB capital market instruments, especially for Asian market participants. For instance, banks in Singapore can explore how to encourage offshore RMB bond issuance in Singapore with longer maturity tenors and different issuer profiles. Conclusion 40. Let me wrap up briefly. Global deleveraging is being accompanied by the continued inflow of funds into Asia’s emerging market economies. This shift poses risks if not wellmanaged, but it is also an opportunity. The next phase of development in Asia’s financial markets is therefore critical. We have to develop greater breadth and breadth in Asian markets, so that savings flows translate into sustainable economic growth rather than recurrent bubbles in asset markets. 41. Thank you and I wish you a successful conference. BIS central bankers’ speeches  5
This includes properly designed incentive structures that must reflect risk outcomes. Financial institutions are also required to regularly review their risk management methodologies and processes to account for the changing business environment. This aims to ensure that risk management does not become something one does to check off a box on a list and then forgets about. A second notable observation has been the broader focus of risk management. While financial risks remain a key focus of risk management practices, risks from reputational, human capital and environmental concerns can have equally significant repercussions for a firm’s business. Recovering from reputational damage is a hugely expensive endeavour, takes a long time, and success is often not assured. We have observed in our own work that where institutions take a broader view of risk management in these areas, conversations around the role of risk management at the senior management and board levels are more likely to shift beyond avoiding losses, to enhancing strategic opportunities for improving the institution’s competitive position. This itself can have a mutually reinforcing effect of directing more resources towards risk management and creating better synergies between business and risk functions. While more firms are acknowledging the importance of reputational, human capital and environmental risks, actions however have generally not measured up. Many companies still have weak succession plans in place and remain vulnerable to key-man risks.

Indeed, an important development emerging in the recent period has been the more explicit consideration of implications for recovery plans in key strategic decisions, such as decisions to hub operations at a particular location or service provider. As much as organisational resources are put into enhancements of business continuity management, it is important for businesses to always keep in mind the inherent limitations of  BIS central bankers’ speeches  3  business continuity plans and not be lulled into a false sense of confidence that these plans may provide. Scenarios featured in these plans are often based on assumptions, which are a simplification of reality at best. Such scenarios should always be rigorously challenged to account for changing conditions. Business recovery or resumption actions should also contemplate a range of conditions to build agility within the organisation to execute required, but potentially untested, responses. Firms should expect that they will rarely get to a point of precision in their scenario planning and BCM responses. This does not mean that BCM is necessarily reduced to an exercise in futility. A commitment to continuous improvements in BCM is almost certainly likely to prepare firms better for disasters and tail risk events even if those specific events were not exactly contemplated. This is because the organisation will be naturally better at coming together in a crisis, and would be able to leverage on some of the core elements of response plans that have already been developed and tested.
Consider for a moment a very simple financial intermediary (a “bank”) that can finance risky lending with either debt, which here encompasses both deposits and credit market instruments, or equity. Assume that the bank pays RD on its debt and earns (a stochastic) RL on its loans, net of intermediation and monitoring costs. Then the return on its capital, RK, is given by: RK = (1+λ)RL – λRD, where λ is the leverage (debt-to-equity) ratio. In the normal course of events, one would expect the return on debt to be an increasing function of leverage, as the greater the leverage, the greater the chance that the bank’s capital will be wiped out in the event of low returns on the loans and they will be forced to default on part or all of the debt. Indeed, with symmetric information between bank and creditor, there should be no gain from raising leverage at all by virtue of the Modigliani-Miller theorem. For a number of reasons, however, this may not work in practice. Creditors – especially if they are households rather than sophisticated financial market participants – may not even factor in the implications of higher leverage for the possibility of default. And even if they do, the debt may be partially or wholly underwritten by the state, with the cost of the insurance only imperfectly passed back to the bank.

As a consequence the prices are apt to drop sharply with changing perceptions of the underlying default rates, a feature that has been apparent during the crisis. A typical CDO comprises a large number and variety of RMBS, including a mix of prime and sub-prime mortgages from a variety of originators. On the face of it, this might seem like a good thing as it creates diversification. However, even more than with plain vanilla RMBS, it becomes impossible to monitor the evolution of the underlying risks – it is akin to trying to unpick the ingredients of a sausage. That may not matter too much when defaults are low and only the holders of the first, equity, tranche suffer any losses. Holders of the safer tranches can in that case sit back and relax – a case of rational inattention. But once defaults begin to rise materially, it matters a lot what such a security contains. And with highly nonlinear payoffs, returns can be extremely sensitive to small changes in underlying conditions. When defaults on some US sub-prime mortgages originated in 2006 and 2007 started turning out much higher than expected, there was a realisation that losses could be much greater on some of these securities than previously believed. And a growing realisation of the informational complexity of these securities made them difficult to price in an objective sense.
Even if the non-bank players do not need to directly engage with these issues, they must have high degree of awareness in order to work effectively with their partner financial institutions. Measures taken in Malaysia to develop a more inclusive financial sector Allow me to now share Malaysia's experience in addressing financial inclusion and branchless banking. In Malaysia financial inclusion has been a high priority in our national agenda for many decades. Since the establishment of the Central Bank, there has been a conscious policy to have an extensive commercial banking branch network across the country, to ensure the outreach, in particular, to cover the non-urban areas. Malaysia now has 10.2 branches for every 100,000 individuals as opposed to the global median of 8.4 branches for every 100,000 individuals. In Malaysia, more than 80% of the population also have some form of savings account. This has also contributed to the financialisation of savings in the country. Deposits as a percentage of gross domestic product is 180%. This means that savings is mobilised even from small savers into the formal financial system. This allows the savings to be channelled to productive economic activity. To further drive the provision of basic financial services to the underserved, the National Savings Bank in Malaysia has been mandated in 2006 to enhance the outreach of deposit services and micro-financing. Their efforts, together with those of commercial banking institutions and government mandated micro-financing agencies, have resulted in a significant expansion of micro-financing.

