samchain/econo-pairs-v1 huggingface dataset:
Zeti Akhtar Aziz: Knowing Nusantara – money that made the region Opening speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the launch of “Knowing Nusantara: Money That Made the Region”, Bank Negara Malaysia Museum and Art Gallery, Sasana Kijang, Kuala Lumpur, 26 August 2014. *  *  *  The Numismatic heritage of the Malay Archipelago is as rich as the region itself. There were few other regions that had such a level of trade that has existed in this part of Southeast Asia. Every type of seafarer had been here over the centuries, bringing with them a wide range of currencies. From Chinese copper cash to South American “pieces of eight”, Nusantara has been a magnet for money of all shapes, sizes and materials. When these are combined with the indigenous currency minted in the Archipelago, the legacy is immense. “Knowing Nusantara: Money that Made the Region” explores the coins and banknotes that have circulated in the Malay Archipelago, telling a story that goes back 2,000 years and that continues to evolve. By telling this story, the objective is to create a deeper understanding of the region. The history of the archipelago is largely about contact and the interconnectivity that existed in the region even during that period. Movement between islands and the mainland are mirrored by the encounters between the indigenous and foreign peoples.

About overall economy, a more sustainable development should be ensured, relating mainly to better control on trade deficit, supporting the sectors that actually contribute or may contribute to increasing exports in the country. Public authorities should strengthen their commitment to developing the non-bank financial market, which gradually leads to reduction of economic dependence on the banking sector condition and improves access to financing of a higher number of private entities. In this way, a greater opportunity would be provided to the financial system to finance projects in the agricultural sector, which has a high potential for ensuring competitive advantages in the Albanian economy. Allow me to conclude by emphasizing the Bank of Albania’s willingness to contribute, through its policies on monetary and financial stability, to maintaining a better climate of sound development of the financial and banking activity, as a condition for a greater financial support to business development in the country. I think that this forum will make a valuable contribution to setting some concrete development policies and projects, about which, I believe that the Black Sea Trade and Development Bank will offer its own support and expertise. Wishing success to the proceedings of this forum, I thank you for your attention! 2  BIS central bankers’ speeches
Further, the reinstatement of the EU GSP+ facility, the expected conclusion of the free trade agreements with Singapore, China and India and strong institutional and policy support are also expected to drive the momentum in exports. We have seen an increased inflow of Foreign Direct Investment (FDI) in 2017 and we expect FDI to gain momentum through the commencement of the Hambantota industrial zone and the continuation of the Colombo Port City project. Higher inflows to the government securities market and the Colombo Stock Exchange (CSE) as well as long term financial flows to the government were also witnessed during the year. With these developments on the external front, the Central Bank was able to build official reserves of over US dollars 7.9 billion at the end of 2017. 4  On the fiscal front, the government has embarked on a revenue based fiscal consolidation path to strengthen the country’s public finances. The government expects to reduce the budget deficit to 3.5 per cent of GDP by 2020 and thereby reduce government debt to a sustainable level in the medium-term. It is in the process of implementing several reforms aimed at improving government revenue collection while rationalising government expenditures to adhere to the envisaged fiscal consolidation path over the medium-term. A positive primary balance is expected in 2017 for the first time since the early 1950s and a surplus in the current account is also expected in 2018 for the first time since 1987.

Total investment will amount to just under 13½% of GDP in 2010, while business investment will be about 9%. Over the period 1980-2009, total investment averaged 22% of GDP, while business investment averaged 13% of GDP. This year’s total investment ratio is the lowest since World War II. The ratio of business investment to GDP has been lower than in 2010, however: in 1945, in 1993-1995, and in 2009. Even in 2013, at the end of the forecast horizon, investment will be only about 18% of GDP, which is below the 20% needed to maintain 3% output growth in the long run. This development in the level of investment is not inconsistent with the experience of other countries with a high pre-crisis investment ratio. Nonetheless, it is cause for some concern, and it is important to ensure that these will be “only forecasts”, for nothing is inevitable in such matters. In speeches I have given in the recent past, I have emphasised that, although the interest rate level has certainly affected the investment level, it is probably far from being the most important determinant, particularly with interest rates as low as they are right now. I think other factors are much more influential, such as post-crisis risk aversion, uncertainty about demand and operating environment, reduced access to foreign credit, and impaired corporate balance sheets. These hurdles must be overcome, and they are one of the reasons that it is so important that progress be made in corporate debt restructuring.
The payments system we live with today is a complex mix of national and cross border systems originally designed for a safer, slower, less complex, more segmented financial world. While many improvements have been made to this system over time, it is important that we work to strengthen further the core infrastructure of the payments system. We also need to promote further evolution in the framework of supervision and regulation of our more complex and integrated global financial system. To paraphrase Bob Rubin in a different context, we need a framework for supervision and regulation that is “as modern as the markets” and that stays abreast of the pace of change and innovation. Perhaps the greatest challenge we face – in macroeconomic policy and in financial supervision - is a challenge of imagination: How do we best prepare for the low probability of an extreme event; a crisis not captured by past experience? How do we generate the will today to build a greater degree of insurance against a more uncertain future, particularly if the risk of adversity seems remote and the immediate future looks strong? We can take considerable reassurance from apparent moderation in overall macroeconomic volatility recently, and from the ease with which our system has handled recent stress. Prudent macroeconomic policy actions will increase the likelihood that these beneficial circumstances will continue. But we cannot know with confidence that the future will bring an enduring reduction in volatility and risk, and it would be imprudent to plan for such a world.

