samchain/econo-pairs-v1 huggingface dataset:
As you all know, Hong Kong has one of the most developed and healthiest mortgage markets in the region with a delinquency ratio reported at only 0.04% in October 2009 2. Hong Kong’s leadership in advancing innovations in sound mortgage risk  1  IMF Global Financial Stability Report, October 2009. 2  HKMA Monthly Statistical Bulletin. 2  BIS Review 3/2010  management practices over the years, including through the role of the Hong Kong Mortgage Corporation (HKMC), provides many useful parallels and lessons that can be drawn for Malaysia. Cagamas is very pleased to have established a strategic partnership with HKMC in 2007 which will allow us to avail of HKMC’s significant expertise to provide the banking industry in Malaysia with expanded options for effectively managing mortgage risks. We are encouraged by the strong turnout from among members of the board risk management committees, senior management and risk managers at this event today. Your roles are critical in bringing visibility and attention to the key risk issues in mortgage financing within your institutions in order to ensure that the associated risks, both present and foreseeable, are identified and effectively controlled. It is particularly useful to bear in mind that vigilance is needed to be alert to problems that can quickly arise in business segments that may not have presented difficulties in the past. By acting proactively to avoid controllable risks, material future losses can be avoided at far lower costs to banks and the society at large.

Ooi Sang Kuang: Managing risks in mortgage financing Welcoming address by Mr Ooi Sang Kuang, Deputy Governor of the Central Bank of Malaysia, for the talk on “Managing Risks in Mortgage Financing”, Kuala Lumpur, 13 January 2010. * * * It is my great pleasure to welcome all of you today to this dialogue on “Managing Risks in Mortgage Financing”. This event is jointly organised by Bank Negara Malaysia and Cagamas Berhad to review and exchange perspectives on developments in the area of mortgage financing. At least two factors make this a highly topical subject at this particular time. Firstly, the dramatic events of the global financial crisis have shed the spotlight directly on the mortgage market, prompting many questions to be raised about current practices in mortgage financing. These questions have challenged traditional assumptions that mortgage lending is generally a safe and low-risk activity, and drawn attention to the blind spots that we need to be concerned about. Secondly, the current accommodative stance of monetary policy coupled with the increasing intensity of competition in the mortgage market calls for greater vigilance by banks in monitoring risks in the mortgage portfolio. Expectations of faster and stronger recovery prospects for Asia, and that Asia will begin the process of unwinding of accommodative policies ahead of the rest of the world, could also lead to strong capital inflows and asset price increases. These combined conditions require banks to carefully monitor any changes in the direction of risks emanating from the housing market.
Ravi Menon: Regional safety nets to complement global safety nets Welcome remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the opening ceremony of the ASEAN+3 Macroeconomic Research Office (AMRO), Monetary Authority of Singapore, Singapore, 31 January 2012. *  *  *  Director, AMRO, Wei Benhua, Counselor, AMRO, Yoichi Nemoto, Head, Civil Service and Permanent Secretary (Finance) Peter Ong, Distinguished guests, ladies and gentlemen. Good morning. Genesis of the Chiang Mai Initiative 1. Twelve years ago, we took the first steps in a momentous journey that has led us here today. 2. It was the aftermath of the Asian Financial Crisis. The Crisis had ravaged several economies in the region and was a wake-up call to all of us. Rapid economic growth was not enough. To sustain growth and foster stability, sound macroeconomics and strong financial supervision mattered. Asian economies had to get their domestic acts together. And they did, with painstaking reforms over the last 15 years. So, when the Global Financial Crisis hit Asia in 2008/2009, Asian economies were shaken, but did not keel over. 3. The Crisis taught us another lesson: had the region better harnessed the resources it had available, it might have been in a stronger position to deal with the crisis. It was this conviction that provided the impetus for the first proposals for a regional financing arrangement. 4.

