samchain/econo-pairs-v1 huggingface dataset:
I am personally committed to enhancing our co-operation with non-member countries and with organisations that have related interests. In this respect, I am confident that the fruitful dialogue that has already begun between the Basel Committee and the IFSB will continue to be successful and mutually rewarding in the future. My talk this evening will address several issues. First, I will talk about why I believe sound corporate governance plays such an important role in bank safety and soundness and financial system stability. Second, I will share some thoughts on how the Basel II capital framework will contribute to better corporate governance. Finally, I will share some of the work that the Basel Committee has underway with regard to bank corporate governance. Why does corporate governance matter for banks and bank supervisors? Before I talk specifically about the corporate governance of banks, I would like to discuss more generally some of the weaknesses in corporate governance that have led to high-profile failures such as Enron and Parmalat over the past few years.

While every situation is unique, and in some cases not all of the facts are known, many of the recent corporate governance breakdowns appear to have several factors in common:  BIS Review 38/2005  1  -  The board of directors failed to understand the risks that the firm was taking, and did not exercise appropriate oversight or questioning of senior managers’ and employees’ actions;  -  Conflicts of interest and a lack of independent board members and senior executives resulted in decisions that benefited a few at the expense of the many;  -  Internal controls were either weak or non-existent, or appeared to be adequate on paper but were not implemented in practice;  -  Internal and external audit “fell asleep at the switch” and failed to detect fraudulent behaviour, and in some cases even aided and abetted such behaviour;  -  Transactions and organisational structures were designed to reduce transparency and prevent market participants and regulators from gaining a genuine picture of the firm’s condition;  -  And perhaps most importantly, the corporate culture fostered unethical behaviour and discouraged questions from being raised. Fortunately, none of the high-profile corporate scandals of recent years have brought down banks. I would like to think that strong, effective banking supervision has been very helpful in that regard and I also believe that a sound risk management culture has become increasingly present in the banking sector in recent decades.
Suppose you split consumption into stuff that can only be produced domestically (“non-tradables” like homes or haircuts) and things that can also be imported from abroad (“tradables” such as holidays and cars). This distinction is important because you’d expect prices of traded goods and services to move reasonably closely across countries (I’ll return to this point later). If so, it turns out you can re-express the real exchange 2  rate in terms of another relative price, that of non-traded to traded output :  𝜀≈  𝑝𝑁𝑇 ⁄𝑝𝑇  [1]  So when things happen that push up this relative price, whether on the demand or the supply side of an economy, the real exchange rate will tend to move in the same direction. Take domestic demand first. The material distinction between non-traded and tradable output is that, whereas the first can only be supplied domestically, the second is also produced elsewhere: its overall supply is more “elastic”. New houses can only be built by domestically located firms; cars are made everywhere. So even a general increase in domestic demand will put relatively more pressure on the resources used to produce non-tradables as their global supply is more limited. As a result their relative price will tend to rise in domestically led expansions and to fall in contractions. This is illustrated in an extremely stylised way in Chart 2.

Luis de Guindos: Challenges for bank profitability Speech by Mr Luis de Guindos, Vice-President of the European Central Bank, at the OMFIF City Lecture, London, 1 May 2019. * * *  Introduction Sustained economic expansion over the past six years and greater banking sector resilience have supported financial stability within the euro area. But the recent softening of growth prospects heightens risks. The financial stability environment has become more challenging than it was a year ago. The risks that have been with us for some time now – a possible disorderly increase in risk premia, debt sustainability concerns, low bank profitability and imbalances in the non-bank financial sector – are still present. But they are no longer being mitigated by an improving macroeconomic outlook. Indeed, the deteriorating macro outlook renders some of these risks more acute. In particular, it may reawaken concerns over debt sustainability and worsen the outlook for bank profitability. Debt sustainability concerns could drive up sovereign bond spreads. In turn higher spreads generate losses on bond portfolios and higher market-based funding costs for financial institutions. Bank profitability tends to go hand-in-hand with economic activity. Slower growth prospects may dent bank profitability through a reduction in lending activity and a possible increase in credit impairments. Moreover, the ongoing political uncertainties – including trade disputes – and the softer economic momentum may trigger volatility in asset prices. And if a sudden, disorderly increase in risk premia were to materialise, it could further elevate banks’ funding costs.
More effective utilisation of technology to improve customer engagements can also increase confidence in the use of financial services. To this end, Bank Negara Malaysia will continue providing an enabling regulatory environment and active facilitation to increase the impact of technology on financial inclusion. This is being driven through several strategic initiatives by the Bank, including the regulatory sandbox, adoption of digital identities for SMEs and piloting the use of psychometric tools for SME credit evaluations. Role of the Financial Industry to drive efforts in SME Financing and Financial Inclusion It has become increasingly important for the financial industry to come forward and address related perceptions on SME financing matters. The industry should actively address issues affecting access to financing by SMEs, by advocating the players to adopt best practices in 2/3  BIS central bankers' speeches  financing activities and lead initiatives to reform inefficient practices. Key strategic recommendations should be made to the Government and regulators to enhance the SME financing ecosystem, particularly in supporting new growth areas and increase contributions by financial institutions to SME sector. In this regard, the financing ecosystem needs to be complemented with comprehensive SME development strategies and initiatives to strengthen SMEs’ capacities and capabilities. This includes efforts towards training and retraining of workers, adoption of technologies in business and operating process, as well as in governance, finance and accounting practices.

