samchain/econo-pairs-v1 huggingface dataset:
It is also impossible for these people to use their assets as collateral to take out loans and perhaps even to sell them. It is therefore crucial, according to de Soto, for developing countries to reduce bureaucracy and thereby release a mass of capital with the aid of the law. The World Bank has extended the studies made by de Soto to include more countries. The recentlypublished report Doing Business in 2005: Removing Obstacles to Growth shows, for instance, that it takes on average more than twice as long to register a new company in poor countries than in wealthy countries and that it is also much more expensive, in relation to income. Most companies in developing countries therefore operate in the informal sector. Despite this, wealthy countries implemented more than three times as many reforms to improve their investment climate last year than were made by poor countries. Developing countries can thus, often using fairly simple means, ensure that more job opportunities are created by improving the opportunities for entrepreneurs in the formal sector and thereby promoting economic growth. The final basic explanatory factor behind increased wealth that I wish to highlight here is the pioneering technological advances made, particularly in the fields of information technology, international communications and global transports. These have led to large cost savings, which in turn have enabled the rapid spread of technology around the world. This has helped, for instance, give developing countries the opportunity to diversify their exports to a greater degree.

Indeed, the large mobile subscriber base and the positive transformational effects of mobile banking and payments offer a unique opportunity to open up the financial system to more customers and communities, in order to achieve financial inclusion for all segments of our society. With the favourable market conditions, various mobile banking and payment initiatives have been launched in recent years. This however, has yet to achieve widespread acceptance. To date, there are only 460,000 subscribers for mobile banking and payment services. This represents only 1.8% of the 25 million mobile phone subscribers in the country. There is, therefore, a significant untapped, and potentially lucrative market for mobile payment and banking services. Pushing mobile channel beyond the tipping point of development There are fundamental issues that need to be addressed if we are to realise the opportunities and allow Malaysia to take full advantage of new mobile technologies. To achieve their full potential, it is important to identify the gaps in the service offerings, and plan the way ahead for Malaysia to make the quantum leap in e-payment adoption. Market participants need to address the mismatch between what consumers expect and what is being offered. Openness and inter-connectivity are also critical in the mobile banking and payment initiatives. Exclusive and proprietary services where the target market is limited to the customer base of individual mobile operators or individual banks will not allow for the potential to be realised.
Finally, we provide central banking services that also foster financial integration. For example, most recently we successfully launched TARGET2, the second generation of our large-value payment system. By moving from a system composed of mutually interconnected national real-time gross settlement systems to a common system with a single shared platform for payments, we achieve further harmonisation for users in different countries and realise considerable scale economies. We achieved a single price structure for both domestic and cross-border transactions, the possibility of consolidated liquidity management for cross-border financial institutions and a harmonised set of cash settlement services for a variety of connected systems. The new system started in November last year with the first wave of countries. More countries will join in a few days and the last wave will follow in May this year. With a view to maximising the benefits from TARGET2, the Eurosystem is currently also exploring the possibility of providing settlement services in central bank money for eurodenominated securities transactions. The objective of this project, called TARGET2Securities, is to concentrate securities and cash settlements within Europe on an efficient, single platform. The user requirements of the system are currently the subject of a public consultation. The Governing Council will take into consideration the views of the stakeholders as well as the relevant public authorities prior to making a decision, by mid2008, on whether to launch the project.

According to this definition, a market for a given set of financial instruments or services is fully integrated when all potential participants in that market (i) are subject to a single set of rules when they decide to deal with those financial instruments or services, (ii) have equal access to this set of financial instruments or services, and (iii) are treated equally when they operate in the market. The instrument in question here is the basic bank deposit. Differences of rules and regulations across countries about how deposits are guaranteed could therefore affect the degree of integration achieved. Given that small depositors tend to be immobile, and  4  BIS Review 17/2008  therefore cross-border retail deposit holdings are rather limited in the EU at present, the main issues arise with respect to the compliance costs for cross-border banks and the competition between banks that are subject to differing rules and regulations governing deposit insurance schemes. Let me compare some main features of deposit insurance schemes across European countries, starting with coverage. 7 In EU countries, the amount of fully insured deposits per depositor varies between 20,000 euros, the minimum threshold prescribed by the Directive on Deposit Guarantee Schemes, and about 103,000 euros. Everything else equal, depositors that possess as much as 100,000 euro in a bank account are more likely to be sophisticated and therefore less needing protection than small depositors. And without such insurance, large and sophisticated depositors may exert some market discipline on banks.
Most likely, the existence of the European single market would also have been challenged in such a situation, given the sequence of abrupt shifts in competitiveness between EU Member States. Globalisation, by contrast, has promoted diversification and allowed risks to be spread across regions. Regional and global financial integration as well as internal stability have shielded the euro area against potential speculative attacks on the euro with all their negative consequences. But the euro is far from a universal panacea. Countries must make flexible adjustments to their product and labour markets in order to increase the potential output of the euro area and to reduce the still intolerably high unemployment rate. Establishing competitive, efficient and well-functioning markets is essential in order to enhance medium to long-term economic growth, to facilitate the adjustment process, and to increase the resilience of the euro area to economic shocks. In this respect, the globalisation process itself should induce policymakers to take unpopular decisions while ensuring fiscal discipline. For a monetary union to work, sound fiscal policies are a prerequisite. Therefore, Member States must adhere to the criteria set out in the Growth and Stability Pact. But is it possible, as some have argued, to promote growth and structural reform at the same time as encouraging further fiscal consolidation? My answer is a clear yes. There is no evidence for such a trade-off.

