samchain/econo-pairs-v1 huggingface dataset:
Here, China’s informed policy of supporting poor Asian and African countries is definitely worth mentioning. Perhaps some of you think that China and India are far countries, and for that reason pose no challenge for us. This is far from being true, as technological progress and lower transportation costs have in many instances rendered distance immaterial, with many economists speaking of ‘the death of  5  R Freeman, The Great Doubling: labor in the new global economy, Georgia State University, Usery lecture in labor policy, 2005. 6  Examples can be found in a book written by T Friedman and entitled The World is Flat. A Brief History of the Twenty-First Century, Farrar, Straus and Giroux, Nowy Jork, 2005. The analysis of services that may be subjected to the global competition can be found inter alia in a paper by B Jensen, L Kletzer Tradable Services: Understanding the Scope and Impact of Services Offshoring:, Institute for International Economics working paper 05-9, September 2005. 7  See the European Commission’s paper Globalisation: Trends, Issues and Macro Implications for the EU, EUROPEAN COMMISSION, DIRECTORATE-GENERAL FOR ECONOMIC AND FINANCIAL AFFAIRS ECONOMIC PAPERS, No 254, July 2006. 8  P Romer, Increasing Returns and Long-Run Growth, Journal of Political Economy, October 1986; P Romer, Endogenous Technological Change, Journal of Political Economy, October 1990. 2  BIS Review 97/2006  distance’.

Financial service providers, both old and new, can capitalize on modern technology to provide new – and perhaps once unimaginable – products and services. These technologies will allow business to by-pass the traditional stages of financial market developments, especially those that are paper-based or those that rely on brick-and-mortar infrastructure. Let me cite a few examples which I find very encouraging. In Thailand, an offshoot of the TMB Bank, called ME by TMB, is a bank that does not rely on physical 5  World Bank Global Findex 2014, measured by numbers of those not having bank accounts  3  branches. Vietnam has a similar model called Timo Bank. Businesses are conducted online, making full use of digital payment technology. These banks pass on reduced costs to consumers in the form of better offers, such as higher deposit interest rates or better services. As technology provides more choices, there is room to provide more alternatives by easing some of our regulations. Take, for example, local currency usage for trade settlement and direct investment in our subregion. The Bank of Thailand is currently working with central banks in the region to relax regulations on the use of local currency for cross-border trade and investment. Amid volatile global financial markets, this will offer businesses more options in choosing currencies for trade settlements. Exporters and importers are able to reduce their foreign exchange conversion costs and better manage foreign exchange risks by using their local currency for settlement.
In the 1980s and 1990s, many emerging markets put in place exchange rate systems that limited or altogether eliminated perceived foreign exchange rate risk. The objective was, in most cases, to reduce inflation. And in many cases the success was remarkable on this front. However, not surprisingly, firms, households and financial intermediaries were reluctant to hedge currency risk in this setting – accumulating liabilities in foreign currencies to finance assets in local currencies. When an external shock, or an increasing exchange rate misalignment, forced the countries to abandon the peg, the value of debts skyrocketed leading to very severe financial crises, as in Chile 1982 or Argentina 2002. Indeed, in these cases there is also a moral hazard issue, since currency mismatches tend to be exacerbated under the promise that the exchange rate will remain fixed, and if changes occur, the authority will have to bail out those who believed in their commitment. The popularly known Greenspan put, is another example. This strategy of relaxing monetary policy once a bubble has burst – although fully consistent with price stability – encourages risk taking by financial intermediaries, firms and households. As the burst of the housing bubble showed, this strategy is not always advisable. An additional example of the role of central bank policies on risk taking is the “great moderation” itself. There is an interesting stylized fact across banks in different countries.

