samchain/econo-pairs-v1 huggingface dataset:
We can work together to forge a more integrated Asia in the areas of trade, investment and finance and thus, strengthen the potential of Asia. My remarks this afternoon will focus on three areas; the increasing regional economic and financial integration in Asia, the implications on the evolving bilateral relationship between Korea and Malaysia and on Malaysia’s strategies for reforms to better position our economy to rise to the new challenges of the global economy. The emergence of the new Asia In these 50 years, Asia has undergone several phases of economic transformation. While individual countries have embarked on their own strategies and achieved tremendous individual success, today, however, as the world becomes more interdependent, the development of Asia has reached a new phase in which greater economic and financial integration will contribute to unlocking our potential in the global economy. Over the years, trade and investment barriers within the Asian region have been progressively removed and capital mobility has been on the increase. Ties within Asia have strengthened on several fronts, from trade to investment and financial linkages, as policymakers recognise the importance of the region as a mutually reinforcing economic entity. As a group, Asia has now emerged as a global economic powerhouse with the share of GDP to world GDP amounting to 13.4% in 2009, about twice that in 1980. Going forward, the IMF projects that developing Asia will grow by 8.2% in the next five years, higher than the rate recorded in the period of 2000–2009.

Lars Nyberg: The repo rate - Spring 2002 Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, to the Swedish taxpayers’ association in Malmö and Kristianstad, 22 April 2002. *  *  *  I should like to begin by thanking you for the invitation to this discussion and the opportunity to develop some ideas on the Swedish economy as it looks in spring 2002. I shall start with the Riksbank's most recent Executive Board meeting on 18 March, where we decided to raise the repo rate by 0.25 percentage points to 4.0 per cent. It may seem as though the interest rate hike did not come at the most appropriate point in time, as economic activity is still weak. Why did we raise the rate so quickly and before most other central banks had done so? Moreover, we, in common with most of the analysts in the market, expect the inflation rate to fall during the spring. Why did we raise the repo rate when inflation is on its way down? These are questions that I shall try to answer today. Some analysts also consider that the Riksbank has made a sudden U-turn in its assessment of inflation and so I thought I would explain a little about how our view has changed and why. However, it was not actually a major change and cannot really be regarded as a total U-turn. Why was the repo rate raised when inflation is on its way down?
I’d now like to remind you of some important events which, I feel, provide us with important lessons and guidance for dealing with the current crisis. The first of these was the collapse of the Bretton Woods system at the beginning of the 1970s. The key lesson from this event was the so-called Impossible Trinity, namely that it is impossible to have a fixed exchange rate, free capital flows and independent monetary policy all at the same time. Cracks started to appear in the Bretton Woods system in the 1960s as a result of globalisation of the financial system and enormous growth in cross-border capital flows. This process was accelerated by the expansive fiscal policy of the USA, which fostered monetary expansion, a loss of competitiveness of US producers and growth in the US trade deficit. As  BIS central bankers’ speeches  1  soon as the rising demand for dollars exchangeable for gold encountered the limited stock of US gold reserves, the credibility of the US dollar foundered. This loss of credibility undermined the very foundations on which the global monetary system was built. The fall of the Bretton Woods system teaches us that a fixed exchange rate requires a consistent macroeconomic framework and corresponding coordination of all aspects of monetary policy.

