samchain/econo-pairs-v1 huggingface dataset:
During my visits to the Middle East, I sensed their interest in investing in Asia. Many are keen to engage China and India but their businessmen told me that they were not so familiar with doing  2  BIS Review 83/2005  business in China. Singapore can serve as a bridge, given our knowledge and connections. Furthermore, Indian, Chinese and Singaporean financial institutions could tap into Islamic funds from the Middle East for infrastructural and other major projects in India and China. 21. As an international financial centre, Singapore is well placed to intermediate and facilitate investment flows between Asia and the Middle East. Already, funds managed in Singapore from the Middle East have increased by over 70% to $ billion in 2004. But this is still a small figure, given the trillions of dollars of wealth in the Middle East. We should work with credible partners to offer a wider suite of Islamic financial services and products. The role of MAS 22. MAS will continue to support and partner the financial industry to seize the opportunities. Last year, I highlighted three strategic priorities for MAS and our financial sector. They are first, strengthen our position as a leading financial centre in Asia; second, maintain excellence in a riskier environment; and third, leverage and build on our reputation. We have made good progress on all three fronts. Strengthening our position as a leading financial centre in Asia 23. As MAS Chairman, I regularly meet CEOs of global banks and big companies.

Today I will focus on how these roles have been taken into account when performing our functions in relation to banking system and payment and settlement systems In banking system, the Bank of Thailand has always been aware of the momentum towards financial service liberalization. We, therefore, did not neglect our roles in reshaping our financial landscape to meet changes in the environment. Financial Sector Master Plan Phase I and II have been launched to prepare banking sector to get ready for more open economy. FSMP Phase I focused on strengthening Thai banking sector through the policies of consolidation and one presence. In FSMP Phase II, the focuses are on comprehensive risk management, cost reduction, and enhancing competitiveness in banking system. Further liberalization of financial services in ASEAN is being considered. The ASEAN central banks are now discussing on what should best constitute Qualified ASEAN Banks (QABs), which will be able to operate on a region-wide basis. However, such liberalization must be done with great care to ensure stability in each country. 2  BIS central bankers’ speeches  As we already know, the payment and settlement systems are the backbone of a modern economy. They are gaining even more significance in the period of regional economic integration. This is because they are financial infrastructures that facilitate flows of goods, services, investment, skilled labor and capital.
Even with the best risk management, banks can be hit suddenly by unexpected events or developments. I am convinced that managements will continue to misjudge situations in the future. This is something we have to live with. The financial system therefore needs to be made more resilient to possible shocks. This means the buffers in the financial system have to be increased. Fine-tuning of the current regulations is necessary in many respects. However, in my view it is an insufficient response to the steadily increasing complexity of financial markets. It is therefore questionable whether the current regulatory approach, with its increasingly complex provisions that intervene at an ever deeper level in the daily business of banks, is the right one. The authorities are, by nature, always a step behind the latest developments. Even the most complex models will never be infallible. In the current crisis, the model-based form of risk measurement failed. The SNB therefore believes that two fundamental adjustments need to be made to the capital requirements for the Swiss big banks. First, the risk-weighted capital requirements for the Swiss big banks need to be tightened. One way of achieving this would be by using an appropriate multiplier to increase the capital requirements under Basel 2. Second, a limit on leverage – often referred to as “leverage ratio” – needs to be introduced for the big banks as a complement to the risk-weighted capital requirements.