As of April 2020, we have seen 117 cross-border financing deals amounting to USD 11 billion. Chongqing enterprises raised USD 7 billion in Singapore, while enterprises in Sichuan, Shaanxi, Qinghai, Xinjiang, Guangxi and Yunnan obtained nearly USD 4 billion of financing. Cross-border loans from Singapore grew 67% y-o-y to reach RMB 5 billion this year. Our financial institutions continue to establish in each other’s markets. A Chongqing-based FinTech, Whalet, obtained a licence in Singapore to conduct crossborder remittance this year. I am also pleased that Vickers Venture Partners, a venture capital fund focusing on deeptech, will be establishing a Qualified Foreign Limited Partnership Fund in Chongqing. Let us continue to build on the progress we have made. I suggest three areas where Chongqing and Singapore can work closer together to strengthen links between the Western Region and ASEAN. one, trade digitalisation; 1/4  BIS central bankers' speeches  two, green finance; three, disaster risk insurance. Digitalising the International Land-Sea Trade Corridor COVID-19 has reinforced the importance of digitalising trade. We have seen how restrictions imposed to contain COVID-19 created severe trade disruptions. Part of this is because trade processes are complex and still largely paper-based. Minister Josephine Teo spoke about the CCI’s New International Land-Sea Trade Corridor (CCIILSTC). Let us make the ILSTC fully digitalised end-to-end: this will be the first of its kind in the world. A digitalised ILSTC will: improve efficiency and reduce cost; build trust in documentation and verification processes; and enable better risk management, reduced fraud, and lower costs.
As the post-pandemic recovery became better established last year, these risks receded – and the need to maintain an ‘ultra-accommodative’ stance receded with them. What’s more, the risks themselves became more symmetric, especially as Bank Rate moved away from its lower bound, and concerns about monetary policy transmission and downward nominal rigidities diminished. As a result, the case for ‘buying insurance’ using monetary easing via QE fell away. By its nature, an asymmetric ‘risk management’ approach to setting monetary policy designed to protect against skewed downside risk is inevitably somewhat over-stimulative should those downside risks not materialise. The challenge is then to manage the impact of this insurance premium, and ensure that it does not lead to departures of inflation from target. Just to be clear, I don’t see this insurance premium as being an important driver of inflation’s rise above target over the past year. That rise follows from new shocks to the UK economy, which I will discuss in a moment. Rather than in the form of inflation, the insurance premium to protect against downside risks through risk management has been paid in complicating what was anyway set to be a challenging process of monetary policy normalisation. By the autumn of 2021, the need to start tightening the monetary policy stance was becoming more evident as those new inflationary shocks mounted. That process was always likely to prove challenging.

A more integrated capital market would provide deeper, more liquid equity markets in which a wide range of corporates could issue equity and risks could be shared more widely. More broadly, areas where reforms could improve borrowers access to market-based financing could include: public platforms, such as, “mini-bond” markets for SMEs, which have enjoyed some success in Italy in particular; pan-European private placement markets which channel funds directly from non-bank investors, such as, insurers and pension funds to mainly medium-sized companies (currently only Germany and France have private placement markets of any notable size) and encouraging the emergence of simple, transparent and robust securitisation markets. 1 Increasing the scale of cross border capital flows across Europe brings benefits. But it is not without risks. One does not have to go back to where I started today – in the late 1950s – to find examples of the power of cross border flows to amplify crises when it all goes wrong. That is why they have to be built on the foundation of sustainable economic policies, good regulation and robust institutional structures. The nature of capital flows matters too. Europe was not short of cross border flows before the crisis. But they were concentrated in interbank lending and in debt often held by highly leveraged investors. Inter-bank lending can of course be a very dangerous way to share risks between economies, particularly if the banking system is highly leveraged.
Scepticism towards far-reaching parallels between theory and practice So how do the monetary policymakers view the relationship between monetary policy theories and the practical implementation of monetary policy? We can gain one indication from a survey carried out a while back. In this, a questionnaire was sent to all of those who are or have been members of the Executive Board of the Riksbank since it was first created in 1999.7 The questions concerned, for instance, how the members view different hypotheses within the research into monetary policy decision-making by a committee. As far as I know, this is the only such survey carried out on a monetary policy committee. An equivalent study is now under way in Norway. Some of the questions concern the link between the way monetary policy is often described in academic research and how monetary policymakers view it with the eyes of a practitioner. For instance, the following question was included: “Would you consider – using your own judgement or, for instance, the Riksbank’s analysis resources – stating in terms of a figure how much importance you would normally place on stabilising resource utilisation in the economy in relation to stabilising inflation (that is, stating your λ)?” A total of nine persons out of the twelve who responded to the survey replied that they would not consider this. These members were given a number of alternatives to select as the reason for their response.