In the post war economy with closed capital and current accounts the banking system was tightly controlled by government. It was an instrument of macroeconomic management and of financial repression in order to repay the national debt. As the Chairman of Lloyds Bank at the time described it, “It was like driving a powerful car at twenty miles an hour. The banks were anaesthetised – it was a kind of dream life”. But, from the beginning of the 1970s, as the financial sector was increasingly liberalised and globalised, the old risks returned. It became apparent by 1979 that the Governor’s eyebrows needed to be bolstered with statutory regulation and supervision of banks. As capital accounts were increasingly opened up and cross border competition grew, the need for a more level playing field between internationally active banks became more apparent. Liberalisation led to a shift towards more explicit prudential standards starting with the 1975 Basel Concordat – the forerunner of today’s Basel standards. The focus was very much on promoting the safety and soundness of individual firms. Much less attention was given to the fact that the risks in the financial system are greater than the sum of the risks in its parts. Central banks were no strangers to such systemic risks. Indeed, they were recognised at the time – the forerunner of today’s Basel Committee identified them and even coined the term “macro-prudential” risks to distinguish and separate them from “micro-prudential” or firm specific risks that were the subject of the Basel Accords.
Duffie, Darrell and Arvind Krishnamurthy (2016) “Passthrough efficiency in the Fed’s new policy setting”, Jackson Hole Symposium, Federal Reserve Bank of Kansas City Flodén, Martin (2015), contribution at the monetary policy meeting in February 2015, in Sveriges Riksbank (2015), Minutes of the monetary policy meeting, February 2015 Flodén, Martin (2016), “The Riksbank’s bond purchases affect government finances”, speech, 9 November, Sveriges Riksbank Goodfriend, Marvin (2011), “Central banking in the credit turmoil: an assessment of Federal Reserve practice”, Journal of Monetary Economics 58, 1-12. Greenwood, Robin, Samuel Hanson and Jeremy Stein (2016), “The Federal Reserves balance sheet as a financial-stability tool”, Jackson Hole Symposium, Federal Reserve Bank of Kansas City Holston, Kathryn, Thomas Laubach and John Williams (2017), “Measuring the Natural Rate of Interest: International trends and determinants”, Journal of International Economics, 108, pp 59-75 af Jochnick, Kerstin (2015), “Does the Riksbank have to make a profit?”, speech, 23 January, Sveriges Riksbank Krishnamurthy, Arvind (2018), “The size of the Fed’s balance sheet”, in M. Bordo, J. Cochrane, and A. Seru: The Structural Foundations of Monetary Policy, Hoover Institution Nessén, Marianne, Sellin, Peter and Åsberg Sommar, Per, (2011), “The framework for the implementation of monetary policy, the Riksbank’s balance sheet and the financial crisis”, , Economic Commentary No. 1, Sveriges Riksbank.

When the Debt Office’s dealers make use of the repo facility and borrow bonds, it is done at an overnight interest rate that is 0.40 percentage points below the Riksbank’s repo rate. As the Riksbank’s holdings of government bonds have increased, the short-term market rates for government securities have therefore been pushed down towards –0.90 per cent, i.e. the repo rate minus the cost for the facility (see Figure 4). Via expectations, the low level of these short-term rates has then also pushed down yields on long-term government bonds. 12 In practice, there are hence two levels on the money market in Sweden, one around the repo rate and one around the cost for the National Debt Office's facility. My assessment is that an equally expansionary monetary policy could in principle have been achieved without quantitative easing but with a repo rate somewhere between these two interest rate levels. In recent years, setting a lower repo rate could have been problematic but in a future scenario with more normal interest rate levels, I see no need to try to affect short-term market rates with tools other than the repo rate. 5 [16]  And as regards the formation of expectations and the transmission from shortterm rates to rates on longer maturities, the Riksbank has a long tradition of using transparent communication to signal future monetary policy plans, for example by publishing forecasts of the repo rate’s development.
Some illustrations of this include the large shift in subprime mortgage originations to less regulated institutions;  BIS Review 27/2008  5  the incentives to shift risk to where accounting and capital treatment is more favorable; and the amount of risk built up in entities that operate in the grey areas of implied support from much larger affiliated institutions. We need to move to a simpler framework, with a more uniform set of rules applied evenly across entities involved in similar functions, and a more effective balance of regulation and market discipline. And institutions that are banks, or are built around banks, with special access to the safety net, need to be subject to a stronger form of consolidated supervision than our current framework provides. Capital The U.S. banking system entered this financial shock with capital cushions significantly above the regulatory thresholds, and in a stronger position to withstand a downturn than was the case in the past. This has made it possible for bank balance sheets to expand rapidly, which in turn has helped offset the effects of the withdrawal of many nonbank financial institutions from credit markets. Yet the shock absorbers in the financial system as a whole – the financial cushions that are critical to financial stability – have proved to be thinner, and behavior has been more procyclical than desirable. This is in part the consequence of changes in the structure of the financial system.