The Bank also has a role in developing the financial system to promote growth. I would like you to follow me now through the details of our role on growth and hope to leave you with more confidence that Thailand is in good policy-makers’ hands. My talk today will cover three areas. Firstly, I would like to share Bank of Thailand’s views on Thailand’s current growth potential. Secondly, I would like to walk you through the current economic conditions and illuminate the role of central bank in returning balance in these situations. And thirdly, I will address the classical yet very current challenge of lifting growth through boosting productivity. I will share with you the opportunities we see for Thailand, involving the structural changes that are now underway, and the cooperation by the central bank, public and private sectors that will transform these opportunities into sustainable long-term growth. Ladies and Gentlemen, Having outlined our plan for today, I would like to begin with the concept of growth potential and its application to the state of Thailand’s economy. What do we expect to see from a Thai economy achieving true growth potential? Two components. First is growth at full sustainable capacity. We would expect to see factories producing their optimum output while hotels have the maximum number of guests that can be served comfortably, and infrastructure from roads to banking system able to lend full support. Second is lifting the long-run growth trend.
The data on the Bank’s historic last resort lending is new and highly granular, Big Data from a bygone era. th  It shows that the Bank’s approach to last-resort lending evolved considerably during the mid-19 century crises. That meant, by the time of the 1866 crisis, the Bank was more or less following the principles for last-resort lending subsequently set out by Bagehot. It is another example of empirics leading theory. Machine learning techniques are being applied to the statistics regularly collected and reported by the Bank. In particular, these techniques are being used to spot errors or anomalies in the raw data provided to the Bank. This makes cleaning the data much more systematic and efficient than is possible using manual processes. Data science methods can also be used to match new sources of granular data. This not only provides another means of checking the plausibility of data, but can offer insights that individual data sources 48  cannot reveal by themselves. At the Bank of England, as elsewhere, the robots are on the rise. 46  Bagehot (1873). Anson et al (2017). 48 Bahaj, Foulis and Pinter (2017), for example, match firm-level accounting data, transaction-level house price data and loan-level residential mortgage data to show how the house price of the director of an SME can affect their firm’s investment and wage bill.

Nyman, R, Kapadia, S, Tuckett, D, Gregory, D, Ormerod, P and Smith, R (2018), ‘News and narratives in financial systems: exploiting big data for systemic risk assessment’, Bank of England Staff Working Paper, No. 704. Obstfeld, M and Rogoff, K (2001), ‘The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?’, NBER Macroeconomics Annual, Vol. 15, MIT Press. Popper, K (1934), Logik der Forschung, Akademie Verlag. Popper, K (1959), The Logic of Scientific Discovery, Routledge. Rotemberg, J (1984), ‘Interpreting the Statistical Failures of Some Rational Expectations Models’, American Economic Review, Vol. 74, No. 2, pp. 188-193. Sabouni, H (2018), ‘The Rhythm of Markets’, mimeo. Schonhardt-Bailey, C (2013), Deliberating American Monetary Policy: A Textual Analysis, MIT Press. Schwab, K (2017), The Fourth Industrial Revolution, Portfolio Penguin. Shiller, R (2017), ‘Narrative Economics’, American Economic Review, Vol. 104, No. 4, pp. 967-1004. SINTEF (2013), ‘Big Data, for better or worse: 90% of world’s data generated over last two years’, ScienceDaily, 22 May. Stiglitz, J (2018), ‘Where modern macroeconomics went wrong’, Oxford Review of Economy Policy, Vol. 34, No. 1-2, pp. 70-106. Tuckett, D and Nyman, R (2017), ‘The relative sentiment shift series for tracking the economy’, mimeo. Turrell, A, Speigner, B, Thurgood, J, Djumalieva, J and Copple, D (forthcoming), ‘Using Online Vacancies to Understand the UK Labour Market from the Bottom-Up’, Bank of England Staff Working Paper. 17  All speeches are available online at www.bankofengland.co.uk/speeches  17
Expansionary monetary policy following a financial crisis and recession can therefore open up a welcome time window for carrying out consolidation measures, cleaning up bank balance sheets and implementing structural reform measures. However, if decision-makers have reason to believe that low interest rates will probably remain in place for a long time yet, their motivation to undertake reform measures is likely to flag. This is particularly the case in countries where reforms have been under way for many years now, but are still insufficient, and where resistance at the political level is now on the increase. Here the temptation to depend on low interest rates – or even to increase political pressure on the central bank to keep interest rates low for longer than necessary – is especially pronounced. In this context, it is important not to forget that central banks cannot do everything. They cannot restructure public sector budgets and they cannot carry out structural reforms. Nor can they provide substitutes for sensible fiscal policies. This area is the responsibility of other economic agents. A prosperous economy requires favourable conditions. In this respect, the contribution of central banks is to secure one of the major conditions – price stability. And inflation? This raises the question of whether the exceptionally expansionary monetary policy will lead to inflation in the long term. In most financial systems, surplus liquidity has reached historical dimensions. Under normal circumstances, monetary developments of this kind would point to a rise in inflation.