To do that, it has involved not only the stakeholders in the euro area, but also those in other countries of the European Union, Poland obviously included, as well as Iceland, Liechtenstein, Norway and Switzerland. Communities outside the euro area will thus have the opportunity to participate in euro payment systems, and will be able to adopt SEPA standards and practices, thereby contributing to the establishment of a single market for payment services. The EPC plans first SEPA products to come on the market at the beginning of the next year. Therefore, today’s Bank Forum is an excellent opportunity for an in-depth discussion on the role and place of the Polish payment infrastructure in the SEPA world. Ladies and Gentlemen, I am pleased to present you the discussants of our panel, in alphabetical order: Mr. Ryszard Drużyński, Vice President of Raiffeisen Bank Polska, Mr. Krzysztof Kalicki, President of the Management Board of Deutsche Bank Polska, Mr. Ronnie Richardson, President of the Management Board of Kredyt Bank, Mr. Witold Zieliński, Vice President of the Management Board of Citibank Handlowy. I would like this discussion to be broad and dynamic, that's why feel free to join it. First, I would like to draw your attention to the fact that changes ahead of us are needed to move towards a more integrated payments market, which will bring substantial economic benefits. The SEPA will not only introduce more comparable services, but will also foster competition and drive innovation.
In these systems, there is a sharp disconnect between the behaviour of individual agents and the behaviour of the system as a whole. Aggregating from the microscopic to the macroscopic is very unlikely to give sensible insights into real world behaviour, for the same reason the behaviour of a single neutron is uninformative about the threat of nuclear winter (Haldane (2015)). The simple aggregation of “micro-founded” models, rather than being a virtue, may then be a cause for concern. The emergent dynamics of these systems are likely to exhibit significant degrees of uncertainty and ambiguity, as distinct from risk (Knight (1921), Shackle (1979)). This uncertainty is intrinsic to complex systems, and makes forecasting and prediction in these systems extremely difficult. There is unlikely to be any simple, stable mapping from shocks through to outcomes, from causes to consequences, from stick to rocking horse. Indeed, in these systems you do not need any shocks to generate variability in the system. This, too, stands in sharp contrast to existing macro-economic orthodoxy, which tends to emphasize the identification of exogenous shocks as a key factor in understanding system dynamics. If I had a pound for every time I had heard someone in the Bank of England say “it all depends on the shock”, I could have long since retired. Yet in complex systems, it is simply not true. There is no simple link between either the size or source of disturbance and its downstream impact on the economy or financial system.

It has helped entrench Hong Kong as a testing ground and pilot market for China’s continuing financial reform and liberalisation. There is clearly immense scope for us to leverage on our key strengths as a close business partner, a capital formation centre and a financial intermediary for the Mainland economy in the development of Islamic finance. There are opportunities for us to extend our reach to potential Islamic investors and financiers in the Middle East and Asia. The addition of Islamic finance as a new asset class in our financial system will add value to Hong Kong as a thriving financial centre and a leading financial services hub in Asia. As a major financial centre, Hong Kong – with its flexible and innovative market participants and its responsive government – has always stood ready to adapt to and embrace new ideas. Even if the current financial environment appears unfavourable to the development of Islamic finance in the short term, this is, at worst, a temporary setback as future prospects remain promising. We at least do not intend to be put off by temporary difficulties from our goal of making Hong Kong an Islamic financial hub. Indeed we believe that this is a good time to do the groundwork of installing the necessary legal, taxation and market infrastructure. 4  Source: World Federation of Exchanges.
We therefore take our AML/CFT efforts very seriously, that include the surveillance and investigation work of our Financial Intelligence Unit in the Commercial Affairs Department. 5 In the last two years, more than 15 government agencies had come together to perform a comprehensive assessment of our ML/TF environment and the adequacy of measures. This culminated in a National Risk Assessment (NRA) report published in January. It is the first time that we have taken a consolidated and comprehensive look at the overall ML/TF risks to Singapore. What did we find? For one, the results largely validated the prevailing instinctive sense that high-risk sectors are primarily the cash intensive and internationally oriented ones, such as casinos and remittance agents. The NRA also revealed emerging risk areas  BIS central bankers’ speeches  1  like virtual currencies and large-value precious stones and metals dealings, and we are looking into addressing the potential risks associated with these sectors. 6 Put simply, the NRA has been a useful “health-check” of the ML/TF risks facing Singapore, by highlighting areas that warrant more resources and attention. As with the importance of having regular medical “health-checks”, we intend to update the risk review regularly, every two to three years, to ensure that our understanding of Singapore’s ML/TF risks is current and accurate. 7 A better understanding of risks should also translate into more targeted mitigation measures.

