samchain/econo-pairs-v1 huggingface dataset:
Domestic loans showed no increase in the first seven months of this year. The result is that loan to deposit ratios have fallen to their lowest levels for many years - around 53% for the local banks as a group. The effect on loan margins has been quite dramatic. In particular, the margin on mortgage loans has fallen from 1.25% over prime rate prior to the crisis to the current low of 2.25% below prime. The current situation may to some extent be temporary. It is difficult to believe that loan demand will not pick up soon given the pace of economic recovery in Hong Kong. Sentiment in the property market is now looking better and this may start to feed through into increased appetite for mortgage loans. But it seems unlikely that the boom conditions of the 1990s will return for the foreseeable future. The implication of this is that the banks in Hong Kong may have to cope in the future with an environment of more restrained loan growth and finer margins. This means that they will need to find alternative means to boost income. One option is to diversify into the sale of products like unit trusts, pensions and life insurance that offer the opportunity to earn fee income. Another is to focus on lending to sectors such as the SMEs that provide higher returns at the expense of higher risk. A common factor in such initiatives is the need to cope with greater complexity in business development and risk management.

As the name suggests the safety net is there to catch banks that are in trouble or, if not the banks, then at least their depositors. This is part of the other aspect of our reform measures that are aimed at promoting the safety and soundness of the banking system. One aspect of this is already in place in the form of a policy statement issued by the HKMA in June of last year on its role as Lender of Last Resort to authorised institutions. The major safety and soundness issues however lie ahead. The first is whether we should introduce a commercial credit reference agency in Hong Kong which would gather and collate information from participating institutions about the indebtedness and credit record of their corporate borrowers. This would enable lenders to obtain a more complete picture of the financial position of their customers, and thus improve their credit assessment and perhaps make them willing to lend. That is the theory, BIS Review 69/2000  4  which seems to be supported by both academic research and the experience of overseas countries. We are currently nearing the end of a consultation period and will consider the way forward in the light of the comments received. As this consultation ends, we are about to embark on another that may be more contentious. I am referring to the possible enhancement of the deposit protection arrangements in Hong Kong.
It starts with monetary policy being directed, of course, to ensuring that the value of central bank money in terms of goods and services is stable. But most money in economies everywhere is private money: deposits with commercial banks. In significant degree, financial stability is about safeguarding the stability of private money (deposits with the banking system) relative to central bank money. Prosaically, depositors with banks have to be confident that they can exchange their deposits at face value for our money – our notes; or that they can switch to another bank where they can be confident of that. At the level of the system, we need an “exchange rate” of unity for private money and central bank money. And we need wholesale funders of banks to be confident of that too. When that is secured, demand for our money is low, and society reaps the efficiency benefits of the private sector banking system. Absent that confidence, the payments system simply would not work. And the supply of credit would be imperilled, as we have rediscovered to the global economy’s great cost. These objectives – price stability, and banking system stability – are the two key facets of stability in a monetary economy. As recent events show, they can be affected profoundly by conditions in capital markets and in overseas financial systems. Focusing ultimately on the stability of our monetary system therefore clearly requires a broad view of financial markets more generally.

Human resource development functions is integral to the talent management process and in supporting the human capital management strategy. Of equal importance is that this should occur at all levels in the organisation. In essence, the accountability for talent development requires concerted efforts throughout the organization and needs to be embedded as part of the working culture that is communicated, shared and understood at all levels. While the need for human capital development is apparent, what is less apparent are the appropriate methods and policies that should be adopted to advance human capital development. The financial services industry needs to identify the appropriate strategic direction for human capital development. Attention need to be given to the entry level, to the specialists and to the senior management levels. This would benefit from greater industryuniversity linkages which is a major channel through which the talent requirement and talent gap can be narrowed. The industry involvement in the curriculum design and delivery will ensure graduates are equipped with the relevant knowledge and skills that meet the requirements of the industry. Participation by the industry players may be in the reform of the academic curriculum and methodologies and in providing other forms of practical support to the institutions of higher learning. This will contribute directly towards meeting the human capital needs for the future. The quality of human capital is the cutting edge of competitiveness.
However, even after several rounds of discussions, the program has not got off the ground as yet. Recent initiatives taken by the Central Bank and the banking and financial sector As in India, banks and financial institutions in Sri Lanka, at the grass root levels, have been advised to engage in basic banking with “no frills”, or to entertain minimum balances and reduce charges where possible to enhance access to finance and financial inclusion. The recent efforts taken by the Central Bank of Sri Lanka as well as some banking institutions have enhanced access to finance and financial inclusion. They are: •  10% mandatory credit to agriculture by banking sector;  •  Agency banking through mobile phones: Permission has been granted to commercial banks to provide facilities using telecommunication services to appoint a number of agents to enable on the spot banking facilities such as depositing and  BIS Review 40/2008  7  withdrawing money and receiving remittances abroad through these agents located throughout the country; •  Upgrading of post offices to provide banking and financial services: The HSBC Bank has established links with post offices which are considered to be grass root financial institutions and providing access to finance in terms of drawing their pensions, monthly allowances and, where possible, remittances from abroad.

