samchain/econo-pairs-v1 huggingface dataset:
Yet, in shaping strategies to capture these opportunities, there is also a realization that the business environment has become significantly more challenging after the global financial crisis. 8. The quantitative easing by the G3 economies is causing wide swings in exchange rates, asset and commodity prices which have heightened the need for hedging and risk management. The ultra-low yields of their treasuries (for example, yields of government bonds of Germany and France of maturity less than 6 years and 4 years respectively are in the negative zone) in turn has made cash management and portfolio investment difficult. The  BIS central bankers’ speeches  1  alternative of searching for yields in emerging markets has resulted in more risks to manage. The interbank market as a source of liquidity also can no longer be taken for granted. 9. Compounding the challenge of treasury management is the regulatory landscape after the global financial crisis. The capability of banks in providing funding and making market for hedging tools has become more constraint due to deleveraging and implementation of the global regulatory reform, in particular the Basle III requirements on capital and liquidity. The increased market volatility has also made the raising of funds in the capital markets more challenging. 10.

In 2012, that figure rose to 22%. By 2017, Western firms expect Asia to contribute 32%. However, this will still be below Asia’s estimated 35% share of the global economy in 2017.” 5. The use of RMB is now catching up with China’s rising economic clout. Starting from scratch in 2009, the portion of China’s trade settled in the RMB quickly surged to 20% in 2014, amounting to 6.6 trillian yuan, equivalent to more than $ trillion. And, in the same year, over 30% and 16% of China’s inward and outward direct investment respectively were denominated in the RMB. Increasingly, MNCs will find it advantageous and necessary to trade with their Asian counterparts, and to conduct the related financing, investment and hedging activities in the RMB. 6. In parallel, riding on her rapid economic growth in the past decades, Mainland China now has a growing cluster of home grown MNCs in a wide range of sectors. Chinese companies now account for 95 of the Fortune 500 companies. These MNCs are now flexing their muscles in the international arena, typically starting with trade and eventually venturing into mergers and acquisitions and global portfolio investment. We can safely assume that they will take even bolder steps with the supportive policies under the “One Belt, One Road” strategy, bringing new business and business partners for other global MNCs. 7. These favourable macro trends are indeed good news to the corporate treasurers.
We started off this year with heightened volatility in the global financial markets, mainly due to concerns over the China’s economic slowdown, declining oil and commodity prices and monetary policy divergence among major central banks. Lately, the global volatility has subsided as the Chinese government has shown a strong commitment to limiting the possibility of hard landing with additional fiscal and credit stimulus while restructuring the economy. Commodity prices have also begun to edge higher. Financial market participants expect monetary policy in major countries to remain highly accommodative, despite an increased possibility of another rate hike by the US Federal Reserve in the next few months. While relative calm has returned to the global financial markets, I must stress that the global financial environment remains fragile. Development on China’s economic restructuring and concerns over its corporate debt, the possibility of Brexit, and major central banks’ policy divergence are among the most significant factors that can trigger new bouts of volatility. Investors’ sensitivity to unexpected news and events could also amplify the volatility. Amid the fragile global financial climate, the Thai financial markets have been relatively resilient compared to those of other emerging markets, thanks to Thailand’s strong external position. Current account position last year registered a surplus of 9 percent of GDP, and is projected to remain at that level in 2016. Our international reserves have been at a healthy level, standing at around three times of the short-term external debt and 1.3 times of the total external debt.

