samchain/econo-pairs-v1 huggingface dataset:
Caleb M Fundanga: The role of professionals in economic development Remarks by Mr Caleb M Fundanga, Governor of the Bank of Zambia, at the Annual National Development Conference of the Zambia Institute for Policy Analysis and Research, Lusaka, 28 November 2009. *  *  *  Hon Minister of Finance and National Planning, Dr Situmbeko Musokotwane The Permanent Secretary Budget and Economic affairs, Mr Emmanuel Ngulube ZIPAR Executive Director – Mwilola Imakando Distinguished Guests, Members of the Press Ladies and gentlemen, It is indeed a pleasure for me to be invited to this very important gathering to give a Scope of the Conference. The central theme of my address today is the role that professionals are expected to play in economic development in general and in the provision of public goods and services in particular. You will agree with me that the levels of professionalism in our country has somewhat declined in the recent past. Nowadays, it is not rare to hear of corrupt practices and unethical conduct in the both the public and private sectors. This has no doubt compromised professionalism. Ladies and Gentlemen, as you are aware, professionalism entails possessing specialist knowledge and following a standard of conduct based on ethics that govern the use of this knowledge when providing a service to the public. Professionals provide essential and valuable services to any society. It is for this reason that the public depend on them more and more as economies advance.

However, it must be understood that codes of conduct are not only meant to serve as a disciplinary guidebook but also outline ideal ethical standards. In order to be effective, Codes of Conduct should be understood and used by all professionals in their day to day activities. It is therefore pertinent for the civil service to develop appropriate codes of conduct that meet the expectations of the public. It is the duty of Government to ensure that the civil service is aware of this code of conduct and its values. In advanced countries such as Japan, Italy and Singapore the importance of the code of conduct is strongly upheld at all levels of the public  BIS Review 159/2009  1  service. This has contributed to a strong, independent and impartial civil service, whatever their political persuasions, that is able to serve different governments in line with the requirements of the code of conduct. In order to enhance professionalism in both public and private sectors, it is key that professions demonstrate high ethical standards and values. I therefore urge all of us professionals gathered here today to take ethics seriously in order to enhance efficient delivery of services to our people. A robust and strong level of ethics can be achieved by providing ethics training and sensitisation as a component of continuous professional development. Although qualified professionals may be competent in their fields, it is vital to test their ethical knowledge. Equally there is need to promote Integrity at all levels of civil service.
In the United States and in this country, for example, inflation has been BIS Review 22/1997  -3-  contained to around 3% with continuing growth and low or falling unemployment. And this pattern looks set to continue. In Japan and on the Continent of Europe, on the other hand, while inflation has been even lower, activity has been disappointingly weak, and unemployment on the Continent at least has risen to quite frightening levels. And while there is now the prospect of a moderate pick-up in activity in these countries, that is not yet assured. Japan, which is in many respects a unique case, faces substantial fiscal consolidation. And in Europe, too, the prospects are clouded by pressure to bring budget deficits down sufficiently to meet the Maastricht convergence criteria this year, notwithstanding the weakness of the domestic economies, and in an environment of longer term structural inflexibility. These divergent developments go a long way towards explaining recent differences in the behaviour of both bond markets and exchange rates. In both the United States and the United Kingdom the sustained expansion of domestic demand and of ouput has generated market expectations of an essentially cyclical rise in short-term interest rates. Sluggish economic activity elsewhere, on the other hand, means not only that short-term interest rates are significantly lower in Japan and the core European countries; but it also means that they are thought, by the market, to be less immediately likely to rise.

