samchain/econo-pairs-v1 huggingface dataset:
The global economy is expected to remain weak following the synchronized recession in the advanced economies. While there is significant uncertainty on the prospects for recovery, the stimulus measures being implemented across the globe and the measures to address the financial crisis in the advanced economies are expected to contribute to improving conditions in the second half of this year. However, should there be further delays in addressing the impairment of the financial systems in the crisis affected countries, this would be a risk to the economic recovery process. This would in turn continue to have significant spillover effects on the rest of the world. Whilst Malaysia has successfully maintained the stability of its financial system during this period of uncertainty, the economy is not insulated from these global developments. Despite the high degree of openness of our economy, Malaysian businesses are however, less leveraged with significantly less foreign financial exposures and therefore better able to cope with the effects of the global economic downturn. During this recent decade, Malaysia has aggressively implemented measures to promote domestic demand as a driver for growth and thus achieve a more balanced growth. While the export sector is still important, the significance of domestic demand has gradually increased. In this current environment, the Malaysian Government has implemented a significant fiscal stimulus to sustain domestic demand. Following the reduction in interest rates, retail borrowing costs have declined to new historical lows.

It is one thing for the enhanced architecture of the global financial house to be sound. It is equally important for its participants to be able to understand and adapt to the new requirements. To illustrate, one particular rule requires market participants to obtain LEIs, or Legal Entity Identifiers for purposes of trade reporting. This will improve the usability of trade reporting data and facilitate better data harmonisation across multiple reporting regimes. In fact, when MiFID II commences in January next year, LEIs will be needed for trades with European counterparties. REFORMS AND CULTURE 16. Last but not least, no amount of regulatory reforms, rules and regulations can assure a sound and stable financial system if the conduct and behaviours of firms and individuals are flawed. A culture of strong Integrity and high ethics are crucial lynchpins to the safety and soundness of our financial system. The key to achieve this must lie in the various lines of defence in all financial institutions – where business units follow rules and regulations diligently; and Boards and Management place importance as well as give recognition to the roles of Compliance and Audit, supported by appropriate systems of reward and recognition. It must be made clear that doing right and doing good are aligned with doing well. 17. On this note, let me conclude. I am sure that this forum will provide many useful insights and much food for thought. Thank you for your attention. 3/3  BIS central bankers' speeches
First, in time for the Argentine G20 Summit, drawing on the work of the Big Four accounting firms, the Task Force will report on implementation experience, focusing on examples of good practice to foster wider adoption. Second, the Task Force is launching a Resource Hub to provide technical support, data, and collaborative partnerships – all aimed at helping companies implement the recommendations in as effective and efficient a manner as possible. As preparers, financials and investors 'learn by doing’, a virtuous cycle will be created where more and better information creates the imperatives for others to adopt the TCFD and for everyone to up their game on the quality of information they provide. This iterative process is a reason why there is likely cause for the Task Force to continue beyond the Argentine Summit in late 2018 and into the Japanese presidency. In particular, it will be important to get feedback from investors on which disclosures are truly decision useful so that this process is as efficient and effective as possible. Third, insurers and banks. Insurers have long been on the front line of the physical risks posed by climate change such as extreme weather events. Since the 1980s, the number of registered weather-related loss events has tripled. Inflationadjusted insurance losses have increased from an annual average of around $ in the  5  See ISS, (2018), United States Proxy Voting Guidelines, Benchmark Policy Recommendations, and Glass Lewis, (2018), Guidelines: An Overview of the Glass Lewis Approach to Proxy Advice.

