samchain/econo-pairs-v1 huggingface dataset:
There is hardly any good reason for different risk weightings on similar loans given by a domestic bank and a branch of a foreign bank. With these thoughts on central banks and macroprudential policies, I would remind you that we organize this conference hoping that we shall be able to take something useful away for our further work on financial stability. I would like to thank the program committee for putting together what looks like an engaging program. I wish all of you good luck and hope you shall have fruitful discussions in the next two days. 2  BIS Review 112/2010

House-holds became more interested in borrowing at the same time as the inflation-targeting regime gained increased credibility and the future became  2/5  less uncertain. As it became possible to lower real interest rates, borrowing became cheaper. Low and stable inflation expectations also meant that in the long run households could count on nominal interest rates being lower than before. It is conceivable, moreover, that the low-inflation regime has enabled households to borrow more on account of low interest expenditure. Can there be a setback for consumer demand later on? Thus, neither the high level of debt nor the high house prices are considered to constitute a threat to the banking system. But could households’ inflated balance sheets tend to subdue consumption and growth later on? Is there a risk of households being forced to cut back sharply on consumption when interest rates sooner or later move up? And how will rising interest rates affect house prices? Will the decline in household wealth (in the form of housing) that could result from higher interest rates lead to decreased consumption? These are questions we try to take into account when assessing the economic outlook on which monetary policy is based. There are no simple answers here either; as always, the decisions have to rest on assessments. Most things suggest, however, that the adjustments we can foresee after a future increase in interest rates belong to the normal transmission mechanism and will therefore occur in orderly forms.
Significant efforts will be devoted towards increasing the acceptance of MyDebit, particularly among lower-tier merchants to lessen the use of cash to lower the operational costs for businesses. Some of the initiatives that will be undertaken by PayNet include enabling MyDebit to be used on mobile phones and operating a ‘shared token service’ for the local payment industry. In addition, PayNet will also expand the use of MyDebit to pay for transit services, including buses and trains, within the coming year. Supporting more inclusive governance arrangements through the transformation of NPAC While we can look forward to developments that will further transform our payment systems, the process also matters. Since the establishment of the National Payments Advisory Council (NPAC) in 2001 to advise on 3/5  BIS central bankers' speeches  and steer payment system development in Malaysia, we have worked to put in place a more inclusive process for setting the payment agenda. This aims to reflect the changing make-up of the payment industry and better anticipate the changing demands of users. We cannot hope to future proof the system without a good pulse on the expectations, constraints and incentives that drive payment behaviours and decisions to invest in innovation. It also often determines how quickly or slowly we can roll out planned initiatives, or even stay the course on these plans. This led to changes that were introduced last year to broaden the representation of the NPAC to include stakeholders on both the demand and supply sides of the payment market.

Muhammad bin Ibrahim: The dawn of a new era in Malaysia's payment systems Keynote address by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Malaysian E-Payments Excellence Awards, Kuala Lumpur, 22 May 2017. * * * I am glad to be with you at this 2nd Malaysian E-Payments Excellence Awards organised by MyClear. This evening, we are recognising the contributions of the financial industry, businesses and government agencies to the country’s e-payment agenda. The achievements showcased by the award winners today reflect the broader innovations and involvement that we continue to witness in the payment space to make e-payments more convenient, cost-efficient and safe for users. I am encouraged that contactless payments, for example, are gaining greater appeal for smaller value payments. Equally important have been the collective efforts made to educate and inform users. This helps to drive changes in payment habits away from cash and cheques to epayments. Malaysians are increasingly embracing e-payments Malaysia has long recognised the importance of e-payments as a key enabler to drive national efficiency and competitiveness, and as a catalyst to facilitate the creation of new sources of growth. Promising progress has been made in achieving the country’s e-payment targets. In a period of 6 years between 2011 and 2016, the number of e-payments per capita has almost doubled from 49 to 97 transactions per capita. This largely reflects the accelerated adoption of electronic fund transfers to displace cheques.
6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  Some of these are on a slower track due to our work with insurers in response to Covid-19. Others have been brought into sharp relief by the crisis. I’ll focus on three. UK life insurers have been incentivised to invest in long-term, illiquid assets with higher yields for some time, given the low interest rate environment. As a result exposure to credit and other risks (e.g. property) has been increasing. This is further exacerbated by Covid-19 as wider economic disruption has impacted the underlying creditworthiness of some of these assets. The PRA has published several – one might say many - supervisory statements setting out how we expect firms to manage risks arising from such investment strategies. We’ve clarified how we expect firms to apply and model the matching adjustment4; taken a deep dive into liquidity risk5; and provided additional guidance on the practical implementation of the Prudent Person Principle 6, which is the part of Solvency II that deals with qualitative aspects of investment risk management. We will be publishing some further, important clarifications on the Prudent Person Principle at the end of this month. We expect firms to demonstrate that they have strong governance and internal investment limits that are effectively implemented; this remains one of our top priorities for supervision of the life insurance sector.