Of this, 27% were first time borrowers and 23% were without collateral and credit guarantee. Nevertheless, our work is far from done. There are pockets of SMEs, particularly the start-ups and those operating in new and high risk segments that continue to face challenges in obtaining financing. When businesses have insufficient access to financial products and services, they may be deprived of a chance to pursue new business opportunities, and as a nation, we are deprived of the benefits of their potential contributions to the economy. 1/3  BIS central bankers' speeches  Over the past 45 years, CGC has played a crucial role in bridging the gap between financial institutions and underserved SMEs via its innovative products and services. I commend CGC’s efforts for its latest venture in developing a dedicated online referral platform that connects the banks and the SMEs, known as imSME. The imSME has the potential to transform the SME Financing Landscape in the country, by matching SMEs’ financing needs with suitable products, thus reducing search costs and improving financing prospects for SMEs. The implementation of imSME exemplifies the importance of technology in increasing SMEs’ financing access. SMEs are now able to submit financing applications 24 hours a day, without the need to visit individual financial institutions to search for suitable product offerings. The Platform also facilitates the partnership between key collaborators to deliver end-to-end solution for SMEs that face higher hurdles to obtain financing.
As a reaction to the crisis during the 1920s, the difficulties of the 1930s with the Kreuger crash and in particular the outbreak of the Second World War, the central government tightened its grip on the financial sector. Many of the regulations introduced at that time still remained towards the end of the 1980s. During this period of regulation, the financial sector looked very different. It is probable that the regulations then curbed the development of economic activity. The regulations covered, for instance, the central government guaranteeing financing of housing construction and the central government borrowing requirement. Interest rates were kept lower than the equilibrium level with the hope that this would stimulate investment and growth. This of course resulted in a large demand for loans, which was managed by means of rationing. A necessary condition for this regulatory system was that the country was screened off with the aid of currency regulation that prevented savers from taking advantage of higher interest abroad. One might think it self-evident that an individual should be able to decide where in the world he or she invests his or her savings, but for a long time we lacked this freedom. In other words, one of the financial markets’ fundamental tasks was eliminated - allocating capital to the most profitable investments. During this long period of regulation we as a country forgot our own experiences from the 19th century on the value of free movement of capital and the importance of the price mechanism in efficient allocation of resources.

It would be beneficial to have more discussion of, and attention paid to, the question of how to stimulate competition. In this particular case a beneficial change appears to have strongly stimulated competition. If we are to achieve increased competition in other areas, too, it is necessary to constantly emphasise consumer interests so that allocation of resources becomes as efficient as possible and protected sectors are not allowed to operate inefficiently to the detriment of potential growth. 2  Statistics Sweden calculates households’ consumption of pharmaceuticals to be approximately SEK 10 billion a year. BIS Review 37/2003  5  What can we learn from 150 years of history? To summarise, there have been many changes in the Swedish economy in recent times. The external framework is currently characterised by considerable fiscal policy and monetary policy stability, which facilitates planning and decision-making for both households and companies. Both our own history and that of other countries shows clearly that a stable external framework is an important basis for economic growth. We have also gone back to being open towards the outside world. During the war we were not, for obvious reasons. After that we were open for a long period according to the rhetoric, but less so in practice. Today we have regained a freedom for ideas, products, services and production factors that is reminiscent of the late 19th century and early 20th century. In both of these aspects we appear to have done our homework.
The first is to familiarize yourself with this new environment – to get to know new colleagues, to learn about the culture of the workplace, and basically to settle in. Some may find this phase more challenging than others, especially if they were easily shaken by cultural shocks. Once you have settled in the new place, you may discover certain shortcomings of yours are constraining your career advances. These shortcomings may already be existing, but are only exposed by the new job. Fixing these shortfalls is the second step in the transition. Finally, to make a significant progress in the career, you will have to set the bar for yourself, and strive to reach it through learning and development. This will require insights to identify one’s strengths, and skills to take advantage of them given the dynamics of the working environment. The stages of economic development may be thought of in a similar vein, consisting of three pillars. The first pillar is to ensure that the economy ‘settles in’ the new global environment smoothly, and remains resilient against new types of shocks. The second pillar is to identify and fix structural shortfalls that may have hindered economic development in the past, and could become even more binding in the future. The last pillar is to lay out a clearer long-term plan for strengthening and developing the economy, leveraging on its strength and the opportunities presented by the evolving landscape.

