samchain/econo-pairs-v1 huggingface dataset:
5  More recently, we have accelerated monetary policy normalisation At the last Governing Council meeting held in early September, we decided to raise the key ECB interest rates by 75 bp, the sharpest increase in the history of the euro, and announced that we expect to continue to raise interest rates over the next several meetings to dampen demand and guard against the risk of a persistent upward shift in inflation expectations. So why did we opt for a 75 bp increase? To understand the rationale behind this decision, let me first explain the nature of our inflation target and how we assess its attainment in practice. As I have said, our objective is to achieve inflation rates of 2% over the medium term. The medium-term orientation means that rather than basing our decisions on the latest inflation figure, or even on the inflation that we expect for the coming months or quarters, we base them on our projections for the medium term, i.e. over a two or three-year horizon. This is because our actions affect inflation very gradually, reaching their maximum impact after about two years. What’s more, even if our actions passed through to inflation more immediately, for certain kinds of shocks – such as adverse supply-side shocks which push inflation and activity in opposite directions – forcing inflation to converge to 2% too quickly, could be undesirable due to the outsize impact on activity and employment that this would entail.

And if the advanced countries’ consumption stops growing, what will happen to global economic growth and particularly that of emerging countries with entirely export-oriented economies? Which brings me to my third remark: we need the emerging countries to continue investing their savings in advanced countries. We therefore need properly functioning international financial markets. In a world where the savings and financing needs are so geographically dislocated, properly functioning financial markets are a prerequisite for economic growth. But, today the capital markets appear very unsettled and full of anomalies, and not just in Europe. •  For example, certain sovereigns (the USA and UK for example) borrow today at historically very low nominal interest rates and at negative real interest rates despite the fact that their deficits are around 10% of GNP and that doubts exist regarding the future evolution of their debt levels. •  Another anomaly: large corporations have accumulated unprecedented cash reserves (several trillions of dollars) despite numerous highly profitable and unexploited investment opportunities around the world, unsatisfied infrastructure needs and investment bottlenecks in commodities production. Fourth remark. We can identify two reasons for this situation: •  The first is the general and exceptional uncertainty weighing on the global economy. Uncertainty makes liquid and safe assets more attractive. It makes investment less attractive. It can therefore partly explain the phenomena that I have mentioned. •  The second reason is more structural: a malfunctioning of our financial intermediation mechanisms. There are doubts about the solidity of banks in numerous countries.
This can be illustrated by the following example: If a perception that oil has made us so wealthy that we can to some extent relax leads to a reduction in annual productivity growth of a quarter percentage point, i.e. a reduction in trend GDP growth from the current level of about 2 per cent to 1¾ per cent, the income base would be reduced by more than the entire return on petroleum wealth. Societies that suddenly gain access to wealth deriving from natural resources have a tendency to spend the money and then fall into decline. A very clear example of this can be found in Spain already in the 1660s. The colonisation of South and Central America gave this country access to a wealth of natural resources, and to gold. Spain chose to spend a large portion of the windfalls on luxury and war. The attitude to working that this led to did not make it easy for these countries to get back on their feet again when the gold came to an end. Many countries have had similar experiences in more recent times. The expression “Dutch disease” comes from the turn of events in the Dutch economy in the 1970s and 1980s after the revenues from the large gas finds in the Groningen field were used to finance strong growth in public spending. When the gas revenues declined, economic growth came to a halt and economy policy had to be tightened.

