samchain/econo-pairs-v1 huggingface dataset:
Yiu-kwan Choi: The debt market of Hong Kong - what can we offer to investors? Keynote address by Mr Yiu-kwan Choi, Deputy Chief Executive of the Hong Kong Monetary Authority, at the third Annual Asia Pacific Bond Congress, Hong Kong, 13 June 2006. *  *  *  Mr. Shale, distinguished guest, ladies and gentlemen, It gives me great pleasure to speak at this year’s Asia Pacific Bond Congress. On behalf of the Hong Kong Monetary Authority, I would like to extend my warmest welcome to everyone here today, especially those of you who have traveled from afar to visit us. I would like also to thank Euromoney for organizing this excellent event, and for organizing it in Hong Kong for the third time. It is a clear recognition of the important role of Hong Kong - Asia's World City, in the bond markets of the Asia Pacific region. Like many other financial markets, the bond markets in the Asia Pacific region have recently seen plenty of new developments, challenges as well as opportunities. I am glad to see that the Congress has rightly covered many of these latest issues, and I am sure that for those who were here yesterday would have learnt from my colleague, Ms Julia Leung, about the Hong Kong Monetary Authority’s efforts in enhancing regional cooperation.

Our exceptional geographical, cultural and language advantages also make Hong Kong an ideal place to link up the Mainland of China with the rest of world. On our part, the HKMA will continue to play a leading role in enhancing the development of the debt market in Hong Kong, by removing market frictions and unnecessary restrictions, and by keeping up with the best practices adopted in other well-developed markets. Lastly, I would like to thank Euromoney again for inviting me to speak. I look forward to the continued cooperation with our partners on the healthy development of the bond market in this region. Thank you. BIS Review 56/2006  3
Since we published our Monetary Policy Report in July, new statistics have been published, which indicate that US growth is already beginning to slow down. According to the preliminary National Accounts for the second quarter of this year, GDP increased by 0.6 per cent compared with the first quarter, which is marginally less than the 0.7 per cent we were expecting, and less than during the first quarter. Employment in the private sector rose in July, but was still slightly lower than expected. US unemployment remained unchanged at the same time, at 9.5 per cent. There are also other signs of weakness. The housing market has not yet begun to recover from the deep fall in connection with the financial crisis. The purchasing managers’ index for the manufacturing industry in the United States fell from 59.7 in May to 56.2 in June and 55.5 in July. Although an index figure above 50 indicates growth in the sector, these listings are the lowest since December 2009. (Figure: Purchasing managers’ index). Inflation in the United States has fallen in recent months. Measured in terms of the consumer price index, inflation was 1.2 per cent, but when foods and energy are excluded, it was unchanged at 0.9 per cent. The relatively low inflation is linked to the low resource utilisation in the United States, among other things. Wages are also subdued. (Figure: Inflation in the USA).

To that end, investments in human capital aimed at improving the quality of the labor force in our country should be intensified and competition should be enhanced through effective regulations and implementations, especially in the goods market. The Competition Authority is one of the main institutional building blocks of the “open economy growth model” implemented in the period after 1980 and is based on strengthening the market economy. Competition policies and price stability, which is the core objective of the Central Bank, are strongly related. In an environment where competition conditions are ensured, monopolistic market behaviors will not be possible. Simplifying the entry and exit of firms to the various  BIS Review 37/2008  1  sectors and increasing transparency are the main factors preventing pricing habits that are based on a high profit margin. Additionally, due to pressures from both domestic and foreign competition, firms choose to implement strategies with the aim of increasing productivity, which in turn triggers innovation and technological development and contributes to the acceleration of the potential growth rate of our country. If firms increase profitability through measures that decrease costs instead of increasing prices, our country can reach higher growth rates in an environment of low inflation. Various instruments can be utilized to establish an effective competition environment in an economy.
My conviction is that the world today is better managed than in the past and, in that sense, is safer. What has increased, however, is the magnitude of a potential crisis. This is what I refer to as uncertainty. The big challenge for international business of today is to learn to live with uncertainty. And in this domain we still have a way to go. Nowadays, our difficulties in dealing with uncertainty permeate all our discussions about the responsibilities of different private and government agents. I perceive an understandable – but in my opinion misconceived – nostalgia for a world that used to appear safer, thanks to regulation. We hear demands for the construction of barriers to protect ourselves from the menacing world outside – demands for more regulations to ensure that financial providers cannot go bust, cannot cheat, cannot make wrong decisions; more trade barriers to ensure the survival of domestic producers; more restrictions to the movement of persons to protect our workers… The problem with this dreamworld cocoon is that it has never worked and will not work. And what is even worse, if it did work, if it were possible to barricade ourselves against all possible menaces, we would still not be better off. Globalisation is a great opportunity and it can make us all richer and safer. But we have to learn to live with risk. In fact, the main danger I see today is that because we live in a more stable world, in a safer world, we may become complacent.

