samchain/econo-pairs-v1 huggingface dataset:
Ravi Menon: Budget carefully, borrow responsibly, invest wisely Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Launch of the Tamil Financial Literacy Guide, Singapore, 16 November 2014. *  *  *  Mr Kumaran Barathan, CEO of SINDA Ladies and gentlemen, good morning. Value of patience and prudence In the 1960s and 1970s, a psychology professor at Stanford University in the US conducted a study on children’s behaviour.   He offered each child a choice: get a marshmallow immediately or, if they waited a little longer, get two marshmallows.   Some children did not want to wait, or perhaps they had doubts about the professor keeping his word. So, they chose to have their sweet there and then.   Others were more patient and received two marshmallows, as promised. Fast forward 20 years. Follow-up studies were done on the same group of children.   Those children who had chosen to delay getting their marshmallow generally performed better in their lives.   They achieved better test results in school, for example.   And yes, they kept themselves in better shape too! The results have intrigued psychologists, social scientists, and educators ever since. Many more studies are being conducted and more elaborate theories are being proposed to explain them. But maybe our forefathers knew the answer all along: the value of patience and prudence; in other words, delay rewards today so that we can reap greater rewards tomorrow.

அதாவது, நமது வாழக்ைகப் பயணத்திற்கு நிதித் திட்டமிடுதல் அவசியம். இவ்வாறு  திட்டமிடுவதற்கு,  ெபாறுைமயும்  முன்மதியும்  அடிப்பைடப்  பண்புகளாகும். The practical insights in Ponnaana Ethirkaalam are relevant not only for the Tamil or Indian community but for all Singaporeans. I understand the authors have plans to translate their book into English to reach out to more people. I congratulate MP Sellvem and Jaafar Ghany on their achievement and wish them every success in the launch of Ponnaana Ethirkaalam. Thank you. 4  BIS central bankers’ speeches
Statistics Norway’s business tendency survey indicates continued favourable prospects for Norwegian manufacturing. Activity is expected to increase in service industries and the construction sector in the near term. Capacity utilisation in the Norwegian economy now appears to be close to a normal level. In manufacturing, capacity utilisation is close to its historical average. According to Norges Bank’s regional network, about 40 per cent of companies will have some or considerable difficulty in increasing production. Even though growth in the Norwegian economy has been high for a long period, substantial pressures have not yet emerged in the labour market. The rise in the number of employed in the first half of the year was fairly modest in relation to output growth. This may be due to lagged effects of the sharp fall in sickness absence through 2004. In many companies, the large increase in available person-hours was probably not fully utilised immediately. A considerable share of output growth may be the result of improved utilisation of company workforces. According to the quarterly national accounts, employment rose by 0.5 per cent from the first half of last year to the same period this year. Measured by the Labour Force Survey (LFS), the number of employed rose by 12, 000 from May to June and by a further 2, 000 from June to July. 1/7  The use of foreign labour has increased in the year that has passed since the enlargement of the EU.

In addition, active and widespread use of foreign currency hedging instruments is also beneficial to mitigate the negative knock-on effects from exchange rate volatility. Liberalization of outward investment by domestic investors also helps promote more balanced capital inflows and alleviate upward pressure on the exchange rate. These international asset holdings can provide a buffer when domestic market faces rigorous tests of volatility. Nevertheless, liberalization needs to be well planned, timed, and sequenced in order to ensure that its benefits outweigh costs. The appropriate degree of liberalization for a country at a given time depends on its specific circumstances, notably its financial and institutional development. More stable and long-term flows, particularly direct investment flows, should be liberalized prior to short-term portfolio flows, which are more volatile and sensitive to cyclical factors. In October 2012, the BOT launched the Capital Account Liberalization Master Plan. This was part and parcel of our longer-term plan to facilitate Thai companies to diversify their investments abroad, especially in neighboring countries. This would encourage private companies to operate their businesses more efficiently by expanding their markets and production bases. In turn, such diversification will help strengthen their competitiveness and absorptive capacity. At the other end of the spectrum, limiting leverage in the banking system would add more cushions to the economy against external shocks. Last but not least, developing fundamental economic strengths to enhance countries’ resiliency to external shocks can work through well-diversified export items focusing on high value-added products.
Inflation will be negative this year, but underlying inflation will be close to the inflation target of 2 per cent. Monetary policy is aimed at dampening the economic downturn. The repo rate was cut to an all-time low of 0.25 per cent in July and is expected to remain at this low level for the coming year. Thank you for your attention! BIS Review 98/2009  7  1. Financial markets functioning better Difference between 3-month interbank rate and expected policy rate, basis points (Basis spread) 400  400 Sweden Lehman Brothers  350  350  Euro area  300  300  USA Secure liquidity prior to year-end  250  250  200  200 BNP  Bear Sterns  150  150  100  100  50  50  0  0  Jan07  Apr07  Jul07  Oct07  Jan08  Apr08  Jul08  Oct08  Jan09  Apr09  Jul09  Oct09  Sources: Reuters EcoWin and the Riksbank  2.

