samchain/econo-pairs-v1 huggingface dataset:
I would like to speak about the role institutions can play in the economic advancement of a nation and use the central bank as an example.1 My co-speakers will view the issue from different perspectives and the ensuing debate will bring forth yet further aspects.2 Good institutions provide sound frameworks that increase confidence and promote economic progress. This is so in relation to minor, everyday situations as well as to major life choices. At the fishmonger’s, the Norwegian Metrology Service ensures that you pay for the actual weight of your cod fillet. When you buy a home, clarity about ownership and encumbrances is ensured by the land register.3 The Norwegian Industrial Property Office grants patents so that entrepreneurs can make profits on their innovations. In the absence of such institutions, each of us would have had to spend more time on taking precautions and fewer investments would have been profitable.4  1  Among the many who have shed light on the role of institutions from this perspective is Douglass C. North, a 1993 Nobel laureate in economics together with Robert W. Vogel. In his work, he refers to institutions as: “Institutions are the rules of the game of a society and in consequence provide the framework of incentives that shape economic, political, and social organization. Institutions are composed of formal rules (laws, constitutions, rules), informal constraints (conventions, codes of conduct, norms of behaviour), and the effectiveness of their enforcement.

The ECB is no fortune teller or oracle, but no doubt you already know what 2017 will look like? As we see it, 2017 will be a year when activity accelerates. We are very confident about the recovery in Europe. But aren’t there risks? There are political risks just about everywhere, both within the euro area and outside it. But it isn’t the ECB’s task to manage political risks. That’s for politicians to deal with. It’s up to us to draw the economic conclusions. The euro area will still require some sort of financial protection to navigate what will be a risk-filled 2017. But when you talk about political risks, that means you see people going to the polls in the Netherlands, France, Germany and, probably, Italy, as a risk. That’s not a risk, that’s democracy. So more precisely, what would you describe as a risk? For us, the risk is that Europe comes under increasing strain and pressure from nationalists, protectionists and sovereignists, who... So you are worried about the rise of extremism and nationalism in Europe, and in all countries, maybe even including France. It’s a concern for us in all countries, because it reduces our ability act jointly. Europe is strong when its countries can act jointly.
In spite of this, lessons should be learnt from the effects of the crisis in other regions and, going forward as a single monetary zone, policies are being designed and implemented to prepare us to cope better with any threats to our financial systems. We must also recognize that there are peculiar risks to our zonal financial sector which are being addressed through new initiatives. Since the signing of a joint memorandum on cross border supervision, as I informed you in my speech last year, Governors’ of the West African Monetary Zone have signed an additional memorandum for the establishment of a College of Banking Supervisors in July 2010. In 2010, Liberia attained full membership of the West African Monetary Zone (WAMZ), increasing the membership from five countries to six, and has now been integrated into a number of projects including the Payments System, Financial Sector Integration, and Trade Policies. Developments on the domestic front Economic developments in 2010 Your Excellency, distinguished guests, on the domestic economic front, projected real GDP growth in 2010 was higher at 4.5 percent, compared to 3.2 percent in 2009, a reflection of government’s effort to stimulate economic activities through investments in agriculture, energy and infrastructure. There was also an increased global demand for agricultural commodities and mineral exports which also improved the country’s balance of payments position. Furthermore, new mining lease agreements have been signed with foreign companies which would increase returns in this sector in the medium term.

Exchange rate policies are expected to be designed to support rebalancing of global demand, while structural reforms to enhance access to finance by small and medium scale enterprises (SMEs), should help boost growth and reduce unemployment. Finally, better policy coordination among all stakeholders should help alleviate liquidity constraints and rebuild confidence. Regional financial trends Your Excellency, distinguished guests, Africa has been reasonably unaffected by the crisis due to the low level of exposure of its economies to international trade and financial flows. The continent experienced encouraging growth in 2010 not only on account of a recovery in exports and commodity prices, but also due to implementation of prudent policies by some of our economies prior to the global down turn. In addition, the effect of reduced foreign inflows from aid, foreign direct investments and remittances was far less than originally anticipated. The increase in global demand and hike in oil prices benefitted oil-producing African countries with Nigeria and Angola, the two largest oil producers experiencing strong growth of around 6 percent. In spite of the encouraging trends, risks to Africa’s economic prospects remain, particularly given the faltering global economy. It was recognized that the crisis originated from the financial systems and this has underscored the need for a more robust and effective financial sector supervision framework in African countries that can withstand potential future shocks.
Each time, we gave visibility over the next twelve months; and we stuck to the provisional indicative timetable that we set without extending the time limits. I turn now to flexibility. Our sequence is clear but the details of implementation are flexible and state-dependent. We have included several options, such as the precise timing of the first increase in interest rates and the path of policy rates thereafter, or the pace of our reinvestments. There is much speculation for instance on the future trajectory of our interest rates; but at this stage, I don’t see any value in trading off our flexibility tomorrow against more clarity today. Beyond that, as Mario Draghi mentioned today, the question of TLTROs will need to be considered. In the face of uncertainty, one often hears reference to the celebrated Brainard 1 ‘conservatism principle’ (as reinterpreted by Alan Blinder 2. This is not, as the impression is sometimes given, a general warning to move cautiously when the world is uncertain. The Brainard ‘conservatism principle’ says only that you should move cautiously if you are uncertain about the effect of your policy instrument on your objective. But we should go beyond a static view of Brainard’s principle (which focuses on one single small step): a dynamic view would include the time dimension and consider how to manage and communicate a sequence of incremental steps. 2. How can we collectively respond to global tensions? There are increasing tensions in the global environment, starting with protectionism.