92 fe b. 93 fe b. 94 fe b. 95 fe b. 96 fe b. 97 fe b. 98 fe b. 99 fe b. 00 fe b. 01 fe b. 02 fe b. 03  0  Annual return Standard deviation  8  Oil 3.3 % 40.5 %  Petroleum Fund 9.9 % 8.9 %  BIS Review 13/2003  7. Return and risk: oil vs Fund - with the Fund’s current equity portion (40 %) Return and risk for combinations of oil and Fund 1 February 1986 – 1 February 2003. Measured in USD. Per cent  Return (geom.annualised)  14 12  Today (80 % oil)  10 100 % oil 0 % Fund  8 100 % Fund 0 % oil  6 4 2 0 0  10  20  30  40  50  Risk (standard deviation, annualised)  8. Annual return in the US Per cent 60  60  40  40  20  20  0  0  -20  Fixed income instruments  Equities  -40  -40  -60  -60 1925  -20  1935  1945  1955  1965  1975  1985  1995  Source: Ibbotson Associates og Datastream  BIS Review 13/2003  9  9. Average return in the US Rolling 10-year periods.
We have taken the option though that central banks should be trying to put up a good system for people to operate in rather than having another prime function of catching thieves and criminals, and in this legislation therefore a new independent government office has been put up dedicated solely to the pursuit of the articles of the legislation. We sit on the committee under the legislation as I have just said, and cooperate wherever we can to make sure its execution is effected and effective. This is another occasion where central banks contribute directly to peace in that criminal activities which by nature are not peaceful is kept to a minimum. Speaking of criminal activities, vote buying in an election is also a criminal activity and although legislation makes it difficult for us to tackle this problem, we cooperate with the Neutral National Election Commission in tracking down movement of funds and we have assigned an assistant governor to directly coordinate with this Commission. The banking laws in Thailand at present though is that banking activity is secret and this inhibits us from doing as much as we could to help in curbing this criminal activity.

Most recently, Fitch international credit rating raised the rating of the Kingdom from AA- to AA with a stable outlook, which highlights the strength of its economy and financial position, and makes it more attractive for domestic and foreign investments. There is a great and deep-rooted confidence in the continued strong growth and overall development of the Saudi economy under the wise leadership of the Custodian of the Two Holy Mosques. At the level of the financial and banking sectors, domestic liquidity increased from SAR 553.7 billion in 2005 to SAR 1,545.1 billion at the end of 2013, recording a growth rate of 179.1 percent, or an average annual increase of SAR 123.9 billion. The banking sector also registered strong and sustainable growth during that period, overcoming the repercussions of the global financial crisis, and, thereby, serving the national economy in accordance with the latest secure technology in the field of banking and financial services. The total assets of banks more than doubled from about SAR 759 billion in 2005 to SAR 1,893 billion at the end of 2013. The number of bank branches during the same period increased by 44.4 percent to 1,768. Automated teller machines rose by 202.6 percent, to 13.9 thousand distributed to various towns and villages in the Kingdom, providing modern and secure banking services. As for SAMA, its total assets went up from SAR 619.4 billion at the end of 2005 to SAR 2,738.7 billion at the end of 2013, increasing by 342.2 percent.
I believe that the line-up of expert contributors for this Programme will 2/3  BIS central bankers' speeches  be able to provide delegates with insightful perspectives on best practices to lead the transition to sustainability. The network built today among delegates can continue and be built upon for future collaborative initiatives, either through a local platform by IBFIM or internationally, through CISL. To end my remarks, I would like to share this quote by Winston Churchill, “I never worry about action, but only inaction.” With that, I wish all of you a productive programme. Thank you. 1 Industries Most and Least Impacted by COVID-19 from a Probability of Default Perspective – September 2020  Update 2 COVID-19 to Add as Many as 150 Million Extreme Poor by 2021  3/3  BIS central bankers' speeches