Hamad Al-Sayari: Recent economic and financial developments in Saudi Arabia Speech by His Excellency Hamad Al-Sayari, Governor of the Saudi Arabian Monetary Agency, to the Custodian of the Two Holy Mosques on the occasion of presenting the 44th Annual Report of the Saudi Arabian Monetary Agency, Riyadh, 11 October 2008. *  *  *  It is a great pleasure for me to present to you the 44th Annual Report of the Saudi Arabian Monetary Agency which reviews the latest economic and financial developments in the Kingdom. Custodian of the Two Holy Mosques, During 2007, the national economy continued its strong growth for the fifth consecutive year, with real GDP increasing by 3.4 percent. The roles of the private and the government sectors in the development process were enhanced, recording growth rates of 5.8 percent and 2.7 percent respectively. The State budget witnessed remarkable improvement in 2007, resulting in a surplus for the fifth consecutive year amounting to 12.3 percent of GDP. The balance of payments registered a surplus for the ninth consecutive year which stood at 24.9 percent of GDP. The monetary and banking sector also contributed effectively to the economy by providing adequate liquidity to finance growing and accelerated activities. Financial institutions played a significant role in the growth of the economy by providing various modern financial services. Custodian of the Two Holy Mosques, With the establishment of the Supreme Economic Council (SEC) under your wise leadership, the Saudi economy has witnessed a dramatic transformation.
With inflation at 1.6%, continuing downward pressure from the appreciation of sterling, and with slack remaining, the current inflation environment is benign. But it will not remain benign if we do not increase interest rates prudently as the expansion progresses. Our latest forecasts show that, if interest rates were to follow the path expected by markets – that is, beginning to increase by the spring and thereafter rising very gradually – inflation would settle at around 2% by the end of the forecast and a further 1.2 million jobs would have been created. In other words, we would achieve our mandate. There is, as always, uncertainty about the future. But uncertainty does not mean stasis. You can expect interest rates to begin to increase. The exact path will depend on the economy. Our assessment will undoubtedly change as the economy evolves and policy will of course be adjusted if geopolitical events have a material impact on the outlook. If indicators suggest the economy is moving more slowly towards our goals, we will have learned that we are further from sustainable capacity. Prospective wage and unit labour cost growth will be weaker. Rates will go up later and more gradually. And should we see faster progress, prospective wage and unit labour cost growth will be stronger, which will suggest we are closer to maximum capacity and that the economy can sustain higher rates sooner. In all events, rate rises can be expected to be gradual and limited compared to the experience of the UK in the past.

BIS central bankers’ speeches  13  Table 1: Participation rates by age cohort (per cent)  16-24 yrs 25-29 yrs 30-34 yrs 35-39 yrs 40-44 yrs 45-49 yrs 50-54 yrs 55-59 yrs 60-64 yrs 6569yrs 70-74 yrs 75+ yrs  Participation Rate in 1994  Participation Rate in 2007  Latest Participation Rate (2014Q1)  Annual average increase (19942007)  Annual average increase since 2007  72.30  66.77  65.75  -0.10  -0.14  83.45  84.41  93.05  0.02  0.03  82.58  84.37  93.64  0.04  0.06  84.08  84.38  93.60  0.01  0.06  86.02  86.15  92.80  -0.01  0.04  85.43  85.56  91.60  0.01  0.05  79.07  82.47  88.75  0.07  0.10  65.99  71.78  81.82  0.12  0.15  37.93  46.25  59.95  0.15  0.15  10.87  16.23  25.76  0.11  0.17  4.49  6.79  12.43  0.05  0.11  1.85  1.80  4.90  0.00  0.05  Source: Labour Force Survey and Bank calculations. 14  BIS central bankers’ speeches  Appendix: stylised description of labour market dynamics This appendix sets out a stylized description of recent labour market dynamics derived from a simple model. First, suppose firms employ labour 𝑁 to produce output 𝑌 = 𝑁1−𝛼 , where 1 − 𝛼 is the labour share of income. Firms pay a real wage of 𝑊.
For example, providing government guarantees for all bank liabilities in one jurisdiction prompted outflows of deposits from other jurisdictions, requiring similar guarantees to be offered elsewhere. This may have resulted in an overall level of intervention that was unnecessarily intrusive and undesirable in terms of the incentives created in the financial sector. In short, the existence of considerable externalities and scope for significant spillovers within a financially integrated region like the euro area may have led to individually reasonable actions resulting in a collectively inferior outcome. Recognising these concerns, the EU institutions have stepped in to ensure that an area-wide perspective, internalising these externalities, is adopted. As we have seen, coordinating both public and private behaviour to achieve a favourable outcome in a multiple equilibrium setting requires both clear and credible programmes at national level, and support and coordination at EU level. After a somewhat hesitant start, the European Union is now moving towards a stronger institutional framework to support this approach. Looking beyond the horizon of existing programmes, the crucial longer-term macroeconomic and financial discipline requires further institutional change and integration, notably an enhanced Stability and Growth Pact, and the introduction of a new and more effective system of macroeconomic surveillance across EU Member States. The creation of the European Systemic Risk Board to conduct macro-prudential surveillance and the three new European Supervisory Agencies for the financial sector also aims to improve the quality and coordination of financial regulation and supervision.