Ranee Jayamaha: Access to finance and financial inclusion for women Speech by Dr Ranee Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the Centre for Women's Research (CENWOR), Colombo, 4 April 2008. *  *  *  Let me start by giving a general definition for access to finance and financial inclusion before assessing the status of women in these two areas, and then discuss the areas of focus in enhancing financial inclusion for women. What is access to finance? In simple terms, this means to provide an environment in which people, in general, have accesses to the formal financial system, through the use of different financial products at affordable prices. The access could be to any formal financial institution, market, and payment system or to a financial instrument, including savings, loans, remittances and insurance services. What is financial inclusion? This means the process of facilitating those sectors and segments of the population that are outside, to become a part of the formal financial system and enrolling individuals or groups into the formal financial sector.
As a result, the Swedish government quickly passed the Government Support to Credit Institutions Act in October 2008, which gives the Swedish National Debt Office powers to intervene if a failing bank poses a serious threat to financial stability. We were fortunate that we could draw on people with experience from the 1990’s crisis to help draft the legislation so quickly. However, the increasing globalization of the financial system means that crisis management is more difficult today than it was at the beginning of the 1990s. As financial institutions and groups have become more internationally active, they are increasingly difficult to resolve as authorities from multiple countries must cooperate on tricky issues like burden sharing and national insolvency / resolution laws can clash. Fortunately, there is currently a considerable push by international bodies such as the Financial Stability Board and the European Commission to design resolution tools (such as bail-in tools) and to develop guidelines or principles for national resolution regimes and for handling the failure of cross-border financial institutions. This work should help reduce the cross-border issues by making national resolution regimes more compatible. It is important that these regimes are well designed and properly implemented as we should not remain in a situation in which certain financial institutions or banking sectors are reliant on taxpayer bailouts to survive. Removing (or reducing) the implicit government guarantee for these institutions reduces the impact and probability of financial crises and avoids an unwanted transfer of funds from taxpayers to bank creditors.

Stefan Ingves: Coming stronger out of a crisis – lessons from Sweden Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Brussels Economic Forum, Brussels, 18 May 2011. *  *  *  “If in debt, you are not free.” This expression was widely used by Göran Persson, Sweden’s former prime minister, to explain the need for the extensive fiscal consolidation process that Sweden underwent after the crisis in the 1990s.1 In 1997, a three-year nominal expenditure ceiling was introduced. This was an important step towards increasing budgetary discipline and strengthening the long-term perspective of the budget process. In addition, as part of this fiscal consolidation process, a new fiscal policy framework that included a budget surplus target of 1 per cent over the business cycle was introduced in the year 2000. With these instruments in place the debt to GDP ratio fell from 56 per cent in the year 2000 to 35 per cent today. Recent developments in many European countries remind us of Göran Persson’s words: small, open economies are vulnerable to crises of confidence when financial markets are in turmoil. They need to stand on very solid economic foundations and be supported by a credible and sound fiscal-policy framework. Sweden was lucky enough to be in this position when the recent crisis struck. This was indeed fortunate as the crisis had a major impact on the Swedish economy. GDP fell by more than 5 per cent in 2009 – the largest fall since the 1930s.
But even if we could be confident that the world would be comfortable financing the United States on these terms for some time, that fact alone does not mean that it is prudent for the United States to continue borrowing on this scale, particularly given that doing so means that the net obligations of the United States to the rest of the world are likely to rise sharply relative to GDP. Another argument for being relatively sanguine about the risks evokes the so-called Lawson Doctrine, noting that when imbalances are principally the reflection of the decisions of private savers and investors, those imbalances should not be a concern to policymakers. This may be true, but it does not apply to the present circumstances. The fact that we are using a substantial part of the resources we are borrowing from the rest of the world to finance an unsustainable level of public dissaving leaves us more vulnerable than if those resources were being used for productive private investment. Large structural fiscal deficits limit the size of the sustainable external imbalance for any country, even the United States, and they necessarily increase concern about the terms on which we are likely to finance the present imbalance. There is also a view that the exchange rate arrangements that exist in the present context—the substantial share of the world economy that shadows the dollar—should increase our confidence that this pattern of imbalances could be financed without stress for some time.