By allowing institutions to finance with the central bank assets they could no longer finance as easily in the market, we have reduced the need for them to take other actions, such as selling other assets into distressed markets, or withdrawing credit lines extended to other financial institutions, that would have amplified pressures in markets. These measures – the Term Auction Facility and swap arrangements – have had some success in mitigating market pressures, in part by providing a form of insurance against future stress. We now have in place a cooperative framework for liquidity provision among the major central banks. And we have considerable flexibility to adjust the dimensions of these liquidity tools. We will keep them in place as long as necessary, and continue to adapt them where we see a compelling case to do so. Encouraging financial repair The Federal Reserve is working closely with other financial supervisors and regulators to facilitate the adjustment underway in markets. This approach has two important elements. The first is to encourage improvements in the quality of valuation methods and disclosure by the major regulated financial institutions and the necessary adjustment in valuations and reserves to reflect the deterioration in expected losses. Better disclosure can reduce some uncertainty about the incidence and magnitude of potential losses across the financial system, although it is important to note that these estimates of losses are a function of the outlook for the economy and will necessarily change as expectations of the future change.
In response to the weak demand, the Albanian economy is growing below its potential, inflation is low, public and private balance sheets show difficulties, and the banking system has been facing upward non-performing loans. These problems have been detected at an early stage by the Bank of Albania and we have, therefore, taken relevant measures to tackle them. The monetary policy of the Bank of Albania has been constantly on the easing cycle. The key interest rate reached the record low 2.75% last Wednesday, from 5.25% in 2011. In line with the best practices of central banking, we have adopted a forward-looking communication strategy. I am convinced that not only the financial market, but also the real economy has received our message that the monetary policy is and will continue to be on the easing side in the quarters ahead. Moreover, we have intensified our liquidity injection operations, which have succeeded in meeting all the market liquidity needs, by extending the horizon for injection and facilitating access to liquidity by broadening the collateral base. Time has proven our monetary and operational policies successful. The Bank of Albania has managed to contain and control the downward inflation pressures. We are convinced that the steps we have taken will bring inflation back to our 3% target, in the medium term. We have managed to anchor the economic agents’ expectations on inflation. This has enhanced the effectiveness of the monetary policy and contributed to maintaining confidence in the national currency and the Albanian financial system.

Nevertheless, we are aware that within this reality, there is room for a more positive approach to consumption and investments, and more lending. Uncertainties and reluctance are the main problems standing in the way of the Albanian economy. The purpose of this forum is to identify, together, ways to overcome this situation. In this context, I would like to quote President Roosevelt: the only thing we have to fear is fear itself. 2. Decision-making on banking supervision and financial stability  Recently, non-performing loans have been mentioned frequently. I will take this opportunity to make the following necessary clarification: First, I would like to underline that we have identified this problem at an early stage and have been very scrupulous with the banking system to evidence every penny of a loan that is not being repaid duly. This is why non-performing loans increased rapidly in the first period, and have stayed at the current levels for a long time. In contrast to other countries in our region, we have persisted not to conceal the non-performing loans, but evidence them accurately and comply with our rules to make provisions for every loss penny. Second, we have adopted a rather conservative approach to non-performing loans classification. In our case, when we calculate the value of non-performing loans, we do not take into account the value of collateral, as is the practice in many countries. If we deducted this value from that of the non-performing loans, the NPLs’ value would be significantly down.
Source: Norges Bank SG 16. januar 2003  BIS Review 2/2003  7  Forward interest rates Norway, Germany and the US 7.0  7.0 6.0  6.0  Norway  5.0  5.0  4.0  4.0  Germany 3.0  3.0  US  2.0  2.0  1.0 1.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  Source: Norges Bank SG 16. januar 2003  Real exchange rate (TWI/relative CPI) 90  90  95  95  100  100 1970 - 2001  105  105  110  110  115  115 1971  1975  1979  1983  1987  1991  1995  1999  Source: Norges Bank SG 16. januar 2003  Purchasing power parity Norway and Germany. Relative prices and exchange rate  200  Consumer prices  100  200  100 Krone exchange rate  50  1970  50  1975  1980  1985  1990  1995  2000  Sources: Statistics Norway and Norges Bank SG 16. januar 2003  8  BIS Review 2/2003  Sweden's real exchange rate and relative GDP compared with the euro area. Quarterly figures.