As a result, euro area countries cannot afford to implement a sovereign default without suffering as a consequence of such a default a major breakdown of their financial, economic and social structure. There is no post-war example of a government in an industrialised economy restructuring its debt. For a euro area sovereign to seek to restructure its debt would be a huge leap into the unknown. This aspect is frequently omitted by financial analysts in their  10  The classic reference is Fischer. I (1933). “The debt-deflation theory of Great Depressions”, Econometrica 1(4), pp. 337–357. BIS central bankers’ speeches  5  newsletters or by commentators or academics in their short op-eds. And this is the reason why they do not get the point right when they state that default and restructuring is unavoidable in the euro area. The fourth difference is that, given the much greater depth and intensity of financial and economic integration in Europe, the strength of contagion across financial institutions and markets is potentially more significant within the euro area today than was the case in Asia in the 1990s. That is not to say that there was no contagion in the 1990s. But the cross-border exposures within the euro area are an order of magnitude greater than was the case for such intra-regional cross-holdings in Asian EMEs. This means that the potential for spillovers and a systemic area-wide crisis is much higher and has to be factored into the policy responses.
Counterparties’ reluctance to deal with Lehman intensified starting on Monday, September 8, 2008, such that by Thursday, September 11, 2008, it was apparent to us that Lehman faced a liquidity crisis – i.e., it would not be able to pay its debts as they came due. The issue was no longer whether this public company could fashion its own rescue. We had come to the point of no return, where Lehman faced two alternatives: bankruptcy, or some kind of third-party rescue. The United States Treasury Department, working in conjunction with the Federal Reserve and the SEC, convened a meeting of the chief executive officers of major financial institutions at the New York Fed after the close of markets on Friday, September 12, 2008. Secretary Paulson opened the meeting with a short and plain declaration that there would be no public money to support Lehman. The Government then gave the CEOs two tasks. First, it was suggested they form a consortium to finance certain of Lehman’s illiquid assets in  3  Richard S. Fuld, Jr., Statement before the United States House of Representatives Committee on Financial Services, April 20, 2010. 4  Transcript, Hearing on Lehman Brothers Bankruptcy Examiner Report, United States House of Representatives Committee on Financial Services, April 20, 2008, pp. 136, 153. BIS Review 112/2010  3  order to facilitate an acquisition.