For us, the Taylor rule derives its appeal from three features. The first is its simplicity in describing the behaviour of different central banks by estimating the policy reaction to deviations from the inflation target and to the output gap. The second is its quality as a benchmark in assessing the current stance of monetary policy with respect to the historical average for a similar macroeconomic situation. And, thirdly, the Taylor rule is appealing because it sets the standard by which monetary policy is introduced in macroeconomic models for forecasting and simulation purposes. The SNB’s monetary policy focus is on maintaining price stability, and we do not follow any explicit rule for setting the short-term interest rate. However, the Taylor rule serves as an important indicator in our decision-making process that helps us to conduct a systematic policy. Having talked about John the researcher, I would like to turn now to John Taylor the policy advisor. Time and again, John has merged research with policy making. On this account, his record is long and outstanding as well. He served as a member of the President’s Council of Economic Advisors from 1989 to 1991. He was on the Panel of Economic Advisers of the Congressional Budget Office from 1995 to 2001. And from 2001 to 2005, he served as Under Secretary of Treasury for International Affairs. His responsibilities included setting up a new currency in Iraq and getting terrorist financing under control.
On the one hand, tougher financing conditions and the drop in property prices have hit hard countries that have been relying on financial services and domestic demand in recent years, mostly Great Britain, Spain and Ireland, but also Estonia. On the other hand, the crisis has not spared  2  BIS Review 89/2009  countries that have been focusing on industrial production exports, primarily Germany, but also Sweden and Finland. Thus, the political choices of the Member States vary as well. Different conditions for countries borrowing from financial markets make up an additional problem in the EU. General distrust in the global financial markets as well as growing fiscal deficits, expanding government debts and insecure growth prospects have caused investors to become more risk-averse. As a result, the spread between the yields of government bods in the EU has notably widened. Some Member States must pay higher interest compared to a couple of years ago when they wish to borrow. This makes it harder to finance state expenditures. Based on the above, the EU's economic policy measures to exit the crisis can be divided into three large categories that were agreed upon in the European Economic Recovery Plan at end-2008. The shorter-term goal is to stop the downturn and to stabilise the economy. In longer term, it is necessary to restore the confidence of enterprises, households and financial markets in the growth potential of the European economy.

If other countries with stable governments offer more attractive tax and regulatory environments, capital that would otherwise go to creating jobs in the U.S.A. will migrate abroad, just as intra-U.S. investment is migrating to Texas. Thus, even if one were to somehow have 100 percent certainty about the future course of Federal Reserve policy and be completely comfortable with it, without greater clarity about the future course of fiscal and regulatory policy and whether that policy will be competitive in a globalized world, job-creating investment in the U.S. will remain restrained and our great economic potential will remain unrealized. I pull no punches here: We have been thrown way off course by congresses populated by generations of Democrats and Republicans who failed the nation by not budgeting ways to cover the costs of their munificent spending with adequate revenue streams. The thrust of the political debate is now – and must continue to be – how to right the listing fiscal ship and put it back on a course that encourages job formation and gets the economy steaming again toward ever-greater prosperity. No amount of monetary accommodation can substitute for the need for responsible hands to take ahold of the fiscal helm. Indeed, if we at the Fed were to abandon our wits and seek to do so by inflating away the debts and unfunded liabilities of Congress, we would only become accomplices to scuttling the economy. I was in Mexico last week.
In considering suitable options, the Committee will have to balance technical complexity with a realistic understanding of practical considerations. The Committee also is addressing what some observers have noted is the potential for introducing greater cyclicality via a more risk-sensitive capital framework. That is, the capital requirements for loans to troubled borrowers will tend to increase at just the point when such trouble is becoming apparent. This is an important point, and one that must be given serious consideration. It is my view that the global financial system needs to move toward addressing potential credit problems preemptively - before these problems have time to grow from minor disturbances to major disruptions. A more risk-sensitive capital framework should help ensure that banks hold appropriate capital behind high-risk credits in the first place, and thus reduce the cyclical tendency for retrenchment that often follows problems with such loans. Credit risk mitigation techniques Greater recognition of the benefits of risk mitigation techniques - such as collateral, guarantees and credit derivatives - also is at the forefront of the Committee’s work in revising the Accord. The Committee learned a great deal from recent consultations with over 50 banks and industry associations within the G10 on their methods for mitigating credit risk. We are now evaluating how best to incorporate the risk reducing benefits of such techniques, while at the same time addressing potential residual risks that may arise from their use.

