samchain/econo-pairs-v1 huggingface dataset:
Mr. Yam talks about the implementation of financial policies in the HKSAR. Address by the Chief Executive of the Hong Kong Monetary Authority, Mr. Joseph Yam, at a symposium in commemoration of the 9th anniversary of the promulgation of the Basic Law of the HKSAR in Hong Kong on 10 April 1999. __________________________________________________________________________________ Ms Ko, Ladies and Gentlemen, 1. I am very honoured to be invited today to address this Seminar. The Basic Law is the constitutional instrument of the Hong Kong Special Administrative Region (HKSAR). The legal protection offered by the Basic Law has, to a very great extent, contributed to Hong Kong’s monetary stability during the political transition and has enabled Hong Kong to withstand the severe challenges brought about by the unprecedented financial crisis. I would like to take this opportunity to examine the implementation of financial policies in the HKSAR. I shall discuss with you the two main areas relating to financial policies under the concepts of “one country, two systems” and “Hong Kong people ruling Hong Kong” as well as the legal protection offered by the Basic Law. The first of these is the monetary autonomy enjoyed by the HKSAR. The second is the monetary relationship between Hong Kong and the Mainland.

But let us not only write reports and elaborate ever more sophisticated thoughts, let us act, starting with comprehensive and effective regulation in the US, as has been done in Europe, and as the UK is on its way to doing with its proposed new set of rules that would bring a broad range of cryptoasset activities into the scope of financial services regulation. This is obviously good news, as long as this proposal ensures consistency with existing legislation, notably in Europe. To that end, I suggest the FSB to monitor closely the implementation of its own recommendations on cryptos, as the Basel Committee does on banking regulations. More broadly, big techs did not make the breakthrough in traditional banking activities that many had expected: why is that? Regulatory constraints certainly stand as a first explanation, especially since they were tightened following the great financial crisis. Both lending and deposit-taking are highly regulated in most advanced economies, and big techs tend to set up partnerships with banks in these countries rather than create a fully-owned subsidiary for instance. In addition, the low-rate environment that prevailed until recently may have been unfavourable to new banks – as their business model relies strongly on the value of sight deposits –, and an ageing population in advanced economies may have preserved loyalty to incumbent banks and insurance companies which benefit from high public trust.
Another initiative of the Bank of Thailand to promote digital payment services is the Thai standard QR code for payment. The Standardized QR Code makes epayment seamless across platforms regardless of which bank or non-bank service provider merchants and consumers are using. In just eight months since its implementations, more than two million merchants in Thailand now accept epayment through QR code, and this figure will continue to grow. Having a common standard for QR code will indeed generate benefits beyond payment convenience. The common standard will help ensure that no incumbent service providers has an advantage of locking merchants with their QR formats, and allow new and innovative payment service providers to easily enter the market. The standard will also help facilitate the move towards information-based lending for SMEs as their payment transaction information can be consolidated. Given that the payment standard was developed together with five global credit card companies using EMVCo, it could serve as a platform to enhance financial connectivity in the region. Thai banks and payment service providers have begun to work with partners in our neighboring countries to facilitate cross-border payments using the standardized QR code. This standardized QR code was a product that went through the Bank of Thailand’s regulatory sandbox. Going forward, there are a few high-impact 7/10  technologies or applications which are being developed and tested in the Bank of Thailand’s regulatory sandbox. The first one is an extension of our standardized QR code to include other means of payment, including credit card.