They engaged in discussions with potential Korean buyers and approached Warren Buffett. At no time did the New York Fed tell Lehman that it would be bailed out with taxpayer money, nor did the New York Fed instruct Lehman to act as if such an option was available. Lehman’s CEO, Mr. Fuld, and the Chairman of the Lehman board of directors, Thomas Cruikshank, have made clear that Lehman was not expecting any Federal bailout. 4 Both men fully understood that Lehman was a public company and needed to be fully responsible for its own financial situation. Lehman weekend September of 2008 will likely be remembered as an epochal period in the history of American finance. The bankruptcy filing by Lehman occurred during that month, and it must be analyzed in the context of that most distressing time. On September 7, the Federal Housing Finance Agency placed Fannie Mae and Freddie Mac into conservatorship, and the Treasury Department used its authority, granted by Congress in July 2008, to make financial support available to these two government-sponsored entities. While Lehman is often considered the trigger for the systemic consequences that were to come later in the month, it is also clear that Fannie and Freddie’s decline, among other factors, caused a number of market participants to begin “hunkering down” to protect their balance sheets. Exposure to Lehman was one of the items to be addressed.
The far-reaching changes in the Spanish economy in recent decades have equipped it with the wherewithal to overcome this difficult stage and to subsequently resume a path of sustained growth, allowing convergence to continue. But if these factors are to operate, the authorities and all agents must face up to the current circumstances and make the required efforts, and economic policies must prevent any slippage and enable the factors conducive to the resumption of sustained growth to come into play. Naturally, I shall focus today on the diagnosis of the situation of the Spanish economy and on its economic policy implications. But these would both be incomplete without some, albeit brief, reference to the deterioration of the international setting and to the economic outlook in the euro area which, as you know, will determine monetary policy developments. Last year, the growth of the world economy reached 5%. The forecasts available for this year, however, place the figure below 4%, with scarcely any scope for the start of a recovery in 2009. Moreover, any recovery will be moderate, slow and subject to a degree of uncertainty fuelled, among other developments, by a rise in major inflationary pressures in most economies. In my view, there are three basic factors behind this deterioration of the global economic situation. The first is the adverse behaviour of the US economy, weighted down by the continuing decline in its real estate sector, which is depressing household and investor confidence.

The Centre will also groom a pipeline of talent in green finance across the career spectrum— from the undergraduate to the executive education levels. The Centre has strong support from our financial industry, which will play a key role in steering the Centre’s focus towards market-oriented outputs. I would like to thank the founding partners— Bank of China Limited, BNP Paribas, Fullerton Fund Management, Goldman Sachs, HSBC, Schroders, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, and UBS AG. MAS will continue to promote a vibrant green finance research and talent development ecosystem. We will look to anchor more centres of excellence with diﬀerent strengths and focus areas — to provide a diversified pool of research and talent in green finance. CONCLUSION People across the world – and in Singapore – are increasingly concerned about climate change and environmental degradation. And they want to do something about it. Climate change is becoming a rallying cry to inspire people to step up to a higher cause, to take collective action for the common good of our planet. The looming climate crisis poses not just an existential challenge to be overcome but also an economic opportunity to be seized. The coming revolution in sustainability has the potential to remake the world, cleaner and greener, creating new value and new jobs. Let us harness the power of finance to help create such a world, and a sustainable future.
At the same time, the industry has asked the Committee not to sacrifice risk sensitivity where it makes sense, even if it means that the rules may become somewhat complicated. Indeed, the complexity of the New Accord stems partly from the options the industry requested to ensure that a blanket rule would not unfairly disadvantage a particular business or exposure. You need only read a few of the comment letters on our website to see that many of the latest suggestions would tend to increase the complexity of the New Accord even further. Nonetheless, the Committee is aware that it is easier to enforce a simpler rule than a complicated one. As we complete the text of the new rules, we will continue to simplify and streamline the framework. Conservatism A second important theme addressed in comment letters suggested that the Committee may have adopted an overly conservative approach to some aspects of the framework, resulting in much higher capital charges than banks feel are necessary. Respondents attribute what they view as excessive levels of conservatism to different sections of the New Accord, including, as I mentioned earlier, the calibration of capital requirements to both EL and UL. We have heard similar concerns about conservatism in the securitisation proposals, in the treatment of certain credit risk-related hedges, and in the recognition of insurance products within the operational risk proposals. Questions about conservatism are important, as we are trying to align capital more closely to risk.

Details on our proposal can be found on the website of the Bank for International Settlements, and the Committee has invited public comment on the approach through the end of this year. In recommending this revision, the Committee seeks to ensure that risk management systems distinguish between losses that can be anticipated versus those that cannot. Moreover, the new framework would include explicit incentives for banks to address each kind of loss appropriately ensuring strong incentives for banks to provision properly against expected losses. Since the proposal would require only modest revisions to the text of CP3 and would not alter the underlying system and data requirements for banks wishing to adopt an advanced approach to credit risk, we expect that the revised treatment will conform closely to the work that banks have already completed to prepare for implementation. The work plan to improve the framework discussed during our last meeting identified several areas in addition to this important EL-UL issue. We think that this work plan is perfectly compatible with the original time schedule to implement the New Accord by yearend 2006. Other issues ahead: complexity Beyond the “EL/UL” issue, the Committee has put at the top of its work plan for the next few months several other credit-risk related issues that emerged in consultations. Of these matters, I’d especially like to highlight three, namely complexity, conservatism, and competition. Certainly, the complexity of the proposals continues to draw the public’s attention.