Given Malta’s dependence on foreign trade and investment, the Bank’s commitment to price stability and its positive track record with a fixed peg, a narrow band, and the lesser degree of uncertainty and volatility associated with it, would be preferable. I should add that as real convergence is progressively achieved and as structural reforms are implemented, a narrow band should become even more feasible. A smooth transition to EMU indeed requires more than satisfying the exchange rate criterion and the other four Maastricht criteria. To be able to implement the ECB’s monetary policy without difficulties, new euro area members should also achieve a minimum degree of real convergence. The ECB will, in fact, give its opinion on the level of real convergence achieved by each country before it is allowed to enter EMU. In reflecting on the future evolution of exchange rate policy in Malta, the Central Bank will thus also continue to monitor developments in the rest of the economy, particularly in so far as they affect the sustainability of the Maastricht criteria. Implications of the single currency for the composition of the external reserves From the date of EU accession until the end of the ERM II phase, Malta would qualify as “a Member State with a derogation”, the lira would remain the national currency and monetary policy would continue to be set by the Central Bank.
•  After the change in our legislation in 2016, which established the finality of payment irrevocability on a legal level, we felt it was timely to resume previous conversations with CLS. Our legislation now should fully meet all the high standards and requirements for the Peso to operate in CLS. •  After demonstrating our interest to CLS, I met personally with the Vice-Governor of the Federal Reserve Board to express our interest. The Federal Reserve Board and the New York Fed are respectively in charge of the regulation and supervision of CLS, hence the importance of their opinion about the benefits and performance of the system. Besides, the Fed presides the oversight committee along with 23 central banks representing the 18 currencies that settle in CLS. Then, it was important for us to show our commitment with the process in order to be part of this committee once the Peso is incorporated. •  We subsequently moved on to the due diligence stage last July 2019, when together with CLS we held the first workshop at the CBC for the private sector. III. Benefits of the CLS for Chile  •  Since the beginning of the process, the CBC has publicly stated on several occasions the benefits of CLS and its intention to incorporate the Peso to the system. •  CLS mitigates the settlement risk, through a multicurrency Payment versus Payment (PvP) system with legal certainty, meaning the payments are final and irrevocable.

While the jury is still out on what institutional arrangements for delivering simultaneously monetary and financial stability are appropriate, there is doubt as to whether institutional changes, politically attractive as they may be, are the right answer. Today Andrew will give us his insights on the subject. He is particularly qualified to do so, being responsible for the running of the central bank of central banks. Some of you may feel that this subject matter is a little arid. I am aware of the fact that those in the private sector have, particularly at this time of the year, more practical and "profitable" issues occupying their minds. But the achievement of monetary and financial stability is central to any successful economy and therefore important to the general conduct of business. It is also a burning issue in this region, where the experiences over the last few years have underlined its importance, and the consequences of failure. Knowing Andrew, who has an admirable ability to present technically complex issues of money and finance in the simplest of terms, I am sure you will find the subject refreshingly interesting. Andrew Crockett has been General Manager of the Bank for International Settlements since 1994. To pursue the classroom metaphor that I used at the last lecture to describe how central bankers get on with each other when they come together at meetings, Andrew’s job is to be the "class prefect" or "captain", who maintains order and prevents us from banging our heads too hardly at each other.
Developing as an invoicing currency, for instance in energy markets or in the context of free trade agreements, would be important steps to gain a global role.viii Indeed, it would create the need to store euros for future trades, and consequently lead to the development of a full range of euro-based financial tools. 3. Safeguarding cross-border payments by technological advances in international financial infrastructures The euro area should remain on the frontier for cross-border payments, including the G20 agenda adopted in October 2021. The G20 roadmap for 2027 has indeed committed to bring profound improvements in this area including in setting ambitious targets on costs, speed, and accessibility of cross-border payments. But the challenge for all the stakeholders, central banks, regulators as well as the private sector, is to deliver and ultimately meet the expectations  Page 7 sur 7 of end-users. This remains a strategic priority for the Banque de France, which in parallel has paved the way for a more prospective solution: namely a wholesale CBDC that could be issued by the Eurosystem, deploying experiments such as the Jura project of cross border wholesale payments in coordination with the BIS and the Swiss National Bank. ** In the 1960s, US Secretary of Treasury Henry Fowler warned that "Providing reserves and exchanges for the whole world is too much for one country and one currency to bear." ix To Fowler, we answer: “We in the euro area are happy to help.” I thank you for your attention and I wish you a good forum.