If given enough authority, rules can induce symmetric behaviour. It remains to be seen how the discretionary fiscal measures adopted in response to the crisis can be wound down and reversed to support fiscal sustainability in the longer run. Since the ECB has started to gradually phase out its extraordinary liquidity support measures, fiscal authorities should also start to withdraw stimulus to safeguard public solvency over the medium term. To support this, we have the right mechanisms in place in Europe. Governments will have to comply with and, as experience shows, even re-enforce the fiscal rules enshrined in the Stability and Growth Pact. Concluding remarks: some lessons From this quick overview, I draw two lessons for monetary policy. The first lesson to be learned is that central banks need to broaden – not restrict – their overview of the economy. Monetary data are critical in warning against risks that are slow to appear in inflation forecasts. Monetary analysis at the ECB consistently sent early signals that risk was broadly under-priced, when inflation was quiescent and measures of slack were moderate. BIS Review 22/2010  3  The second lesson is that price stability is the only anchor which can pin down the economy in turbulent times. It is not sufficient to guarantee financial stability, but it is certainly necessary to prevent financial instability. Increasing the level of inflation that central banks should aim at would be a step in the wrong direction.
But what does strike you is a broader point: that it is normal to have simpler requirements for the smallest banks. And as our early research indicates, the most sophisticated capital and liquidity requirements may not be as important, relative to sound governance, for small firms as they are for large ones. KISS  I am conscious that we are all at the moment very much focused on the Covid crisis. This is a hard time for the economy and for many of the firms that we oversee. There are also, as ever, many issues du jour for us to debate – dividends, the MREL Review and resolution topics, buffer usability, and mortgage risk-weight floors to name just a few. There is the small matter of coming to the end of the Brexit transition period and finalising our new relations with our neighbours. And further afield we face a world of heightened geopolitical and trade tensions. So this is not an easy time. But while doing everything we can to manage the risks we face, we also need to keep an eye to the future and to opportunities. With that in mind I hope that the short sketch I have provided today will trigger a debate about the merits or otherwise of introducing a simpler regime for small UK banks and building societies. If it does, we will progress to a discussion paper in the Spring and take it from there. In the meantime, a surprising new acronym has entered the PRA lexicon: KISS.

Second, the new model, which relies to a great extent on national supervisors, will not entail a decrease in the workload or, therefore, in the staffing needs of the participating countries’ authorities, or in the importance of their work. This will also be the case for the Banco de España. And third, the Banco de España has already made the necessary changes in the organisation of the Directorate General Banking Supervision, to adapt its structure to the 4  BIS central bankers’ speeches  needs and arrangements that the SSM requires. Moreover, it has also begun to implement the changes needed in its working methods and systems in order to contribute, as effectively as possible, to the operation of the euro area’s new supervisory structure. But we are still at the early, founding stages of the SSM. And foreseeably for some time, even for some years, adjustments and changes will have to be made to the different components of our supervisory arrangements, both in terms of organisation and of working procedures and staffing levels. Thank you. BIS central bankers’ speeches  5
Mojmír Hampl: Central bank independence in practice - the case of the Czech Republic Speaking points by Mr Mojmír Hampl, Vice Governor of the Czech National Bank, at the Annual Research Conference of the Central Bank of Ukraine, Kiev, 1 June 2018. * * * Ladies and Gentlemen, Before I begin my talk in earnest, I would like to thank the organizers for inviting me to this inspiring event. It is an honor to participate in such a distinguished panel. And it is a particular pleasure for me to visit Kiev, one of the great historical pivots of Europe and also a city with immense economic potential. The latter, I believe, can be said about Ukraine in general. The topic of this panel and the entire conference is monetary-fiscal interactions. This is an important issue, and I am convinced that a good working relationship between the central bank and the government is imperative for the proper counter-cyclicality of economic policy. My intention today, however, is to offer a related but cautionary tale. I will talk about central bank independence, with an emphasis on the experience of my own country. Few economists nowadays doubt the importance of central bank independence for achieving price stability. For example, the latest meta-analysis of this research question summarizes 300 empirical estimates from dozens of studies and finds strong evidence that independence is crucial for delivering low inflation (Iwasaki and Uegaki, 2017). This finding holds for both developed and emerging economies, as the authors clearly show.

But many economists in this stream of literature, most prominently Alex Cukierman, stress that it is not enough to have independence enshrined in the central bank’s charter. Legal independence is a necessary condition for actual independence, but not a sufficient one. I would say that actual independence is a state of mind of central bankers. This state of mind, then, determines the outcome of monetary policy and is imperative for providing price stability. So how can actual independence differ from legal independence? The key condition for actual independence is the de facto impossibility to dismiss central bank board members. In fact, the charters of almost all central banks around the world (including the National Bank of Ukraine and the Czech National Bank) allow for board members to be dismissed under some very specific conditions. But the applicability of these conditions varies widely, depending on custom and – crucially, I believe – the central bank’s standing in society. This observation brings me to an important point I want to make. Even if a central bank is actually independent from the government, it cannot over the long term act in direct contradiction to the preferences of society. For example, if the population is not averse to modest inflation, the central bank will have a hard time imposing an ultra-low-inflation environment, with all the associated costs and benefits, over the long run. The experience of the Czech National Bank, perhaps, serves as a case in point, although in the opposite direction.
We will aim for close cooperation with the FSOC and other authorities for macro-prudential oversight. The case for macro-prudential oversight So what exactly is macro-prudential oversight? In many respects, it is the missing link between the different approaches of a central bank – which has such an important stake in stability at a macro level – and a financial supervisor – concerned with the financial soundness of individual market participants. The de Larosière report argued pointedly that before the crisis, supervisory arrangements, whilst concentrating on the supervision of individual firms, were placing too little emphasis on the stability of the financial system as whole. Indeed, until the late 1990s, the dominant view  2  BIS Review 156/2010  in policy circles was that if individual institutions were financially sound, the financial system as a whole would also be necessarily sound. We now know that relying only on micro-prudential supervision to ensure financial stability suffers from the fallacy of composition. What is true for a part, or even for all parts, is not necessarily true for the whole. Amongst other elements of systemic risk, inter-linkages between institutions, correlated and concentrated exposures to risk, as well as herding behaviour may contribute to a destructive dynamic between institutions, markets and infrastructures. This would ultimately threaten the stability of the whole system. Putting macro-prudential oversight into practice Putting macro-prudential oversight into practice raises two questions: who should be charged with macro-prudential oversight and how it should be performed? Let me start with the question of “who”.

