samchain/econo-pairs-v1 huggingface dataset:
Eddie Yue: Asian Development Bank – working to reduce poverty in Asia Statement by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, and Head of Delegation, Hong Kong, for the 49th Asian Development Bank Annual Meeting, Frankfurt am Main, 3–5 May 2016. *  *  *  I would like to thank the Government of Germany for hosting the 49th Annual Meeting of the Asian Development Bank (ADB), and the Management and staff of ADB for the excellent arrangements of the event. I would also like to congratulate ADB for the successful conclusion of the Eleventh Replenishment of the Asian Development Fund, which would provide critical resources to ADB to further its work in poverty reduction in Asia. ADB is approaching its 50th Anniversary this year. Over the past fifty years, Asia has undergone tremendous development. The economic miracle in Asia, together with the important work of the Bank, have lifted millions of people out of poverty and substantially improved our standard of living. After decades of rapid growth, however, there have been signs that the trend growth of the region is slowing. This reflects, to a considerable extent, supply-side constraints on potential output. In particular, a number of emerging economies in the region have been held back by infrastructure bottlenecks. As I have noted during the past few Annual Meetings, to sustain growth and propel the economy to the next stage of development, boosting infrastructure investment is a top priority for many developing members in the region.

Banks, like other companies, need to discover what will or will not work in the internet world. They are thus exposed to their own mistakes. But they are also exposed to the potential mistakes of their customers. For example, if the telecom companies in Europe really have taken too big a gamble on 3G, this would have repercussions for the banks that have financed them. These challenges are also confronting banks in Asia as they recover from the hangover of the Asian crisis. I do not think that bankers anywhere would ever claim that they have an easy life. But certainly the existence for banks in Asia before the crisis was easier than it is now. If I take Hong Kong as an example, the banks here have always competed actively. But that competition was taking place in a buoyant market, whereas business is currently much harder to find. A few simple statistics illustrate the point: in the six years from 1992 to 1997, domestic lending by the locally incorporated banks grew at an average rate of 21% per annum, and pre-tax profits rose at an annual rate of 15% during the same period. In contrast, the equivalent annual figures for the three years to mid-2000 were 1¼% and 4½% respectively. It is true that bank profits staged a sharp recovery in the first half of this year. But growth in bank lending has remained sluggish.
The aim, as I have said, is to enable the bank’s critical economic functions to continue, without taxpayer support, while it is being resolved. A great deal has been achieved. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  We now have agreed international standards covering the design of resolution regimes, the amount of ‘bail-inable’ resources banks must hold, and agreement with industry participants to ‘stay’ termination rights by counterparties in derivative and repo transactions if resolution is in train. Alongside this we also have international guidance on how to ensure continuity of access to FMIs as well as on the mechanics of executing a bail-in. The UK now has in place a comprehensive and effective bank resolution regime that implements the EU’s Bank Recovery and Resolution Directive (BRRD) and the international standards. The Bank of England has been established as the UK’s resolution authority with a wide range of powers to ‘bail in’ shareholders and creditors of failed banks. The biggest UK banks have begun to issue bail-inable debt at scale and are well on their way to meeting the target for loss absorbing resources in resolution. 7  Key policies and guidance to firms have been issued, notably on operational continuity and on the internal distribution of loss absorbing resources. Last October the Bank, with the publication of the Purple Book, the Bank set out in detail its approach to resolution and how it would tackle a failing bank.