With this regard, the Data Management Group would act as the owner of the project. In addition, as the project itself is very crucial, which could create some wide impacts throughout the organization, the Bank of Thailand realizes its significance and hence assigning a group of high-ranking officials in forms of the Steering Committee to closely monitor the progress along the way. The committee panel is led by the Assistant Governor, Information System while I also serve as the project sponsor to ensure that the data management system project could well progress in accordance with the pre-scheduled plan. As for the roles of financial institutions which are major providers for a good deal of financial data in the system, most institutions have to bear high burden, both human labor resources as well as other expenses for data submission under the current system. With the implementation of the new system, most institutions unanimously provide great cooperation - to create comprehensive data transmission network that could accommodate all data transfer demands in time. Today’s opening ceremony presents the first phase of the financial institution electronic data submission project. From today onwards, financial institutions’ submission of over 200 hard copy and CRF reports would be substituted by merely 41 data sets. Consequently, this would more or less lessen the burden and make it more convenient for financial institutions to report data to the Bank of Thailand.
Within the framework of the Treaty establishing the European Community (EC Treaty), the Governing Council shall be held accountable for the maintenance of price stability in accordance with its published definition. The Governing Council is neither responsible for the content of these projections, nor should its performance be judged against them. While macroeconomic projections are a useful instrument for undertaking the forward-looking assessment on which monetary policy decisions are based, the limitations I have outlined imply that such projections cannot be the only tool used by the Governing Council. The Governing Council should no more assume responsibility for the staff macroeconomic projections than it does for the content of other analyses that constitute inputs into its policy decisions, such as the monetary analysis under the first pillar or the evaluation of developments in individual indicator variables or financial prices and yields. Assuming responsibility for one input into its decisions would detract from the Governing Council’s true responsibilities, first for monetary policy decisions and ultimately for the maintenance of price stability. Given the Governing Council’s overriding commitment to the maintenance of price stability, the only forecast for which it could take responsibility would be one that was consistent with price stability. BIS Review 109/2000  4  Such a forecast - which, by its nature, would not change over time - would not, in itself, be very informative about the Governing Council’s assessment of the prevailing economic situation.

That takes us to a third potential explanation for the downward trend in risk weights, one familiar from every other field of self-regulation – the system has been gamed or arbitraged (Blum (2008), Masera (2012)). Under a self-assessed standard, banks may have both the incentive and the ability to shade downwards risk weights, or to switch to lower risk-weighted asset categories, thereby boosting reported capital ratios. The aggregate evidence is consistent with this having occurred secularly and on a significant scale. Firm-specific evidence is also consistent with this hypothesis. A survey by McKinsey in 2012 found that 65% of firms were engaged in “RWA optimisation” of some form (Babel et al (2012)). And the recent US Senate investigation of the J P Morgan “whale” incident is the latest in a long line of identified misdemeanours sourced in model manipulation. In short, while one of the original aims of the Basel Accord was to prevent a race to the bottom, the move to risk-based capital adequacy standards may in fact have accelerated it. What, then, of the second objective of the original Basel Accord - levelling the international playing field? From an economic perspective, a level playing field would imply that banks with equivalent portfolios should hold a broadly equivalent amount of capital. The most compelling test of this hypothesis comes from the hypothetical portfolio exercises (HPE) recently conducted in the UK and internationally. These take a set of common portfolios and ask how much capital banks’ internal models would set against them.
Recognizing that inflation targeting is not a panacea, the Monetary Policy Committee has supplemented the framework with a regular monitoring and assessment of seven key areas of financial imbalances, where buildup may threaten the macroeconomy and price stability. These seven areas are the country’s external position, the real estate sector, bank credit, household and corporate financial positions, the financial market, and the fiscal position of the Government. Ladies and Gentlemen, despite all these reform efforts and the stronger foundation the Thai economy now has, we have to remain vigilant. Today, the change of pace in the global economic environment is simply unprecedented. Some of these changes, if left unchecked, may have significant implications on a country. While the new global dynamics represents an opportunity for a country like Thailand to leap forward, it also entails increasing risk of economic instability. The evolving complexity of the global economy means that conventional thinking and approaches to deal with economic problems may, at times, need to be adapted. The 1997 crisis highlighted this point. Back then, the conventional wisdom for a crisis-ridden country is to adopt restrictive monetary and fiscal policies. As we all now know, overtightened stance aggravated the already fragile situation and created many unnecessary pains. Only when the crisis contagion spread to several countries was it evident that such measure was a wrong medicine for Asia, which ultimately led to the abandonment of some of these measures. Today we are faced with the major problems of global imbalances and large and volatile capital flows.