But a prolonged continuation of the exchange rate arrangements that have given rise to the large increase in foreign official investments in U.S. financial assets is unlikely to be consistent with the domestic requirements of those economies, and for this reason many are already in the process of change. The impact of a reduction in the scale of official accumulation of dollar assets could potentially be fully offset by increases in purchases by private investors. But even in the context of a continued high degree of confidence in the relative return on claims on the United States, it is hard to know with confidence how the preferences of private savers will respond to the gradual evolution in their nation’s exchange rate regimes that is now underway. Some have drawn comfort from the adjustment process experienced by other economies with large external deficits. Industrial countries that have gone through a process of current account rebalancing have not generally experienced particularly damaging moves in interest rates or exchange rates. But the present circumstances seem sufficiently different from historical precedent that history may not be a particularly useful guide. And even in these past cases, the adjustment process did entail a slowdown in GDP growth, increasing unemployment, and a sharp fall in investment. Finally, there is the belief that the nature of U.S. external assets and liabilities mitigate the potential problems ahead.
But my point is that wherever there is a problem, for instance a problem with trade disputes, that is a real economic problem that is going to have real consequences. You can certainly smooth the impact with monetary policy, but you will not be able to address and fix this kind of problems with monetary policy. The real role of monetary policy is price stability. And in order to guarantee price stability, we have to monitor the evolution of the real economy – domestic demand, external demand, the exchange rate, and the rest. But you cannot fix all the 1/4  BIS central bankers' speeches  economic problems of the world with monetary policy. President Draghi hinted recently that if there is a slowdown and those downside risks materialise, fiscal policy might also play a role. Yes, sure. It’s the policy mix. Of course there is monetary policy, and we have been the main game in town since 2012. Monetary policy has been key to understanding the recovery of activity and employment creation, among other things. But it’s not the only policy in place. Fiscal policy has to play a role, as do structural reforms. And in the case of fiscal policy, it’s not only the nominal deficit level, it’s the composition as well: the quality of public finances. Are you saying that the public investment-to-GDP share, which has remained flat, at 2.6%, during the QE years, could now increase? It’s not even only public investment.

It is not a coincidence that this period has overlapped with the rise of attention paid to good governance. One may just look at the number of occurrences of the word “governance” in academic search database (Econ-Lit) over time. It occurred just five times from 1970 to 1979, 100 times in the 80s, 4000 times in 1990s, and more than 10000 times since 2000. Globalization of economic activity and greater reliance on private sector in economic decisions has created an environment in which the pursuit of efficiency has acquired utmost  BIS Review 38/2008  1  importance. Globalization has increased the likelihood of international financial crisis in countries where the governments do not function properly. Economic crisis in South Eastern Asia in late 1990s showed that even countries with considerable success in economic development may easily collapse into turmoil if they do not follow good governance practices. Quite paradoxically, as the control of governments over the economy decreases, the quality of governance becomes more critical and decisive. With greater mobility of capital, countries have become more vulnerable to negative assessment of investors. Today, financial markets are facing the most acute crisis they have experienced since the emergence of globalization. It is not surprising that good governance is once again at the center of public debate at this juncture. The seeds of current problems may be traced to past governance practices of governments, monetary authorities, financial institutions, and corporate sector. But before that, let me first introduce some conceptual issues.
As to removing the weakest institutions from the system, 2 banks and 28 savings banks had disappeared up to December through integration processes, and there should be further processes in the coming months. Finally, as concerns having institutions on a more efficient scale, average size measured by managed assets has doubled over these years. 1  RDL 9/2009; Third Additional provision of Law 3/2009; RDL 6/2010; RDL 11/2010; RDL 2/2011; RDL 16/2011 y RDL 19/201; and RDL 2/2012  BIS central bankers’ speeches  3  But perhaps the results best testifying to the transformation of Spain’s banking system during the crisis are not quantitative but qualitative, for example, the metamorphosis of savings banks into banks. If before the crisis someone had said that, except for two small institutions, all Spanish savings banks would be converted into banks, nobody would have taken them seriously and they would have been accused of seeking to do away with one of Spain’s oldest and best-loved institutions. Yet today what this conversion brings in terms of improved management, market discipline, etc. has been accepted, and should in the future spare Spaniards from again suffering the consequences of the excesses detected at certain savings banks. Another most important qualitative advance with a view to the medium term has been the enhanced transparency of our banks, not only thanks to the stress tests which, as you know, were first proposed by Spain, but above all to the greater disclosure requirements progressively imposed over recent years.