In 2011, Pak Muliaman and I were given the privilege to lead the Taskforce on ASEAN Banking Integration Framework. We were succeeded by Deputy Governor Abdul Rasheed and Pak Wimboh. Coincidentally, both of them were at the IMF together representing our constituency, in their roles as Alternate ED and ED respectively. They were replaced by Aznan Aziz and Pak Mulya Sirega. When they completed their term at the IMF, Pak Wimbo became the Chairman of Bank Mandiri and Rasheed became the Deputy Governor. As fate had it, Pak Muliaman became OJK Chairman and yours truly became the Governor. 1/3  BIS central bankers' speeches  All the planets were perfectly aligned. All of our efforts culminated in 2014 with the signing of the ASEAN Banking Integration Framework by ASEAN Central Bank Governors. Another key achievement was the signing of the bilateral ABIF agreement between Indonesia and Malaysia in August 2016 by Pak Muliaman and I. Six years since its genesis, we are proud to see the conceptualisation and realisation of ASEAN banking integration beginning to take shape. Under ABIF, banks in the region will be able to play a greater role in facilitating cross-border trade and investment. It will further enhance linkages. The framework allows deeper integration while providing adequate safeguards to account for national development objectives and financial stability. Given the significant role of banks in regional economies, the successful implementation of ABIF will be a major catalyst for sustainable, inclusive and mutually reinforcing growth in the region.
Among the factors behind these differences are the date that the first cases appeared, the speed of the spread of new cases, how strictly containment measures were adopted and the response of the population. In the case of China, the greatest impact of the pandemic was recorded in the first quarter. Peru, on the other hand, saw a dramatic drop in the second quarter, as strict nationwide quarantine was implemented. Incoming information for Chile suggests that activity is picking up in sectors that had been particularly hard hit, such as retail and some services (Figure 5). This reveals that some activities have managed to adapt more quickly to new forms of operation, notably a more intense use of online sales and teleworking. In contrast, sectors such as construction, which are highly intensive in on-site work, have suffered greater than expected consequences, given the territorial and time extension of the quarantines. Because of its highly contagious nature, the pandemic caused a particularly sharp contraction in demand and supply in socially intensive areas, directly affecting the incomes of businesses and individuals. This has had a strong impact on the labor market, including self-employment. Thus, in the moving quarter ending in July, the annual drop in employment affected slightly more than 1.8 million jobs. About half of this figure corresponds to salaried jobs, mostly formal. Another 760,000 interrupted occupations correspond to non-salaried workers (i.e. self-employed workers and employers).

In Australia, for example, this adjustment had already begun at the end of 2012 with the postponement of investment projects in iron or coal. Peru and Chile saw their adjustments in the second half of 2013. On the financial side, the normalization of international financial conditions has resulted in greater market volatility in emerging economies, together with higher risk premiums and capital outflows, plus a depreciation of their currencies against the U.S. dollar. In Chile, unlike past episodes, the effects on domestic financial markets have been bounded. The long-term rates have fallen while the money market has operated smoothly, and the risk premium is close to or only marginally above its levels of a while back. The exchange rate has absorbed the shock to terms of trade and the tightening of international financial conditions. Actually, the depreciation of the Chilean peso is among the highest in emerging economies. From a year ago, the currency has depreciated around 17% against the U.S. dollar, and the real exchange rate (RER) did by about 15%. This depreciation of the currency, in any case, is a desired effect, since it means an adjustment of relative prices and thus contributes to rebalance the sources of growth across economic sectors. In fact this is consistent with the macroeconomic framework that Chile has in place. Short- and long-term interest rates have declined while the currency has depreciated. In this scenario, inflation in Chile has returned to near 3% and medium-term expectations are in line with the target.
These projects are often felt to yield the highest long-term (private and social) returns and hence offer the biggest boost to future growth. That makes short-termism a public policy issue. But what would be an appropriate public policy response to this capital market failure? A number of proposals have been suggested by various authors. These include: (a)  Transparency: The lightest touch approach would be to require greater disclosures by financial and non-financial firms of their long-term intentions – for example, their long-term performance, strategy and compensation practices.26 For financial firms, this might include metrics of portfolio churn. This could be accompanied by a programme of educating managers, investors and advisors of their fiduciary responsibilities. (b)  Governance: A more intensive approach would involve acting directly on shareholder incentives through their voting rights. For example, fiduciary duties could be expanded to recognise explicitly long-term objectives.27 More concretely, shareholder rights could be enhanced for long-term investors, perhaps with a duration-dependent sliding scale of voting rights.28  (c)  Contract Design: There have been various attempts over the past few years to make compensation contracts more sensitive to long-term performance and risk. This includes employment contracts conditioned on long-term performance, or with deferral or clawback.