Home bias in the debt instrument market euro area countries (annual data) among euro area countries (annual data)  Sources: IMF, Thomson Financial DataStream, Sources: BIS, IMF, ECB calculations. ECB calculations. Note: The home bias of the euro area is computed Note: The home bias of the euro area is computed excluding intra-euro area asset trade allocation. excluding intra-euro area asset trade allocation. Indeed, a simple inspection of the data reveals that European countries increased their holdings of euro area international assets (as a share of their total international portfolio) between 1997 and 2003 (see Charts 5-6). 10 Over this period, the share of intra-euro area allocation increased markedly by 10 percentage points for equity portfolios and by almost 25 percentage points for fixed income portfolios. 10  12 EMU countries consists of the 12 euro area countries. “Other EU countries” refers to Denmark, Sweden and the United Kingdom. “Non-EU developed countries” comprises ten other developed countries: Australia, Bermuda, Canada, Iceland, Israel, Japan, New Zealand, Norway, Singapore and the US. “Emerging markets” is formed by 7 countries: four Asian emerging markets (Indonesia, Korea, Malaysia and Thailand) and three Latin American emerging markets (Argentina, Chile and Venezuela). BIS Review 43/2006  5  Moreover, global financial integration was accompanied by a large shift in holdings towards the euro area countries, thereby favouring international risk-sharing vis-à-vis the euro area, particularly with regard to other European countries and, to a lower extent, with respect to emerging markets in equity portfolios (see Charts 5 and 6).
It is definitely easy to make a reasonable case that the Government could have considered the matter more carefully when it made radical changes to its housing policy at the onset of the upswing in 2003, and that it would have been more prudent to postpone them until the boom came to an end. (I presume people realise which Prime Minister this criticism is levelled at). But there are even stronger arguments for claiming that, in spite of the questionable timing, this represented a very positive reform to the housing system framework, which the Government can be proud of. However, the response by the banking system certainly caught the Government by surprise. As things have developed, this is now a secondary consideration. The banks’ response rendered the housing system in its old form virtually obsolete overnight, whether we like it or not. Mortgage interest rates are admittedly still high in Iceland. That is by no means the most interesting point in the current debate, however. Access to credit and finance terms for buying or building housing in Iceland have never been better. But it seems obvious that a large part of the banking system is probably subsidising its own mortgage lending at the moment. Of course this may be a deliberate risk taken in the faith that, since such lending is long-term, lenders will eventually reap handsome profits when interest rates move into line with those in other countries.