But producers have also gained because price stability helps them to plan ahead. Lower inflation and confidence in central bank policies have, in turn, reduced uncertainty about future price developments. The lower inflation risk premium is allowing even industrial economies to grow at lower real interest rates than in the past. And, finally, an unambiguously beneficial consequence of the new international monetary order is that it allows for more efficient distribution of capital. At the same time as the current polarisation of exchange rate regimes has come into being, financial globalisation has intensified. Capital controls are being lifted in a growing number of developing countries. In the 1970s, net flows of private capital to the world's poor countries amounted to a little over 1% of host-country GDP. 3 By the end of the 1990s, this percentage figure had grown by a factor of three. Today, there is a broader acceptance of the benefits to be derived from financial liberalisation. Indeed, the gains expected from a free market for international capital are substantial. Global finance allows for a better allocation of world resources, enhancing the prospects for growth of all nations. For richer countries of the world, there are new investment opportunities to finance the expanding needs of their aging populations. Younger and poorer nations obtain access to capital to realise their high potential growth. This is the basic teaching of the theory of international capital flows.
  Higher import prices for goods, such as apparel. This reflects many factors including commodity prices pressures and higher wage inflation in countries such as China. Some of these upward pressures on inflation appear to be fading. Oil and gasoline prices have fallen in recent months. Apparel price inflation should gradually ease, given the sharp drop seen in cotton prices. Owners’ equivalent rent should also eventually stabilize as multi-family construction picks up and programs that shift real estate owned by banks to investors so they can be rented gear up. More generally, there are several reasons to think that inflation will remain moderate and close to our objective. First, and most obviously, the economy continues to operate with significant slack. Second, measures of underlying inflation show little upward pressure. In fact, one – the Federal Reserve Bank of New York’s Underlying Inflation Gauge – is turning down. This measure uses a very wide set of variables to forecast the underlying inflation trend. Third, it is hard to be very concerned about inflation risks when the growth rate of nominal labor compensation is so low and stable. It is noteworthy to me that the employment cost index has risen only 2.1 percent over the past four quarters and has shown no acceleration. Fourth, inflation expectations remain well-anchored. This is critically important because inflation expectations are an important driver of actual inflation outcomes.

I know the Bank will continue to do just that under Mark’s leadership. Mark inherits a wealth of young talent in the Bank, led by three outstanding Deputy Governors: Charlie Bean, Andrew  4  BIS central bankers’ speeches  Bailey and, of course, Paul Tucker, who has made an enormous contribution to the Bank over three decades. The Bank of England is in safe hands, and the country will be the better for it. Lord Mayor, the wheel may have come off your carriage at last year’s installation, but then we saw your characteristic ability to turn every situation to advantage as you returned in triumph to Mansion House in a Land Rover. As the City too faces the challenge of turning disaster into triumph, it would do well to follow your example of how to “treat those two imposters just the same”. Roger, your commitment to the promotion of the creative industries – crucial to this, the most exciting city in the world – as well as opportunities for children, aspiring musicians, even trees and bicycles, is well known. And all of us here tonight would like to pay tribute to you Lord Mayor, and to thank the Lady Mayoress, Clare, and yourself, Roger, for the splendid hospitality which you’ve extended to us all this evening. So I invite you all to rise and join me in the traditional toast of good health and prosperity to “The Lord Mayor and the Lady Mayoress, Roger and Clare Gifford”. BIS central bankers’ speeches  5
17  Table 2 World growth (annual change, percent) 2018 (f) Jun.18 Report  2017  2019 (f) Jun.18 Report  Sep.18 Report  2020 (f) Jun.18 Report  Sep.18 Report  Sep.18 Report  World at PPP World at market exchange rates Trading partners  3.7 3.2 3.7  3.9 3.3 3.8  3.8 3.1 3.6  3.8 3.1 3.6  3.6 2.9 3.5  3.6 2.9 3.4  3.4 2.8 3.4  United States Eurozone Japan China India Rest of Asia Latin America (excl. Chile) Commodity exporters  2.2 2.4 1.7 6.9 6.7 4.4 1.1 2.7  2.7 2.2 1.0 6.6 7.3 4.3 2.1 2.3  2.9 2.1 1.0 6.6 7.3 4.2 1.3 2.3  2.3 1.9 0.8 6.3 7.6 4.3 2.5 2.2  2.3 1.9 0.8 6.2 7.6 4.1 2.1 2.2  1.9 1.7 0.5 6.2 7.6 4.2 2.6 2.2  1.9 1.7 0.5 6.1 7.6 4.2 2.6 2.2  (f) Forecast. Source: Central Bank of Chile. Figure 8 Interest rates by type of loan (1)  Real loans (3) (4)  (index, 2002-2018=100)  (annual change, percent)  200  200 25  180  180  Commercial  160  25 Consumer  20  20  160 Consumer  140  140  120 10  100  100  80  80 Housing (2)  40  60 40  02  05  08  11  14  17  (1) Weighted average rates of all operations performed in each month. (2) Loans indexed to the UF.