Based on the views expressed by industry participants and the work the Committee is currently engaged in, I can tell you that we are firmly committed to the use of banks’ internal ratings as an approach for setting regulatory capital requirements. Internal ratings Many of you in the industry have noted that a capital regime based on banks’ internal ratings, which reflect a wide range of information about borrowers, can prove to be quite sensitive to the level of risk in a bank’s portfolio. From a supervisory standpoint, an internal ratings-based approach can also provide banks with the proper incentives to improve their risk management practices, which is consistent with our overall objectives for revising the Accord. With this in mind, the Committee is actively exploring how to link banks’ internal ratings to a regulatory capital scheme. We are seeking to develop flexible approaches since all banks wishing to use internal ratings may not yet be able to generate the complete set of information necessary to tie ratings to capital requirements. Thus, for at least some banks, we are investigating the possibility that some of the information would have to be supplied by the supervisor, even while the core elements were supplied by a bank’s internal ratings scheme. As an important first step in developing these approaches, the Basel Committee has been gathering information about banks’ internal ratings systems, and assessing both “best” practice and overall sound practice in this area.
Forward-looking regulators consider not just the here and now, but emerging vulnerabilities and their impact on business models. That is why the PRA has worked with regulated firms, many of them represented here tonight, to produce for the Department for Environment, Food and Rural Affairs a review – published today – into the impact of climate change on British insurers. The Report concludes that insurers stand exposed to each of the three types of risk climate change poses to finance; and while the sector is well-placed to respond in the near-term you  4  BIS central bankers’ speeches  should not assume your ability to manage risks today means the future is secure. Longer term risks could have severe impacts on you and your policyholders. The insurance response to climate change It stands to reason that general insurers are the most directly exposed to such losses. Potential increases in the frequency or severity of extreme weather events driven by climate change could mean longer and stronger heat waves; the intensification of droughts; and a greater number of severe storms. Despite winter 2014 being England’s wettest since the time of King George III; forecasts suggest we can expect at least a further 10% increase in rainfall during future winters. 14 A prospect guaranteed to dampen the spirits and shoes of those who equate climate change with global warming. While the attribution of increases in claims to specific factors is complex, the direct costs of climate change are already affecting insurers’ underwriting strategies and accounts.

Hence, the enactment of the legislation by our country’s legislature is welcomed by all of us who value stable economies and peaceful societies. Due to the scale and magnitude of the heightened global interest in Money Laundering and Terrorist Financing, international obligations too, required many countries to introduce  BIS Review 9/2007  1  legislation. In fact, in terms of their international obligations the legislative approach pursued by many countries, including Sri Lanka, has been in the context of Security Council Resolution 1373 dealing, inter alia, with financing of terrorism and the International Convention on the suppression of financing of terrorism. These agreements have, to a great extent, unified the world in its fight to meet this challenge and, I dare say, the closing of ranks among the countries of the world, would have certainly helped to curtail terrorism which may otherwise have reached unimaginable levels, thereby threatening world peace in general and the world economy in particular. Let me now say a few words about our own efforts in this sphere of activity. The initial phase of establishing a comprehensive framework for anti money laundering and combating financial terrorism in Sri Lanka was focused on the preparation of the draft legislation. With the passage of legislation, our efforts were then directed towards setting up of the infrastructure for the Financial Intelligence Unit (FIU). We now have a fully operational FIU established in the Central Bank, the apex institution in the financial system in Sri Lanka, to meet both its local and international obligations.
Survey Chile  30 25 20 15 10 5 0 97  98  99  00  01  02  03  04  05  06  07  08  09  10  11  (1) The solid lines show the simple average of the reference rates of each group of countries. Dots are the averaged responses of analysts surveyed by Bloomberg during July 2010, regarding expectations for September and December 2010, and March and June 2011. (2) Includes Canada, Eurozone, Japan, Norway, Sweden, Switzerland, U.K. and U.S. (3) Includes Brazil, Colombia, China, Czech Rep., Hungary, Mexico, Poland, Peru, South Africa, South Korea and Turkey. (4) Data from before the nominalization of the reference rate (August 2001), consider actual inflation. Subsequently, they consider the effective policy rate. Sources: Central Bank of Chile and Bloomberg. BIS Review 124/2010  7  Figure 3 Economic growth (annual change, percent) Developed economies Chile Emerging economies  15  Emerging economies Developed economies Chile  10 5 0 -5 -10 -15 80  83  86  89  92  95  98  01  04  07  10(f)  13(f)  (f) Forecast. Source: International Monetary Fund (WEO, April 2010).