Less extreme is the euro zone, where, after a period of slow growth in the area as a whole, recovery is now well established. The internal imbalances in each country - differences between growth of domestic demand and the supply of output - are the mirror image of the external imbalances - current account surpluses and deficits. Widening imbalances are unlikely to be sustainable for long. But the extent to which they will be self-correcting, or will require policy adjustment, depends in large part on why they have arisen. This is my second question - why have the imbalances arisen? Sustained current account deficits can reflect profitable investment opportunities that exceed the supply of domestic savings so that it is necessary to borrow from abroad. And the most popular explanation of the recent rapid growth in domestic demand, especially in the US, is as the consequence of a rise in productivity growth, and investment opportunities, reflecting the so-called “new economy”. It has been pointed out by several economists, including Alan Greenspan and my colleague John Vickers, that an increase in trend productivity growth might increase demand by more than it raised supply initially, as firms invest in new technology and consumers anticipate higher future incomes and spend today out of this revised estimate of their “permanent” income. Hence new information technologies, because they raise  BIS Review 34/2000  2  potential future output in the economy, would add to demand today.
BIS central bankers’ speeches  1  The challenge for most individual euro area countries is obviously to achieve strong fiscal consolidation while ensuring long-term growth. Clearly for me, there is no contradiction between these two objectives. On the contrary, they are complementary. The efforts already made on the fiscal front by the euro area are already bearing fruit: not only is the absolute level of the euro area’s deficit half that of elsewhere, but also the pace of fiscal consolidation is actually much greater. It is clearly an asset for us today and an element of confidence both for the markets and economic agents, which needs to be further enhanced. But, by the same token, countries need to create the conditions for a strong and sustainable growth through strong structural reforms. Here as well, the progress already made in many countries is important but more needs to be done, notably with regard to the labour and goods and services markets. Beyond these national efforts, I believe that what the euro area really needs today is to make progress towards a more coherent and integrated economic and financial union. Indeed, the crisis has clearly brought to the fore a number of weaknesses in the functioning of the euro area and has thus fuelled concerns. First, the fiscal discipline mechanism through peer pressure as established by the Stability and Growth Pact proved to be weak. Second, the euro area did not equip itself at the outset with an instrument for monitoring competitiveness.

Christian Noyer: Euro area’s situation – analysis, challenges and solutions Lunch-debate by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Montreal conference: “Demographic shifts – threats or opportunities?”, Montreal, 11 June 2012. *  *  *  Prime Minister, Governor, Mr Chairman, Ladies and Gentlemen, It is a great pleasure and honour to participate in this lunch-debate with you today. I would especially like to thank the International Economic Forum of the Americas and its Chairman for organising this Montreal Conference, which for the past 18 years has been a major international economic event. I would also like to take this opportunity to share my analysis of the euro area’s situation, the challenges we face and the solutions available to us. Before doing so, I think that it would be useful to say a few words about the international economic situation. At the global level, growth is expected to slow down slightly in 2012 compared with 2011, notably due to a moderation in growth in Europe and a little bit also in emerging countries, in particular China. The United States is recovering relatively rapidly, but faces a number of challenges, especially with regard to its fiscal situation and the housing market. Overall, – and this is one of the things that the crisis has clearly highlighted since 2008 – the world’s economic areas are closely interlinked and problems end up being shared.
I also believe what science teaches about behavior: Our actions are a product of both individual disposition or volition and the situation in which we function. And, the situation might be more potent than we might think.5 So, I wonder, for example, whether the thought of “getting caught” even crosses someone’s mind if a prohibition is so routinely disregarded that violating that rule is normal. In the LIBOR and FX cases, for example, traders discussed openly their manipulation of 4/6  BIS central bankers' speeches  reference rates in electronic chat rooms that they knew were recorded and monitored. The fact that those traders used a back channel to communicate evidences an awareness of wrongdoing —not to mention the brazen content of their communication. I have to conclude that the risk of getting caught either never crossed their minds or was massively discounted. On behalf of their firms, compliance personnel can help identify the root causes—especially the situational factors—that contribute to control failures. A thorough and honest exploration of those factors can help inform structural and governance changes mandated in enforcement actions. It is in everyone’s interest for those reforms to succeed, to fulfill the mantra of “Never again.” I do not think this type of inquiry is easy—not because the root causes are unknowable. Rather, it may be uncomfortable to ask the right questions. Here are some examples. There are sure to be others. Are behavioral expectations—and the consequences of violating those expectations—clear?

We might then ask how these can people become living, breathing “nudges” in favor of better behavior. Third, and more generally, I wonder whether our approach to compliance is, at times, too rulesbased. This is a classic “rules versus standards” debate, that is familiar to many lawyers.3 A surfeit of rules may cause employees to believe that they are not trusted. This could create the misimpression that it is someone else’s job to consider long-term consequences or what is the right thing to do. Now, I am not suggesting that there should be a wholesale elimination of rules. But, in some areas, compliance programs may be more effective if some rules were redeployed as standards. That way, front line businesses would have to exercise good judgment in interpreting and applying those standards. Simply put, some empirical basis for evaluating the right balance of rules and standards would be helpful. So, there is room for improvement and creative thinking in compliance—even in ways that challenge basic assumptions on how compliance should work. You are familiar, no doubt, with the phrase, “Don’t let the perfect be the enemy of the good.” My first message to you is, “Don’t let the good be the enemy of the better.”  Compliance and influence Progress aside, I still see confusion about the basic roles and responsibilities of compliance functions within supervised financial institutions. Or, perhaps, there is a degree of entrenched resistance. Before I tell you what I mean by that, here is what I don’t mean.
A broad-based analysis of the data, taking the appropriate medium-term perspective and allowing for these considerations, confirms the underlying strength of money growth. In particular, the pace, maturity and sectoral composition of borrowing from banks suggest that, at the level of the euro area as a whole, the availability of bank credit has, as yet, not been significantly affected by the ongoing financial tensions. This notwithstanding, growth in loans now shows signs of moderation, as previously anticipated, with corporate demand for credit slowing. At the same time, the growth of loans to households continues to follow the downward trend observed over the past few years, as a result of higher short-term interest rates and housing market weakness in several parts of the euro area. To sum up, a cross-check of the outcome of the economic analysis with that of the monetary analysis clearly confirms the assessment of upside risks to price stability over the medium term. The information that has become available since the last meeting of the Governing Council has confirmed that annual inflation rates are likely to remain well above levels consistent with price stability for a protracted period of time. The growth of broad money and credit aggregates is now showing some signs of moderation, but the still strong underlying pace of monetary expansion points to continued risks to price stability over the medium term. The latest economic data also confirm the weakening of real GDP growth in mid-2008.

