samchain/econo-pairs-v1 huggingface dataset:
In this sense, the implications are very similar to those described by Xavier Gabaix and Matteo Maggiori in their 2015 Quarterly Journal of Economics article, which states that the risk-bearing capacity of financial intermediaries provides a role for capital flows to affect the exchange rate.16 The difference is only that if asset purchases are understood by investors to be part of the reaction function of central banks, then the exchange rate can be expected to adjust before capital flows take place. This is certainly what we have seen in the euro area. This also means that we should treat more carefully findings in the event-study literature that assign most of the observed exchange rate change around central bank asset purchase announcements to the signalling channel.17 Given that intermediaries are forward-looking but constrained by their balance sheets, policy-induced exchange rate changes can also be expected to reflect expectations of future cross-border capital flows and their associated impact on the future supply of and demand for currency. In this sense, the debate also shares some similarities with a related strand of the literature, namely the transmission channels of sterilised foreign exchange interventions. The view that such interventions are effective mainly by signalling future policy intentions is frequently challenged by empirical evidence suggesting that portfolio rebalancing may have economically relevant effects.18 Of course, this does not mean that understanding the potential spillovers of central bank asset purchase programmes is enough to explain exchange rate movements.

All empirical studies confirm that much can be gained by embracing good governance and it is an essential component of crisis prevention efforts. Good governance is equally vital in both the public sector and the corporate world, and its merits are relevant in all countries. Recently, corporate governance issues have been prominent on the world economic agenda as financial markets have been recovering from scandals that came to the fore following a period of excesses in equity markets. In order to increase confidence in the markets, it is imperative that the corporate world adhere to the principles of good governance. Good governance in the public sector is also an essential tool for strengthening institutional capacity, which is fundamental  BIS Review 42/2003  1  for economic and social development. The Fund has an important role to play in this field and we welcome the increased emphasis it has given to the issue of governance. Transparency and International Standards With the world economy having suffered a confidence crisis, it is important to continue to promote greater transparency and accountability. Various studies have demonstrated that transparency and adherence to international standards lead to easier market access and lower borrowing costs. There is much to gain by applying these simple principles. It is also important to continue developing international standards and codes that enhance transparency and facilitate comparison between countries and regions.
In future, the Bank aims to be able to offer through the FSR some greater clarity to financial firms about the sorts of vulnerability scenario it thinks they could use as one (and only one) input to their stress-testing machinery. This might include both solvency and liquidity-type scenarios. As the FSA have proposed, banks should also test to destruction their balance sheets through “reverse” stress tests, in order to identify potential areas of balance sheet weakness. •  Second, regular evaluation of common stress scenarios. Having banks conduct regular evaluations of their positions relative to a set of common scenarios (provided by the authorities) would be an improvement on current practices in several respects. First, it would allow some degree of benchmarking of results across institutions; second, it would allow a degree of benchmarking, and hence peer review, of models; and third, it would hopefully help in ensuring stress-testing exercises form an input to management decisions and are not an annual regulatory ritual. Comparing these bottom-up exercises with top-down evaluations conducted by the authorities – the like of which have appeared in recent Bank FSRs – can also help in benchmarking results and models. •  Third, an assessment of the second-round effects of stress. The results of these common stress evaluations should be the starting point, not the end point. These common stress tests need to be made dynamic, so that the second and subsequent round interactions, and their consequences for system-wide risk, can be evaluated.

One danger of such developments is that, in the face of a prolonged period of low interest rates, asset managers might be tempted to chase “tail-risks”. This calls both for more market discipline in the form of better monitoring and disclosure of the risks borne by financial institutions and possibly by investors, and for a close supervision of these institutions. Demographic shifts are a key factor in the equation of the future world economy. They are key for economic activity, the fiscal stance, and, maybe less obviously, for the monetary policy stance, given their impact on output gap and financial stability. That is why I found the topic of this session particularly appropriate and timely, and I am sure that your discussions will bring very interesting insights. 2  BIS central bankers’ speeches
There might be arguments in favour of basing the interest rate assumption on external factors, as an exogenous assumption, either by assuming that the interest rate will remain constant through the projection period or that it will develop in line with market expectations. The projections that result from such technical interest rate assumptions do not necessarily provide a reasonable balance between the different objectives of monetary policy. In some cases, both the interest rate assumption and the projections may seem unreasonable. This may raise the question of the purpose of forecasting. However, it provides a starting-point for discussions about how the interest rate path might be adjusted to produce more acceptable results. Alternatively, the interest rate can be treated in the same way as other variables forecast by the Bank. We would then have to try to make projections for inflation, output and the interest rate simultaneously, with the aim of arriving at an interest rate path that provides a reasonable balance between the different objectives of monetary policy. If the central bank has the intention of adhering to this interest rate path, this might be regarded as an interest rate forecast rather than a technical assumption. BIS Review 6/2006  1  Establishing such an interest rate path is not a straightforward matter. Flexible inflation targeting, which is the system we use, means that the deviation from the inflation target and the output gap are both taken into account.

