samchain/econo-pairs-v1 huggingface dataset:
In Australia, for example, the 1998 Payment Systems (Regulation) Act gives the RBA powers to regulate the payments system and purchased payment facilities (such as travellers’ cheques and stored value cards). It also allows the RBA to obtain information from payment system participants and to set access regimes and determine risk control and efficiency standards for designated payment systems. The RBA’s responsibilities in this regard are discharged by a Payments System Board. The adoption of Real Time Gross Settlement (RTGS) has been another key risk reduction initiative on the part of many central banks in the past decade and a half. These systems eliminate the build up of settlement exposure and Herstatt risk between financial institutions as a result of the exchange of high-value payments and debt securities settlements. Instead, individual transactions are settled in real time across accounts at the central bank. The availability of RTGS is also an important step in dealing effectively with foreign exchange settlement risk. Finally, no discussion of payments system oversight would be complete without some mention of AntiMoney Laundering initiatives. AML is important for the integrity of payments systems, and thus also has important macroprudential implications. The publication of a Financial Stability Report is the second way in which central banks have given more prominence to their macro prudential responsibilities. The Bank of England was among the first movers and its Financial Stability Report is now a decade old. The report recently underwent a revamp reflecting how rapidly this type of analysis has evolved in that time.

So the message has to be not one like "we think it’s too risky to extend more credit to this sector” but instead more like “have you thought about the entire range of relevant risks in extending more credit and are your underwriting criteria in line with the riskier environment?" It’s important in publishing a financial stability report to present its findings as a range of possible outcomes which the private sector can then be encouraged to factor into its own risk management practices. Stress tests and scenario analysis provide the intellectual backbone for financial stability reports. Stress testing, in particular, has come a long way in recent years. The HKMA’s requirements on stress testing by banks have been in place for some time. Our Supervisory Policy Manual Module on Stress Testing, issued in early 2003, requires banks to have in place a stress-testing programme and to integrate stress testing into their risk management processes. For our own internal purposes we also conduct stress tests by applying a range of shocks to the supervisory data that is reported to us. These shocks take into account various adverse movements in banks’ liquidity, interest rate and market risk positions. However, the techniques of stress testing are rapidly evolving and are becoming increasingly more sophisticated. The first generation of stress tests simply took a variable and subjected it to a shock. It was basically just a matter of saying "let’s see what happens to capital if NPL’s go to 20 percent."
Mr. Lamfalussy reflects on the possibilities and constraints of monetary policy against the background of price stability in Europe Address by the President of the European Monetary Institute, Baron Alexandre Lamfalussy, on the occasion of the change of the presidency of the European Monetary Institute in Frankfurt am Main on 30/6/97. The moment has come for me to say a heartfelt “thank you” to you all! I should like to express my gratitude, first of all, to the governors of the central banks of the European Union, who, in the autumn of 1993, chose me as their candidate for the presidency of the European Monetary Institute, thereby setting in train a process which has allowed me to play a part in a ground-breaking enterprise of exceptional scope and responsibility. I should like to thank them, secondly, in their capacity as members of the EMI Council, for their cooperation in this undertaking and for their wisdom, prudence, willingness to compromise but also their will to achieve results. They have invariably acted with the utmost professionalism. I should like to add that we should not have been able to achieve what has been done without the conviction - which each of us shares - that the first duty of a central bank is to maintain price stability. This fundamental principle has never been a matter of dispute. My thanks go next to the political authorities.