We will then know what the capital shortfalls are and whether they can be covered. Moreover, the state of the banking sector is a serious problem for the country, but not the only one. Slovenia has inefficient state enterprises, attempts to introduce pension reform have failed twice and it is running a larger budget deficit than EU regulations allow. Many people are also concerned about the heavyweights France and Italy. Some observers fear that both countries are completely incapable of introducing reforms. How frustrated are you and your ECB colleagues that the large countries are not making better use of the time that the ECB, too, is “buying” for them to introduce reforms. Let me say one thing first: we all have a strong interest in an economically strong France. The entire construction of the euro area can only function with a strong France. The latest pension reforms are a step in the right direction but do not go far enough. I also see problems regarding the intended funding through higher taxes and contributions, rather than through specific spending cuts. Besides, the plans also contradict the EU Commission’s country-specific recommendations. The bottom line is that France will need to do more to enhance its competitiveness. The government will need to speed up the pace of reforms. And Italy? Much was achieved through fiscal policy efforts under the former prime minister Mario Monti. It is now important to ensure that these successful achievements are not eroded.
The rapid growth across most large emerging market economies (EMEs) in particular has fuelled global demand for raw materials, which in the short term are in relatively fixed supply, pulling their prices upwards. In August, oil prices were up 60% higher than a year earlier, wholesale gas prices were up 90%, and food prices 40%. These sharp increases in costs have fed into food and petrol prices and passed along the supply chain, driving up the prices of other goods including in particular household gas and electricity bills (Chart 2). But so long as the prices of wholesale energy and foodstuffs on global markets stabilise at their new higher levels, their direct impact on inflation should wash out after a year. In other words, by late 2009 these items would not be making any contribution to the rate of consumer price inflation: whereas, at present, they are contributing almost 3 percentage points. Moreover there are some signs that the commodity cycle may have turned down. Since the peak in July, the price of food has fallen by 10% and the price of crude oil has fallen by over a quarter, and that is consistent with other indicators that point to a slowing in growth in both emerging and advanced economies. That good news on commodity prices has been offset somewhat in the UK by a falling exchange rate. Sterling has been trading at around 1.8 against the US dollar – a year ago it was 2.0.

Unconventional policies during the challenging times fast reaching limits At the onset of the Global Financial Crisis, immediate policy responses were largely targeted towards stabilising the financial markets. As volatility began to subside, and as financial institutions and markets were stabilised, the policy focus subsequently shifted to rejuvenating growth and raising employment. An immediate policy challenge facing crisis-affected countries was that conventional policy responses of expansionary monetary and fiscal policies have fast reached significant constraints. Let me elaborate. 1/8  BIS Central Banker's Speeches  In the aftermath of the crisis, public debt in crisis-affected countries reached very high levels, in large parts due to the high cost of bailing out financial institutions. In the advanced economies, public debt grew by almost half within the span of 5 years from 2007 to 2012. For Europe, it even culminated in the European Sovereign Debt Crisis. The enlarged public debt levels and fiscal deficit put a hard limit on current governments’ ability to spur real activity, even as growth falters. Many governments of crisis-affected countries undertook austerity measures to avert financial market backlash. This, of course, have had a further dampening impact on growth. In short, fiscal policy has lost its ammunition and has been rendered impotent in many countries. In many of the economies, monetary policy became the only feasible stimulus tool, so called ‘the only game in town’. However, substantial easing by major central banks has led to global policy rates reaching historically low levels.