We will achieve the closest to a co-operative solution if we avoid large surprises between policy makers. While trade multilateralism is at risk, monetary and financial multilateralism stands fast, fortunately. This means continuing to favor dialogue and exchange of information among central banks, and to be very clear about our monetary policy regime choice. We should cherish the “great convergence” of policy objectives of the last fifteen years. Among major advanced economies, we now have domestic inflation targeting around a 2% medium-term objective. We are ruling out any currency war, as clearly stated in the unanimous communiqué of our Bali meeting earlier this month: “We will not target our exchange rates for competitive purposes”. On capital flow management (CFM) measures, we should support the ongoing reflections undertaken within the relevant international bodies and give priority to practical and pragmatic solutions – IMF type – rather than dogmatic purity. Last, as the G20 Eminent Persons Group (EPG), led by Tharman Shanmugaratnam, rightly stressed in its recent report, we need to put in place a reliable Global Financial Safety Net before the next crisis and co-ordinate its different layers. This should include an “IMF standing liquidity facility”. The global financial safety net is the best insurance we can get against the risks created by economic divergence and it comes at a limited cost.
So, the only way to ensure debt sustainability is to raise productivity, invest and increase the employment rate, and this implies structural reforms. Q: None of these factors are present. There is hardly any growth, investment or jobs. A: I am aware that the situation is still very difficult in Spain and that the Spanish people have suffered a lot in the process of reducing imbalances and implementing reforms. However, they can rest assured that Spain has turned the corner, and that the outlook is once again improving. This will encourage firms to invest and to start recruiting again, not only Spanish firms but also foreign ones. In a way, Spain can stand as an example not only for other countries that have been hit by the crisis, but for other large countries at Europe’s core, that have not been so active in reforming their economies. Spain is an example of how, through reforms, it is possible to redress imbalances and get out of the doldrums. Q: Which reforms are urgent? A: It depends on the country. The European Commission has already issued so-called “country specific recommendations”. The worrying thing, as the Commission acknowledges, is that these recommendations are too rarely followed. It would be preferable if countries took them seriously and felt collectively committed. In the case of Spain, my personal view is that much remains to be done to support the young people and help find jobs. They are the future.

3  See, for example, Joseph Gagnon, Matthew Raskin, Julie Remache, and Brian Sack, “Large-Scale Asset Purchases by the Federal Reserve: Did They Work?” Federal Reserve Bank of New York Staff Report no. 441, March 2010. Several private-sector firms have estimated yield effects of similar magnitude. In addition, a working paper by James Hamilton and Jing Wu, “The Effectiveness of Alternative Monetary Policy Tools in a Zero Lower Bound Environment,” finds that changes in the Federal Reserve’s asset holdings produce considerable yield effects. 2  BIS Review 128/2010  Under this view, the FOMC’s influence on financial conditions is associated with the size and composition of its securities portfolio. This perspective provides a clear rationale for the reinvestment decision made at the August FOMC meeting. The decline in the size of the Federal Reserve’s portfolio that would have occurred in the absence of the reinvestment program would have amounted to a passive tightening in the stance of monetary policy, as the portfolio balance effect would have gradually reversed. Moreover, the extent of this tightening was increasing in response to the weakening of the economy, as lower longerterm yields were leading to more rapid repayment of MBS. This perverse effect was seen by the FOMC as working against its efforts to reach its dual mandate. In effect, the policy approach that was implemented before the August meeting acted to mute the amplitude of movements in longer-term interest rates.
Unless we deliver effective resolution regimes, public finances will be under more pressure. So, summing up why the resolution reforms are so important: if you believe in solving Too Big To Fail, in an international financial system that is not only free but also safe, in shielding taxpayers from the risks in banking, and in shielding banking from politics, you will be committed to making a success of resolution. Thankfully, the extent of progress since the 2008/09 bailouts, while still incomplete and needing continuous political impetus, is good. It has involved agreement on a global model for resolution regimes capable of handling the largest and most complicated firms; legislation in some, but not yet enough, jurisdictions to embed that regime; the development of high-level resolution strategies that can be applied to different types of global group; concrete steps towards agreement between countries on how to apply those strategies across borders to specific institutions; and plans for top-level reviews of the adequacy of the resolution plans for each Global SIFI. If that progress has not been faster, which is an understandable concern, it is for the good reason that the required reforms involve an agency of the State, the resolution authority, having powers that affect property rights.