This G-SIFIs loss absorbing capacity is a complex matter, involving the need to clarify or determine a long list of questions, for instance: its characteristics, minimum amount, intragroup distribution and triggers for it, enforceability of bail-in; regulatory limits on loss absorbing holdings, and disclosure. Let me underline that a shared view on the characteristics and levels of this “loss absorbing capacity” is critical for a “level playing field” among G-SIFIs. Also, we must avoid any approach that might be considered as an additional layer of differentiated capital requirements, a sort of differentiated “Tier 3” requirement. As I mentioned before, determination of the appropriate levels of GLAC must be dependent on the complexities and risk of the activities developed by each institution. The approach currently being worked out in the European Bank Recovery and Resolution Directive, in terms of both identifying characteristics and specific levels or of “eligible liabilities” is, in our opinion, a correct approach to the problem. Now, my last point, the discussion in Europe regarding the European Union bank recovery and resolution directive and the entry into force of the bail-in arrangements included in that directive. Although still under discussion, the Bank Recovery and Resolution Directive bail-in is to be introduced in a sequenced way. Bail-in of regulatory capital instruments will be applicable from the moment the Directive is transposed, while bail-in of senior creditors can be postponed to 2018, depending on each Member State.
This will also promote a better understanding by SMEs of their financial conditions, drawn from the analysis provided through the Bureau reports. Initiatives have been taken to continuously develop new financing products that meet the evolving needs of SMEs in various segments and stages of growth. This includes the introduction of the new CGC guarantee scheme to assist start-up SMEs that have insufficient collateral and insufficient financial track record to obtain bank financing. Finally, to complement the financial infrastructure, initiatives have been taken to develop comprehensive financial advisory services. Bank Negara Malaysia's Laman Informasi Nasihat dan Khidmat or BNMLINK, and BNMTELELINK, which is a dedicated Contact Centre, provide financial advisory services to the SMEs. In addition, Bank Negara has also  BIS Review 90/2008  3  established the Small Debt Resolution Scheme where viable SMEs that are constrained by non-performing loans are assisted through loan restructuring and the provision of additional funding. Today, SME financing has become robust with financial institutions being the main provider of SME financing. In 2007, banking institutions approved RM55 billion in new financing to more than 109,000 SME accounts. For the first five months of 2008 alone, a total of RM22.7 billion in new financing was approved to more than 55,800 SME accounts. As at end-May 2008, outstanding SME financing by banking institutions amounted to RM120.3 billion. In 2008, banking institutions are projected to approve RM61 billion of financing to more than 115,000 SME accounts, increasing at an annual growth rate of 10%.

With the foundations now in place, on 2 June 2008 the Council announced the formation of the SME Central Coordinating Agency to further build on the successes that have been achieved and to take the SME sector to the next stage of development. This dedicated SME Agency represents a major structural enhancement in the SME development agenda and marks another milestone for SME development in Malaysia. The Small and Medium Industries Development Corporation or SMIDEC, will be transformed and repositioned to undertake this role. This new entity, that will be known as the SME Corporation Malaysia or SME Corp, will be a one-stop agency that undertakes the overall coordination of SME policy formulation and assessment of the SME development programmes. The SME Corp will serve as the central point of information, reference and advisory services for SMEs for all sectors and will assume the role of Secretariat to the Council, a role which has until now been undertaken by Bank Negara Malaysia. Increasing SME access to financing Bank Negara Malaysia's own efforts have been focused on ensuring that SMEs, at different stages of the business life cycle, have adequate access to financing. The initiatives have been directed at four broad areas. Firstly, the strengthening of financial service providers. This has involved strengthening the role of the banking institutions in providing financing to SMEs. This recent five years have seen the financial institutions accord greater focus to the SME sector.
Some elements of the general bankruptcy procedure, such as freezing balance sheets, may in some cases be directly harmful if applied to a systemically-important institution. For example, the banks’ central role in the payment system means that one cannot merely stop payments in one or more of the major banks, as this could have devastating consequences for the financial system. During the bank crisis no banks were declared bankrupt. The lack of specially-adapted regulations for winding up problem institutions with the capacity to take into account society’s need for financial stability was emphasised by the Banking Law Committee. This was a commission of enquiry appointed in 1995 in the wake of the bank crisis to look into the needs for modernised legislation for banks. The Committee also presented a proposal for a new system to manage banks in distress, called public administration. This proposal has now been under investigation, as it is called, by the Government Offices since the year 2000. Custodia was a reminder of the shortcomings Since then we have received new indications of the shortcomings in the regulations. The course of events at credit institution Custodia in 2006 indicated worrying difficulties in managing even a relatively small and insignificant problem institution. We are therefore in no way better equipped than the United Kingdom to manage problem institutions and this applies with regard to both small and large institutions. Fortunately, Custodia was a small company and the problems occurred in a situation where there was relative calm on the financial markets.

