samchain/econo-pairs-v1 huggingface dataset:
Mohammad bin Ibrahim: The development of the Malaysian financial markets Opening remarks by Mr Mohammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the Persatuan Pasaran Kewangan Malaysia (PPKM) Gala Dinner, Kuala Lumpur, 12 November 2010. *  *  *  Allow me to express my thank you to the organizer, Persatuan Pasaran Kewangan Malaysia, in short PPKM, for inviting me to tonight’s 2010 PPKM Gala Dinner. It gives me great pleasure to deliver the opening remarks. My address will specifically focus on the development of the Malaysian financial markets. The future of the financial markets is of interest to us all here today. I am pleased to note the significant progress that the Persatuan has achieved since its establishment in 1973. It has contributed significantly in representing the interest of the dealer community and in providing feedback and developmental ideas on issues relating to the development of the Malaysian financial markets. PPKM also plays an important role as a bridge to the relevant regulatory authorities. The relationship had been productive to the overall development of our financial market. Indeed, through this cooperation, the Malaysian financial markets have come a long way and have grown steadily in size, breadth and depth over the years. This has received acknowledgement in the recent World Economic Forum’s overall Financial Development Index (the Index refers to three broad areas: Factors, policies and institutions, Financial intermediation and Financial access), where Malaysia is now ranked 17th, up 5 notches from 22nd place previously.

Still others fault inappropriate government policies and perhaps complacency in not taking early action. BIS Review 91/1997  -5-  All in all a rather confusing picture. At the risk of causing even greater confusion, let me try to identify and articulate the monetary problems that Asian economies have been facing. 23. Capital inflow must be at the top of the list. At the beginning of the decade, net capital inflow to emerging markets was less than $ billion a year. By 1996, however, this had increased to $ billion. Asia has received roughly half of this capital inflow, thanks to the rather attractive basic economic fundamentals. These fundamentals, incidentally, have remained attractive today, notwithstanding the recent turmoil in Asian financial markets. The key factors that contributed to the surge in capital flows into the region include Japan’s willingness to export capital as a result of sustained and large current account surpluses. The rising costs of production in Japan, associated with the appreciation of the yen have forced many Japanese firms to relocate their production to the rest of Asia. Also contributing was the low interest rate policy in the industrial economies, particularly in Japan in the post-bubble phase, which has flooded the global market with liquidity. Increasing amounts of mutual funds and pension funds of these economies looked for higher returns in the emerging markets.
[5]  In April this year, non-euro area residents became net buyers of euro area long-term debt securities – in moving annual sums – for the first time in nearly three years. As non-residents have been important counterparties to the Eurosystem in implementing the APP, the gradual slowdown in their net sales of euro area securities may not be surprising. It is likely related to the step-wise reduction in the actual pace of Eurosystem purchases. [6] 3/7  BIS central bankers' speeches  Euro area residents, by contrast, and this you can see on the right-hand side, have reduced their purchases of foreign securities to a much lesser extent. In fact, when we cut the monthly pace of our purchases from € billion to € billion in April last year, euro area residents increased their acquisition of foreign debt securities by more than 15% over the following six months. Even when we cut the monthly pace of purchases to € billion as of January this year, euro area residents remained important buyers of foreign securities. In the United States, and this you can see in the chart on the left-hand side of my next slide, euro area residents accounted for nearly 30% of total US Treasury purchases during the first half of 2018. In 2017, their share was 25%. Now, there is no simple answer that could help explain the observed investment pattern. Some would argue that foreign securities – US Treasuries in particular – offer a considerable yield pickup compared with comparable euro area securities.

