samchain/econo-pairs-v1 huggingface dataset:
To supplement its guarantee schemes, the CGC, under its Business Advisory Service Entity programme, has identified and engaged a panel of consultants to assist the SMEs, particularly in drawing up business plans and other financial documents. Bank Negara Malaysia recognises the important complementary role of DFIs in the financial system and their developmental role in supporting the national socio-economic agenda. As such, Bank Negara Malaysia in its Financial Sector Masterplan (FSMP) has drawn out the roadmap on the development of the DFIs, with the objective of developing a group of DFIs that are able to perform their mandates in an effective and efficient manner at minimal cost to the Government. In order to achieve this objective, three broad development thrusts have been outlined for the DFIs, namely, strengthening of the regulatory and supervisory framework of the DFIs, capacity and capability building as well as institutional efficiency enhancement of DFIs. A total of eight recommendations have been formulated premised on these development thrusts. One of the significant milestones in the strategies to strengthen the DFIs is the enactment of the Development Financial Institutions Act 2002 (DFIA). The Act provides a comprehensive regulatory and supervisory framework for DFIs, with the primary objective of ensuring that the DFIs perform their mandated roles and that their activities are carried out prudently, effectively and efficiently. Bank Negara Malaysia was appointed as the single regulatory and supervisory body for DFIs under the Act.

In some instances, the DFIs have widened and diversified their scope of activities, to cater to the financial needs of new growth areas, such as information and communication technology (ICT), and biotechnology. Many of them have expanded their financial products to include providing short-term working capital loans, equity participation and investment banking. While operating with the widened scope of activities, it is observed that the majority of DFIs continue to maintain the provision of medium to long-term finance and project finance as the core of their activities. At the same time, the DFIs still fundamentally remain complementary, especially in supporting strategic sectors such as the SMEs and agriculture. As reflected by the term, "development financial institution", DFIs are not only expected to provide development finance for nation building, but also to undertake a higher degree of developmental role to nurture and develop the targeted sectors. With regard to this, the DFIs have been demonstrating outstanding performance in their developmental role. For instance, the KfW Mittelstandbank, a prominent DFI in fostering SME development in Germany, is providing credit facilities to not only the established SMEs but also the new start-ups. Another example is the Organisation for SMEs and Regional Innovation of Japan which focuses on providing advisory and consultancy services, and training to nurture and develop the SMEs. Let's now look at the prospects and challenges for DFIs, i.e., the second part of this presentation.
I also announced last year that we have established a cross-border collateral arrangement with De Nederlandsche Bank. This year, we have established such arrangements with the Banque de France, Bundesbank and Bank of England. These arrangements will allow banks in Singapore to pledge Euro and Sterling cash and eligible government securities, custodised with these central banks, as collateral when they access the MAS Standing Facility. 22. These measures will help to broaden the availability and diversity of regulatory and liquid assets for banks and allow international banks greater flexibility to tap on their global  BIS Review 103/2010  3  sources of liquidity, while maintaining the high quality of eligible collateral of the Standing Facility. Maintaining the growth of Singapore’s financial services sector 23. Let me now turn to the performance of our financial sector. The sector has staged a strong rebound as global financial conditions improved. In the first quarter of this year, the financial sector grew by 3.5%, its fourth straight quarter of expansion. More recent data such as bank lending suggests that the financial sector continued to expand in Q2. Meanwhile, hiring in the financial sector has picked up from 4,000 in Q4 2009 to 5,500 in Q1 this year. The 5,500 financial sector jobs created accounted for 15% of total job creation in Q1 2010. 24. The recovery in the financial sector is broad based – banking intermediation, trading and asset management activities have all rebounded.