We have therefore moved further and further away from capital-intensive production to production that is more dependent on human capital than heavy plant and machinery. Another factor to take into account is the decline in housing construction, which has also contributed to the drop in the figures for capital formation. However, housing construction does not have the same importance for productivity growth as industrial investment, for example. This means that the dramatic decline in capital formation does not have to imply an equivalent fall in productivity growth. Nevertheless, I still have the impression that we are focusing less on capital formation than before. This is indicated by the fact that structural change is currently relatively limited. 4  BIS Review 56/2003  The labour supply Permit me now to discuss the other component that determines a country’s long-term growth capacity besides productivity, namely the labour supply. This is determined by the number of people in work and the number of hours they work. The number of hours worked rose during the years after the crisis at the beginning of the 1990s. This was partly due to greater demand for labour, to a rise in the working age population (20-64 years) and relatively low numbers on sick leave. The trend in the number of hours worked has been broken in recent years, however. This is because the total number of people on sick leave has risen in Sweden since 1997-1998.
In a well-functioning financial system, there is a stable relationship between changes to central bank rates and the cost of bank loans to firms and households. This allows central banks to influence overall economic conditions and maintain price stability. BIS central bankers’ speeches  1  But the euro area financial system has become increasingly disturbed. There has been a severe fragmentation in the single financial market. Bank funding costs have diverged significantly across countries. The euro area interbank market has been effectively closed to a large number of banks and some countries’ entire banking systems. Interest rates on government bonds in some countries have risen steeply, hurting the funding costs of domestic banks and limiting their access to funding markets. This has been a key factor why banks have passed on interest rates very differently to firms and households across the euro area. Interest rates do not have to be identical across the euro area, but it is unacceptable if major differences arise from broken capital markets or the perception of a euro area break-up. The fragmentation of the single financial market has led to a fragmentation of the single monetary policy. And in an economy like the euro area where about three quarters of firms’ financing comes from banks, this has very severe consequences for the real economy, investment and employment. It meant that countries in economic difficulties could not benefit from our low interest rates and return to health. Instead, they were experiencing a vicious circle. Economic growth was falling.

However, some slowdown is foreseen, partly because of a weak international trend but also due to subdued consumption. The high level of equity prices has been cited as a risk to US economic development. US stock markets have recovered completely from last autumn’s fall and new all-time highs have been noted. Equity prices are considered by many observers to be unduly high in relation to the companies’ profit expectations and there has been talk of a future correction. Given the importance of the share price rise for the US economy’s upward trend, a price fall could by the same token lead to a slowdown. Prospects for the euro area as well as for the Japanese economy seem to have become somewhat poorer since the December Report, at least for the coming year. In the euro area, it is mainly manufacturing which has weakened, while the consumption trend still looks relatively good. At the same time, household sentiment is closely related to the development of employment, not least in Germany. Thus, the international outlook can hardly be said to have improved since the publication of the December Report and there still seem to be risks of a development that is weaker. Industrial activity weaker but domestic demand good so far Turning to the Swedish economy, the statistics suggest that industrial activity may go on weakening. But households’ expectations of their own economy indicate that private consumption may remain relatively strong.
In terms of agents, an improvement of 0.3 pp of GDP is considered for social security funds and the regional governments, to 1.1% and 1%, respectively, while central government might post a deficit of 3.7% of GDP, compared with the figure of 3.8% projected for 2013; local government should run a balanced budget. The target for 2014 entails an improvement in the general government structural balance of between 0.1 and 0.3 pp of GDP. Following the considerable adjustment made in the past two years, when the structural deficit was cut by 6 pp of GDP, the budgetary plans for 2014 are more conducive to the entrenchment of the recovery and compliance therewith will help maintain agents’ confidence in fiscal consolidation. On the expenditure side, three budgetary items – namely pensions, unemployment benefits and the burden of interest on public debt – will continue to influence budgetary programming, given that they account for almost 50% of total overall general government spending. The adjustment is centred, in fact, on government consumption, with a projected reduction of 0.4 pp in total spending on general government employee compensation, owing to the wage freeze for civil servants and to the prolongation of the austerity policies governing public-  BIS central bankers’ speeches  3  sector employment; and of 0.3 pp in intermediate consumption, further to the maintenance of the restrictions on goods and services purchases at all levels of government.