It includes a number of important recommendations to ensure that we are best equipped to take forward the next stage of the work, including how the Bank as resolution authority can gain the greatest leverage possible by using the supervisory machinery of the PRA to ensure firms prepare for resolution while respecting statutory obligations requiring structural separation of supervision and resolution functions. 11  Conclusion  This transparency and public assurance should help in one other key respect. Effective resolution of a globally systemic bank will require cooperation and coordination between a range of authorities in a number of jurisdictions. These need to have confidence that an effective resolution - and one that treats all jurisdictions fairly - can be carried out by the home resolution authority. Absent that, they may need to take action that would frustrate a successful resolution for the bank as a whole. 10  Two further major pieces of the framework will be published shorty – our statement of policy setting out the requirements for internal MREL, and our final policy on valuations. 11 BRRD (DIRECTIVE 2014/59/EU) – Article 3 – states that there should be “Adequate structural arrangements … in place to ensure operational independence and avoid conflicts of interest” between the supervisors of firms and the resolution authority of firms when the two functions are carried out by same public authority.
This is another manifestation of interdependence between fiscal and monetary policies: the more successful the central bank is in terms of securing sustainable price stability, the larger is the room for manoeuvre used by the Government to build up budget deficit and government debt to pursue a countercyclical policy. Actually, there is no choice whether the government debt is good or bad. Any medicine can be fatal, or at least toxic, if overdosed. The same is true of the government debt: it can easily turn out from a basis for the financial system development to its grave digger. This is one of the reasons which cannot help being taken into account in shaping fiscal policy. While assessing the size of potential development of the Russian debt market, one cannot help taking into account several material risk factors. The first one is various off-balancesheet budget liabilities, explicit and implicit ones. The case of Vnesheconombank shows that they may be rather significant. Therefore, balancing federal budget alone without accounting for debt accumulation by the regions is insufficient. Such factor as population aging and the need to finance the growing costs of pension provision in the next five to ten years cannot be ruled out either. The second factor is high uncertainty in the global commodity markets, first of all, the oil market. This is another argument in favour of using conservative scenarios. Finally, there is uncertainty with regard to the duration of the period of low oil prices.

To take it one step further, we are prepared to take a liberal view if an overseas bank wishes to engage in both retail banking through a subsidiary and, in parallel, corporate or private banking that would more appropriately be conducted through a branch. We have had several precedent cases and the HKMA is prepared to consider applications on the basis of the merit of the case. 18. While we maintain an open mind on the use of branches by overseas banks, we have to take steps to mitigate the potential risks arising from cross border contagion. This is particularly important given that Hong Kong is a net provider of funds, i.e. our banks collect a lot more customer deposits than they lend out locally. Hong Kong therefore has to closely monitor intra-group or inter-bank funding that flows from Hong Kong to overseas centres. We have seen in the Global Financial Crisis very clearly how wholesale funding through this kind of cross border intra-group or inter-bank channels may be susceptible to significant shocks in times of market stress. The problem could be exacerbated if the host supervisors, in selfdefence, sought to ring-fence domestic liquidity by blocking the flow of funds at the most difficult time. So the HKMA has been in discussion with banks in Hong Kong on how best they could achieve a better match between liabilities derived from Hong Kong and assets booked in Hong Kong.
Amid the changes in the financial landscape, there have been equally significant developments in the auditing standards both globally and locally. The standards and regulations are becoming increasingly tighter and more stringent. The Institute of Internal Auditors (IIA) for example, has proposed several changes to the Internal Audit Standards, which are expected to take effect in January 2017. The changes to the Standards are aimed at reinforcing the fundamental principles of internal auditing practices, promoting a broad range of value-added internal auditing and fostering improved organisational processes and operations. The direction of changes in the financial reporting standards also places more accountability on the Audit Committees to provide strong oversight on the organisation’s financial reporting and internal controls. The new Companies Bill 2015 (the Bill) was passed by the Dewan Rakyat and is anticipated to come into force by end-2016. The new law is expected to bring major reforms to our corporate landscape and will place greater pressures on the audit function to understand the emerging regulatory requirements and their impact on business operations. In the wake of uncertainties due to the global developments, the change in regulatory standards and technological advancement require businesses and regulators to think beyond conventional norms in order to navigate through these unchartered waters. Turning to the theme today, the importance of an independent and effective internal audit function as a core line of defense with a strong Audit Committee in business cannot be overemphasized.