Given the strong data, this is not what and how a developed market should behave as there is ample FX market liquidity. If we look at the recent daily volume of FX trade, although lower than last year, it was still double the amount 5 years ago, between USD5-6 billion for the USD/MYR pair and between USD8-10 billion for all other currency pairs. What we need to do now is to remind ourselves and each other constantly that we need to put things in proper perspective. As a group, we constitute the market and individuals, we should behave responsibly. BIS central bankers’ speeches  1  On the other hand, despite the adverse market conditions, we noted that the Malaysian bond market has been holding up quite well despite lower level of liquidity, thanks to domestic institutional players’ support. Nevertheless, we also realized that significant foreign participation in our financial market can be both a boon and a bane for the industry. While high foreign participation has led to better liquidity and lower cost as what we have experienced in the past, it has also brought risks and vulnerabilities. The percentage of nonresident holdings itself has evolved into a risk indicator, regularly quoted by market commentators, where 48% is the number frequently quoted as the percentage of nonresident government security holdings. There was also the argument that large holdings by non-residents might leads to sell offs during period uncertainty, thus causing financial market instability. This is erroneous and misleading.
A society: •  that spurs continuous innovation in payments technology;  •  that gives consumers maximum convenience and confidence in making payments;  •  that enables firms to increase productivity through payments integrated with business processes; and  •  where swift, simple, and secure payments is a reality for everyone. MAS has been working closely with the financial industry and other government agencies to drive electronic payments. We have also engaged KPMG Advisory to study Singapore’s payments landscape; KPMG’s report will be released later today. Let me elaborate on the four key strategies to create an e-payments society: •  streamlined regulation;  •  inclusive governance;  •  interoperable infrastructure; and  •  pervasive digitisation. Streamlined regulation – targeted, activity based, risk appropriate First, we will streamline our regulatory framework for payments; strengthen consumer protection; and make regulation more targeted based on the specific payment activities that businesses undertake. The existing regulatory framework for payments cuts across the Money-Changing and Remittance Businesses Act (“MCRBA”) and the Payment Systems (Oversight) Act (“PS(O)A”). The MCRBA was introduced in 1979, an era when bricks-and-mortar money changers and remittance agents were the norm. •  For more than three decades, it has served us well. •  We have a thriving remittance industry that provides an essential service to residents, including the many foreign workers in Singapore. The PS(O)A was enacted in 2006, with the objective of keeping our key payment systems safe and efficient.

The Association of Banks in Singapore, or ABS, is therefore developing a Central Addressing Scheme (or CAS). •  CAS will allow payments to be made through FAST using only a recipient’s mobile number, or NRIC number, or Unique Entity Number. •  The industry is also working to provide a seamless and common user interface for making FAST transfers regardless of the customer’s bank. •  If all goes well, by this time next year, we will no longer need to remember bank account numbers for a majority of our electronic fund transfers. A second key barrier to using FAST is cost. •  SMEs have told us that some banks can charge up to $ for fund transfers using FAST. But they offer free cheque payments every month! •  This is surprising. Our own studies indicate that the marginal cost of e-payments, including FAST funds transfers, should be far lower than that of cheques. •  Cheque processing is a resource intensive operation that is far from costless. •  Banks should not be reluctant to accurately reflect the true marginal cost of their various payment instruments. Acceptance of card payments – unified point-of-sale terminals (UPOS) Debit and credit cards are widely used by Singaporeans but the experience at the acceptance points in our retail outlets and restaurants needs to be enhanced. •  Not all cards can be used everywhere, and we often have to ask merchants if our card of choice is accepted.
At the end of the 20th century, the service sector provides employment for over two-thirds of the labour force in comparison with around 20% at the beginning of the century. In the beginning, it involved expansion of the private service sector, but from the late 1950s and the beginning of the 1960s, public employment grew at a fast rate. The share rose from around 10% to approximately a third of the labour force in the 1990s. An important factor behind the rapid expansion of the service sector is that women started to take paid employment. This created a demand for the production of both public and private services. Women’s entry into the labour market meant that a previously untapped labour reserve was used. These changes have meant large transformations which have had an impact on people’s everyday lives. However, these have probably been necessary to bring about the marked increase in material prosperity. Figure 6. Volatility in inflation and growth  6.

14 / 19  BIS central bankers' speeches  The medium term refers to a time span that is long enough to be consistent with a central bank’s capacity to control inflation, taking into account the typical transmission lag. The horizon should be short enough for the public to be able to assess the performance of the central bank in delivering its inflation goal. At the same time, too long a span of time obstructs accountability. However, the definition of the medium term cannot be reduced to a fixed interval: it must be interpreted as state-dependent. A demand shock that pushes inflation away from its desired level and output away from potential in the same direction calls for a policy horizon as short as the typical transmission lag: the policy response to such a shock is faster and stronger than otherwise. By contrast, if the economy is hit by persistent supply-side shocks, for example, the medium-term interval can stretch well beyond the standard transmission lag of monetary policy. Furthermore, a medium-term orientation implies that inflation can deviate from our aim in both directions, so long as the path of inflation can be expected to converge back to the objective. Maintaining a medium-term orientation is facilitated by a credible commitment to the inflation goal, such that inflation expectations remain well anchored even during a prolonged phase of inflation deviation.
These are: •  The public announcement of medium-term numerical targets for inflation with due advance notice. BIS Review 95/2000  2  •  The recognition of price stability as the sole objective of monetary policy without other nominal targets. •  Increased transparency of the monetary policy strategy through communication with the public and the markets about the plans, objectives and decisions of the monetary authorities. •  An independent central bank both in the context of the institutional and operational arena. •  Development of appropriate policy instruments and a clear understanding of the underlying monetary policy transmission mechanism or at least a reliable model for forecasting medium to long-run inflation. The announcement of inflation targets communicates the central bank’s intentions to the financial markets and to the public, and in doing so helps to reduce uncertainty about the future course of inflation. Many of the costs of inflation arise from this uncertainty or variability rather than from its level; for example, uncertainty about inflation exacerbates the volatility of relative prices and increases the riskiness of non-indexed financial instruments and contracts set in nominal terms. By making explicit the central bank’s medium-term policy intentions, inflation targets improve planning in the private sector, enhance the public debate about the direction of monetary policy, and increase the accountability of the central bank.