Indeed, the Constitutional Organic Act mandates the CBC Board to present at this time of the year an evaluation of the progress of the policies and programs of the current year, a report of those proposed for the following calendar year, the overall economic projections that sustain them, and a recount of the factors that can affect its balance sheet. In other words, it is not just about presenting the Monetary Policy Report, but a more complete account about the evolution of our institution. However, today I wish to go beyond the usual institutional account. I would like in particular to recount the content and progress of the Bank’s Strategic Plan that I anticipated on this same venue last year, as well as share some additional steps that we intend to take on the issue of institutional transparency. Our Strategic Plan 2018-2022 was prepared during the better part of last year and is currently in full implementation. Although this type of exercise was not new to our institution, this time it relied on an extensive process of external consultations, gathering of relevant information and internal deliberation unprecedented in the CBC, which is very innovative 9  for the central banking community in general. This exercise was completed at the end of 2017 with the approval of the Plan. Below I summarize its main contents and advances. This Strategic Plan 2018-2022 updated the basic definitions of the CBC’s institutional mission and vision.
The expansion of private capital flows was gradual, and, until about ten years ago, was primarily concentrated on flows among the developed economies. It is only in the past ten years that the explosion of private capital flows to emerging market economies has taken place. Data from the World Bank suggest that annual capital flows to emerging markets were less than $ bn in the early 1970s, rising to around $ bn in the late 1990s. At their peak, capital flows to emerging markets were around 5% of those countries' GDP. Unfortunately, capital flows on this scale can reverse themselves as suddenly as they appear. The result of such sudden and large reversals of short-term capital flows has been a series of international financial crises, in Mexico in 1994-95, Asia in 1997-98, Brazil in 1998-99, and, more recently in Turkey and Argentina. The frequency and scale of these crises, if they were to continue, would be a serious impediment to the evolution of the international capital market. Unless we can both reduce the frequency and severity of such crises, and improve our techniques of crisis resolution, then the demonstrators against globalisation will be provided with unnecessary ammunition. The costs of recent crises have been large. Between 1996 and 1998, the reversal of private capital flows to the five Asian countries primarily affected (Indonesia, Korea, Malaysia, the Philippines and Thailand) was almost $ bn, equivalent to about 15% of the pre-crisis level of GDP.

In the upper storeys of the Bank he placed pavilions which are derivatives of the ends of the Secretariat blocks in New Delhi. As Lord Keynes said in his speech at the closing plenary session of the Bretton Woods Conference on 22 July 1944, "it has been our task to find a common measure, a common standard, a common rule applicable to each and not irksome to any. We have been operating, moreover, in a field of great intellectual and technical difficulty. We have had to perform at one and the same time the tasks appropriate to the economist, to the financier, to the politician, to the journalist, to the propagandist, to the lawyer, to the statesman – even, I think to the prophet and soothsayer. … We have shown that a concourse of 44 nations are actually able to work together at a constructive task in amity and unbroken concord. If we can continue in a larger task as we have begun in this limited task, there is hope for the world." The IMF is still the only international body with the legitimacy, as well as staff and expertise, to build and defend a successful international financial system. It is important, therefore, that we not accept uncritically the way it has developed, and we must examine closely how far changes in international financial markets require us to understand the consequences of limits to IMF lending and the implications of those limits for borrowing countries and private creditors alike.
We will be joined by Agustín Carstens, the General Manager of the Bank for International Settlements, Alejandro Díaz de León, Governor of the Central Bank of Mexico (Banco de México), Liliana Rojas-Suárez, Chair of the Latin-American Committee for Financial Affairs and Director of the Initiative for Latin America of the Centre for Global Development, and Leonardo Villar, Governor of the Central Bank of Colombia (Banco de la República). Clearly, monetary policy has played – and continues to play – a crucial role in this crisis. And this has been so not only in the advanced economies, but also in the emerging ones, and specifically in Latin America. There, the region’s central banks cut their policy interest rates to record lows, and some even set in place asset purchase programmes for the first time in their history. This session of the conference will largely address the experience of the Latin American central banks in monetary policy management during the pandemic. 2  But let me take this opportunity to share with you some brief thoughts on the European Central Bank’s (ECB) monetary policy and its conduct during the pandemic. In many cases, they may also be applied to other countries.1 Firstly, allow me to highlight the importance of the ECB’s swift and forceful monetary policy response. As I said, the outbreak of COVID-19 in Europe in late February and early March 2020 prompted a health crisis that resulted in an economic shock on an unprecedented scale.