Jean-Claude Trichet: Macro-prudential oversight and the future European Systemic Risk Board Keynote address by Mr Jean-Claude Trichet, President of the European Central Bank, at the European Banking Congress, Frankfurt am Main, 19 November 2010. *  *  *  Ladies and Gentlemen, It is a pleasure for me to participate in the European Banking Congress. We are meeting at a very important time for Europe’s financial system, of which so many senior representatives are assembled here. This is also a very important time for the European economy and for the governance of the euro area. Looking at the current situation, we have to be very clear as to what the issues are and where the solutions lie. As its name suggests, Economic and Monetary Union has two attributes: one is “Economic” and one is “Monetary.” The “Monetary” attribute refers to the ECB, its mandate and its independence. I will come to this in a moment. The “Economic” attribute comprises the fiscal regime enshrined in the Stability and Growth Pact; the national frameworks of economic policy; and the system of mutual surveillance. The developments we are currently witnessing in Europe’s economy have to do with its “Economic” functions. They have essentially three origins: unsound fiscal policies in a number of member states; inappropriate macroeconomic policies in a number of member states; and overall an inadequate system of surveillance by all member states. This is the triangle that provides the perimeter of the current situation.
Nevertheless, inflation remains very high and its convergence to 3% is subject to risks. Hence, we have communicated that the monetary policy interest rate has peaked in this cycle but that it will remain at its high current value until the macroeconomic situation shows a clear convergence of inflation to 3%. 7  . Keeping a low and stable inflation is not only desirable for the real economy, but also very important to develop fix income local currency market, which in turn, positively affect the real economy in the long run on a virtuous cycle. On the other hand, tight monetary policy, fiscal consolidation, and higher real exchange rate will also alleviate the external imbalance. The role of central bank in pursuing these macro-adjustments is instrumental to the development of a sound and deep local financial market. 3. Financial Policy developments of the Central Bank of Chile: Building a sound regulatory framework and an up-to-date infrastructure As I mentioned earlier, a deeper and properly regulated financial system contributes to financial stability, inclusion and increases welfare. Even though significant progress has been made in this regard, there are still challenges ahead to further strengthen our financial system. Let me now briefly explain how the Central Bank is contributing to the goal of improving the functioning of the financial market and keeping the resilience of our financial system. The financial policy agenda of the Bank has been quite active in recent years.