Nevertheless, the past two years have witnessed a squeeze in firms’ gross profit margin as a result of increased competition and the appreciation of the baht relative to other regional currencies. BIS Review 46/2007  3  And as for the banking sector, which was at the center of the crisis, painful financial restructuring has now bore fruits. The banking sector has gained strength, with stronger profitability. The level of nonperforming loans has been cut down by four-fifth from its peak in 1998 to about eight percent in Q3 2006. And with the BIS ratio of nearly 15%, the banking system appears well cushioned to unexpected shocks. Finally, the fiscal sector benefits greatly from the economic upturn. Increasing corporate profits and consumption spending have resulted in higher tax revenues, allowing the government to strengthen its fiscal position significantly. Public debt to GDP has declined and is currently at only 41% of GDP. Ladies and gentlemen, I hope my account of these selected developments has shown you how far the Thai economy has come since 1997. The improvement was not due to luck or natural recovery process. It took a concerted effort by both the public and the private sectors to enable this turnaround. A natural question that follows then is whether this renewed dynamism will be sustained and this leads to my second point. 4  BIS Review 46/2007  That is, despite important challenges both domestically and externally, the medium-term outlook of the Thai economy remains positive.
Michael C Bonello: Single currency issues – a central bank perspective Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the conference “The Euro - the impact on business”, organised by the Malta Federation of Industry, 16 January 2003. *  *  *  By way of introduction, it is important to stress that Economic and Monetary Union (EMU) and the euro are key aspects of the Treaty on European Union. They are a logical consequence of the process of European integration, and in particular of the economic rationale of increased trade as the driving force for the further integration of citizens, institutions and markets. Indeed, the arguments for more closely integrated markets, namely that greater trade and financial integration will increase economic efficiency and improve welfare, can equally be made for a single currency. In the case of the EU, the advantages of a single market postulated by economic theory appear to have been amply realised. Since internal borders were removed ten years ago, it is estimated that the Single Market has helped to create 2.5 million extra jobs; the EU’s combined GDP in 2002 was 1.8%, or euro 164.5 billion, higher than it would have been; and each household was on average 5,700 euro 1 better off. Market opening is, therefore, not only good economics but also very good social policy. Further benefits can be expected to flow from the introduction of the single currency.

We also hope that you will also have the opportunity to experience Malaysia during your time here. On that note, I thank you for your attention. BIS central bankers’ speeches  3
In terms of competitiveness, progress since 2008 has been most significant. On Banco de España estimates, we will by early 2014 have regained, relative to the average of the euro area countries, all the competitiveness forgone from 2000 to 2008. These gains in competitiveness have been underpinned, above all, by the moderation of wage costs, a trend to which the labour market reform approved in early 2012 has proven conducive in respect of collective bargaining. Along the same lines, inflation has been very contained since 2009, and this has naturally contributed to the recovery in competitiveness. The export sector has shown great capacity and has notably increased its presence and sales both in the euro area and in other markets. Suffice it to say that this year, from January to August, the trade surplus, excluding energy, was almost double that of 2012, climbing from € billion to € billion. These developments have been upheld by corporate restructuring that has enabled the average value exported per company and the export base to increase. The sustained increase in the number of exporting companies over the past five years is due mainly to the growing participation of SMEs. Our trade balance with all regions has improved, with the exception of the oil-exporting countries. Spain is running a surplus both with the euro area and with the rest of the European Union.

Further, like the Federal Reserve and the Bank of England, it has pursued a very expansionary liquidity-provision policy, which can be measured by the sizeable increase of over 50% in its balance sheet since 2008. Among the extraordinary measures, I would highlight the long-term (as long as three years) refinancing operations; the extension of the list of assets accepted as collateral for the loans made to banks; and the launch of asset purchase programmes, such as the Securities Market Programme, the two Covered Bonds Purchase Programmes (including Spain's) and the announcement, in August 2012, of the Outright Monetary Transactions programme. More recently, in July this year, a policy of forward guidance has been adopted, involving the more accurate communication of the projected behaviour of official interest rates in the future. Yet we should remember that the capacity of monetary policy to resolve the problems at the root of this crisis is very limited. What it can do, and is doing, is making time so that other players who do have the proper tools to resolve the problems can adopt the measures needed, and so that such measures may take effect. The other European economic authorities, starting with the Commission, have – in close collaboration with national governments – taken significant steps towards correcting the weaknesses exposed in the euro's institutional arrangements. Thus, a permanent mechanism, the European Stability Mechanism, has been set up, with the capacity to provide funds to the Member States deprived of access to the capital markets.