But let me highlight one change. 2  BIS central bankers’ speeches  12 When banks first started their ML/TF risk assessments, the focus has largely been around processes to identify and deal with customers with high ML/TF risks. This level of risk assessment is necessary but insufficient now. Just as how a bank should look at the credit risk of its overall loan portfolio and not just of individual customers, ML/TF risk assessments can also benefit from the same approach. We will therefore require financial institutions to assess ML/TF risks at the institution level, to complement individual transaction level checks. This will in essence be the banking industry-equivalent of what the government has done in the NRA. There are several banks that already have such a practice in place, so this requirement will level-up the industry as a whole. 13 Other changes in our impending consultation document will include formalising the need to screen one’s customers, tightening the threshold for enhanced measures on cross-border wire transfers, and providing a risk-based approach for politically exposed persons. Details of these and other amendments will be laid out in the consultation paper. Overall, we do not expect the revisions to require major changes to existing processes, and I welcome your inputs during the consultation. An effective supervisory regime 14 However, even the best regulatory framework is futile, if it is not backed by effective supervision. As I have alluded, MAS’ supervisory approach is premised on “prevention is better than cure”.
As one can see in the chart, the relative minimum wage in Malta is the fourth highest in the euro area, and this may impact the incentive to acquire additional skills or pursue more advanced education. It is worth reflecting on the experience of other countries in this respect. For example, Slovenia increased the minimum wage by 23% in 2010. The IMF, in its reaction to this increase, remarked that this will “hurt employment in labour intensive sectors and put upward pressure on the general wage level, exacerbating already high unit labour cost compared to regional peers. The increase is also likely to reduce incentives for workers to increase their human capital by compressing the wage differential between unskilled and specialized low-skilled workers.” 1 From discussions I have had with officials from the Central Bank of Slovenia, it is their considered opinion that the IMF as well as the Commission were right in their assessment. Indeed, a major reason for Slovenia’s increased fiscal gap and loss of competitiveness can be laid at the door of this large increase in minimum wage a few years ago. A similar picture emerges from the experience of Greece and Cyprus that also had significant increases in minimum wages, while labour market inflexibilities have contributed to the loss in competitiveness in Spain and Italy. The most sustainable way to raise living standards is through structural reforms along with investment in education and physical capital (that is, through the promotion of investment in human and fixed capital.)

For example, in Ireland and Spain, banking sector difficulties have necessitated bail-outs by the governments concerned. This led to sovereign downgrades which in turn increased the government  BIS central bankers’ speeches  1  borrowing costs, in some cases to unsustainable levels. All these problems were compounded by instability in financial markets and volatility in sentiment. Chart 1 shows that prior to the formation of the monetary union yields started to converge – regardless of the fiscal position or economic fundamentals – and then stabilised within a fairly narrow band during the first years of the euro until the crisis of 2009. Many countries failed to reduce the debt to GDP ratio during this period as shown in Chart 2. The market’s focus and sentiment changed drastically in 2009, by giving full recognition to the importance of fiscal sustainability, such that yield spreads widened sharply. Market complacency turned into market volatility, and it is only lately that this has been somewhat mitigated after the announcement of the OMT programme, a subject that I will come back to later. Fiscal excess and inappropriate banking practices were not the only causes of the crisis. There was also an erosion of private sector competitiveness, as shown by the relative increase in unit labour costs in several of the weaker economies (see Chart 3). In many countries, the deterioration in competitiveness was the result of wage increases that were not matched by higher productivity.
The concept of the "efficiency frontier", part of a nascent research field that is little used in France, may provide a partial answer to this question. viii It involves comparing the relationship between each type of public spending and one or more international performance indicators (for example, the PISA scores for education) between different countries. However, this remains a little-known, insufficiently operational concept with recurring methodological difficulties for comparing public spending between different countries. Page 10 of 19  How to interpret fiscal multipliers? Another area of economic research providing a greater body of work is the calculation of fiscal multipliers. The effect of a fiscal measure on the economy varies depending on the channel used (public expenditure or tax), how it is financed (whether debt is used or not), whether there is a short- or medium-term time horizon, and, obviously, according to the type of spending concerned. However, we are struck by the disparity and fragility of estimates of the same multiplier, which can double in size, depending on the method used. This means there is a risk that everyone uses these concepts in a way that serves their political preferences: certain people advocate tax cuts while others want to increase spending. In truth, few people possess the wisdom to put these multipliers into perspective and analyse them in greater detail, instead of betting time and time again on – supposedly self-financing – fiscal stimulus measures.

It is planned to finalize the studies on the Financial Sector Assessment Program, which were started at the beginning of 2006 with the  4  BIS Review 68/2006  coordination of the Undersecretariat of the Treasury in order to contribute to the ongoing reform process of the Turkish financial sector, by the end of the year. The Financial Sector Assessment Program process in Turkey is expected to contribute to the development of the financial sector in terms of institutional infrastructure. Furthermore, the resistance of the sector will be analyzed on an international platform via stress tests to be applied to banks within the framework of the Program. Distinguished Guests, Proper and effective implementation of macroeconomic policies, in other words, the achievement of macroeconomic stability, is the sine qua non of financial stability. It is very important for the banking sector, which should be able to cope with the Basel II process in the near future, that the improvement of the infrastructure of the financial system continues and that efficient control and supervision is carried out. As firms will contribute to stable growth with the funds that they obtain from banks, the compatibility of the corporate sector with the Basel II process is of great importance as well. In this framework, determined implementation of current economic policies, increased confidence in financial markets, the establishment of risk culture and the adjustment of economic actors’ risk perceptions according to dynamic conditions will strengthen the stability in financial markets.