The question, then, is whether the approaching end of net asset purchases in the euro area might see a sudden waning in the support for global bond yields, and thereby risk amplifying 2/7  BIS central bankers' speeches  prevailing upward pressure on global sovereign bond yields stemming from the ongoing tightening by the US Federal Reserve. If such adjustments were abrupt, they could risk causing broader capital reallocations, including from emerging market economies, and force a revaluation of global equity prices, with potentially adverse impacts on the financial conditions consistent with our primary mandate. The gradual decline in net capital outflows since their peak in the spring of 2016, which you can see in the chart on the left-hand side, would, at least at face value, nurture such concerns. It suggests that there is at most a loose correlation between the actual pace of Eurosystem purchases under the APP – which has been gradually declining since April last year – and the intensity of cross-border capital flows. The persistence of policy-induced cross-border capital flows The chart masks important differences across investors, however. You can see this more clearly on my next slide. Up until May this year, net capital outflows in debt securities have decelerated, by and large, as a result of a reduction in the pace of net sales by non-euro area residents – as you can see in the chart on the left-hand side.
Indeed, the volume of global FDI has almost quadrupled since 1980, a much faster progression than world trade, which barely doubled. For the FDI host countries this has meant not only an increase in output and employment, but often also a transfer of technology and know-how that has considerably strengthened their economies. In this respect, the experiences of Ireland and Portugal immediately spring to mind. Thus, failing to compete in a globalized world is likely to result not merely in lower sales but, more importantly, also in less investment and, therefore, in weaker growth prospects. In sum, globalisation implies increased opportunities but also risks. The opportunities cannot be seized and the risks minimized, however, without an appropriate strategy. For this reason many countries are to-day actively engaged in improving their market positioning and their cost structures relative to their competitors in order to exploit opportunities for increasing their value added. Some of the more interesting dynamics engendered by globalisation are taking place at the regional level. Economic integration is proceeding rapidly in Europe, Asia and the Americas and, as a result, the region rather than the nation state is gaining pre-eminence as the locus for policy-making in the political sphere and for investment in the economic sphere. Regional integration is, therefore, rapidly becoming a key vehicle for gaining access to world markets and for attracting foreign investment. There is a growing realization that countries which remain outside of regional alliances are likely to become increasingly marginalized.

Jessica Chew Cheng Lian: Generating new solutions for remittances in Malaysia Remarks by Ms Jessica Chew Cheng Lian, Deputy Governor of the Central Bank of Malaysia, at the Launch of Project Greenback 2.0 Kota Kinabalu, Kota Kinabalu, 4 March 2018. * * * It is my great pleasure to be here today for the launch of the Greenback 2.0 Project in Kota Kinabalu. First of all, on behalf of Bank Negara Malaysia, I would like to thank Dewan Bandaraya Kota Kinabalu for agreeing to host this Project. We are sincerely honoured by the presence of YB Datuk Hajah Jainab at today’s launch event. And of course, the World Bank has been a truly committed and equal partner in this project with Bank Negara Malaysia, and as we concluded our collaboration in Johor Bahru last year, we are excited to begin another chapter in this journey together with the World Bank. Kota Kinabalu is Malaysia’s second remittance champion city and only the third champion city for the Greenback Project in Asia. Through the project, our aim is to help more people living and working in Sabah remit moneys whether for business or personal purposes, safely and at lower costs. To achieve this, we want to provide people in Sabah with information, with access and with the confidence to use remittance services. And we want to encourage more competitive remittance services in Sabah that will better serve the community. You may ask what is the significance of being a champion city?
If fiscal policy lacks a long-term anchor, the interplay in economic policy will not function and the result will be a more unstable krone exchange rate and wider cyclical fluctuations. This will also result in poorer use of our resources, partly because strong fluctuations in domestic activity and long-term interest rates and the exchange rate will prompt investment decisions that are made on a very uncertain basis. BIS Review 92/2000  10  Concluding remarks Allow me to conclude where I began. I would like to highlight two points. First, the main function of monetary policy is to contribute to nominal stability. This is the best contribution monetary policy can make to a sound distribution policy, to employment, to economic growth and to welfare. Second, history has shown that monetary policy can be effective. If we set interest rates at a level that is too low, we may trigger strong forces in the credit market, as witnessed in other countries and as we experienced in Norway in the mid-1980s. If we allow imbalances to develop in the domestic economy, this could also lead to sizeable capital movements, accompanied by wide fluctuations in the exchange rate and long-term rates. These are strong latent forces that are far too easily forgotten. References Akram, Q F (2000): “PPP despite real shocks: An empirical analysis of the Norwegian real exchange rate”. Working Paper 2000/7, Norges Bank, Oslo. Bernhardsen, Tom and Øistein Roisland (2000): “Which factors influence the krone exchange rate?”, Economic Bulletin 2000/4 (to be published).