Targeting the price level directly, however, was generally considered not possible since the linkages between policy instruments and prices were somewhat uncertain and contained the long and variable lags. These problems led to two new issues which brought about a revolution in the approach to central banking. These are transparency and improved forecasting. Clearly, monetary policy is most effective in the presence of a firmly established nominal anchor, and the more understandable that anchor is to the public the better. An effective commitment to long-run price stability is just such a nominal anchor that the target rate of inflation communicates to the public the price level the central bank is aiming to achieve at specified dates in the future. Any move away from policy rules for long periods must face and deal with long and variable lags in the economy’s response to changes in policy stance. Improved modeling and forecasting is giving central banks increasing confidence in basing current policy decisions on expected future outcomes. When we sum up these developments in monetary policy, we need a monetary framework which includes the following components. It should be: •  transparent;  •  accountable;  •  predictable and easy-to-monitor; and  •  reliable. This is also why the IT (inflation targeting) countries introduced these institutional and operational features into their monetary policy frameworks. Before passing to the key issues for the success of IT regime, I would briefly like to focus on the basic key requirements of the inflation targeting framework in the literature.
There are studies indicating that domestic cost components may comprise as much as 75 per cent of the end-price.2 Arguing that the Riksbank cannot affect imported inflation is therefore simplifying rather too much. On the other hand, it may be the case that during the prevailing changeover process it may be quite reasonable to allow inflation to be below (or in a different situation, above) the inflation target for a period of time. This lies within the boundaries of the flexible inflation targeting the Riksbank conducts. A policy of flexible inflation targeting means that we always consider how large a deviation from the inflation target might be acceptable, and whether we can allow a little more time before bringing inflation back in line with the target. Another challenge is the low interest rates. At present, the Riksbank’s key rate is at an historically low level, although we are in the upturn phase of the economic cycle, at least this appears to be the case in our view of recent growth and our forecast for future growth. At the same time, one cannot rule out the possibility that inflation might remain low for a long period of time. If economic activity should  2  Burstein, Ariel, Martin Eichenbaum, and Sergio Rebelo (2005), "Large Devaluations and the Real Exchange Rate", Journal of Political Economy, Vol. 113, No. 4, August 2005, pp. 742-784. 6/7  decline substantially, the problem will be that there is little scope for further stimulation using monetary policy.

1/7  The new target for monetary policy, to aim for a low and stable inflation rate, was announced in January 1993 and applied in terms of the consumer price index (CPI) with effect from 1995. The fact that there was some delay was partly due to the economy having just been exposed to strong inflation impulses, mainly due to the weakening of the krona after the fixed exchange rate was abandoned. The target for monetary policy, which was further manifested by being written into the Sveriges Riksbank Act in 1999, is to “maintain price stability” and the Riksbank’s interpretation of this is that inflation should be retained around 2 per cent a year, measured as the annual change in the consumer price index (CPI). There is also a tolerance interval of plus/minus 1 percentage point around this target. Maintaining inflation at exactly 2 per cent all of the time would hardly be possible and constantly fine-tuning the rate for this purpose would probably risk reinforcing fluctuations in the economy rather than having a stabilising effect. When the Riksbank adjusts the key rate, its repo rate, this affects total demand and ultimately also inflation through various “channels” in the economy – the cost of borrowing, incentives to save and exports and imports, via exchange rate changes. It takes time for an interest rate change to have full effect via these channels; one usually estimates that it takes around 1-2 years. Monetary policy is therefore conducted on the basis of this time horizon.
The Bank’s interest thus has a stimulating effect on the economy, and note that real interest rates at present are lower than they have been since the spring of 1996. It should  BIS Review 12/2003  1  also be borne in mind that changes in interest rates only affect demand and inflation with a considerable time lag, so that the full effect of interest rate cuts in recent months will not be felt for some time yet. ISK exchange rate No one doubts the importance of the ISK exchange rate for the Icelandic economy. The exchange rate has enormous impact on price levels and the performance of the export and competitive sectors. On the other hand, people must realise that the Central Bank has only limited long-term effect on the exchange rate. Many aspects of the economy affect the exchange rate. These include, for instance, foreign trade, foreign investments in Iceland and investment by Icelanders abroad, not to forget expectations of future economic developments. There is little doubt that expectations concerning power-intensive industry developments have influenced the exchange rate in recent months. Interest rates certainly affect the exchange rate, but experience both in Iceland and elsewhere shows that this effect eventually disappears, as long as monetary policy aims at maintaining long-term inflation comparable to that of the country’s trading partners. At the same time, intervention by central banks can have a temporary impact.

