samchain/econo-pairs-v1 huggingface dataset:
Also, there is a box that scrutinizes the steps taken to solve the debt problem in the euro area, which points out to the role of structural problems such as the marked divergence in member countries’ competitiveness in hindering stable growth in the euro area. There is also a box exploring the rebalancing process in domestic and external demand thanks to the policies implemented last year. Titles of the boxes are shown on the slide. All of these boxes include important analyses. They will be published on our web-site shortly and I strongly recommend that you read them. Considering the ongoing major role of the developments in the global economy on our policies, I would like to start with the global economic outlook. Since the publication of the October 2011 Inflation Report, concerns over sovereign debt sustainability across the euro area have continued to weigh on the global economic outlook despite the implementation of various policy measures. Growth forecasts were revised downwards at a global scale particularly in the euro area economies (Chart 1). Thus, perceptions for a further delay in the normalization of monetary policy in advanced economies grew stronger. Notwithstanding a relative improvement in the risk appetite as of the onset of 2012, uncertainties regarding the solution of euro area problems persist. Coupled with the increased risk of contagion, this feeds into the fragility in global financial markets, highlighting the significance of a flexible monetary policy framework. BIS central bankers’ speeches  1  Chart 1.

Events that we once thought to be implausible or highly unlikely, have become the “new normal”. 1/5  BIS central bankers' speeches  In many parts of the world, health care costs continue to rise, and many face uncertain futures as public sector safety nets and government finances come under increasing strain. Against this backdrop, financial inclusion for the underserved segments remains an elusive goal. For the insurance industry, this raises important issues. Two issues come to my mind. First is on the industry’s role in addressing a few of the challenges facing our economies and society. And second, the manner in which regulation and supervision can adapt to support broader economic and social development. In addressing these issues, I shall attempt to advocate the idea that a rethinking in approach is an imperative. New paradigms are needed to anchor business and public policy to the realities of the future. I will touch on three of them: competitive, stability and ethical paradigms. A new competitive paradigm In an increasingly interconnected world, traditional models of competition deserve a re-think. Network effects will become more important, both in increasing the value of insurance products and services, and to better manage risks. Rather than see the competitive landscape through a zero-sum lens, co-operative competition or “co-opetition” can result in synergistic benefits. The example of Hewlett- Packard (HP) clearly illustrates this idea.
It is expected that by 2025, the number of older people in Thailand will account for 20% of the population and exceed the number of children under 15 years old. In an ageing society, banks that are able to cater to the needs of older population and tailor their products to accommodate changing demands would be successful. The next trend, urbanization, happening in many East Asian countries, brings both challenges and opportunities. According to the World Bank Research that just came out early this year, almost twelve million people in Thailand now live in urban areas; about ten million live in Bangkok alone. The number seems low for the area outside Bangkok because of the strict definition of urban areas employed by the World Bank. The same research also says that, cities outside Bangkok are growing at a much faster rate, and some cities such as Surat Thani have more than doubled its population in ten years. Urbanization results in increased purchasing power and fuels domestic demand. More infrastructure investments such as housing, electricity and transportation will be required. This is where the financial sector can contribute and benefit from the development. The trend towards regionalization poses a fourth challenge as well as an opportunity for the banking sector. With the commencement of the AEC in 2015, competition will intensify, benefiting those prepared to pursue opportunities across borders.

Building block 15 calls for harmonised API data protocols and the Bank will support this objective in its development of an API layer. The Bank is also involved in the more exploratory building blocks in Focus Area E. In the light of the continued decline in cash for transactional purposes, and great technological advancement, many central banks, including the Bank of England, are considering whether introducing a CBDC would be appropriate. In March this year, the Bank published a discussion paper10 to explore the benefits, risks and practicalities of a retail CBDC in the UK. We have received valuable feedback from across the payments industry, technology providers, academics and public authorities and we look forward to setting out more information in due course. The Bank’s Financial Policy Committee also set out regulatory expectations for payment stablecoins in 2019 and 2020, which is feeding into our work on designing appropriate regulation and requirements for firms proposing these. As set out in the building blocks it is important that as these issues are debated it is also done with an eye to how they could support cross-border payments. These examples provide just a taste of the areas that the Bank of England is involved in and we will be working closely with other central banks and relevant organisations to address the building blocks as a whole.
No one is going so far as to allege that the global markets are besieged by a broad-based movement to violate the law or act contrary to ethical business practice, but it could nonetheless be that the rules are stretched quite a bit, though perhaps within the limits of legality and even ethics. In so doing, companies everywhere are factoring in the value of assets for which there is, at present, no market. To be sure, assessing the market value of assets that are not marketable, either for the short term or for the long term, is a tricky matter. In the vast majority of cases, a market will develop at a later date, and if the companies in question have the wherewithal to hold them until that market develops, there is no reason to harbour any real anxiety. But assets that end up at a fire sale are another matter entirely. So it is difficult to determine market value when the market is sticky and virtually closed. All of these conditions kindle suspicions and undermine faith, and as it seems, the real problem is not so much a growing lack of liquidity as a growing lack of faith. The sooner trust and faith begin to grow again in world markets, the sooner they will rise up from this slump, or recession – at the moment we don’t know which term is more appropriate. Many things are changing, both in Iceland and elsewhere. A new edition of the book “Ten Little Negroes” causes ripples of unrest.