Let me offer four suggestions. First, we must help corporates understand the value of green financing. Singapore financial institutions have been partnering local authorities in Chongqing to build capabilities in green finance through workshops and online seminars. Second, we must ensure common understanding of what constitutes green or transition activities. In Singapore, an industry taskforce is developing a taxonomy that encompass green and transition activities. We are keen to collaborate with partners in China to identify commonalities in our taxonomies to unlock more cross-border sustainable financing flows. Third, we must enable corporates which want to improve their sustainability performance obtain cheaper financing in the form of sustainability-linked bonds and loans. 2/3  BIS central bankers' speeches  Sustainability loans can provide discounts on the lending rate if predefined sustainability performance targets are met. MAS’ grant schemes can help to defray the costs that borrowers incur to certify the fulfilment of sustainability targets. Fourth, we must explore innovative policy measures to facilitate qualified Chinese enterprises to issue green bonds overseas. For example, corporates from Chongqing or the broader Western Region could be allowed expedited approval for green bond issuances in Singapore. This could be done within specified limits and perhaps something akin to a dedicated green foreign debt quota for Chongqing. A growing number of Chongqing and Western Region companies are tapping Singapore to obtain green financing. Just last month, Chongqing Three Waters Conservancy and Power Co. signed an MOU with Chongqing Rural Commercial Bank to explore a potential RMB 1 billion green bond issuance in Singapore.
Encik Abu Hassan Alshari Yahaya: Results of the National Risk Assessment on money laundering and terrorist financing Speech by Mr Encik Abu Hassan Alshari Yahaya, Assistant Governor of the Central Bank of Malaysia, at the International Conference on Financial Crime and Terrorism Financing (IFCTF) 2014, Kuala Lumpur, 8 October 2014. *  *  *  It is my great pleasure to be here today to discuss with all of you the results of the National Risk Assessment on money laundering and terrorist financing (or the NRA). First, allow me to thank the Compliance Officers Networking Group (CONG) and the Asian Institute of Finance (AIF) for organising this conference and inviting me to this morning session. I also would like to extend my special appreciation to Mr. Roger Wilkins, the President of the Financial Action Task Force (or FATF) for delivering his keynote address and to the delegates from FATF namely Mr. Rick McDonell, the Executive Secretary of FATF, Mr Liu Zhengming and Mr Young-Han Byun, members of the Steering Committee of FATF for attending this morning session. It is an honour to have with us Mr Wilkins and delegates from FATF, and to get an update on the latest development on AML/CFT directly from the FATF President.

A threat is anything, be it people, object or activity with the potential to cause harm to the country, society, or the economy. In the money laundering and terrorist financing context this includes criminals, their criminal activities, terrorist groups and their facilitators, their funds, as well as past, present and future money laundering or terrorist financing activities. Identifying the threat is an essential starting point in assessing money laundering and terrorist financing risks. It provides an understanding of the nature, size and volume of the predicate offences and proceeds of crimes and an understanding of the environment in which these offences are committed and the proceeds are generated. The concept of vulnerabilities used in risk assessment comprises those factors that can be exploited by threat or that may support or facilitate its activities. In the money laundering and terrorist financing risks assessment context, vulnerability is distinct from threat because vulnerabilities are the factors that represent weaknesses in certain features of a country, or in the AML/CFT systems or controls. They may also include the features of a particular sector, a financial product or type of service that make them attractive for money laundering and terrorist financing purposes. By assessing the country’s threats and vulnerabilities, we are actually putting the risks assessment in the context of our country’s situation in terms of materiality of these threats and vulnerabilities in our country’s structural elements, and other factors that form important features of our country.
Second, globalisation has contributed to higher imbalances of income and wealth in many countries.24 Amongst economists, a belief in free trade is totemic, but while trade makes countries better off, it does not raise all boats within them. 23  For example, two-thirds of official foreign currency reserves are in US dollars, over 60% of countries use the US dollar as their anchor currency, and around half of international trade is invoiced in US dollars - far greater than the US’s 10% share of world trade. 24 The IMF finds that technological progress during the 3rd Industrial Revolution has been the biggest contributor to these increasing imbalances. See IMF (2017), Understanding the Downward Trend in Labour Income Shares, April World Economic Outlook, Chapter 3. 15  All speeches are available online at www.bankofengland.co.uk/speeches  15  Rather, the benefits from trade are unequally spread across individuals and time. Consumers get lower prices and new products, and further benefits from higher productivity over time. Some workers, however, lose their jobs and the dignity of work, or see their “factor prices equalised.” In plain English, their wages fall. Such dynamics are being felt by those at either end of the great convergence. Survey evidence shows that 70% of Chinese workers believe that trade creates jobs and increases wages, US households think the opposite, and UK public opinion is equivocal.25 The nascent fourth industrial revolution may (for a time) harden such concerns.