Birgir Ísl Gunnarsson: The policy and objectives of the Central Bank of Iceland Article by Mr Birgir Ísl Gunnarsson, Chairman of the Board of Governors of the Central Bank of Iceland, published in the Morgunbladid Newspaper, in Reykjavík, 28 February 2003. *  *  *  When the Central Bank of Iceland became an independent institution in 1961 it was generally believed, both here in Iceland and abroad, that several different simultaneous objectives could be set for central banks. Low inflation, full employment and strong economic growth were among the objectives that people felt central banks should be able to achieve. Gradually it became clear that this would not work. In the work of a central bank, these objectives can come into conflict with one another, resulting in an economic fiasco. As a result, in recent years legislation on central banks has been altered in many countries and the banks assigned one principal objective: ensuring price stability. Inflation is primarily a monetary phenomenon, persistent inflation being the result of insufficient restraint in monetary policy. In the long term, monetary policy thus has an impact on price levels but less on economic growth and employment. With free movement of capital between countries, the principal instrument of a Central Bank is interest rates; in the long run this instrument can only achieve one macroeconomic objective, i.e. to ensure price stability.
Against this economic backdrop, and amid heated banker-bashing, it is easy to see how the social benefits of segregation were perceived as far outweighing the private costs at the time. Kennedy (1973) describes how “Stock dealings which had made bankers rich and respected in the era of affluence now glared as scarlet sins in the age of depression. Disillusionment with speculators and securities merchants carried over from investment bankers to commercial bankers; the two were often the same, and an embittered public did not care to make fine distinctions”. Glass and Steagall made just such a distinction. They underpinned it with legislation, signed by President Roosevelt in June 1933. As with McFadden, Glass-Steagall appears to have been effective from the 1930s right up until the latter part of the 1980s. Measures of concentration in the US banking system  14  Chapman and Westerfield (1942). BIS Review 40/2010  5  remained broadly flat between the 1930s and the late 1980s (Chart 2). But competitive pressures were building from the late 1970s onwards. Strains on US commercial banks intensified from alternative lending vehicles (such as mutual funds and commercial paper markets) and from overseas banks. The private costs of restrictions were rising. Legislators responded. After 1988, securities affiliates within BHCs were permitted, though were still subject to strict limits. In 1999, the Gramm-Leach-Bliley Act revoked the restrictions of Glass-Steagall, allowing co-mingling of investment and commercial banking.

This is done by mapping from ratings to the yields paid on banks’ bonds; 6 and by then scaling the yield difference by the value of each banks’ ratings-sensitive liabilities. 7 The resulting money amount is an estimate of the reduction in banks’ funding costs which arises from the perceived government subsidy. Table 4 shows the estimated value of that subsidy for the same sample of UK and global banks, again between 2007 and 2009. For UK banks, the average annual subsidy for the top five banks over these years was over £ billion – roughly equal to UK banks’ annual profits prior to the crisis. At the height of the crisis, the subsidy was larger still. For the sample of global banks, the average annual subsidy for the top five banks was just less than $ billion per year. These are not small sums. Table 4 also splits UK banks and building societies into “Big 5”, “medium” and “small” buckets. As might be expected, the large banks account for over 90% of the total implied subsidy. On these metrics, the too-big-to-fail problem results in a real and on-going cost to the taxpayer and a real and on-going windfall for the banks. If it were ever possible to mint a coin big enough, these would be the two sides of it. These results are no more than illustrative – for example, they make no allowance for subsidies arising on retail deposits. Nonetheless, studies using different methods have found similarly-sized subsidies.