And this is exactly why this very sector should also place the interests of society at the forefront of their concerns. Banks’ involvements in various community projects or the likes, are commendable, of course. But they also have to exercise caution not to be involved in anything which could bring about detrimental impact on society. For instance, they should take care to avoid facilitating any powers-that-be to exploit the banks or the financial market or financing projects which are clearly damaging to the environment, or partnering with businessmen in projects that take advantage of the economy. In this context, therefore it becomes yet another duty of Board Members to also oversee that projects endorsed by the financial institution are not the kinds that facilitate the exploitation of society. It is my belief that any protection of the interests of the organizations cannot be done without the protection of the interests of society as well. The organisation can only survive if its customers are satisfied with its workings, and if the society accepts its actions. Ladies and Gentlemen, Allow me to end my remarks by quoting a teaching from a very senior monk who is well versed in Buddhist economic philosophy. He said that in order for an organisation (corporation) to grow sustainably, it must not exploit its employees, it must not take advantage of its customers, and it must not exploit society in which it thrives in.
The enhanced intermediation during this decade has benefitted access to financing, particularly for small and medium enterprises, has also improved, both in volume and efficiency. By leveraging on the distribution networks of commercial banks, enhanced product and risk management capabilities, access to financing by this sector has increased at an annual rate of almost 20% since 2005. The financial infrastructure in Malaysia has also been significantly strengthened. Malaysia has an effective financial safety net that includes a comprehensive deposit insurance system and institutional arrangements that provide avenues for advisory, redress and rehabilitation. Innovations in payment systems and instruments as well as infrastructure for the issuance, trading and settlement of debt securities and the access improved market information has contributed to greater efficiency and has also enhanced the overall price discovery process. To support our liberalisation measures our payment infrastructure has also been enhanced to support cross-border trade settlements in local currency and cross-border liquidity support arrangements for financial institutions. Today, Malaysia also has a deep and vibrant bond market which is the largest in South East Asia, and a comprehensive Islamic financial system that is recognised as among the most advanced in the world. The bond market comprising of the conventional and sukuk market has trebled in size, providing businesses with alternative access to financing solutions including in multicurrency to meet a diverse range of risk and maturity preferences.

A range of measures will be introduced to accelerate the pace of migration towards e-payments, including driving the adoption of the mobile phone banking and payment transactions, increasing the number of point-of-sale terminals, and introducing a pricing structure that incentivises the use of e-payments. Conclusion Let me conclude by expressing the Bank’s appreciation for all the valuable contributions received from the industry, Government agencies and other stakeholder groups with whom the Bank engaged over the course of this year to develop the recommendations in the Blueprint. In total, the Blueprint sets out 69 recommendations to achieve the vision for the financial sector in 2020. The Blueprint provides the vision and direction to secure a financial system that will firmly support and drive Malaysia’s long-term growth potential and aspirations. It will be our shared commitment that will result in its success. 4  BIS central bankers’ speeches
With disheartened creditors and investors, access to capital markets as well as short-term funding markets become increasingly impaired, impeding any possibility of a sustained recovery in the securities and credit markets. Ladies and Gentlemen, Global financial markets are now at a critical juncture. Risk aversion across the system has risen to unprecedented levels, and an aggressive deleveraging process is under way. Many  BIS Review 141/2008  1  financial institutions need to raise significantly more capital at a time when their ongoing earning power appears to have been permanently reduced. These dynamics will intensify the current global slowdown and have an impact although somewhat indirectly on emerging market economies, despite the relative strength of these countries’ financial institutions. In response to the renewed tensions, the authorities of a number of countries have introduced a number of measures and initiatives to address the problems at both market and individual institution levels. This should eventually encourage private investors to re-enter the market and complete the deleveraging process. Meanwhile, coordinated efforts have been strengthened to ensure adequate liquidity at an appropriate interest rate as inflationary pressure began to subside. Although it remains uncertain when the current financial storm will end, these international co-operations if properly executed will undoubtedly speed up the resolution of this crisis and ultimately limit its economic and financial consequences worldwide.

So this is an extraordinary time for the world financial market and probably most suitable for an international symposium on the subject of financial globalization. Ladies and Gentlemen, Financial globalization has certainly made the international financial landscape look very different today compared to just a decade ago. And almost every day, new events continue to re-shape it even further. One aspect among these changes, however, remains constant. That is, despite the complexity and sophistication of today's financial institutions as well as instruments that are developed to manage all kinds of risks, the remarkable degree of global financial linkage still makes financial turmoil transmit from one country to another at an ever faster pace than we have previously anticipated. Like all financial crises of the recent past, several weaknesses and excesses were initially submerged and only later found to be much larger than the initial estimates, contributing to the permanent boom-bust cycle that seems to always accompany modern business and finance. Understanding the various causes of the crises is only the initial step towards resolving its short-term impacts and preventing its recurrence, if entirely possible, in the longer-term. In the meantime, we will probably continue to have to witness an intensification of the financial crisis. As mortgage-related assets deteriorate further, economic growth will inevitably slow down even more, along with the downside risks of financial and the economic outlook.
I do think the reforms already made to the capital adequacy and liquidity frameworks have improved markedly the robustness of the system. A leverage ratio, if and when it is introduced in the UK alongside the risk-weighted approach, would in my view make the capital adequacy regime for the banking sector appreciably stronger by guarding against model risk. And, as regards the non-bank financial sector, what some would classify as “shadow banking” – I also think we are starting to see some positive momentum towards the development of diversified credit channels in the UK and the EU – though there is a great way still to go. At the same time, the financial regulatory community is keeping a pretty close watch as to whether risks are migrating from the bank to non-bank sector and building up elsewhere. The FPC recently made its first analysis and assessment of risks in the UK outside the regulated banking system. That assessment was made difficult by generally incomplete data in this area, which we are starting to correct. But it concluded that, based on its current risk assessment and policy initiatives underway internationally – including through the FSB work on shadow banking that is coming to completion this year – it did not currently see a case for recommending changes to the UK regulatory framework. I am afraid, for financial stability, that is as good as it gets. The financial sector evolves at a phenomenal speed. Risks can change and build very quickly.