So today’s orthodoxy ascribes to macro-economic policy the job of keeping demand in line with the capacity of the economy to meet that demand in the medium and longer term. Within this overall framework, monetary policy is allocated the specific task of achieving and maintaining effective price stability. This is not, as some commentators still seem to suggest, simply some doctrinaire end in itself. Inflation is seen rather as a symptom of imbalance between demand and supply in the economy. So what we are essentially aiming to do through monetary policy is to anticipate the emergence of that imbalance and head it off before it becomes entrenched. If we are successful in that, inflation will be lower, there will be less need for violent interest rate movements than in the past, and the economy will grow at a steadier, and more sustainable and predictable, rate. That, in turn, will encourage more rational, longer-term, economic decision-making and investment, which will help indirectly to improve underlying, supply-side, performance. Similarly, today’s macro-economic orthodoxy requires fiscal policy to be directed to restricting government borrowing to levels that can be sustained into the medium and longer term, without either forcing up real yields or implying the prospective need for progressively rising tax rates - which could otherwise damage the development of private sector economic activity. Now in some respects we have made considerable progress over the past two years and more.
First of all, in a Monetary Union which covers an area stretching from Lapland in the north of Finland to Andalusia in the south of Spain, we cannot expect complete homogeneity of the economic cycle or of economic conditions in a more general sense. Therefore, it makes sense for the euro area Member States to maintain control over the remaining tools of economic policy so as to be able, if necessary, to respond to developments which are particular to their own economies. On the other hand, when formulating their economic policies, euro area Member States must give sufficient consideration to the impact that these policies will have on the rest of the euro area economy. This is particularly important in EMU since euro area countries are no longer exposed to the discipline of financial markets to the same extent as used to be the case when they conducted their own autonomous monetary policies. Prior to the introduction of the euro, unsustainable economic policies were penalised by the markets in the form of higher interest rates, substantial risk premia and exchange rate pressure. In EMU, however, where financial markets take an increasingly euro area-wide focus and where the exchange rate risk associated with national currencies no longer exists, the effects of inappropriate policy choices in any one country tend to be largely spread across the entire euro area. Only relatively small risk premia remain.

But, for my purposes today, the key point is that any correction in asset prices would most obviously be concentrated, at least initially, in the foreign exchange markets and, if associated with a reduced appetite for dollardenominated assets, plausibly in US Treasury yields too – perhaps amplified by various option-like structures. 4 But these are, of course, the deepest, most liquid markets in the world. So while sharp changes would no doubt inflict losses through parts of financial system, many practitioners seem to regard the market dynamics as manageable. Indeed, when in the Bank’s Market Intelligence rounds we explore this issue, the mechanism that elicits most concern is that any consequent macroeconomic slowdown – brought about in the US by higher risk-free bond yields or in the euro area by exchange rate appreciation – might put pressure on the corporate and household sectors after a period in which credit risk may have been underpriced and so abundantly available. In other words, discussion of “global imbalances” shades into an exploration of the potential consequences of “low risk premia”. But more important, the fundamental changes in the structure of credit markets over the past half decade or so have left many practitioners uncertain about the dynamics of any adjustment. Views vary of course, with some seeing the system as clearly more resilient than half a decade ago, but on the whole practitioners seem to be more uncertain about the potential for nasty spillovers from adjustment in “low risk premia” than in “global imbalances”.
However, this is not a sufficient condition for ensuring financial stability, which demands other additional measures. These include, for instance, fiscal discipline, and the design of exchange rate policies that ensure the consistency of the exchange rate system chosen with domestic policies, and that contain vulnerabilities associated with exchange rate instability in the different sectors of the economy. Macroeconomic policies must also be consistent and sustainable over time. Indeed, unstable macroeconomic settings are one of the main causes of excessive volatility on financial markets. Secondly, an appropriate institutional framework is also needed. In particular, a set of mercantile and civil laws must be in place, including the treatment of bankruptcy situations; accounting obligations that ensure the uniform representation of economic events; external auditing requirements; guarantee funds providing appropriate safeguards; independent supervisors with operational capacity, etc. The legal structure and its application by the judiciary should ensure the respect of property rights and equality before the law; in sum, legal security. BIS Review 8/2005  3  The need for this set of minimum prerequisites is reinforced by the "Core Principles for Effective Banking Supervision”, which are invaluable as a tool for the evaluation of supervisory systems. In this respect, let me mention also the excellent work of the Financial Stability Forum over the last years in bringing together various standards issued by a number of bodies.