My expectation is that once the price reversals and short-run imbalances from the economy reopening have played out, inflation will come back down to about 2 percent next year. Although the U.S. economy is on a very favorable trajectory overall, we must remember that our economy does not exist in a vacuum. The speed of the recovery will also depend on the global picture. We are seeing a slower rollout of immunizations, emerging strains of the virus, and a more subdued rebound in other parts of the world. This international context is another reason why a complete U.S. recovery will take time to achieve. 2/3  BIS central bankers' speeches  The Fed’s Policy Response Given all of this information, it’s clear there is a big shift in the economy, and the outlook has improved. But let me emphasize that the data and conditions we are seeing now are not nearly enough for the FOMC to shift its monetary policy stance. For these reasons, the FOMC decided last week to keep strong monetary policy support for the economy in place. Specifically, the FOMC maintained the target range for the federal funds rate at zero to ¼ percent and made no changes to its program of asset purchases. In thinking about adjusting its stance in the future, the FOMC has defined conditions and measures that will inform its decision-making.
But the economic outcomes have been dramatically worse. A key difference here is that property price rises – unlike big rises in equity prices – are invariably accompanied by big increases in debt. So when property prices fall they are more likely to create solvency problems – and funding problems associated with heightened solvency risks – than when equity prices fall. My colleague Adam Posen recently presented evidence that big falls in equity prices in themselves generally do much less damage than big falls in house prices. He found that the average output loss after real estate booms cumulates to over 5% of GDP over five years, and in 75% of cases at least 2% of output is lost. For equity price booms and busts, there is no output loss on average over five years, and following them only 25% of economies experience a loss of more than 4% (Posen 2009). What has happened to the hedge fund sector during this crisis is also illuminating. In Q4 2007, total assets held by hedge funds were around $ and aggregate equity capital (or what the industry refers to as assets under management, AUM) was around $ This implies that the hedge fund sector had an average leverage of around 2.8, compared to typical banking sector leverage ratios at that time of 30 or more.

The difficulty today is one that monetary policy must address – this is to balance the risks of removing the stimulus from the expansionary monetary policy too soon, starving a recovery while it is still immature, against the risk of allowing inflation and inflation expectations to become stuck at above the target level. Balancing those risks in the UK is not easy. That is the issue the Monetary Policy Committee at the Bank of England faces today and the one I now want to explore. The immediate monetary policy problem The financial crisis dealt a huge blow to the financial infrastructure in most of the developed world. In the UK, and here in Ireland, the financial system came close to total breakdown. It was not so much that virtually no-one thought this sort of thing would happen. It was worse than that; virtually no-one thought this sort of thing could happen. But it did happen. As a result the supply of credit to businesses and to households was – and continues to be – seriously affected. The confidence of businesses and households has been severely dented. Fiscal deficits have exploded; private sector investment has imploded. Whatever the aftermath of this event is – and we will not know that for many years – I very much doubt it will be a normal cyclical recovery after a downturn.
Microprudential policy, which addresses risks in individual banks, interacts with macroprudential policy, which aims to address risks in the whole system. In both micro- and macroprudential policy, the national and European levels must work in tandem. And in the banking union, they do. While it is the national authorities that take decisions in the first place, it is the ECB that assesses these decisions. And if it sees a need to take stronger measures, it can do so; it can “top up”, as we say. For this to happen, the ECB’s Governing Council would act on a proposal from the Supervisory Board. So, the Supervisory Board is again strongly involved. In addition, the Supervisory Board and the Governing Council meet regularly to discuss macroprudential issues. Again, everything is done to avoid a situation where a Member State disagrees with a decision taken by the Governing Council. Now, in order to work together, we must apply common standards and approaches. As I have already said, I see such harmonisation as a major benefit of the banking union. It helps to level 5/7  BIS central bankers' speeches  the playing field, and it ensures strong and consistent supervision. But I know that some see this from a different angle. They feel that harmonisation is more of a threat than a benefit. They fear that it will lead to a uniform banking sector, which leaves no room for diversity – either for banks, or in terms of supervision and regulation.