The Fed held a conference in Woodstock, Vermont in October 1999 on the ZLB.1 At that conference, Marvin presented his paper “Overcoming the Zero Bound on Interest Rate Policy,” which was subsequently published in the Journal of Money, Credit and Banking (JMCB).2 In January 2002, Marvin briefed the FOMC on aspects of the research that he had presented at the Woodstock conference, as part of a session on the ZLB in which David Reifschneider and I presented our research as well.3 By that point, the federal funds rate had fallen to 1.75 percent, so the ZLB was starting to get on policymakers’ radar screens. On those occasions, Marvin emphasized the importance of the ZLB as a constraint on policy and urged us to think differently about how central banks could still carry out their missions, even under that constraint. He developed and analyzed what were then considered “outside the box” options for overcoming the ZLB. These helped lay the groundwork for how economists and 1/2  BIS central bankers' speeches  policymakers think about these issues in both conceptual and practical terms. For example, Marvin was one of the first people to think seriously about how the constraint caused by the ZLB could be relaxed by implementing negative interest rates. Now, I know that the topic of negative interest rates is controversial. But, whatever conclusions you may draw about the relative merits of negative rates, Marvin’s research early on helped identify and explore a broad dimension of issues and potential choices for policymakers.
But that does not mean there is no risk to the wider economy. Far from it. In the face of unexpected events, they cut back sharply on all other spending to keep paying the mortgage. 3  Although no individual household can shape the wider economy, if large numbers feel forced to behave like this, they can affect everyone by making economic downturns deeper. The evidence from the financial crisis is that households with big mortgages cut their spending six times more aggressively than households with no, or at least small, mortgages (Chart 2). This effect of high mortgage debt on economic risks is reinforced by another. By making downturns deeper, high levels of mortgage debt raise the risk to banks of losses on all their non-mortgage loans, from company debts to credit cards. 3  Cunliffe, J. (2014) ‘Momentum in the housing market: affordability, indebtedness and risks’, remarks given at the Worshipful Company of International Bankers dinner, London, on 1 May 2014. http://www.bankofengland.co.uk/publications/Documents/speeches/2014/speech725.pdf  4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Without the strength to face those risks, banks are more vulnerable to the unexpected. When the unexpected happens, they do what they did in the financial crisis. They cut back their lending, making downturns even deeper. Unlike mortgages, high levels of consumer debt are a danger to the wider economy primarily through this channel of losses to banks.

Income distribution of consumer credit borrowers relative to the general population  Sources: Finance & Leasing Association, Society of Motor Manufacturers and Traders (SMMT) and Bank calculations. (a) Annual sterling gross lending to individuals on dealership car finance for new car purchases provided by Finance & Leasing Association members, attributed to personal contract purchase (PCP). (b) Annual transactions on dealership car finance for new car purchases provided by Finance & Leasing Association members, as a proportion of SMMT new car registrations. Sources: NMG Survey and Bank calculations. 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Chart 15. Stylised PCP deal  Chart 16. Market share objectives as a factor contributing to changes in secured credit (a)(b)(c) availability Net percentage balances (c)  Balance remaining Car value/amount left to repay £  Car value  40  20,000 Deposit  20  18,000 Monthly payments  16,000 0  14,000 Margin  12,000  -20  10,000 Optional balloon payment  8,000 2007  2009  2011  2013  2015  -40 2017  6,000 4,000  5  10  15  20 Month  25  30  35  Source: Bank calculations. Example shown: • Car value at new is £ Car value depreciates 45% after 3 years with most of the depreciation occurring in the first year. • Initial deposit of 10%. • 36 month contract with monthly repayments of £ per month. • Optional balloon payment of £ at the end of the contract.
Based on statistics, there are high numbers of STRs reported by and on these sectors, and there are also high numbers of investigation carried out by the LEAs on customers or transactions originated from these sectors. Vulnerabilities could also come from the country’s economic and geographical elements, as well as our legal framework. As a highly open economy, there are certain economic factors that contribute to the attractiveness of money laundering risk in the country such as the high integration with international markets, cash-based economy, high existence of non-bank remittance transfer, exposure to international trade, high percentage of informal economy and large volume of physical movement of currency. Vulnerabilities in the country’s geographical elements that may contribute to the attractiveness of money laundering risk is the country’s long and porous border. In the case of drugs trafficking for example, Malaysia position that is close to the “Golden Triangle” and within the route of “Afghanistan Opium” make our country vulnerable to trafficking of drugs from these areas. In the case of human trafficking, our country’s proximity to conflict areas such as Myanmar, makes us vulnerable to smuggling of migrants and trafficking of persons from Rohingya areas. Although in most cases Malaysia is not the final destination, we are the favourite transit points for these refugees. The NRA highlights the money laundering and terrorist financing risks faced by Malaysia, and areas that warrant more resources and attention.