Prasarn Trairatvorakul: Thailand in the new regional and global financial landscape Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the International Chamber of Commerce (ICC) Thailand General Council and Networking Dinner, Bangkok, 30 September 2014. *  *  *  Good evening distinguished guests, ladies and gentlemen. I am delighted to be here today, to address honorable members of Thailand International Chamber of Commerce. Thailand International Chamber of Commerce has made an important contribution to our nation in two main ways. At home, the organization helps develop awareness among members on future trends of business. In the international arena, the International Chamber of Commerce ensures member’s participation in the formulation of trade and investment policies. On this occasion, I would like to express my appreciation for the hard work that you have done throughout the past fifteen years and the strategic function that your organization will continue to serve in a more dynamic environment going forward. Today, I would like to share with you my perspective on how Thailand could prosper in the new regional and global financial landscape. Let me offer an analogy. Imagine yourself embarking on an important challenge, perhaps a new job with demanding responsibilities. Naturally you may feel a little nervous, since there is no guarantee that the new venture will be a successful one. A transition to a successful career consists of three stages.
Consequently the pressure for austerity is greater in the periphery, than it is to boost demand in the core. So, while the euro-area authorities have been making substantial progress in constructing the economic architecture to support the monetary union, the adjustment process taking place in the periphery is nevertheless likely to continue to weigh on euro-area demand prospects for some time. And that will also act as a headwind to the recovery here in the United Kingdom. Let me turn finally to the global picture. During the build-up to the financial crisis, significant international payments imbalances emerged (Chart 9). On one side were the advanced economies, most especially the United States, running large and persistent current account deficits. On the other side were the emerging economies – most notably in Asia – and latterly the oil exporters, showing large current account surpluses. In the decade prior to the financial crisis, for example, the US current account deficit widened from under 2% of GDP to 5%, while the surplus in China rose from 4% of GDP to 10%. That constellation of international payments flows, with emerging economies exporting capital to advanced economies, was the opposite of what conventional economic models would predict. Normally one would expect countries in the catch-up phase of economic development with temporarily high investment levels to import the necessary savings from overseas. But a combination of limited household safety nets and under-developed domestic financial markets generated unusually high private savings rates.