As the economy continues to adjust to these changes, the situation is still uneven across different sectors. In addition to the above-mentioned oil industry, passenger transportation and international travel still remain below pre-pandemic levels as well. When restrictions were toughened, public catering and entertainment companies faced a decline in the demand for their services. Nonetheless, a lot of industries are demonstrating steadily higher output and sales than before the outbreak of the pandemic. Specifically, there has been a surge in the demand for durable goods (computers, telecommunication devices, and household appliances) and online trade and delivery services. The lockdown period boosted the demand for countryside housing and better housing conditions in general. These uneven trends across both industries and regions are also described in the Regional Economy report released by our regional branches before the quiet period. The situation in the labour market also evidences that the economy has not only recovered, but is generally returning to its pre-pandemic growth path. The number of vacant jobs is at its peaks. High demand for labour resources is demonstrated by companies in construction and transport, a whole range of manufacturing enterprises, and in trade. These are the industries that started to bounce back earlier and were recovering faster and where demand exceeds prepandemic levels. A further expansion of output is possible through a restoration of the inflow of labour migrants, but — first of all — through an increase in labour productivity.
This is further complemented by the proliferation of payment cards, particularly electronic money, which enables banking and payment services to be conducted without a bank account or visits to traditional bank branches. According to data from the Consultative Group to Assist the Poor, or CGAP, there will be more than 120 mobile money schemes in developing countries by the end of 2009, more than double the number in 2008. CGAP estimates that by  BIS Review 162/2009  1  2012 some 1.7 billion people will have mobile phones but no bank account, and 20 percent will be using mobile money. A key challenge, to implement a commercially viable and workable mobile banking solution, especially where population density is low, is to achieve a critical mass of users required to reap economies of scale to keep transaction cost low. This is even more relevant if the aim is also to promote financial inclusion as financial services would have to be offered at affordable costs. Thus, a requirement for an open and interoperable mobile platform that facilitates the participation of many service providers and that offers a broad range of services is critical in developing a sustainable and efficient solution for both providers and users. The other type of branchless banking is the use of non-bank financial service providers, also referred to as Business Correspondents in certain jurisdictions.

Governor Dr. Zeti Akhtar Aziz had proposed a regional forum to exchange experiences and understanding amongst central bankers and financial policy makers on issues such as institutional structure, regulatory framework and supervision requirements and the application of technology for promoting access to financial services. Branchless banking offers the means to provide the full range of financial services such as payments, deposits, credit and micro-insurance services without the use of physical bank branches, thus reducing significantly the cost structure. The financial services could be provided through mobile telecommunications networks or network of non-bank intermediaries, such as supermarket chains or post offices. For the purposes of this Forum, I would like to focus my remarks on three key areas. Firstly, how payment systems technology is supporting branchless banking to improve access to financial services. Secondly, the policy and regulatory concerns pertaining to branchless banking. Thirdly, Malaysia's experience in developing a more inclusive financial sector and supporting branchless banking activities. Payment systems technology for branchless banking The most critical enabler of branchless banking relates to the role of payment systems technology, principally the use of mobile phone as a banking channel and payment device. The pervasive availability and use of mobile phone around the globe and familiarity amongst its users makes it a very cost-effective distribution channel to improve accessibility to financial services to the unbanked and underserved segment of the population.
That is why, the primary surplus is the targeted variable and we set our goals high in order to increase the credibility of the policies, which aim to reduce the ratio of public debt to national income. The high primary surplus target convinces economic units of the possibility of debt rollover as well as reducing public debt, improving expectations and generating confidence. Positive expectations lead to a decline in the risk premium and, as a result, real interest rates and contribute to the stability of the New Turkish Lira. This process is likely to directly affect growth. The most convincing proof of this is the implementation of tight fiscal policy in Turkey for the last three years and the realization of record high growth rates. Now let me touch upon a subject that I frequently come across in the print media and peoples’ comments, which shows there are mixed opinions on macroeconomic policies. In the scope of the entire Turkish economy and the definition of various economic variables such as growth, employment, inflation, debt stock, foreign trade statistics and current account balance, a fact determined not only technically, but also in practice, is that macroeconomic policies cannot affect all these variables  BIS Review 36/2005  15  directly and at the same time. Therefore, setting a figure for each economic variable and defining these as targets is not correct practice within the framework of the market economy.

Since the introduction of the euro in 1999, the average interest rate on three-month euro deposits has been 3%, while the three-month Swiss franc rate has been 1.4%. If we assume a difference of about 1% in the expected level of inflation between the euro area and Switzerland, the Swiss real interest rate advantage accounts for 60 basis points. •  Switzerland is also a firm believer in flexible exchange rates. Our monetary regime has been unchanged since 1973, when the peg to the US dollar was removed. Today, the Swiss franc is freely determined by market forces. Our last foreign exchange intervention dates back to 1995 – and that was a coordinated action in favour of the US dollar! •  And what about the European issue? As you know, we are not a member of the European Union; nor do I foresee Switzerland joining the EU in the near future. The Swiss people remain sceptical about the efficiency of the Union and are very aware of what they stand to lose in terms of political rights and economic freedom in the event of integration. But our relationship with the EU is of key importance, since Europe accounts for two-thirds of our foreign trade. In order to secure our access to the European market and to avoid discrimination, we concluded two packages of bilateral agreements with the Union – in 2002 and 2004.
Most likely, if a similar study is conducted in Malaysia, the results would show bigger savings here, given the greater digital connectivity we have today. Our efforts over the years have shown some encouraging developments. The aggregate data points that we are on the right track. The growth rate of cash in circulation (or better known as CIC) in Malaysia has been slowing down for three years in a row since 2015. Measured against GDP, CIC decreased albeit marginally for the first time last year since 2014. With high penetration of debit cards and mobile devices, Malaysia is well-positioned to transition into a cashless society in the medium term. To continue our collective effort to ensure widespread adoption of e-payments becomes a reality, my remarks today will touch on the following perspectives; future proofing the Malaysian payment infrastructure, embracing digital disruption that will redefine the payment mechanism as we know it, and some thoughts on public engagement and consumer protection. Future-proofing Malaysia’s payments infrastructure The use of big data will provide a competitive edge among payment service providers. Payment flows used to be an operational matter, but now have immense strategic value. It has to do with the enormous amount of data and information that the system collects on the payment habits of the public. With data analytics, these data can provide deep insights on consumer and merchant behaviour, and even the economy at large. With this information in hand, there is also the enormous responsibility to ensure that it is not being abused and mishandled.