chart 6). The latest World Economic Outlook by the IMF reports that “Global growth is in low gear (…) and downside risks persist.” The IMF now anticipates global growth of 2.9% for 2013 and 3.6% for 2014. BIS central bankers’ speeches  3  A change in growth momentum is becoming evident at a global level. Chart 7 shows the purchasing managers indices (PMIs) for various countries. On the vertical axis we see the current level of PMIs and on the horizontal axis, movements over the past six months. Momentum in the emerging economies has declined recently (red ring). By contrast, the advanced economies are picking up, in particular in the euro area (green ring). Moreover, PMIs for most of these economies are above the growth threshold of 50 points. Growth in the US, especially, is very robust and, on this side of the Atlantic, the UK has exceeded expectations (blue ring). Particularly important for Switzerland were the surprisingly favourable economic indicators in Europe this summer. In the second quarter of 2013, the euro area reported positive growth for the first time in six quarters. There are encouraging signs from the peripheral economies, especially. Since mid-year, for instance, these countries have again been recording surpluses on their current accounts. Nevertheless, these signs must be put into perspective. The improvement in the peripheral economies is beginning from a very low base level and the unemployment figures are oppressive. The banking system is very fragmented and unhealthy bank balance sheets give rise to declining levels of lending.
I can see, unfortunately, a couple of reasons why inflation may remain higher than we have hoped and why the price increases might continue to spread. Firstly, only half of the increase in the inflation rate could be explained by temporary effects. Many prices have risen more than expected. This is probably due to resource utilisation in the economy being relatively high as demand was sufficiently high to enable implementation of price increases. The fact that competition is weak in certain sectors probably reinforces this, which facilitates passing on the costs to the consumers. A further sign is that the increase in employment has been good. There has been an adjustment downwards in working hours rather than in the number of jobs. The division on the labour market, with increases in employment in sectors less exposed to competition has meant that wages have risen more than expected. Thanks to expansive fiscal and monetary policy,  BIS Review 13/2002  5  unemployment is expected to rise only marginally. As economic activity appears to be increasing during 2002, it is difficult to imagine that the pressure on the labour market will decline significantly. Secondly, my personal opinion is that it is possible that inflation expectations, reflected as an acceptance of price rises, may have increased. I believe that the temporary price rises that have occurred have clouded our view and it has been possible to undertake more price rises under cover of these.