And in my view, it takes us further than purely national supervision. But I would like to clarify one thing that is often misunderstood. The best supervisors in the world cannot guarantee the success of each and every bank. Banks compete in a market. Some will do well and thrive; others will do less well and fail. They will make way for better business models, for stronger banks. What I want to say is this: sometimes banks just have to fail. And when that happens, the European resolution mechanism kicks in, the second pillar of the banking union. It ensures that banks can fail in an orderly manner. And here too, the European approach has many benefits. Let me mention just two of them. First, over time, the European resolution mechanism will gain much more experience than national mechanisms. Why is that? Well, for the simple reason that it covers a much larger pool of banks and so, statistically speaking, will have to deal with a larger number of banks exiting the market. Second, there is the Single Resolution Fund, which can step in under certain conditions to carry some of the costs of bank failures in order to support financial stability. Since it is a European fund, it has much more firepower than any national fund. And that firepower would be even greater if a common backstop for the Single Resolution Fund were to be set up. In my view, that should be done as soon as possible.
Cumulatively, these factors can undermine consumer confidence and trust in the industry, with important implications for business growth and persistency. Globally, financial institutions need to get serious about addressing the trust deficit in the financial industry. The hallmark of an industry that engenders trust often goes back to the basics of serving its core purpose, and doing it well. This begins with product innovations that should be aimed at increasing the level of public engagement and interest. The industry must abandon the mindset that “insurance is sold not bought”, and design products that people actually need and want to buy. Such products must also be able to afford protection to the underserved segments of society through affordable and simple product solutions. Such products will be easier to sell, lowering distribution costs and contributing to even lower prices in a virtuous circle that delivers benefits to all parties. The industry also needs to explore new cost-efficient delivery channels. The industry has not done well in this respect. As a catalyst, beginning next year, insurers will be required to offer pure protection products through a direct channel without commissions. The high internet and mobile phone penetration in Malaysia suggests that internet or mobile insurance makes good sense. Other untapped channels include banking agents, retail chains, employers and cooperatives. We expect the industry to fully adopt these channels to diversify delivery of services.

New products and delivery channels that enhance outreach ultimately contribute towards expansion of a larger industry, and pool of customers for all participants in the insurance sector as a whole. In other words, it is not a zero sum game. Everybody will gain. Insurance agents and financial advisers will continue to provide a valuable service as households and businesses move up the income ladder and require more personalised advice on product options. It is important that this evolution is accompanied by a strong focus on raising standards of professional competence. Increasing the proportion of full time agents from the current 40% in the life sector and 30% in the general sector will be a vital component of this agenda. Equally important is ensuring that remuneration structures are aligned with the  BIS central bankers’ speeches  3  interests of consumers. The implementation of the balanced scorecard is an important step in this direction and should not be further delayed or diluted. There is no question that the potential for growth in the insurance and takaful industry is significant, with estimates placing the life and medical insurance protection gap alone in Malaysia at between RM550,000 and RM723,000 per household. Closing this protection gap is ultimately the moral responsibility of the industry. Microinsurance and microtakaful should be further developed to improve access to the underserved segment of society.
Their need to deleverage and reduce borrowing means that if another abrupt adjustment is to be avoided, they cannot risk taking too long to rebalance their economies. In contrast, many of the emerging economies continue to require rapid economic growth and abundant employment opportunities in their export industries to ensure adequate levels of employment for their vast populations. As a result, policymakers in countries like China quite simply see limits to the extent and speed at which they should expand the share of domestic demand in their economies. They do not want to rebalance their economies too quickly. Of course, ex post there must be consistency between these two strategies as demand in the world as a whole must “add up”. The current pattern of demand in the world economy is unsustainable. The political tension generated by the divergent preferences of surplus and deficit countries risks moves towards protectionism, as happened in the 1930s. So there must be scope, in the short term, for a “grand bargain” to adopt a set of policies that would support an agreed path of rebalancing and avert a move towards protectionism. Such a “grand bargain” should be the central objective of the G20’s Framework for Strong, Sustainable and Balanced Growth. It would require a shared analysis, seemingly absent at present, of the relative importance of the “good” and “bad” aspects of the imbalances.

And his British counterpart, John Maynard Keynes, proposed an International Clearing Union with penalties on large surpluses or deficits (his suggestion of a new currency, the bancor, was included primarily because at the time national currencies were not convertible). His aim was to ensure symmetric obligations. As he wrote in 1941, “[T]he social strain of an adjustment downwards is much greater than that of an adjustment upwards. And besides this, the process of adjustment is compulsory for the debtor and voluntary for the creditor. If the creditor does not choose to make, or allow, his share of the adjustment, he suffers no inconvenience. For  BIS central bankers’ speeches  3  whilst a country’s reserve cannot fall below zero, there is no ceiling which sets an upper limit. The same is true if international loans are to be the means of adjustment. The debtor must borrow; the creditor is under no such compulsion”. And ever since then, the absence of an effective symmetric framework of obligations on both debtor and creditor countries has led to periodic crises. The obstacle to the creation of a binding framework is clear. Governments know whether they are debtors or creditors today. So a framework that has economic and indeed moral force when seen from behind the “veil of ignorance”, as suggested by John Rawls, is unlikely to appeal to governments.