The economic downturn and unemployment which often follow when the bubble bursts will primarily affect the most vulnerable segment of the labour force and have very negative distributional effects. Monetary policy cannot and shall not steer price developments in the housing market or other asset markets, but a monetary policy that inspires confidence will curb wealth effects because the potential for the emergence of bubbles is reduced. Nominal stability is the best contribution monetary policy can make to the distribution of income and wealth. Interplay between economic policy components - the role of monetary policy The basis for achieving stable economic growth is created through a successful interplay between the various components of economic policy, ie between fiscal policy, monetary policy, the system for income settlements and other measures aimed at improving the functioning of the economy - often referred to as structural policy. The Norwegian economy is vulnerable to abrupt shifts in the global economy. We cannot fully shield ourselves against external shocks, but we can curb the effects to ensure that economic developments are optimal in the long term. Fiscal policy in Norway has had an important role in stabilising demand and production. The Petroleum Fund shelters the mainland economy from the effects of oil price fluctuations to some extent. Developments in the real economy are of importance to price and cost inflation and hence for Norges Bank’s setting of interest rates.
As you are all well aware, during 2018, the European Central Bank gradually scaled back the nonstandard monetary policy measures that it had introduced to combat the risks of a long period of low inflation and possible deflation. In January, the monthly purchases in terms of the Asset Purchase Programme were halved from € billion to € billion. They were halved again, to € billion, from October. The Governing Council currently anticipates that, subject to incoming data confirming the medium-term inflation outlook, the net purchases will cease altogether in December 2018. Indeed, even after net asset purchases have ended, monetary policy will continue to provide support to the euro area economy as the stock on Central Banks’ balance sheets will be maintained with the re-investment of maturing bonds. The ECB’s key interest rates remain very low, with the overnight deposit rate standing at -0.4%. The Governing Council expects them to remain unchanged at least through the summer of 2019. At the same time, the Governing Council will ensure that ample liquidity conditions will continue to prevail for as long as needed by reinvesting principal payments from maturing securities for an extended period of time. This combination of very low interest rates and ample liquidity should ensure favourable financial conditions for firms and households, underpinning economic activity, and should strengthen the sustained convergence of inflation to the target. Looking ahead, domestic demand will play an important role in economic growth. The prospects in this regard remain favourable.

There has been no conflict between low inflation and high economic growth, as previously claimed by economists. 4  BIS central bankers’ speeches  The guidelines and the financial crisis The financial crisis in 2008 put our economic policy guidelines to a severe test. The interest rate cuts that followed from the inflation target led to a reduction in households’ annual interest expenses of around NOK 40 billion, or around 4 per cent of their disposable income. The krone depreciated and acted as a buffer. The burden on leveraged companies was eased and investment projects became profitable in an environment of lower interest rates. Altogether, monetary policy made a substantial contribution to Norway’s resilience to the crisis. BIS central bankers’ speeches  5  Well anchored inflation expectations made monetary policy effective – the reduction in Norges Bank’s key policy rate was perceived as a decline in the real interest rate. Other central banks experienced that there was little scope for reducing the real interest rate to a sufficiently low level. This downturn contrasts sharply with the downturn in the 1980s when the interest rate had to be maintained at a high level to defend the krone exchange rate. At that time, there was a lack of confidence in both monetary policy and fiscal policy. The costs were substantial. Unemployment increased, in line with that experienced in some European countries today. When the financial crisis reached Norway in 2008, we were in a much better position.
BIS Review 126/2010  7  Figure 5 GDP growh in selected regions and countries (1) (2) (annual change, percent)  Monetary policy rates in the world (3) (percent) 14  14  12  12  10  10  8  8  0  6  6  -5  -5  4  4  2  2  -10  -10  15  15  10  10  5  5  0  00  02  04  06  América Latina EE.UU. Japón  08  10  0  0  02  04  06  08  10  Developed economies (4) Emerging economies (5) Chile  Asia ex Japón Zona Euro  (1) Regions are weighted by PPP as in WEO, April 2010. (2) Dots show growth forecasts for 2010 and 2011 respectively included in the baseline scenario of September 2010's Report. (3) Solid lines describe simple-averaged reference rates of each group of countries. Dots show averaged responses from analysts surveyed by Bloomberg during August 2010. These reflect expectations for September 2010, December 2010, March 2011 and June 2011. (4) Includes Canada, the Eurozone, Japan, Norway, Sweden, Switzerland, the U.K. and the U.S.. (5) Includes Brazil, Colombia, China, the Czech Republic, Hungary, Mexico, Peru, Poland, South Africa, South Korea and Turkey. Source: Central Bank of Chile based on statistics institutes of each country, Bloomberg and IMF.