“Recent developments in the Chilean Financial System and Challenges ahead” Rosanna Costa, Governor of Central Bank of Chile Chile Day – December 12 and 13, 2022 – London, United Kingdom Good morning distinguishes authorities and dear friends. I am going to talk about the recent developments in the financial system in Chile and the view of the Central Bank of the challenges ahead. Introduction In December of last year, the former Governor of the Central Bank of Chile (and nowadays the Minister of Finance) presented in this very same forum in London about the developments and prospects of the Chilean economy. By then, our country was going through a process of strong recovery from major shocks that affected our economy: first the social unrest of 2019 and then the pandemic of Covid-19. Therefore, the discussion last year focused on the aftermath of the pandemic and the different measures that were adopted by the Central Bank and the government to mitigate its effects on the real economy. Since July 2021, the Central Bank has been hiking the monetary policy interest rate, due precisely to strong pickup of household consumption driven by governmental aids and pension funds withdrawals. A year ago, the Central Bank also raised a note of caution for 2022 and 2023 due to the weakening of the capital markets, identifying several factors including the reduction of long-term savings due to pension withdrawals and its impacts on access to long-term financing for companies and individuals, risk of fiscal deterioration and persistent uncertainty, among others.
With respect to stock prices, the S&P 500 index has recovered by more than 50 percent from the trough reached in March. But this should be put in context. The S&P 500 index is still about one-third below its recent peak in October 2007. Moreover, compared with its level ten years ago, the S&P 500 index is down by about 20 percent. The shock to household net worth seems likely to have several important implications for household behavior. The shock creates a risk that the household saving rate could increase further. For example, during the period from 1990 to 1992, the household saving rate averaged about 7 percent of disposable personal income, considerably higher than the 4.3 percent average rate during the first half of this year. If the household saving rate were to rise, then consumption would rise more slowly than income, making it more difficult for the economy to develop strong forward momentum. In addition, it seems likely that some workers will respond to the wealth shock by postponing their retirement. This suggests that the labor force participation rate may rise once labor market conditions improve. This would tend to push up the unemployment rate, all else being equal. The second force that could restrain the recovery is the fiscal outlook. The fiscal stimulus that is currently providing support to economic activity is temporary rather than permanent. This has to be the case if we are to ensure that fiscal policy is on a sustainable path over the longrun.

For example, as the recession has pushed up the unemployment rate, the demand for office building space has declined; as the recession has led to a reduction in discretionary travel, hotel occupancy rates and room prices have declined; and as retail sales have weakened, this has reduced the demand for prime retail property space. The decline in commercial real estate valuations has created a significant amount of “rollover risk” when commercial real estate loans and mortgages mature and need to be refinanced. The slump in valuations pushes up loan-to-value ratios. This makes lenders wary about extending new credit, even in the case when these loans are performing on a cash flow basis. This means that more pain likely lies ahead for this sector and for those banks with heavy commercial real estate exposures. 2  BIS Review 122/2009  For small business borrowers, there are three problems. First, the fundamentals of their businesses have often deteriorated because of the length and severity of the recession – making many less creditworthy. Second, some sources of funding for small businesses – credit card borrowing and home equity loans – have dried up as banks have responded to rising credit losses in these areas by tightening credit standards. Third, small businesses have few alternative sources of funds. They are too small to borrow in the capital markets and the Small Business Administration programs are not large enough to accommodate more than a small fraction of the demand from this sector.
In essence, the CDS protection is not really being used to insure against default but to reduce market price volatility. Let us now turn to a second example of a bank hedging its corporate lending. Banks lend to a broad range of companies. In many cases they would be expected to hold these loans on their books until maturity (as opposed to selling them off to other investors). In order to reduce its measured outstanding credit risk, a bank may choose to purchase off-setting CDS protection, probably on a portfolio of loans. By so doing, the bank can make greater use of its internal credit risk limits and may get regulatory capital relief. In most cases, another leveraged market participant (bank or hedge fund) would write the CDS. (In some cases the insurance provider may be an unlevered institution, for which most of the concerns below would be reduced.) In the first example, the pension fund was concerned about short-term price swings. In this second example, the bank should be concerned to protect itself against clusters of defaults. But if the risk management of the ensuing portfolio of loans and CDS is not done with serious attention paid to the joint risk profile of the corporate borrowers and the providers of the CDS protection, the true net risk position might be worse than it appears. That could fool regulators as well as the bank’s own risk management function.

Accordingly, you have instructed the various appropriate authorities and bodies to combat it and reduce its effects on the society, while maintaining the momentum of development achievements. The package of the various procedures, introduced by the government at the beginning of this year, is an appropriate preliminary step aimed at addressing inflation sources that directly affect the society segments who are less able to bear its impacts. As for the monetary policy, the Saudi Arabian Monetary Agency (SAMA) has taken steps to control excess domestic liquidity by increasing rates of reserve requirements many times. However, because of the dominance of the fiscal policy over the economy, the greater burden falls on reviewing spending priorities and its programming to be in harmony with the absorptive capacity of the national economy and its ambitious development objectives. It is hoped that these procedures, along with reviewing the expansion in government spending, will achieve the targeted goals, and inflation will resume its pace and stabilize at appropriate levels in the near future. Custodian of the Two Holy Mosques, The world is experiencing a crisis that threatens economic growth and financial stability in several major countries of the world. This crisis has prompted authorities in these countries not only to take unusual measures to protect their financial stability but also to review their supervisory and control regulations of the financial system, while economic policies are being affected by competitive goals, namely, maintaining economic growth, controlling inflation and maintaining financial stability.