Chart 12: Interest rates on government bonds in % Spread to German Bonds in pp  Interest Rate on 10 year government bonds 10  14 12 10 8 6 4 2 0 -2 -4 -6 -8  8  6 4 2  0 -2  average (2008-2012)  average (2015-2013)  Difference in pp  average (2008-2012)  2015-2013  Average  SRB  ALB  MKD  SLO  ROM  POL  HUN  LIT  LAT  CRO  CZR  -6 BUL  Average  ALB  SRB  MKD  SLO  ROM  POL  HUN  LIT  LAT  CRO  BUL  CZR  -4  Difference  *The data for all the countries, except for Albania, Macedonia and Serbia is Eurostat data referring to the Maastricht Treaty EMU convergence criterion series which relates to interest rates for long-term government bonds denominated in national currencies. Data is based on central government bond yields on the secondary market, gross of tax, with a residual maturity of around 10 years. For Serbia and Albania –Thomson Reuters data on average interest rate on government securities. Macedonia data refer to the average interest rate on securities at the longest available maturity issued. The continuous debt increase suggests need for further fiscal adjustment, which will be challenging in case of tightening of financial conditions. The presence of ultra-low interest rates in the Euro Area and the abundance of liquidity on the market have not been conducive to faster consolidation.
In fact, capital controls were only fully lifted on the eve of EU membership in 2004. During the experimental phase, the liberalisation of direct investment and other long-term flows preceded that of flows with a shorter maturity. At this time in particular the Bank ensured that its policy interest rate contained a sufficient premium over euro rates so as to make Maltese lira assets relatively more attractive. As a result, and despite the persistence of a relatively high current account deficit, the Maltese lira did not experience undue selling pressures. This was reassuring, but it was not enough. When it was time to decide on the strategy to pursue in ERM II, therefore, the Bank only put forward its proposal to eschew the use of the 15% fluctuation bands after it had carried out the necessary studies to assess the level of the equilibrium exchange rate. These studies, based on different methodologies, showed that the Maltese lira exchange rate was not significantly out of line with its estimated equilibrium level, and so promised to be broadly sustainable. The ECB and the EU Commission reached a similar conclusion. Hence the decision to enter ERM II at the market rate prevailing the previous day and the commitment not to allow the lira to move from its central parity rate in ERM II. Such a commitment, of course, could only be made against the background of a strong external reserves position.

There was, moreover, no departure from the Bank’s prudent approach to reserve management and the reserves remained well above the minimum statutory level. This was the case even during periods of rising international oil prices, which inflated the import bill, and in 2007 when the public started to convert Maltese lira holdings into euro and to hold on to euro earnings in anticipation of the change to the euro. Another favourable element during the ERM II phase was the comfortable surplus position on the capital and financial account, which more than offset the current account deficit. A combination of substantial inflows of FDI and inward portfolio investment flows provided strong support to the Maltese lira. The Central Bank of Malta’s credibility - based on its track record in delivering exchange rate and price stability - as well as the small size of Malta’s financial market probably also helped to ward off any unwanted attention. The absence of volatile short-term capital flows into and out of the country during this period supports this impression. Finally, Malta’s experience points to the importance of a shared vision between the government and the central bank on policy objectives, as well as of a holistic approach to achieving them. In this regard, the continued acceptance by economic operators of the need to support the fixed exchange regime facilitated the authorities’ task in imposing the fiscal and monetary discipline necessary to meet the nominal convergence criteria.