Working through local community groups to engage borrowers, or identifying with religious tenets to overcome weak willpower to repay, are some experiential learning that creates favorable conditions that can expand access to credit and encourage high repayment rates. These “small nudges”, a notion popularized by behavioral scientist David Halpern, allow us to revisualise how operating models and technology can be adapted more effectively and efficiently to deliver sustainable microfinance solutions. Malaysia’s microfinance journey has also reflected a wider focus on developing the broad range of financial services that are needed by the unfortunate to manage and improve their financial circumstances. Credit is important, but not all important. Savings, insurance, business training and financial education are other key components of our program approach which work together to amplify the economic and social impact of microfinance. The largest microfinance institutions in Malaysia are also among the largest mobilisers of micro savings. As a case in point, our National Savings Bank ranks among the top three financial institutions in the country with the largest number of micro-loan and savings accounts. Overall, 92% of the population have a deposit account, compared to 42% who have a loan account. We are also currently working to expand the offering and take-up of micro insurance solutions under a multi-pronged strategy that combines tailored products offered by insurance companies and development financial institutions, and a universal product option available through low-cost mobile and other channels.
Muhammad bin Ibrahim: Perspectives and issues in navigating the development of the Malaysian financial market Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the ASEAN Risk Conference 2017 “Perspectives and Issues in Navigating the Development of the Malaysian Financial Market”, Kuala Lumpur, 24 May 2017. * * * Thank you ladies and gentlemen. Two years ago, I spoke at this very conference on ASEAN integration. Two years on, I am pleased to share that we have achieved substantial progress on this front. Among others, the ASEAN Banking Integration Framework and the bilateral frameworks to settle trade in local currencies are two significant milestones for financial integration. Today, I intend to speak on a few issues relating to ASEAN integration and outline the latest developments and challenges in the domestic financial market. For decades, globalisation has been the cornerstone of global economic development. Globalisation was a way to bring the countries of the world together to gradually flatten the intercountry disparities in income, wealth and overall standard of living, in hope that the motivation for war and conflict among countries would gradually reduce as disparities narrowed. Globalisation expanded trade and the free flow of capital, allowing countries to reap the benefits of comparative advantage while facilitating the growth of new sources of income and the transfer of knowledge and technologies. Truth be told, globalisation bore fruits that lead to greater economic growth, prosperity and wealth.