We can see that these restructured loans, coupled with the safety cushion accumulated over previous periods, help protect the banking system and prevent a situation where last year’s crisis could turn into a problem for the financial system in the future. We believe that loan restructuring has already passed its peak. Since the outbreak of the pandemic, banks have restructured approximately 10% of their loan portfolio, which is quite a considerable amount. As estimated by banks themselves, up to one-third of these restructured loans may turn into non-performing ones. Banks consider that this figure may reach 20– 30%. This would imply that non-performing loans could make 2–3% of the entire loan portfolio, 1/7  BIS central bankers' speeches  and banks would need additional provisioning for them. We do not consider that this could entail any systemic risks since loss recognition would be gradual. Judging by the previous crisis period, this process takes about two years, that is, provisions will not be created immediately in any case. Most banks have sufficient revenues to form provisions without the need to use their capital. The sector also has a significant capital cushion maintaining it at six trillion rubles, which is three times more than the potential amount of additional provisions for restructured loans. In other words, we can see no problems in this respect for the banking system as a whole. There is also an unevenness in terms of both capital and income distribution and the process how nonperforming loans will be recognised in banks’ balance sheets.
A year and a half ago (in the March and June 1999 Inflation Reports) we forecast a period of slower growth in the mainland economy. We were uncertain as to how long it would take for the decline to be reversed. The basis for these projections was high cost increases peculiar to Norway following the 1998 wage settlement, together with low international demand in the wake of the Asian crisis, low oil prices, sluggish price trends for other Norwegian export goods, and major restructuring in key manufacturing sectors. 9  BIS Review 67/2000  We assumed that there was a relatively high risk of a major recession. The greatest uncertainty with regard to setting interest rates was linked to developments in the sheltered sector, where price and cost pressures remained strong. A relatively tight central government budget for 1999 laid the foundations for curbing growth in the sheltered sector. On the basis of these analyses and the approved government budget for 1999, Norges Bank announced that it would be easing its monetary policy stance. The key rates were lowered in five stages by a total of 2.5 percentage points in the course of the first nine months of 1999. This helped stabilise the Norwegian economy, and hence the krone. The outlook for the global economy and the Norwegian economy improved unexpectedly quickly. It now appears that the period of slower growth in the Norwegian economy was in fact over by summer 1999.

Measured by the trade-weighted index calculated as a monthly average, the krone touched a record low level earlier this summer. We can derive indicators of market expectations concerning future exchange rate movements and inflation. Implied forward rates can be interpreted as the expected nominal interest rate between two future dates. For a given expected real interest rate, the forward rate provides some indication of inflation expectations. Chart 6 3  E Alberola, S Cervero, H Lopez and A Ubide (1999): “Global Equilibrium Exchange Rates: Euro, Dollar, “Ins”, “Outs” and Other Major Currencies in a Panel Cointegration Framework”, IMF WP/99/175. 7  BIS Review 67/2000  Nordic forward rate differentials against DEM 16 August 2000 In the long term, ie up to ten years ahead, it is highly unlikely that market participants have specific expectations about the economic situation. If the equilibrium real interest rate is the same between countries, the differential between Norwegian and foreign long-term forward rates may be interpreted as the differential in expected inflation plus any risk premium. The risk premium may be partly attributable to the limited volume of Norwegian financial markets. As such, the long-term forward rate  differential between Norway and Germany may be interpreted as the expected inflation differential between Norway and the euro area in the future - plus any risk premium. Chart 7 shows that the forward rate differential between Norway and Germany, ie the differential between short-term interest rates at future dates, is gradually narrowing, and is not much greater than for the other Nordic countries.
Note that to achieve the best fit to the empirical data, the fitted distributions do not integrate to unity. 26  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  26  Real-World Applications of Agent-Based Models  Given that ABMs potentially better match the moments of real-world data, at least in some situations and in some markets, and given their seeming success in other disciplines, the Bank of England has recently made an investment in them as part of its One Bank Research Agenda (Bank of England (2015)). Let me briefly describe two pieces of Bank research which have drawn on ABMs in an attempt to better understand two markets and how policy might reshape dynamics in these markets. (a) The UK Housing Market  The housing market has been one of the primary sources of financial stress in a great many countries (Jorda, Schulerick and Taylor (2014)). Not coincidentally, this market has also been characterised by pronounced cyclical swings. Chart 7 runs a filter through UK house price inflation in the period since 1896. It exhibits clear cyclicality, with peak-to-trough variation often of around 20 percentage points. Mortgage lending exhibits a similar cyclicality. House prices, like other asset prices, also exhibit out-sized booms and busts. Chart 6  Chart 7: Long-run UK house price growth 1846 to 2015  plots the distribution of UK house price growth  Percent year on year  since 1846.