These declines have been even larger if measured from the release of the minutes of the previous FOMC meeting in August, after which market expectations of easing in September increased. This is solid evidence that our policy has been and continues to be effective – though it is certainly not allpowerful in current circumstances. However, the impact of monetary easing on the economy through housing and mortgage finance has been impeded to some degree by two factors. First, not enough people can take advantage of today’s low primary mortgage rates. Mortgage underwriting standards have tightened quite dramatically and the share of new mortgages going to households with better credit metrics has risen. While it is difficult to disentangle how much of this is due to supply versus demand factors, it appears likely that credit standards for home purchase loans have not just tightened since the housing bust but overcorrected. BIS central bankers’ speeches  1  In addition, many homeowners find it difficult to refinance their existing mortgage because they have little equity in their homes, or are outright “underwater” with mortgage balances that exceed the current appraised value of their property. In a speech earlier this year, I called for measures to ease refinancing and tackle other frictions and market failures that lead to economically inefficient outcomes in housing. Some useful steps have been taken. But, more could be done, and these issues warrant ongoing focus by policymakers.
So, as well as delivering the highest levels of resilience, we need to make sure we take this once in a generation opportunity to facilitate innovation for many years to come by expanding the functionality of the renewed service. Whether that is ensuring that the new RTGS can interact with Distributed Ledger Technology, or developing hooks to allow third party operators to synch the movement of funds on the RTGS ledger with movements across other ledgers, we expect to deliver a platform that enables the future generation of financial services. Across all of these services, the data that are used, and the way that they are formatted and presented to users, is vital. And because the standards we are implementing are used internationally, there is a critical need to ensure we implement them well. 5  See previous footnote. For numerous examples, see Haldane, A (2018), “Will Big Data Keep Its Promise?”, available at https://www.bankofengland.co.uk//media/boe/files/speech/2018/will-big-data-keep-its-promise-speech-by-andy-haldane.pdf 7 The Real-Time Gross Settlement service is the infrastructure that holds accounts for banks, building societies and other institutions. The balances in these accounts can be used to move money in real time between these account holders, this delivers final and risk-free settlement. 8 As set out in Carney, M. (2018), “New Economy, New Finance, New Bank”, Mansion House Speech 2018, available at https://www.bankofengland.co.uk/-/media/boe/files/speech/2018/new-economy-new-finance-new-bank-speech-by-mark-carney.pdf.

Engagement with key stakeholders13 is also vital - and we’re very pleased to be hosting a Financial Stability Board workshop on LEIs here on 10 December. But, crucially, this means that both public sector and private sector will need to show concerted commitment, drive and leadership to deliver success. Looking forward And this brings us back to why we are here today. The need for close private and public sector collaboration is why we sought your feedback through our consultation. And, it is why we, with Pay.UK, have announced the Standards Advisory Panel, a senior group providing strategic advice on the adoption of new payments standards in the UK. This group will bring vital private sector expertise into the Bank and Pay.UK’s work to ensure consistent adoption of standards including ISO 20022, the CCM, and the wider adoption of LEIs. The cutover for moving to ISO 20022 messaging for sending and receiving CHAPS payments is planned to occur in 2022. This will be on a like-for-like basis with the current messaging standard, but we will then introduce enhanced data into CHAPS payment messages, including LEIs for messages in financial institutions in 2023. And, as I mentioned earlier, we will then look at further enhancements, including a broader inclusion of LEIs in payment messages, over later years. This may seem on the horizon now, but I’m sure I don’t need to remind a room full of payments experts that strategic change deadlines are never as far away as they seem.