Let me now refer to what I call a new set of instruments and their consequences for monetary policy. So far I have assumed that dealing with financial stress involves only “traditional” instruments. But if financial stress is too severe, some unconventional actions may be in order. In particular, if financial stress damages financial intermediation substantially, the channels through which “traditional” policy responses operate will be shut down. This is a “financial crisis”: a severe disruption of intermediation in financial markets. The policy response in this case is going to depend crucially on the type of financial market we are operating in. During the recent financial crisis, we saw direct interventions of some  6  BIS Review 76/2010  central banks in financial markets. This direct policy intervention has been called credit policy. Given that financial intermediation is severely impaired, central banks have stepped in to replace private financial intermediaries. In this way, central banks avoid a collapse of the economy and the self-reinforcing forces of deflationary spirals. In economies where banks are the most important financial intermediaries, credit policy may be less effective. That may be the reason why in some emerging market economies, state-owned banks apparently played an important role in mitigating the recent crisis. And also why in the past, a common policy action following a financial crisis was to intervene private banks. Coming back to credit policy, this policy has resulted in a significant increase in the balance sheets of central banks necessary to finance those operations.
A crisis was narrowly averted when the counterparties were persuaded to purchase LTCM. I might say that in due course they got their money back: which only goes to show that a liquidity crisis can arise even when the solvency position of the institution remains positive. Thirdly, we cannot ignore the threat of a “Major Operational Disruption” (MOD). What I mean by this is a natural disaster, a major act of terrorism like 9/11, or an IT catastrophe such as we sought to mitigate in the Y2K preparations. Considerable time has been devoted to work in this area, on ex ante mitigants to provide predictability and help to enable the system to get back to work quickly. You need robust back-up sites, operating procedures, personnel regrouping plans and so much more. We are not on our own of course if a financial crisis does occur. Clearly we would work closely with FSA and the Treasury both directly and through the Tripartite Standing Committee. The Standing Committee of representatives of the Bank, FSA and Treasury meets on a monthly basis and of course ad hoc. We discuss both individual cases of significance and specific threats which could be relevant to financial stability. The Committee covers surveillance, strengthening the infrastructure and crisis management. For the latter, the objectives and roles of each party are outlined on the Financial Sector Continuity Website. The Bank’s roles relate to ensuring the orderly functioning of the UK markets, including the maintenance of adequate liquidity and the functioning of payment systems.

We have a three-pronged approach: surveillance, strengthening the financial infrastructure and, as a last resort, crisis management. We start with surveillance. We need to keep a watch on the institutions in the financial sector and their interactions, both amongst themselves and with lenders and borrowers outside the financial sector. The soundness of individual banks is a key area of the FSA’s activities. And we are in daily contact with them. Reassuringly at present this area of threat looks quite remote - in the UK itself at least. Supervision has come a long way in the past five to ten years as have the banks’ risk management systems. But nowadays financial crises do not necessarily just involve banks. There is an increasing overlap and interaction between banks and securities markets, and between both of them and the insurance sector. A problem in one can have a knock-on impact in the others. Most of these organisations are prudentially supervised by the FSA. But there are also organisations that are not supervised but which could be of systemic importance. The case of the hedge fund LTCM is perhaps the most notable example in recent times. And one to which I will return. But it is not just the wide range of institutions that potentially play a part in the emergence and propagation of financial crises. You also need to consider the wide range of instruments. Some of them are extremely complex.
Kevin Stiroh: The theory and practice of supervision Remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the SIFMA Internal Auditors Society Education Luncheon, Harvard Club, New York City, 11 April 2016. *  *  *  Introduction Good afternoon. I’m Kevin Stiroh, the head of the Supervision Group at the Federal Reserve Bank of New York. I’d like to thank SIFMA for the opportunity to speak today about the theory and practice of supervision. By way of background, I took over my current role in October of 2015, after spending time in the New York Fed’s Research, Markets and Integrated Policy Analysis Groups, as well as earlier positions within Supervision. I am an economist by training and I spent much of my career studying the performance and function of financial institutions in the U.S., the critical role of bank capital, and the potential link with financial stability. I’d like to cover three topics today related to the theory and practice of supervision. First, what is supervision? Second, why is it necessary? Third, what are some of the emerging issues in the execution of supervision? Before beginning, let me emphasize that my comments today are my own and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System. What is supervision?

But some of our fundamental strengths, ironically, have made us vulnerable to market manipulation. Our economy and our markets are small in relation to the rapidly growing volume of international capital. But they are liquid and open enough to be attractive for large players to seek to exploit the smallness of our markets and move prices to their benefit. And our policy response is highly predictable. This is particularly so with a rule-based monetary system in which capital outflow would, automatically and without discretionary decisions on the part of the authorities, lead to higher interest rates. I am convinced that much of the difficulty over the past year or so in Hong Kong arose not out of any problem in our economic fundamentals, but because, by being small, open and predictable, we are vulnerable to market manipulation. Given that there is not much we could do in the short term to enlarge the size of our markets, and given our firm commitment to openness, we had to resort to doing something unpredictable to defend ourselves. The episode last summer, when we made purchases in the stock and futures exchanges to defend our financial system against a concerted speculative attack, is so well known now, and has been so thoroughly debated at home and abroad, that I can dispense with most of the details. The facts, in brief, are as follows.
This is in fact what Sasana means in Sanskrit – a convening point for the wise and learned. When combined with Kijang, a word that is strongly associated with the Bank, Sasana Kijang represents a powerful meaning that is consistent with our identity. The architectural concept of Sasana Kijang is also inspired from our earliest form of currency that was used in the third century and which denotes a harmony of simplicity and class. And the facade design of the building is derived from the geometric patterns of the traditional Malaysian songket fabric which is woven with intricate gold and silver threads which creates a strong bond, thus giving the fabric its strength and elegance. This is similar to the Central Banking community that is interlinked through our similar objectives and bonded through collaboration and strategic alliances. Other features of the building is the extensive use of glass which allows for the greater use of natural light. The building also features a range of green technologies as part of our commitment and responsibility to the environment. Finally, another important part of Sasana Kijang is the Bank Negara Malaysia Currency and Economics Museum and the Art Gallery that will be opened to the public.