Up to now we have only seen isolated capital outflows but we need to keep an eye on that. In the 1/4  BIS central bankers' speeches  event of large outflows from investment funds, the main concern would be to prevent an excessive fall in prices caused by fire sales – that is, distressed sales of assets at large price discounts. On Sunday, the world’s central banks decided on extensive coordinated measures. The ECB announced a first major package on Thursday. What is the point of all that if the financial crisis has not yet set in? The situation in financial markets is already very tense. Last Thursday, we decided to provide abundant and very cheap liquidity to the banking system. That is the primary task of central banks at present. On Sunday, in a coordinated effort with other major international central banks, we took measures to provide banks with cheap US dollar liquidity. We did so because banks in some countries, especially Japan, had been finding it harder to access US dollars. The US Federal Reserve slashed interest rates. The ECB stepped up its asset purchases. But none of this seems to have had the desired effect. Equity prices continued to fall. What is going wrong? The ECB’s package was very comprehensive. But market volatility is partly masking the effects. Moreover, not all market participants seem to have immediately understood all of the components of the programme.
However, it is not excluded that some of the existing banks will not survive the wave of technology-enabled disruption and are replaced by new technologydriven banks founded by FinTech and BigTech companies. In a more extreme scenario, which is not likely nowadays but may be viable in the very long run, banks are displaced by FinTech and BigTech companies and are no longer significant players on the market. In order to establish Open Banking in Macedonia, it is necessary to implement the best practices and regulations from European countries. Although our regulation is still in drafting process, our Banks are not passive in this field and are already undertaking activities for opening their IT systems with new interfaces and modules for interacting with customers and external companies. The biggest challenge that can endanger this process are digital space attacks (cyberattacks) in this domain, which are a relevant threat with a high probability of happening. The National Bank as a regulator is in charge of defining the framework for information security in our financial system. The task of our banks is to implement concrete safeguards on the technical, administrative and physical level based on performed analysis of risks from 3/5  BIS central bankers' speeches  introduction and use of new services, which includes the risks of digital attacks.

According to the latest IMF forecasts, world output will shrink by 1.3% and the advanced economies by no less than 3.8%. However, GDP in emerging markets, though lower than in previous years, will still grow by 1.6%. Despite the crisis, the long-run prospects for emerging market economies remain bright. Projections for long-term growth, based on demographic trends and models of capital accumulation and productivity, suggest that the emerging markets are likely to gain in global importance. A number of studies found startling results regarding the growth prospects for emerging markets. According to one study, Brazil, Russia, India and China (the so-called BRIC economies) could account for over half the size of today’s six largest industrialised economies from 2025 onwards. 1 We have to prepare for a very profound structural rebalancing of world output during the next years. The world economy is changing profoundly, as so should its governance. The creation and the recent reinforcement of the G20 and the enlargement to the G20 of the Financial Stability Board are milestones in this respect. The rise of the emerging economies will also be reflected in the reforms of the international financial institutions. What are the specific implications of the growing role of emerging markets for the euro area? The euro area has close links with emerging market economies. In trade terms, the euro area is actually more open than other major economies. Our exports and imports of goods and services account for more than 40% of GDP, significantly more than in the United States or in Japan.
A rapid and pronounced change in the interest rate may be appropriate in cases where there is a risk that inflation may deviate considerably from the target over a longer period, or where heightening turbulence in financial markets or a cost- push shock resulting from wage negotiations indicates that confidence in monetary policy is in jeopardy. Financial market confidence in the inflation target provides Norges Bank with greater scope for promoting stability in output and employment through monetary policy. This scope will also increase as the inflation target is incorporated as an anchor for wage formation. We have also indicated that in the event of runaway overall credit growth and a sharp rise in property and house prices as well as equity prices, it may be necessary to reassess the time horizon. It would in general have been possible to achieve the inflation target at a horizon shorter than two years by changing the interest rate more rapidly and more markedly. This might, however, have a greater impact on output and employment. BIS Review 53/2003  1  Norges Bank has based its monetary policy on flexible inflation targeting, where variability in output, employment and inflation are given weight. How do changes in the interest rate affect the economy? Norges Bank’s monetary policy instrument is the key rate. Norges Bank’s key rate affects short-term money market rates, and expectations concerning future developments in the key rate are decisive for banks’ deposit and lending rates and bond yields.