This may mean, for instance, the willingness to take progressively tougher measures where the situation warrants. This in essence is what the MAS and other agencies in Singapore have done recently on the property cooling measures. Let me add that these measures are not a substitute for banks’ own risk assessment processes. Banks should continue to maintain prudent lending practices. This includes taking into account potentially higher interest rates in their credit assessments, and not assuming that current low interest rates will last indefinitely. MAS will continue to monitor banks’ activities and practices closely. Understanding Asia 12. Asia’s growth prospects have attracted global interest and a surge of capital inflows. Asia is now the second highest contributor to global trade, and is expected to overtake Europe in a few years. China, India and Indonesia are growing rapidly, registering GDP growths more than four times that of US and Europe. The prospect of greater Asian currency appreciation has drawn greater fund flows into the region. In 2010, inflows into Asian local bond markets reached record levels. 13. However, investing in Asia is not without risks. The huge capital inflows, if left unchecked, have the potential to increase inflationary pressures and fuel asset-price bubbles. In an informal survey by MAS of 30 major fund managers, almost half cited the possibility of a hard landing of major emerging economies in Asia as a key risk. While inflows have been swift, we must be prepared for a rapid outflow as well.
We have also taken initiatives to accomplish the task of introducing a near paperless operating environment to EPF by introducing a real-time document image scanning project and workflow management system. 29  Foreign Exchange Management Following the successful implementation of proposals announced in the Road Map for 2017, a new foreign exchange management framework was introduced in order to implement government policy. Accordingly, the Department of Foreign Exchange was established in place of the Exchange Control Department to implement provisions of the new Foreign Exchange Act. In addition, we have implemented several policies for further relaxation of capital transactions in 2017. The foreign exchange policies to be implemented in 2018 and beyond are basically focused upon facilitating integration with the current overall policy stance of the country which seeks to promote competitive advantages for Sri Lanka in the global business environment. With the view of introducing an effective monitoring mechanism, a new ‘real time’ reporting and monitoring system is to be introduced for authorised dealers and restricted dealers in order to create a better database for macro-economic decision making through identifying patterns related to mobilisation of foreign exchange flows. Offsite surveillance will be strengthened as a part of the reporting requirement with the view of tracking and reducing non-compliances to improve market discipline.

This flexibility is necessary in a world of elevated risks and uncertainties as well as rapid changes. Similarly, we strongly believe that the government would continue its fiscal consolidation measures, which will support us to pursue our policies towards macroeconomic stability. In particular, this will be a necessary condition for us to successfully adopt FIT as the monetary policy framework as planned. 32  Before concluding my speech, I would like to convey my sincere gratitude to a number of individuals who constantly contribute and support our efforts to carry out our functions of the Central Bank effectively. First and foremost, I am grateful to His Excellency the President Maithripala Sirisena, and Honourable Prime Minister Ranil Wickremesinghe for their guidance and leadership. I would also like to thank Honourable Minister of Finance and Mass Media Mangala Samaraweera for his support, especially in making every effort to ensure close coordination between the Ministry of Finance and the Central Bank. I highly appreciate the ample support and prudent inputs from the Members of the Monetary Board of the Central Bank. My sincere gratitude goes to Secretary to the Treasury, Dr. R H S Samaratunga, Mrs. Manohari Ramanathan, Mr. Chrisantha Perera and Mr. Nihal Fonseka for the constant interaction and deliberations at the Monetary Board. I am also grateful to Senior Deputy Governor Dr. Nandalal Weerasinghe, and Deputy Governors, Mr. K D Ranasinghe and Mr. C J P Siriwardena for their enormous support and for their highly professional advice and recommendations.
The shock caused by the health crisis has led to a historically high level of debt, slightly below 115% of GDP in 2021, as, alas, we were starting from a pre-crisis ratio that was significantly higher than the average for the euro area. If the current trends of the past ten years are continued in the future - low potential growth, increased public spending in volume terms of over 1% per year, deficits still above 3% for several years – this debt ratio will at best only be stabilised. At best, because the public debate today is awash with proposals for new spending and additional tax cuts. The reality is that our country cannot afford either. Speaking with the voice of an independent institution, I would like to remind you that we cannot further worsen our public finances. Page 13 sur 15  This simple stabilisation is not sustainable, for several reasons. First, because it would be irresponsible to bet on the continuation of extremely favourable interest rates. A rise of merely 1% in interest rates - which is not an extreme scenario - would cost EUR 39 billion per year after 10 years, i.e. the equivalent of the current defense budget. Second, because France must be prepared to face another crisis in the future, and in any case to face spending shocks such as the ageing of the population or climate change. We cannot forever pass the bill on to the next generation, i.e.