However, once the economy has significantly improved, both fiscal and monetary policy will need to be much less accommodative. Getting this balance right will be one of the main policy challenges over the next several years. I am confident that the Fed’s Federal Open Market Committee (FOMC) will meet the challenge. Finally, I’d like to note that even with some early signs of economic improvement, a number of risks remain. As I have highlighted today, the housing market remains fragile and is not likely to contribute to economic recovery in its traditional way – and this is part of why I do not expect growth to exceed 4 percent in 2011. Furthermore, in many areas of the country the impaired balance sheets of borrowers, high foreclosures, and high vacancy rates imply a long time before local housing markets normalize. State and local governments remain significantly challenged by the aftershocks of the financial crisis and recession. And many state and local governments continue to have both short-run and long-run fiscal challenges. Finally, the large fiscal deficits of many governments accrued during the recession will need to be addressed. And as Figure 17 shows, financial markets are concerned that many countries will be forced to make very painful fiscal choices – in economies with already significant challenges – or risk default. Yet while risks like these remain, the economy is in a much better place than it was one or two years ago.
Work done by my Federal Reserve colleagues, Thomas Laubach and John Williams, suggests that the so-called neutral real  BIS central bankers’ speeches  5  federal funds rate today may be close to zero. 4 This presumably reflects still-persistent headwinds from the financial crisis, such as the constraints on mortgage credit availability to prospective borrowers with lower FICO scores. Second, one might expect that it will still take additional time for these headwinds to fully subside. This implies that the neutral short-term rate may be depressed for some time. Third, my assessment is that the long-run equilibrium real federal funds rate is lower now than in the past, reflecting the likelihood that potential real GDP growth is lower due to slower growth of the labor force and more moderate productivity growth performance. Another important factor that will affect the trajectory of short-term rates is how financial market conditions respond to a rise in short-term rates. Monetary policy works on the economy through how it affects financial market conditions. Economic conditions at any point in time warrant a particular set of financial market conditions so the FOMC can best achieve its objectives of maximum employment and price stability. The FOMC chooses a policy stance to help support financial market conditions that will lead to economic outcomes consistent with its objectives. An important aspect of current financial market conditions is the very low bond term premia around the globe.

When the normalization process starts and we raise the target range for the federal funds rate, what should we anticipate? I anticipate a smooth lift-off in terms of the ability of the FOMC to push the federal funds rate up into a higher range. Less clear is what the financial market reaction will be. Will it be more like the turbulent taper tantrum of 2013 in response to Chairman Bernanke’s remarks that we might at some point begin to taper our asset purchases, or the benign response when the FOMC actually tapered in 2014? Let me consider these two issues in turn. I am very confident that the Federal Reserve has the tools in place to ensure that the FOMC can successfully raise the federal funds rate into a new, higher target range when the time comes to do so. This reflects several factors. Most importantly, we have demonstrated that the interest rate paid on banks’ reserve balances (IOER) – which is our primary tool to raise the federal funds rate target – and daily overnight reverse repo (ON RRP) operations – which is a supplementary tool to help put a floor under money market rates – have been effective in keeping the federal funds rate well within the FOMC’s desired target range.
Page 16 of 27  Figure 5 Participation rate by gender (*)  Employment by gender (*)  (percent)  (index February 2020=100) Women  60  Men (right axis)  80  105  Women  Men  100 55  75 95  50  70  90  85  45  65 80  40 Mar-10  60 Mar-12  Mar-14  Mar-16  Mar-18  Mar-20  75 Jan-19  Jul-19  Jan-20  Jul-20  Jan-21  Jan-21  Apr-21  (*) Source: National Statistics Institute (INE). Figure 6 IMACEC by sectors (*) (seasonally-adjusted series, index February 2020 = 100) Mining  Manufacturing  Other goods  Trade  Services  120  110  100  90  80  70 Jan-19  Apr-19  Jul-19  Oct-19  Jan-20  Apr-20  (*) Source: Central Bank of Chile. Page 17 of 27  Jul-20  Oct-20  Figure 7 Perception and uncertainty – EPU (*) (index) Chile  United States  United Kingdom  500  400  300  200  100  0 Jan-18  Jul-18  Jan-19  Jul-19  Jan-20  Jul-20  Jan-21  (*) Moving 30-day average. Data up to 4 June 2021. Sources: Becerra and Sagner (2020) and www.policyuncertainty.com.

All of this has important implications both from a historical perspective and for the future evolution of the labor market and the women’s place in it. For example, the female participation rate has fallen back ten years in terms of the progress women had attained in the labor market. It is possible that this historical setback and the burden of household work may largely explain women’s perceptions of the economic situation, which surveys have shown to be more negative than men’s: in May of this year, 73 percent of women had a perception of a stagnant or deteriorated economy, compared to 68 percent of men.3 Finally, the impact of the crisis on the insertion of women in the labor market may have significant implications not only for the evolution of social variables, but also for the economic recovery process itself. From a social standpoint, three elements stand out:   First, the high proportion of extremely poor households headed by women—52 percent of all households in extreme poverty, according to the 2017 CASEN Survey—means that a deterioration in the economic situation of the latter could have a major impact on the country’s poverty and inequality.
The deliberative model has not been tried and tested in anger for the full gamut of societal decisions. As put, that is true. Yet there is at least one domain of public policy where this model has been tried and tested (both literally and metaphorically) for a wide range of societal decisions over many centuries: the judicial system. Many judicial systems draw on both expert (judges) and non-expert (juries) opinion, like the Athenians. Non-experts are drawn randomly from the population, as in Athens. There is a clear process for deliberation among participants, as in the boule. This system is the nerve-centre of decision-making on a defined set of issues, as in Ancient Greece. The English judicial system has already lasted for almost 1,000 years, more than twice as long as the Greek Empire. The Next Revolution  Against this backdrop, what concrete steps might central banks take to build an improved infrastructure for engagement with the general public? Can it build on others’ experience in engaging wider society, in ways which improve the public’s and policymakers’ understanding of the economy? Let me offer some suggestions, which are motivated by recent initiatives at the Bank of England aimed at doing just that. 19  All speeches are available online at www.bankofengland.co.uk/speeches  19  (a)  Minding Your Language  Historically, the language of central banks has often been pitched at a level which has made it difficult for most non-experts to understand. This has contributed to the public’s understanding and trust deficits.