It may be useful to distinguish between three channels through which monetary policy operates: •  The demand channel  •  The exchange rate channel  •  The expectations channel  The effect on inflation of changes in interest rates occurs with a lag and may vary in intensity. In the time it takes for a change in interest rates to feed through, other factors will also have an impact resulting in changes in inflation and output. We cannot assume that the various relationships are entirely stable. As interest rates fall, household and municipal consumption and investment will tend to accelerate. This is because they have more money left over after servicing their debt and because borrowing is less expensive. Corporate finances are strengthened and investment may become more attractive. Higher demand leads to higher output and employment. Wage growth may pick up. Higher wage growth combined with higher profit margins will result in higher inflation. The effect of interest rate changes may be amplified because the interest rate also affects the krone exchange rate. When interest rates are lower, more people will borrow money and fewer will invest in NOK. Lower interest rates will thus normally lead to a depreciation of the krone. Imported goods will then become more expensive and inflation will accelerate. A weaker krone also boosts exports and improves profitability in Norwegian business and industry. The effect on the exchange rate of a change in interest rates will vary as themes and sentiments shift in the foreign exchange market.
In addition, the distribution of net saving flows across the globe, with large excess saving (relative to domestic investment opportunities) in some emerging market economies searching for higher global investment returns also contributed to the fast pace of financial globalisation and development in recent years. When examining and assessing the effects of  BIS Review 9/2008  5  globalisation on the financial system – its efficiency and stability – it is important to keep in mind the role of the other factors, e.g. financial innovation, new business models, risk management practices, which have simultaneously exerted a significant impact on the functioning of financial markets and institutions. The securitisation of bank loans and the development of credit risk transfer (CRT) instruments and complex structured finance products have fundamentally changed the functioning of the financial system and the distribution of risk across sectors and borders. Since the mid-1980s, an unprecedented growth in the development and issuance of new financial market instruments has allowed the transfer of risks across market participants also in connection with previously relatively illiquid assets like bank loans and mortgages. While initially the focus was on transferring market risk, credit risk transfer instruments have increasingly gained in importance since the 1990s. 13 With respect to securitisation, this development can best be described by pointing out that the outstanding value of US agency mortgage-backed securities grew from about 100 billion US dollars in 1980 to about 4 trillion dollars in 2006 [Chart 9].

Globalisation can affect inflation dynamics through various channels: (1) by influencing the responsiveness of wages and prices to measures of domestic slack in the labour and product markets (that is, by affecting the slope of the shortterm Phillips curve and the sensitivity of profit margins to cyclical factors); (2) by affecting trend productivity growth; and (3) by causing shifts in the “natural rate of unemployment” or NAIRU; (4) by making a measure of “global economic slack” an important determinant of domestic inflationary pressure; and (5), more directly, by affecting the trend rates of change of the relative prices of imported final goods, intermediate products and commodities. It is important to keep in mind the various channels and potential effects because their impact can be offsetting, and also because theoretical arguments and empirical analyse often focus only on some of the potential channels, thus providing a partial picture. I will elaborate on some of these effects and the empirical evidence for the euro area. Economic theory does not provide unambiguous conclusions about the impact of globalisation on the slope of the short-term Phillips curve, that is, on the responsiveness of domestic inflation to measures of domestic economic slack, e.g. the output gap and/or the deviation of unemployment from its natural rate. Arguments can be advanced – and have been advanced – that imply that globalisation would tend to make the Phillips curve flatter 7 or steeper.
On this scale, misconduct towards bank customers clearly has the potential to cause lasting damage to banks’ prudential safety and soundness. Given those spillovers, what progress has been made since the crisis in better protecting consumers? Here too there have been a slew of initiatives over the past few years to reshape standards within the financial sector, partly in response to episodes of mis-selling and market-rigging. This has been a collective effort by legislators, regulators, standard-setters and, ultimately, banks themselves. The report by the Parliamentary Commission on Banking Standards (PCBS) in 2013, which involved a number of people here tonight, laid out a very comprehensive reform road-map. Among its recommendations was to make senior bankers personally responsible for their actions, aligning rewards with responsibilities. The good news is that this recommendation is now embedded in statute through the Senior Managers and Certification Regime in the UK. Just two weeks ago, the extension of that regime to all authorised financial services firms was given Royal Assent. I think that can be chalked up as a big win. The PCBS also made recommendations in the area of professional standards and culture in banking. In response to that, and following a review by Sir Richard Lambert in 2014, the Banking Standards Board (BSB) was established in the UK last year. As one of its first tasks, the BSB assessed banks against their own internal standards and sent them confidential reports on their compliance.