In its meeting in April, the Monetary Policy Committee noted that “labour market data on quantities were signalling a tighter position than the price [earnings] data”. At that time, the Labour Force Survey and claimant count BIS Review 103/1998  –7–  measures of unemployment had both fallen below their previous troughs recorded in the spring of 1990, and were still declining. This position was evident across all categories of unemployment, as can be seen from chart 2 which shows the various measures of joblessness reported in the EPI’s Employment Audit. In addition, employment and total hours worked were rising quite strongly; recruitment intentions were at their highest level for nine years, with the level of vacancies at Jobcentres, and the average duration of these vacancies, both well above their 1988/89 peaks; and survey measures of recruitment difficulties were also at high levels. The underlying rise of the Average Earnings Index had increased to 42% by the beginning of 1997, but was little changed by the end of the year. If I had been asked to deliver the third Annual EPI lecture, rather than the fourth, the main question you might have expected me to grapple with would have been why earnings growth had not at that point risen by more, given the 1.0 million fall in unemployment and the 1.4 million rise in LFS employment since the end of 1992.
The assessment of capital adequacy needs to look beyond the computed capital ratio. The new Basel Accord therefore comprises three pillars. The first pillar provides a minimum capital measurement framework for credit and operational risks. In essence, the regulatory capital requirement is aligned more closely with the actual degree of underlying risk that the banking institution faces. It provides the capital measurement that has three options with different levels of complexities for both credit and operational risks to better reflect actual risk. The second pillar focuses on strengthening the supervisory process, particularly in assessing the quality of risk management in the banking institutions. The supervisory process aims to provide the mechanism to ensure that other risks such as concentration risks and market risks in the banking books being managed. Under such an environment, prudent lending such as that characterized by a high degree of portfolio diversification, could justify lower capital requirements. The third pillar specifies minimum disclosure requirements on capital adequacy to enhance market discipline. Despite its relatively more complex architecture, the implementation of the new framework provides a number of options and flexibility to banking institutions. This is to ensure that the approach adopted reflects and is commensurate with the nature of risk-taking activities and the level of sophistication of individual institutions. In adopting the standardized approach for credit risks, the credit exposures are weighted based on recognized external credit ratings.

We are very pleased to note collaboration by all parties in particular the financial industry has brought positive result with the declined number of ATM robberies being reported last year compared to 2013. I am also very pleased to note the industry continues to collaborate to enhance ATMs’ security. Today, marks another significant milestone in our payment system progression with the launching of an ink staining technology for our ATMS. ATMs fitted with this technology are protected by a security device containing a special ink that will smear the currency note. When there is an attempt to temper the protected ATM, the security device will be triggered to release the ink, staining the currency notes on all corners. This ink is indelible and can be traceable to a particular financial institution that dispensed the currency notes; thus it can assist the police more effectively in their course of investigation. More importantly stained currency notes will lose their legal tender. Stained currency notes are valueless to the criminals but the owner of the currency notes (the financial institutions) can exchange the currency notes with the Central Bank. These stained currency notes cannot be brought back to circulation as they are not a legal tender anymore. To make the initiative effective and our ATMs safe, members of the public also have a civic duty to play. They must be vigilant when receiving stained currency notes, which most likely are stolen currency notes.
This is shown by the fact that from the mid 19th century up to the late 1960s growth in Sweden was  BIS Review 80/1998  -2-  among the highest in the world. It is rather the case that the favourable outcome was promoted by low inflation and the stability this represents. The decades immediately after World War Two were particularly notable for high growth, low inflation, external balance and an optimistic mood that resulted in the Swedish economy’s successive expansion. That was a prosperous period with a good, stable economic trend, a rising standard of living and high employment. After the collapse of the Bretton Woods system in the early 1970s it proved difficult to establish an equally robust fixed exchange rate regime. A firm anchor no longer existed for economic policy in general and wage formation in particular. Sweden experienced a series of devaluation cycles, with an expansionary fiscal policy, inefficient wage formation and growing structural problems. With the deregulation of the financial sector the problems became all too evident. During the 1970s and 80s economic growth in Sweden became weaker than in other countries. But the economy still became overheated and this, together with an expansion of public sector activities, meant that unemployment was restrained for the time being. The situation was of course unsustainable. An inflationary, speculative bubble cannot grow indefinitely; sooner or later it is bound to burst. There was also a limit to the public resources for financing employment.