However, a basic understanding of the concept of Islamic banking should provide a basis for determining an appropriate regulatory framework for Islamic banking. Of particular importance to Zambia is an arrangement where borrowers can borrow without paying interest. Lending rates are very high in this country, thus making borrowing for capital investments prohibitive. This is one issue we have been grappling with for a long time. Therefore, an arrangement where borrowers can access funds for investments without paying interest, offered by Islamic Banking is worth exploring. Mr. Chairman, over the past two years, we have noted with delight that financial institutions in Zambia are beginning to rise to the challenge by broadening the scope of their financial services beyond the traditional customers to include previously unbanked segments of society. Ladies and gentlemen, the need to foster an enabling environment cannot be overemphasized. In this regard, the Bank of Zambia will continue to ensure stable macroeconomic policies and development of appropriate financial sector regulations that will facilitate financial inclusion. Ladies and Gentlemen, the introduction of Islamic banking would come with its own challenges. For us at Bank of Zambia, this entails further strengthening of our supervisory capacity. We would welcome this challenge and hope to rise to the occasion by providing adequate supervisory infrastructure and an environment for conducting good business.
However, in our country this is clearly contained, thanks to the soundness of our economy, with strong macroeconomic fundamentals, and capable of implementing and sustaining policies that mitigate the impact from abroad. Our financial system, unlike that of other countries, has suffered no dislocations compromising its solvency. Inflation has rapidly been reduced, and medium-term expectations are consistent with the target. The Board has reduced the MPR aggressively and does not rule out that further cuts may be necessary. Accordingly, it reaffirms its commitment to conduct monetary policy so that projected inflation stands at 3 percent over the policy horizon. The worst part of the financial turbulence seems to be fading into the past, but its effects on output and employment will remain with us for a while. Monetary policy will continue to aim at reducing these effects. It has proven to have significant degrees of flexibility, always consistent with reaching the inflation target. While in quiet times a gradualist behavior of monetary policy can be expected, when confronted to extreme conditions like we see today, proactive action is called for, and that is what we have been doing. We know this world crisis cannot last forever, and we are confident in the healthy fundamentals of our economy and in the expansionary capacity of the unprecedented and significant macroeconomic stimulus packages that are now under way. 6  BIS Review 65/2009  Thank you very much.

Figure 1 Countries experiencing drops in real GDP in the fourth quarter of 2008 (*) (percentage of sample) 100  100  90  90  80  80  70  70  60  60  50  50  40  40  30  30  20  20  10  10  0  71  74  77  80  83  86  89  92  95  98  01  04  0  07  (*) Using the annualized quarterly GDP for a sample of 29 developed or emerging economies. Source: Central Bank of Chile. Figure 2 Monetary Policy Rate (MPR)  Change in MPR  MPR level  (basis points)  (percent)  Japan U.S. Canada Switzerland Israel Hong Kong U.K. Sweden Eurozone Chile Czech Rep. Norway South Korea Malaysia N. Zealand Australia Poland Peru Philippines India China Colombia Mexico Indonesia South Africa Hungary Turkey Brazil Argentina Russia Iceland  Chile Turkey N. Zealand U.K. India Norway Colombia Australia Sweden Israel South Africa South Korea Eurozone Hong Kong Brazil Canada Switzerland Iceland Poland Mexico Peru China Czech Rep. Indonesia U.S. Philippines Malaysia Japan Hungary Russia Argentina -800  -600  -400  -200  From 4 Sep. 2008 to 8 May 2009  0  200  0  2  4  6  8  10  12  14  At 8 May 2009  Source: Bloomberg.