The range for this year has been upgraded from June, based on actual data above projections in the first half and more dynamic figures available for thirdquarter demand and output, which are foreseen to continue into the first half of 2011, prompting output gaps to close in this latter period (figure 7). For the year 2011 GDP is expected to grow by 5.5%–6.5%. Moderation of world growth towards 2011, the dissipation of one-time effects of the crisis and 27-F, plus the gradual withdrawal of monetary policy stimulus will result in both output and domestic demand slowing down by the second half of 2011. It is worth noting that y-o-y GDP growth figures in the second quarter of 2011 will be high due to the low basis for comparison associated to the earthquake. Similarly, once the swelling of domestic demand is finished, it should expand next year at a rate the half of the strong growth it should post this year. This will come accompanied with more dynamic export volume growth that will revert the tough 2009 and 2010 years, when exports were affected by the global recession and by the disruptive effects of the earthquake (table 2). The rebound of the Chilean economy is also apparent in a dynamic labor market, where employment is growing strongly and the rate of unemployment has dropped (figure 8).
Meanwhile the largest investment bank from euro area ranks only ninth worldwide, far behind the top five ones – which are all American. More worrying still, EU banks are losing ground on their own soil: the market share of the six major US investment banks in Europe increased from 44% to 58% between 2013 and 2020. This question of size reaches far beyond the question of G-SIBs indicators and methodology, which should of course duly take into account the achievements of the Banking Union so far. More than anything else, our banks need economies of scale to have the means to invest properly – including in their digital transformation. Digital is mainly about IT investment, hence 2/4  BIS central bankers' speeches  fixed costs, hence size. It is high time to start thinking European, instead of national. Let us not fool ourselves: preventing our banks from growing will only make them less profitable and easier prey. We have to avoid a scenario where European G-SIBs would disappear or remain too few, because then we would have partly surrendered our strategic autonomy. Regarding the method, we obviously need to switch from a disappointing sequential approach to a more agile process. Raymond Chandler, author of The Big Sleep, once said: “There is no trap so deadly as the trap you set for yourself.” I therefore very much welcome Eurogroup President Paschal Donohoe’s recent statements. Without prejudging future proposals and discussions, I will briefly lay out what a realistic and pragmatic approach might look like.

Second, over the next few years the transition to a higher national saving rate is likely to imply a switch of resources from consumption in the private and public sectors to investment and net exports. It will  2  BIS Review 4/2005  not be easy to achieve that while keeping inflation on track to meet the target and maintaining steady growth in output. It is very likely that, when the ONS publish next week their first estimate of economic growth in the final quarter of last year, it will show that the UK economy has now had 50 consecutive quarters of positive economic growth. No other G7 economy avoided falls in output over that period. But we should recognise, as I hope the English cricket team does tomorrow, that reaching a halfcentury is no time for complacency but for renewed concentration. Third, the ability to buy goods from abroad at ever lower prices has kept down inflation at home and sustained faster growth in real incomes and consumption - just as Richard Cobden and John Bright, and the other founders of the Manchester School, argued more than 150 years ago. And it is not just consumers who are paying less for these items. Retailers are too. But the inflation rate of goods and services produced in the UK has been rising modestly for two years or so. That has been offset in large part by a fall in import prices. Although we can influence the former we have little control over the latter.
1  2  See “Background note on public financial assistance in the restructuring of the Spanish banking system (2009–2013)” published on 12 June 2014 and available at www.bde.es  BIS central bankers’ speeches  Essentially, three different types of public financial assistance have been made available. The first and most significant type have been the contributions of funds in the form of subscription of capital instruments, whether ordinary shares or contingently convertible bonds. These amounted to a total of € million, of which € million have already been recouped, and encompassed actions both by the FROB and the Deposit Guarantee Fund (DGF) which, despite being financed by contributions from the banking industry, is included for National Accounts purposes under the public sector. We might also add here the acquisition by the DGF of shares valued at € million of Nova Caixa Galicia Banco Catalunya Banc held by minority investors in these banks following the burden-sharing exercises undertaken, and the subscription by the FROB of capital and subordinated debt instruments of Sareb for a total of € million. The second type of public financial aid refers to the so-called Asset Protection Schemes (APSs) or other guarantees offered by the DGF or the FROB under resolution or restructuring processes. APSs consist of the assumption by the guarantor of a majority portion of the risk associated with specific portfolios of the beneficiary bank.

This Law is a fundamental step for ensuring that all credit institutions are managed independently and professionally so that the governance problems which contributed to destabilising part of our financial system are diffused once and for all. In practical terms, this year should see the completion of the transformation of virtually all of the savings banks – those still existing as such – into ordinary foundations or bank foundations. For this purpose, and as it is legally conferred to do, the Banco de España is drafting a Circular. This Circular will regulate the core aspects of the functioning of bank foundations in order to safeguard the healthy and prudent exercise of the dividend and voting rights corresponding to them as the shareholders of credit institutions, thereby ensuring the professional management of such credit institutions. The Circular will specify aspects such as: (i) the content of the protocol governing bank foundations’ management of their ownership interest in the credit institution; (ii) the financial plan, which will envisage how they must meet the possible capital needs of the institution in which they have an ownership interest; and (iii) the requirements which the reserve fund must fulfil as regards its funding, target volume and possible uses; all the foregoing in cases where, given the percentage of ownership they hold in the credit institutions, these requirements must be met.