Chart 10: Global current account imbalances and gross capital flows Total current account surpluses (a) BIS bank outflows (c) Gross capital outflows Per cent of world GDP (inverted) 20  Total current account deficits (lhs) (b) BIS bank inflows (lhs) (d) Gross capital inflows (lhs) Per cent of world GDP 20  15  15  10  10  5 0 + 5  5 + 0 5  10  10  15  15  20 1980  20 1984  1988  1992  1996  2000  2004  2008  2012  Sources: Bank for International Settlements, International Monetary Fund World Economic Outlook and Bank calculations. (a) Sum of global current account surpluses. (b) Sum of global current account deficits. (c) Sum of global net purchases of foreign assets by residents. (d) Sum of global net purchases of domestic assets by foreigners. BIS central bankers’ speeches  11  Chart 11: Global imbalances Other current account deficit countries  China and emerging market Asian economies  Germany and Japan  Oil exporters  United States  Rest of the world  Cyclically adjusted, assuming substantial supply impact  Cyclically adjusted, assuming little supply impact  Per cent of world GDP  4 3 2 1 0 -1 -2 -3  Forecast  -4 1998  2000  2002  2004  2006  2008  2010  2012  2014  2016  Source: International Monetary Fund World Economic Outlook, April 2013.
Zeti Akhtar Aziz: Reflections on small and medium sized enterprises Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 7th Conference of Asia-Pacific Economic Cooperation (APEC) Financial Institutions Dealing with SMEs, Lanai Kijang, 16 July 2010. *  *  *  Introduction This conference takes place at a time of great consequence for the financial industry as the world emerges from the recent global financial and economic crisis. Attention continues to be focused on supporting this recovery process and to provide more permanent solutions that would ensure sustainable global growth. In relation to this, the development of small and medium sized enterprises (SMEs) is an important and urgent agenda. For emerging economies, in particular in the APEC region, this is not only important as a driver of the economic growth process but also that it would achieve a more balanced growth. It is my pleasure to be here this morning to speak at this 7th Conference of APEC Financial Institutions Dealing with SMEs, that is organised by the Association of Banks in Malaysia. History has shown that in the 20th century, it was large corporations that drove economic progress; particularly in the industrial economies. In this century, there is a discernible shift towards the increased importance of SMEs as drivers of growth. The growing importance of domestic demand and the emergence of new sources of growth and new business models have encouraged the emergence of small and medium size businesses.

I begin my day here at NJPAC and following this visit, I will take a tour of the Teachers Village, which is a new mixed-use community here in downtown Newark, attend a roundtable lunch meeting with members of the Statewide Hispanic Chamber of Commerce of New Jersey in Union City, and hear about the economic and community development activity in Jersey City from Mayor Steven Fulop. I will then meet with nonprofit small business lenders to hear about lending conditions, and I’ll end the day at Stevens Institute of Technology where I will learn how they have partnered with NBC Universal to create a new minor in media engineering to address a skills gap issue in the region. These trips are one of the many ways in which we engage with people and businesses in our region. We track the health of household balance sheets at the state and local level using data from the New York Fed’s Consumer Credit Panel. These data show debt balances and delinquency trends across all forms of consumer debt, including mortgages, student loans, auto loans and credit cards. Later this month we will release a Regional Household Debt and Credit Snapshot that will provide an overview of the household debt trends in metropolitan areas within New Jersey. We also conduct a biannual poll of small businesses to understand their credit needs and availability.
However, in over two decades’ time, the ratio will deteriorate significantly to 2:1, which means that there will only be 2 persons in the age group of 15–64 supporting one elderly person. The Government has already made it clear that, while we are having budget surpluses, structural budget deficits will occur within a decade mainly due to changing demographic structure. 20. Ladies and Gentlemen, I have just made a long speech and now I would like to leave you with several key takeaways. First, it is very easy for governments to fall into the trap of going down the path of fiscal unsustainability as a result of the collective irresponsibility syndrome as well as population aging. Second, it is very, very hard and immensely painful to try to get out of a government debt crisis. Third, more likely than not, it is the next generation and the next and the next that will have to shoulder the costs and to suffer the pains for excessive spending and stock piling of debts by the current generation. If we don’t want to mortgage the future of our children and grandchildren, try not to leave with them a pile of debts as in the case of many developed countries. How can we do this : we must take great care in not demanding or condoning policies that would undermine the long-established fiscal prudence and discipline of our Government.

Under the influence of anonymity that cultivates “collective irresponsibility”, the temptation of “spend now and not having to repay” mind-set can easily overwhelm common sense in favour of populist policies with unsustainable fiscal consequences in the medium to longer run. How to get out of a government debt crisis: Painful deleveraging and resolute structural reforms 16. It seems clear enough even to people without training in economics that the solution to a crisis caused by excessive level of government debts is not through borrowing more money and piling up more debts. The solution must be through deleveraging over time in the overly indebted sectors. At the national level, three things must be done at the same time. First, the government must implement a credible fiscal consolidation programme to reduce public spending and increase revenues. Second, the government should, within the reduced budget, strive to allocate resources to infrastructural and other productive investments that could facilitate the return of healthy economic growth in the medium to long term. Third, the  4  BIS central bankers’ speeches  government must pursue structural reforms that would enhance the flexibility and capacity of the labour, product and services markets that would raise the productivity and competitiveness of the economy and its workers. 17. Of course, I appreciate that these three things are very hard to implement. However, I don’t think there is any short cut or easy way out. The adjustments after any financial crisis triggered by excessive debt are by nature very painful.