Firstly, the role of maintaining economic stability that I described earlier in this talk, as stability is a prerequisite to structural changes that lift productivity. Secondly, the developmental role, a form of supply-side policies, to enhance financial sector efficiency and create a favorable financial environment for investment that would lead to higher productivity growth. The importance of financial markets has long been realized by the Bank of Thailand as being the crucial part of growth potential. Indeed, our annual economic symposium this year, “Rethinking Finance for Sustainable Growth”, will discuss the links in detail. A healthy financial market can distribute funds to the parties that can bring most value out of them. For example, investors in the stock market closely monitor businesses, and will withdraw funds from those that have low prospects of future growth, moving them to those with better prospects. The growth prospects will be realized, and in aggregate will improve the whole economy’s growth potential. A well-developed financial market also lowers the cost of raising funds, as the increased competition broadens the variety of financial products offered. An SME for example, whose credit-worthiness is difficult to assess compared to a corporation, might be limited to self-funding in a less-developed market. But in a well-developed financial market, corporations can turn to other channels, leaving commercial banks more incentive to serve SMEs. In 2004, Financial Sector Master Plan Phase 1 was adopted and, to continue improving the financial sector, Financial Sector Master Plan Phase 2, the current phase, was launched in 2010.
In addition, the severe supply-chain bottlenecks that initially affected this category began to improve last year, which likely contributed to the easing of prices for some durable goods in recent months. However, there are factors that may throw sand in this gear going forward. The economic resiliency of Europe and a rebound in growth in China following the end of COVID restrictions will likely increase global demand for goods. And further improvement in global supply-chain disruptions has stalled over the past few months. For example, the New York Fed's Global Supply Chain Pressure Index remains elevated relative to pre-pandemic levels. The slowest gear to turn is the one that represents non-energy services. It's influenced by the balance of overall supply and demand, and it will take the longest to rotate at the right pace for low and stable inflation. One area where we are seeing signs of this gear turning is in shelter costs. After a sharp rise, we have seen a steep decline in the rate of increase in new lease rents. Assuming this trend continues, we should see a slowing of overall rent inflation during this year. That said, we have yet to see the gears turn for inflation of non-energy services excluding housing, which is still quite elevated, averaging 3-3/4 percent over the most recent six months. Tightening Monetary Policy Taking into account the different speeds the gears are moving, it is clear that overall demand remains well in excess of supply, and inflation is running far above our 2 percent target.

For microprudential supervision, the proposal is based on the so-called Twin Peaks model which separates prudential supervision (one peak, to be in the PRA) from conduct of business and consumer and investor protection (the other peak, to be in the Consumer and Markets Authority). One of the very important features of this approach is that it doesn’t mean one peak is less important than the other, that is not a consequence of financial stability being a necessary condition for good conduct of business. Rather, it should enable each regulatory body to be focussed on its own objective, because it requires different skills and experience to undertake the two peaks. Of course, great attention needs to be given to ensuring the boundary between the two peaks is robustly defined, and there is effective and efficient cooperation between the two authorities. But, my view is that done properly it will improve the system of regulation. As far as microprudential supervision is concerned, we are clear that it should not be a regime in which firms cannot fail. A successful industry of any sort needs to have means by which unsuccessful firms can fail without an unacceptable cost to the public, and where appropriate means by which firms can recover from serious problems without having recourse to a formal resolution process. Banking still suffers from the too big, too complicated, too interconnected to fail problems. This has meant that public money has had to be used to prevent disorderly failures.