The time may be ripe for appraising, or re-appraising, these options and others besides, especially in banking where shareholder tensions and short-termism may be particularly acute. (c)  Communicating “purpose” in banking  Actions to restore trust and purpose, in banking and elsewhere, speak louder than words. But words matter too – indeed, they may never have mattered more. Many banks these days  55  Haldane (2015), Big Innovation Centre (2016). 56  See Kay (2012) and http://www.investorforum.org.uk/. 57  See http://www.fclt.org/en/home.html. 58  Big Innovation Centre (2016). 59  Big Innovation Centre (2016). BIS central bankers’ speeches  13  can no longer rely on personalised interaction to generate trust. Instead, they are reliant on arms-length interaction, on generalised trust among the public. That trust is likely to be easier to restore and maintain if banking can communicate its objectives and purpose in ways which are understood by all. It could be argued that there is no shortage of words by which to judge the actions and intentions of the banking system. Both are set out in great detail in banks’ annual reports. Indeed, the detail in these reports has never been greater. Chart 2 plots the page length of annual reports by the big four UK banks since 1990. This has risen from under 100 pages then to anywhere between 300 and 600 pages now. While all companies’ annual reports have risen in length at the same time, banking tops the tree-felling league table.
They can insist upon higher standards of financial reporting and transparency, facilitating better risk assessment of the counterparties and borrowers. And, on the more technical level, they can also ensure that the risks arising from the payments system infrastructure - especially the wholesale payments system - are minimised, reducing the danger that a failure of one institution will set off a chain reaction among other financial institutions that are its direct creditors. The importance of strengthening our defences in all these various ways against systemic financial disturbances can hardly be over-emphasised. Over the past 15 years something like 150 of the 180 or so member countries of the IMF have experienced significant banking sector distress, in many cases amounting to full-blown crises. Some Bank of England estimates of the costs of financial instability suggest that banking crises have over the past 25 years caused a cumulative loss of output of as much as 15-20% of GDP in the countries concerned. But finance is, as I say, inherently a risk business. And however much effort we put in to accident prevention - however vigilant we are - we have to recognise that accidents will occur. So we have to be prepared to limit the damage that they may cause.

Any irregularities are detected and reported to concerned authorities to take actions for continually checking that they are corrected. 7. SAMA has established a permanent committee for regular monitoring of financial crimes in general and money laundering crimes in particular. The committee is made up of members from SAMA and banks to review the instructions and procedures taken in this regard so as to be applied as required. 8. SAMA has attached great importance to training in the field of combating money laundering. SAMA’s IOB held 47 training courses benefiting 800 trainees during 2009. Several government authorities, which are concerned with anti-money laundering issues, have also made great efforts to train their employees. A number of conferences and symposiums at the domestic and regional levels have been  2  BIS Review 54/2010  hosted to raise awareness of the issue of money laundering and strengthen human and technical capabilities to combat it. Your meeting today in this symposium is only part of SAMA’s efforts to raise the level of compliance and anti-money laundering. Dear audience, Despite considerable efforts made to promote the principle of compliance and anti-money laundering that have had a significant positive impact, money laundering criminal activities always seek new techniques to be able to continue. Hence, we always need to be alert and cautious, and we should enhance our capabilities and do our utmost to fulfill the tasks entrusted to us.