Under these circumstances the Riksbank has chosen to use currency interventions to underscore that the movements in the krona’s exchange rate have been unduly abrupt and exaggerated. BIS Review 80/1998
In part for those reasons, a number of countries have over recent years developed indices of well-being, drawing on a much wider array of economic, social and environment factors. For example, in the UK the Office for National Statistics (ONS) has begun tracking 43 separate measures of well-being grouped into 10 categories: personal well-being, relationships, health, participation in civic society, where we live, personal finance, the economy, education and skills, governance and the natural environment. These different metrics are slightly apples and oranges – and some may be bananas. Nonetheless, a variety of empirical studies have found these categories to be important determinants of individuals’ subjective well-being. 12 A good starting point is personal well-being – people’s sense of whether their lives are satisfying. Chart 28 plots an index of personal wellbeing since 2012. At an aggregate level, it suggests a rising tide of well-being, consistent with a growing economy. There are also few clear distributional differences in this pattern of wellbeing, with different regions, ages and income groups all rising. Other measures of well-being paint a more mixed picture. Of the 43 measures of well-being tracked by the ONS, 17 have seen some improvement since 2012. Many of these improvements are among economic indicators – employment, income and wealth. In some ways more interesting, however, the majority of these well-being measures have not improved during the recovery, while a fifth have deteriorated. Interestingly, the areas of weakness chime with some of the messages I heard from charities in Nottingham last year.

By slicing and dicing the data in different ways, it is possible to assess how different segments, sectors and regions of the UK have performed during the recovery. That means looking at aggregate metrics of economic health, such as income, employment and wealth. But a different lens is provided by looking at these metrics on a disaggregated basis and at non-standard measures of societal well-being. Taken together, these disaggregated data tell a rather more nuanced story about the UK’s recovery: a recovery which for most has been slow and low, for many partial and patchy and for some invisible and incomplete. This uneven economic surface helps reconcile the macro data and the micro stories from my regional visits – the “recovery puzzle”. It also has implications for what happens next to the economy in the light of the referendum, including monetary policy, on which I will conclude. Why it matters Before turning to the data, it is worth spending a moment on why this matters. Why look at the distributional pattern of activity when monitoring the economy as a whole and when setting monetary policy? This might seem like a strange question. Surely the fortunes of different sectors and segments of society are important? Yet, at least viewed from one angle, the distribution of gains and losses across the economy and across society ought not to much matter, at least when it comes to setting monetary policy. Here is why. The tools available to monetary policymakers, like the Bank of England, are small in number.
It is generally agreed that monetary policy can be used to affect production and employment in the short run. An important reason why monetary policy is capable, at least in principle, of influencing employment in this time perspective is the existence of rigidities in price and wage formation. Suppose, for example, that low wage settlements are concluded with a certain rate of inflation in mind. If monetary policy becomes more expansionary and inflation takes off, wage costs will be lower than expected in real terms. It will pay firms better to take on additional labour and employment will rise. In the short run, then, one can expect a trade-off between inflation (or the extent to which monetary policy is expansionary) and employment (or unemployment). BIS Review 32/1997  -4-  The existence of such a short-term trade-off does not mean, however, that it will serve to raise employment permanently. This is because when actual inflation changes, economic agents (firms, employees, etc.) normally adjust their expectations of future inflation. So in the next round of wage agreements, for example, employees may demand compensation for a higher expected rate of inflation. Changing expectations mean that the trade-off between inflation and unemployment ceases to be stable. This is intuitively intelligible. If the normal rate of inflation is, say, 5 per cent, it seems reasonable that employment will rise if inflation moves up to 10 per cent because this reduces wage costs in real terms. In the figure this amounts to moving from A to B.

Problems may arise, however, if monetary policy is perceived as  BIS Review 32/1997  -5-  The Phillips curve T h e P h illip c u r ve In f latio n  *B *  A  U n e m p lo ym e n t  In f latio n  *  B  *C  U n e m p lo ym e n t  BIS Review 32/1997  -6-  focusing primarily on the stabilisation of employment. As we have seen, people’s expectations play a major part in the inflation process. If people expect monetary policy to concentrate in the first place on stabilising employment, then firms and employees will not regard unduly high wage increases as all that serious because they will count on measures being taken to stimulate demand if employment is in danger. Sweden in the 1970s and ’80s is a good illustration of the problems that may arise. Wage and price increases in that period were systematically higher than in other countries, which led to recurrent cost crises and problems with competitiveness. An important reason for the lack of adjustment to wage increases in the rest of the world was that employees and firms reckoned that the government and the Riksbank would ultimately bail them out with devaluations, which is what actually happened.