The budgetary plan projects maintaining the weight of public investment as a percentage of GDP, following the cuts seen in recent years; that said, the cuts would be prolonged in the case of the State. Likewise, the envisaged revision of pensions is set at 0.25%, in line with the floor set in the draft law defining the sustainability factor. As in previous years, the main challenges surrounding the budgetary projections arise from the course public revenue may take; despite the projected gradual recovery in activity and some re-balancing of the attendant growth factors, revenue will remain considerably influenced by the greater relative weight of exports and by the moderation of wage income, which will limit the response by public revenue to greater activity. To conclude, I have a comment on public debt and its implications for the fiscal drive still to be made. On official projections, the public debt/GDP ratio might rise to 98.9% in 2014 and stand above 100% in 2015, beginning to turn down in subsequent years. Placing public debt below the ceilings set by the Stability and Growth Pact and the Stability Law will, in any event, require that high primary surpluses be maintained over a prolonged period of time. This is the indicator that best illustrates the scale of the challenges still ahead for us. It also highlights the importance of successfully seeing through fiscal consolidation and structural reform, so that the ongoing reduction in budgetary imbalances may combine with an improvement in our potential growth.
The securitisation figure covers US and European securitisation markets. 3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  As a knowledge intensive service industry, the financial sector depends crucially on the availability of specialised labour. Complex financial service firms rely on access to a large pool of skilled workers. For example, 390,000 people work in financial services in London and 330,000 in New York, the two largest financial centres. Financial services have an increasingly complex production chain that depends on the availability of specialised intermediate inputs of both financial and non-financial services. A modern financial market transaction may be the simple purchase or sale of a single financial asset. But it is more likely to be a complex chain of transactions involving a range of financial markets and intermediaries. One can see this complexity in the value chains of financial services. In 2014, every £ of Gross Value Added created by the financial services sector in the UK relied on £ of inputs from other financial services firms and £ of inputs from legal, accounting, consultancy, information, IT and business support services. Knowledge and information is a critical input to financial services – perhaps more than any other industry. Quick access to information can lead to better decisions about the allocation of capital. Information about successful innovations in financial firms’ production processes can lead to more efficient production across the industry.

It is not clear that before the late 19 century a single dominant financial centre existed in Europe as the economies of scale were not sufficiently developed. 5  There is perhaps another puzzle in the way financial services have developed, one that is closer to home. The resurgence of London. According to the Global Financial Centres Index, London is the world’s leading 6  financial centre, just as it was in the days of Cunliffe Bros. But as we know, London did not enjoy uninterrupted status as a premier financial centre over the intervening period. As I have noted, international financial activity dried up materially after the First World War. But even accounting for the overall decline, London’s relative importance as a financial centre declined further as the global footprint and importance of the UK economy decreased along with sterling’s reserve currency role. It was only with return to financial globalisation, some 50 years ago, that this process was reversed – leading to the concentration we now see. The puzzle here is that historically, the clustering of financial activity has tended to follow trade and commerce. It was commerce that led to the rise of Venice and then Amsterdam as financial centres in the th  th  16 and 17 centuries.
Despite the importance of inflation expectations for forecasting future inflation and economic activity and as a key link in the monetary transmission mechanism, surprisingly little is known to directly answer these questions. This was partly because back in 2006 when we started out, macroeconomists had enjoyed around 20 years of success with models where these questions were answered in a simple and unambiguous manner. As we have learned painfully from the financial crisis, the success of these models was much more due to luck than deep insight. Our relative ignorance was also partly because economists do not receive detailed training in the design of survey questions. One of the issues that sparked our initial interest was the wording of questions. We found most questions on inflation expectations did not directly ask about inflation but instead asked about prices. For example, the Thomson Reuters/University of Michigan Survey (the Michigan Survey from now on) asks about the change in “prices in general” or the Bank of England/GfK NOP survey asks about the expected “change in prices in shops generally.” Not being experts in survey design, we decided that we needed a wide collaboration to understand the implications of asking about prices in general and whether it was possible to ask directly about the rate of inflation. We formed a cross-disciplinary team among Federal Reserve research staff, academic economists, and psychologists at Carnegie Mellon University who specialize in behavioral decision-making, as well as risk perception and communication. The initial part of the project was structured in three stages.

‘Bailin’ is a verb not a noun. Orderly resolution will not be achieved by drafting term sheets. 6  BIS central bankers’ speeches  Looking back on the 2007–2009 part of the crisis, those precepts should have been in place anyway. In the UK, it was alarming that many medium-sized domestic banks had been allowed to hold each other’s bonds in what were purportedly ‘liquidity’ portfolios.9 Contagion (2): the creditor hierarchy and depositor preference Preparations for bailin, and even more the recent reconstruction of Cypriot banks, have heightened awareness of the prospect of creditors of distressed banks losing money, prompting calls for clarity about the relative standing of different types of creditor. Who stands where in the creditor hierarchy affects the loss they incur in the event of default, and therefore their behaviour before default, including the return they demand to compensate for risk and whether they flee at the first signs of the firm weakening. Insured depositors are insured, pure and simple – they are covered by the relevant Deposit Guarantee Scheme. The details of the resolution regime do not affect that.10 Nor does preference for insured deposits affect those depositors directly.