The ECB’s actions are heading off an increase in financing costs which, potentially, would have significantly curbed the national fiscal authorities’ capacity to support the economy. The ECB’s measures have complemented those adopted both by national governments (in particular the public guarantee programmes backing loans) and by the prudential authorities (aimed at allowing financial institutions to use some of the capital buffers built up in recent years). This has proved key to smoothing the flow of financing to the economy during the crisis.4 Let us not forget that, in addition to the response of national fiscal policies, on this occasion there has also been a genuinely pan-European response to the crisis, in which the creation of the Next Generation EU (NGEU) recovery fund has been to the fore.5 This fund adds significant elements for sharing the economic recovery effort, some of which unprecedented, such as the large-scale issuance of supranational European public debt to finance reforms and investments in the Member States most affected by the pandemic. In conclusion, let me simply reiterate the major role we central banks have played and must continue to play in overcoming this crisis. Set against high uncertainty and a still-fragile economic situation, monetary policies need to continue contributing to maintaining favourable financing conditions that allow the recovery to take firm root. The road ahead will not be free from setbacks and difficulties.
As a comparison, the same rate stands at 75% in the USA. The necessary reforms aim, in particular, at eliminating unemployment and poverty traps. For instance, in France, some useful steps have been taken: for example, a series of cuts to employer social security contributions has been implemented in order to reduce labour costs. We must also continue to step up efforts in training and education. The third way of raising potential output growth is to promote ways to boost gains in labour productivity: The rapid transformation of information systems is likely to accentuate the structural transformation of the economy. Although the euphoria of entering a new economic era has faded somewhat, remarkable potential for economic change remains. This may help to boost labour productivity significantly and on an ongoing basis. That strategy should be pursued whilst increasing the overall competitiveness of our economy If I refer to what we observed in the past, the French strategy of competitiveness, which was based on limiting increases in the unit costs of production, gave us a very important advantage. And this competitive advantage for the French economy was transformed into growth, into job creation and into solid external accounts. Thus, in the present situation, it is vital to continue in this direction and to maintain a multi-partisan consensus on this competitive disinflation process. Competitiveness is also linked to European harmonisation in other fields, for example in the service industries.

But consumers have to be vigilant, companies and retailers must remain responsible as regards price setting, and competition will play its part in lowering the prices in the short-to-medium term. ·  Second, we must closely monitor the risks of counterfeiting of notes and coins : the communication campaign of the Eurosystem “The euro. Our money” was aimed at familiarising all the European citizens with their new banknotes and coins (and their security features) and, by doing so, it helped them to easily identify the obviously fake banknotes. All institutions concerned, both national and European, are co-operating closely to prevent and fight counterfeiting. The credibility of the Eurosystem and of the single monetary policy, and the successful changeover to the euro are a major achievement. They certainly contribute to the efficient functioning of EMU and to European economic and financial integration, as I will explain now. *  *  *  EMU is a balanced concept fostering economic and financial integration EMU is an economically sound and well-grounded concept The usual criticism … A few years ago, it was necessary to convince a great number of sceptics, in Europe as well as in the rest of the world, that the euro would really be launched. The opinion that the single currency would never exist has of course been disproved by the facts. Nevertheless, objections are still being raised from time to time, on the alleged grounds that the euro area economy is full of major inconsistencies that could endanger and challenge the viability of EMU.