I am fully confident that in our next monetary meetings, in the coming months, we will decide, in a pragmatic approach, about the best evolution after March of all our available tools: QE, TLTRO and forward guidance on interest rates. And we have many options open regarding the size and length of instruments like our APP, excluding either a sudden stop of its contribution to our accommodative policy in March, or the continuation of the same contribution forever. Second, we in Europe share a large single market. It is a tremendous asset which belongs to us all, the 27. It is no coincidence that access to the single market lies at the heart of the Brexit debate. We cannot prejudge the outcome of the future negotiations, but we can be sure of one consistency principle: access to the single market must continue to go hand-in-hand with strict acceptance of all its rules. There can be no cherry-picking or free-riding. And we must obviously preserve the single European trade policy, if we want to exist in the trade negotiations to come worldwide. Third, we share a common social model (slide 2) which combines high standards of public service and relatively low levels of inequality – much lower than in American society. And this has been achieved in a market economy.
The NBRM expects that the new legislation in the payment area will: –  foster the competition by allowing non-banking institutions enter the market with innovative payment solutions;  –  strengthen the rights of payment services users by obtaining clearer and timely information, lower prices of payment services for payment users;  –  enhance further the stability of payment systems;  –  consolidate current regulation covered by several acts related to payment services; and  –  establish a legal base for faster integration of the Republic of Macedonia in the EU and inclusion in the Single Euro Payment Area. Apart from the new regulation in the payment services area, the NBRM took an important step towards harmonization with the EU regulation in the oversight area by adopting new oversight regulation. The new regulation brings together the internationally accepted standards for payment systems operation contained in the Principles for Financial Market Infrastructures, as well as the European Central Bank revised oversight framework. In addition, I would like to point out the significant changes that have been done in the domain of payment statistics in accordance with the ECB Regulation on payment statistics. The NBRM developed new bylaws on payment statistics, which are expected to generate high quality and comprehensive data, and will provide methodological and operational readiness of payment statistics of the NBRM with that of the European System of Central Banks.

For the fiscal union, finding the balance between cooperation and diversity is difficult. National preferences for taxing and spending are stronger, and the case for elevating certain functions to the European level is more complex. And there can be no taxation without representation, meaning any shift to a more European fiscal policy must be accompanied by the same shift towards European democratic control. So to frame the discussion, I think it is helpful to recall the taxonomy of economic policy functions described by Richard Musgrave. He distinguished between stabilisation, allocation  3  Schoenmaker, D., (2011). “The financial trilemma,” Economics Letters, vol. 111, pages 57–59, April. BIS central bankers’ speeches  5  and distribution. Broadly speaking, stabilisation helps smooth the business cycle, allocation ensures that resources are used efficiently and distribution ensures an equitable sharing of income. Stabilisation Concentrating on stabilisation, there is a long-standing debate in Europe about whether monetary union needs a federal budget to support counter-cyclical stabilisation. As you may know, the report by the four Presidents on a genuine EMU suggested that a small fiscal capacity could be used for this purpose. I do not want to comment on the specifics of this proposal, but there are questions about whether national preferences are sufficiently aligned to permit it. For that reason, we have to think carefully about whether it is essential for the euro area. In particular, we have to consider how having a genuine banking union might change the debate.