However it is without doubt also a result of activities like this, which introduce or staff to the relevant work that is done in academia and other central banks. Whether you are from Academia or central banks, we are grateful for your continued interest and thankful for your participation. We hope that you and your colleagues will continue to join our workshop in the future, hopefully, in a COVID free world. Hence, we can go back to our traditional ways of the past, and give you the opportunity to present your works at Bank of Albania, engage with our research and introduce yourself to our beautiful Tirana, Albanian culture and the delicious taste of Albanian cuisine. Wish you the best and the most productive event! 3/3  BIS central bankers' speeches
The regional cooperation agreement to be  2  BIS central bankers’ speeches  signed at the ShamGen Banking Conference will complement these agreements and enhance their effectiveness. The Turkish Banking Sector, which was restructured following the 2001 economic crisis, managed to overcome the global crisis with no apparent damage and verified its outstanding resilience. Turkish banks are also interested in venture opportunities in the Middle East and will contribute substantially to the betterment of the banking systems of the region countries. Moreover, I am of the opinion that also the participation banks in Turkey operating through the interest-free system will not only contribute to but also benefit from cooperation among these countries. Intended as a long-term formation, the common market calls for not only political and economic, but also cultural cooperation. The fact that it is easier to establish commercial and economic cooperation between closer cultures is supported by both history and academic studies. Therefore I believe, it is significant that this conference is organized in İstanbul, a city that has hosted a great diversity of cultures in the past, as well as being the European capital of culture in 2010. At the end of this conference, a city tour will be organized for our guests who would like to get to know İstanbul better. I hope that you all enjoy this beautiful city. BIS central bankers’ speeches  3

While impact analyses reveal that the reform would increase capital requirements in some jurisdictions, they also show that certain facets of the reform would lower them. Specifically, some of these latter facets have already been implemented via the European quick fix I mentioned earlier.14 The objectives of this second phase of the Basel III reform, which consist of balancing simplicity, comparability and risk sensitivity, remain wholly in place. Thus, after deciding to defer implementation by one year so as to increase banks’ operational capacity, all members of the Basel Committee on Banking Supervision (BCBS) have committed to its full and consistent implementation on the new date agreed. The economy and financial system will thus have sufficient time to absorb the main effects of this crisis and to progressively rebuild their buffers, if they were used. Domestically, the coordinated supervision of the risks to financial stability has been strengthened in recent years through the creation of the Spanish macroprudential authority 14  For example, in relation to the digitalisation of the banking sector, this reform exempts from deduction from CET1 investment in software development, databases and database management; the related amortisation, however, must still be deducted. This is because such investment is considered a basic input for banks to pursue their activities amid the economy’s and society’s growing digitalisation, and for banks to be able to better compete with BigTech firms, which are software asset-intensive.
The Asian financial crisis of the 1990’s has been described by some as being the most severe in its depth and regional coverage. Looking back, I think three important lessons clearly stand out. The first is the risk associated with liberalizing capital flows without adequate safeguards and proper policy framework. Important in this context is the need for greater policy and economic flexibilities to help manage the effects on macroeconomic stability from persistent capital inflows and possible subsequent reversals. Also important is the need to have in place a credible crisis prevention mechanism that will allow timely liquidity support to be mobilized. As for the financial sector, the lesson learned is that a resilient and robust financial sector is key to avoiding crisis. The foundations for a resilient and robust financial sector are in the strong framework for prudential regulation and supervision, greater transparency and good governance, as well as a balanced financial sector. This last point applies particularly to well developed capital markets that can allow financial risks in the economy to be spread out, shared, and more efficiently managed. And the third lesson is the need to have in place an effective mechanism of economic and financial surveillance to identify potential risks, especially those relating to financial sector and capital flows issues, which are the two most important risks for emerging markets. All three lessons are now well known. And we have seen conscious efforts by national governments and IFI’s such as the IMF to take heed of these lessons.

And how agile and resolute is the bank in actually changing the beliefs, structures, dynamics and thus behavioural patterns that are preventing it from reaching, or restoring, its reputational and strategic goals? Conclusion Let me conclude. Some of you here today are non-executive directors at banks. As such, you play a vital role in setting the right tone for your entire institution. Your conduct is crucial in creating a healthy risk culture within your organisation, and you are responsible for nurturing behaviour which reflects the core values of your organisation and protects its best interests, not just in the short-term, but also in the future. Beyond your technical skills and your experience in banking, there are broader expectations regarding your conduct and behaviour as board members. You must ensure that there are concrete consequences for failing to adhere to prudent behaviour. Governance in the stricter sense deals with the structure which shapes a banks’ actions. Getting these structures right is of the utmost importance. But that is not the whole story. It is also relevant how people behave within these more formal structures and what the underlying cultural drivers of their  behaviours are. Banks would be well advised to seek to identify these behavioural patterns and to act on them if such patterns encourage conduct which is not in line with their values and risk appetite.