We are mindful that for the NDF market to truly reduce in significance and adverse influences, the onshore market must become highly competitive, not just the foreign exchange market but also all aspects of the financial market. We are determined to realise the idea of having a market that possesses the breadth and depth to cater to the increasingly complex and diverse needs of the economy, and a market that is able to sustain and weather volatilities that contribute to the overall wellbeing of the economy. The early positive results of the measures speak for themselves. The onshore foreign exchange market now regularly records a healthy daily volume. In addition, the ringgit exchange rate has remained stable with volatility reducing by half since the introduction of these measures. The domestic bond market is now more resilient as speculative positions have mostly exited the market. There is a larger composition of stable and longer term investors. This fact is much more important than just looking at the percentages or size of non-resident holdings. Our experience suggests that there is a threshold where non-resident investors will become a destabilising force. The success of our measures and our continued faith in the market mechanism is now validated and restored. Ensuring trust, confidence and integrity of the financial market There are many lessons that we ought to learn. Some of the disruptions were caused from the uncompetitive market behaviors and questionable conduct by players.
Tharman Shanmugaratnam: Opportunities in Asia for long-term growth and a look at the role of Singapore’s local banks Speech by Mr Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore, at the Official Inauguration of DBS Asia Central, Marina Bay Financial Centre (MBFC) Tower 3, Singapore, 17 October 2012. *  *  *  Mr Peter Seah Lim Huat, Chairman, DBS Bank Limited Mr Piyush Gupta, Chief Executive Officer, DBS Bank Limited Distinguished Guests, 1. It is a real pleasure to be here with you for the official opening of DBS’ new headquarters at the MBFC – DBS Asia Central. 2. Established in 1968 as the Development Bank of Singapore, DBS played a key role in helping to drive Singapore’s industrialization efforts. As Singapore moved to develop into a key financial centre in the Asian timezone, DBS also evolved into a full-fledged financial services group, offering a comprehensive range of products and services. 3. Over the last few decades, DBS has also expanded strongly into Asia, and has established a strong regional footprint. Apart from its key markets in Singapore and Hong Kong, DBS is strengthening its franchise in Southeast Asia (SEA), China, India and Taiwan. Today, with its network spanning 12 markets in Asia, DBS is not only a leading bank in Asia Pacific but also ranked by some as one of the strongest banks in Asia1. Leveraging on opportunities in Asia to anchor long term growth 4. The global economy continues to face many risks and uncertainties.

On the international front, global and European GDP growth forecasts have been revised downwards in recent months. To mention what appear to have been the most important factors, this has been due to the decline in activity in some of the main emerging economies and to the sluggishness of world trade. BIS central bankers’ speeches  1  As a result, for this year and for next year too, we should expect more moderate growth in the Spanish economy than in 2015. Indeed, the latest projections published by the Banco de España and by various analysts and international institutions are along these lines, with GDP growth rates of 2.7% in 2016 and 2.3% in 2017. This lower growth will come about when we are still far from having sufficiently corrected the serious imbalances that built up in the expansion and in the early years of the crisis. These may be listed under four headings: the labour market; fiscal consolidation and public debt; private debt and dependence on external funding; and productivity. Let us look more closely at each of these four aspects. 1. The reduction in unemployment  Firstly, unemployment. The main challenge facing the Spanish economy is to reduce the unemployment rate, which stood at the end of last year at almost 21%, 6 pp down from its peak at the start of 2013, but still far above the average for the European Union and the level in almost every other euro area country.
The structural reforms, that we are badly in need of, must be implemented as rapidly as possible if we want Europe to be up to its historical challenges. The Chinese say “It is later than you think” has never been so true. In any case, history itself does not wait for us. And when I look back, over the last twenty years, it seems to me that an unfortunately well-founded criticism could be that we have constantly under-assessed the rapidity of the stream of history: the rapidity of the deterioration of the situation in the USSR, the rapidity of the collapse itself, the rapidity of the enlargement process, the depth, the strength and the intensity of the “desire of Europe” which is spreading in the countries in transition. Second word: stability. Economic and financial stability, in a period of excessive volatility and of wide boom-bust episode, financial and real stability appear to be a very precious asset. Over the last twenty years, we have constructed a new world: technology has permitted instantaneous communication and incredibly powerful real-time computation. Globalization has created new cultural, conceptual, commercial and financial links between all economies including previously centrally planned systems; together technology and globalization are progressively driving us to a unified planet of universal rules and regulations, code of conduct and practices, market procedures and market instruments, accounting standards, etc.

In my view, three other major prerequisites are needed in order to foster robust, sustainable growth and durable job creation, namely : the continuation and strengthening of a policy designed to keep in check unit production costs, the improvement of the competitiveness of the economy, through ambitious structural reforms and lastly, the completion of a fully integrated European capital market. Raising the potential output growth and enhancing the competitiveness of the economy: If Europe wants to secure sustainable growth at levels that are as high as possible, the key variable is potential output growth. The level of potential output growth can firstly be raised thanks to investment: business leaders are completely free to invest wherever they want in Europe or elsewhere in the world. It is thus important that we create economic, legal and fiscal conditions that are as favourable as possible to investment in Europe. The investment appeal of Europe is crucial in this respect : the more we invest, the fewer inflationary pressures we will have, and the stronger potential output growth will be. BIS Review 60/2002  1  Another way of raising potential output growth is to increase the quantity of available labour and to boost gains in labour productivity: the fast transformation of information systems is likely to accentuate the structural transformation of the economies.