Adaptive compliance – adding speed and agility to process and procedure  Over the past 20 years, as ethics and compliance has moved through infancy and into early childhood, we have become committed to the process and procedure that is emblematic of a program. There is much about this progression that is good. The building of compliance programs has produced real benefits,5 and these benefits have created the compliance profession. There is a risk too. The risk is that the process and procedure that is the substance of the compliance program will become a kind of iron cage, restraining innovation so that the organization cannot adapt to changing circumstances. In short, the process and procedure can stifle speed and agility. One place where this has occurred recently is in financial services. Some institutions witnessed some malefactors violating the law and engaging in anti-competitive practices with respect to the setting of the Libor rate. Those institutions responded to very specific rate fixing abuses, but they did not envision that the abuses with respect to Libor could also be occurring in other businesses, like foreign exchange. Compliance, in this particular instance, was not adaptive. Compliance professionals, in this instance, did not show the needed speed and agility. They did not reason along the lines that “if it is happening concerning Libor then it might be happening concerning foreign exchange.” As compliance becomes increasingly routinized and subject to what the consultants would call the “repeatable process”, the process can have a tendency to drive out creative thought.
But this reflex response is not the only macro-economic force at work. Two further large and powerful sources of economic energy are also fuelling growth, one public, one private. The public source is the extra-ordinary degree of additional stimulus that has been provided to the UK and global economies by monetary and fiscal policy. In the UK, the quantum of additional QE and fiscal easing both presently stand at around 15-20% of GDP, adding significant further momentum to an already rapidly bouncing-back economy. The private source of economic energy comes courtesy of the large pool of involuntary savings amassed as a result of restrictions on spending. For UK households these amount to over £ billion and for UK companies around £ billion. Leakages from this saving lake are already fuelling spending on goods and assets. And lower than expected unemployment is encouraging more of these savings to be spent in a virtuous cycle. The size and depth of this saving lake means it could finance demand at scale for some period to come. With public and private financial fuel being injected into a macro-economic engine already running hot, the result could well be macro-economic overheating. When resurgent, and probably persistent, demand bumps up against slowly-emerging, and possibly static, supply, the laws of economic gravity mean the prices of goods, services and assets tend to rise, at first in a localised and seemingly temporary fashion, but increasingly in a generalised and persistent fashion.

The pace of technology adoption by incumbent banks is high, while level of fragmentation among finance providers is low. This is a more ambitious, albeit possible, scenario where banks successfully adopt the best strategies and emerge as the dominant winner in all finance segments; b. Here we see banks as incumbent institutions responding quickly to technology shifts, realigning their business processes and delivery channels to meet customer expectations. They succeed in nurturing both tech-literate management personnel and digitally-savvy talent; c. Emerging tech firms remain important sources of innovation but are acquired by the incumbents. As a result, these institutions can successfully retain and expand their customer base; and d. In this scenario, although we will not see a dramatic change in terms of players in our financial system, the functions and ways in which they conduct businesses will be dramatically different. The second scenario is “Plugged-in Finance” a. Both technology adoption by incumbent banks and fragmentation among finance providers are high. Finance is marked by an ecosystem of “co-dependence” between banks and tech start-ups that target specific, profitable segments of the market rather than the whole suite of financial services; b. The resulting partnership is one that is both rich and dynamic.
An alternative would be to apply these same techniques on a normative and prescriptive basis – how should central banks be communicating to best engage with a wider audience? For some time, this has been as area of active study and policy design by behavioural economists. For example, in the UK the Behavioural Insights Unit (BIU), initially set up by the UK government, has worked on a range of public policy questions, including taxation, regulation and consumer choice. In particular, their work has focussed on how sometimes subtle changes in language can be used to improve understanding by the public and to “nudge” them towards a particular course of action. 74  Understanding the response of the public is often not easy and often calls for the use of randomised control trials familiar from development economics. For example, the Financial Conduct Authority in the UK has recently used these techniques to explore how changes in the language used to describe financial products affects the likelihood of them being understood and purchased by retail investors. In choosing retirement income products, use of the word “annuity” shrunk take-up by 25%. 75  This approach of trialling, eliciting feedback and then adapting is not common in macro-economic public policy. That is, at least in part, for the understandable reason that doing experiments with the general public on a macro scale is a rather daunting task.

There are two elements to this – the technical and the behavioural. The first is easier to fix. By technical I mean the complexity of the language used – the length and complexity of words, sentences and paragraphs. Currently, central banks score poorly technically, in part because they are themselves technicians. This comes at a cost in terms of accessibility. Fortunately, there is a large literature, and a sizable cohort of grammarians, who have considered how to shape language to improve its reach. For example, like many others I suffer from an acute case of hippopotomonstrosesquipeadaliophobia – that is to say, the fear of long words. And if you choked on that last sentence, so now might you. Simple words can make a dramatic difference to readability. “Inflation and employment” leaves the majority of the public cold. “Prices and jobs” warms them up. “Annuity” deep freezes the public, whereas “investment” thaws. 65  In general, the readability of text is improved the larger the number of nouns and verbs and the fewer the adverbs and adjectives. 66  This old mantra remains true in the Facebook age: Facebook posts are more  likely to be shared the more frequent nouns and verbs and the less frequent adverbs and adjectives. The ratio of nouns and verbs to adverbs and adjectives in an Elvis song is 3.3. In my speeches it is 2.7. 65  Smart (2016).