We have also made very real progress on the liquidity framework for banks, though I do not propose to go into that today. But as we have reinforced regulatory standards for the regulated banking sector, there is considerable concern that we have simply moved the risks beyond the regulatory perimeter. In short, that bank-like activities, carrying bank-like risks are taking place without bank-like regulation and supervision. Many of these concerns find expression in the term “shadow banking”. I think “shadow banking”, like “backstops” and “frontstops”, is an unhelpful and misleading description. To be clear, we want to see more diversity in the way credit is provided in the economy – more players in the banking sector and more non-bank market-based finance. Because another lesson of the crisis for many countries was that the risks from a credit “banking monoculture” could be very serious – when banks were badly damaged, it led to a credit crunch that left the economy without other forms of credit intermediation. I suspect one of the reasons the US recovered more quickly from the crisis was because it had greater diversity of credit channels in the economy. It is for this reason that the Bank is working with the ECB and others to encourage the revival of a robust, simple and transparent securitisation market in Europe. But – and this is an important “but” – it is important that bank-like activity does not migrate outside of the regular banking system in an uncontrolled manner that presents equally important systemic risks.
In particular, the Legislative Council passed a motion by a wide margin urging the Government “expeditiously to implement a DIS, which is cost effective and easy for depositors to understand, for effectively protecting small depositors, and to formulate appropriate complementary measures aimed at reducing the risk of moral hazard.” The HKMA has studied the responses received during the consultation and has submitted a report to the Government on the outcome. We are seeking a decision in principle on whether we should proceed with the deregulation, subject to further work on the technical arrangements during the rest of this year. I cannot anticipate what the decision of the Government will be nor can I provide details of what the final shape of any scheme would be. I will however comment on two key issues. The first is that even the supporters of deposit insurance, including Legco, are keenly aware of the need to minimise moral hazard. Moral hazard refers to the incentive for increased risk-taking that may be created by deposit insurance. The problem is that both banks and their depositors may exercise less self-responsibility if they know that deposits are protected. This is a risk in any form of insurance, but it has received particular attention in relation to deposit insurance because of its alleged role in the Savings and Loan crisis in the United States in the 1980s. BIS Review 29/2001  3  Moral hazard is a real issue, but it is one that can be addressed.

I am not going to comment on the merits of the precise measures that the banks are taking, except to say that they are in line with what we anticipated at the time the decision to proceed with deregulation was taken. They should be seen not as something that is peculiar to Hong Kong, but as part of a global trend. This global trend is being driven partly by an increased focus by banks on the bottom line and on the creation of shareholder value. This seems the right thing to do in the interests of long-term survival. There are plenty of examples of companies around the world that lost track of what they were actually in business for and as a result are no longer in business. Banks, like other companies in a free market economy, have a responsibility to make profits for their shareholders. It is in the interests of society as a whole that they do so, otherwise we could end up with the banking sector in a mess. But any company maximises shareholder value subject to constraints. These may be imposed by laws and regulations, such as those relating to environmental protection, or by the expectations of society. This means that if banks wish to preserve their reputation and the confidence of their customers, on which ultimately the strength of their franchise depends, they should act in a way that is seen to be fair and reasonable.