The Inflation Reports contain different measures of how households and companies expect the rate of price increase to develop. Pricing on the financial markets can also provide some information here. A further type of inflation expectation is reflected in the various forecasters’ assessments of developments. The Riksbank bases its estimations on a total assessment of these different measures of inflation expectations. Stable and low inflation expectations affect both companies’ pricing behaviour and wage formation, as well as having a beneficial effect, as far as monetary policy is concerned, on how consumers react to price changes. Companies’ pricing behaviour is based partly on the development of marginal costs, the competitive situation, demand and inflation expectations. If a company has confidence in the Riksbank’s monetary policy, its prices will not be affected as much by temporary changes in, for instance, supply, demand or the exchange rate. In this situation, the company can assume that inflation will return to the longterm trend once the effects of the disturbance subside. A credible inflation target can thus contribute to maintaining the monetary policy target at lower cost in terms of fluctuations in demand and interest rates. One means of inspiring confidence is to show a high degree of openness and clarity with regard to how monetary policy is conducted. The fact that the Riksbank describes the considerations regarding economic prospects that form the basis for the interest rate decisions makes it easier for external analysts to understand and predict monetary policy.
Intermediaries contribute to link both sides and bridge gaps of incentive and information frictions, by managing credit risk, liquidity risk and transforming maturities; thus contributing to a better resource allocation and fostering growth. Proper regulation, with a sound balance of risks assessment, can help prevent unsustainable and irresponsible credit growth, reducing the probability of insolvency while allowing banking institutions develop profitable businesses. So, it is not a question on whether or not to regulate, but rather how much to regulate, and how to do it without impairing efficient allocation of resources. Regulation has not been an obstacle to financial development in Chile in the 35 years since the debt crisis. Chilean capital markets—broadly defined—evolved in tandem with economic growth. The 1986 Banking Law was key in fostering this process, but it was hardly the only piece of the financial architecture that changed significantly. Notably, the creation of a defined contribution pension system, and subsequent capital market reforms, together with capital market openness, have dramatically changed the size, composition, depth, and strength of the financial sector in Chile. By funneling household savings into capital markets, Pension Funds were especially important to the early development of a deep debt market; and their contribution to market-making benefited from a stable macroeconomic environment with controlled inflation, extensive use of the UF, and the restructuring of Central Bank’s debt into longer maturities. A deeper and more liquid debt market also facilitated the pricing of debt issued by private companies in local markets.

Central Bank of Chile March 2019  CBC-IADB Joint Workshop on “Basel III in the Context of the Macroprudential Approach” Opening Remarks by Mario Marcel, Governor of the Central Bank of Chile Ritz-Carlton Hotel, Santiago, Chile – March 29, 2019 Good morning and welcome to the “Basel III in the Context of the Macroprudential Approach” workshop which is co-organized by the Central Bank of Chile and the Inter-American Development Bank. It is a pleasure to host this event in Santiago, at a very appropriate timing. After a year and a half of legislative discussion, on January 12th of this year, the new General Banking Law was enacted. This is the most significant change to solvency regulations since 1986, setting the basis for the implementation of the Basel III framework in Chile. A second reason goes back 35 years. In a few more days, the Central Bank will receive the last repayment of the subordinated debt originated in the rescue of the Chilean financial system of the early 1980s. It has been a long way since this episode, and the fact that only now can we finally put it behind us, highlights the importance of doing everything in our reach to prevent the occurrence of major financial disruptions. Allow me to go briefly over the history of the Chilean financial system over the last five decades, and how regulation has reacted and evolved over time. Some 50 years ago, banks where almost the only source of financing for companies and households.
The quest for efficiency in statistical reporting and compilation As we have seen, data - whether micro data or aggregate variables - are an essential ingredient for analysing and designing economic policies. But at the same time, reporting data are not free. This always means a burden on reporting agents. And I think that the responsibility of all of us as authorities is to minimise that burden and establish the mechanisms which ensure data collection is as efficient as possible and smooth the ensuing interactions with agents to check data quality. In a sense, collecting micro data may help reduce the reporting burden on economic agents (such as banks, investment funds, non-financial companies, etc.) if they are able to replace other aggregate requirements imposed by the authorities. Moreover, these requirements may sometimes change over time, thus demanding a continuous and costly adaptation of the agents’ reporting schemes, including complex IT developments. But, in any case, data collection imposes short-term costs on agents. Public institutions should be sensitive to their demands to establish an efficient system to collect information, avoiding overlaps and harnessing synergies. In order to tackle this issue there are already some data-sharing mechanisms in place across statistical institutions. Indeed, the special relationship between INE and the Banco de España in the national accounts and balance of payments fields is a good example. Yet more can probably be done both at the national and international level. On the international front there are good practices we can explore.

These have included the change of competition law and the regulatory framework, the reform of the judicial system, and the reform of regulated professions and of the housing market. Finally, programme targets for privatisation were achieved ahead of time. Structural reforms need a long-term commitment As I said at the start of my remarks, an improvement of the underlying prospects for these economies has moved expectations. Perceptions about the sustainability of the recovery path in Portugal, in particular, have been reflected in persistent improvements in confidence and associated reductions in risk premia. Over time the economic and social pay-offs of reforms will be high, in terms of higher wealth and employment. High and sustainable GDP growth will in turn bring about improvements in fiscal positions and sizeable reductions in debt-to-GDP ratios in the medium to long-run, contributing therefore to long-term debt sustainability. However, to reap these benefits implies a long-term commitment. The reform process is a continuum. A reform that has just been legislated does nothing for the citizens of a country, if it is not followed-up with effective implementation. Making sure that reforms transfer from the statute book to the real economy requires painstaking monitoring, as well as a prompt reaction in case outcomes deviate from expectations. When countries exit adjustment programmes, such an orientation will help prove to markets that reforms have been undertaken not only due to external pressure, but also out of a genuine recognition of their benefits.