These collections that have been built since the earliest days of our Bank over a period of more than five decades aim to foster greater understanding on the history of our currencies and of our economy and financial system, and also represents our support to contemporary art in Malaysia and thus contribute towards preserving the heritage of our country. Allow me now to invite Yang Amat Berhormat, Dato’ Sri Mohd. Najib bin Tun Haji Abdul Razak to deliver his address and to officially launch Sasana Kijang. 2  BIS central bankers’ speeches
Here, the government has to incite the establishment of other companies as well as apply the reduced taxes. Another way of amplifying competition in the sector is by pressing on price transparency. Remittances, as mentioned earlier, are also affected by economic and financial situation in beneficiary country. International experience brings many examples to illustrate this point. After a constant growth of remittances in Philippines, as a result of improvements in the investments environment in the early 90s, they became very shaky as the financial crisis affected the Asian countries at the end of the 90s. Likewise, Turkey after experiencing a stable growth of remittances during the 90s, saw a drastic fall as the financial crisis broke out in 1999-2000. However, an interesting observation in these cases is that, the fall of remittances and their volatility were lower than those of private capital flows. Remittances seem to react less to economic ups and downs compared to other capital flows displaying considerable stability over time (Ratha, 2003). In this context, countries with high remittance percentage relative to other capital flows could be more immune to capital drain during crises. Remittances are not simply expression of emigrants’ fondness to assist their families in adverse situations. They also represent an important financial source that augments capital inflows and investments in economy. Remittances may have a positive impact not only on the volume but also on the quality of investments.

Encik Abdul Rasheed Ghaffour: The ethical challenge – building a culture of professionalism and integrity Remarks by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the AIF-FSBP Business Ethics Conference 2017 “The ethical challenge: building a culture of professionalism and integrity”, Kuala Lumpur, 24 April 2017. * * * Ethics is not a new topic. It has been talked about for thousands of years. Plato claimed that “Good people don’t need laws to tell them to act responsibly, and bad people will find a way around the laws”. In essence, he suggests that there are “good apples” and there are “bad apples”. More controversially, he implies that the state of the apples has nothing to do with “the barrel”. I am sure that many of us in this room are probably inclined to disagree. But while ethics has been discussed and debated throughout the ages, it has been put into sharp focus lately. This is especially so within the ambit of the financial industry. It is therefore an honour to address you today at the onset of this conference. The need for ethics Prior to the global financial crisis, the focus of investors, financial firms and even many regulators fell primarily on strong balance sheets and robust internal controls. While necessary, these were not sufficient. Many financial institutions still failed to function as they should.
Josef Bonnici: An alternative model for banking in Malta – a case for setting up a cooperative bank in Maltese economic realities Address by Professor Josef Bonnici, Governor of the Central Bank of Malta, at the Seminar on “Cooperative banking”, Valletta 27 September 2012. *  *  *  Honourable Ministers, distinguished guests, ladies and gentlemen. As the previous speakers have shown, cooperative banks, though not often in the news, in these times perhaps thankfully, have a considerable presence in most countries, particularly, but not only, in European countries. Indeed, data for 2010 show that in Europe cooperative banks hold a market share of over 20% of deposits and a similar market share for loans. Their presence is particularly marked in France, where the three cooperative banking groups (Credit Agricole, BPCE and Credit Mutuel) account for some 50% of the market share for loans and 60% of that for deposits. There is also a significant presence in Italy, where they enjoy a market share of 34% of deposits and 30% for loans; in Germany, where they have a market share of 19% for deposits and 16% for loans; in the Netherlands, with a market share of 43% of deposits and 30% for loans; and in Finland, with a market share of 34% for deposits and 32% for loans. They include, apart from the well-known French banks already mentioned, such respected names as Rabobank in Holland and the Raiffeissen banks in Germany.

Some reporting requirements for insurance firms, especially smaller firms, have already been removed. The PRA will be consulting in the coming months on easing insurance reporting burdens further. The PRA has also started a review of banking reporting requirements. 20. On empirical research supporting this argument, see Ross Levine, ‘Finance, Growth, and Inequality’, IMF Working Paper WP/21/164 (2021). 21. PRA CP 4/23 – ‘The Strong and Simple Framework: Liquidity and Disclosure Requirements for Simpler-regime Firms’, February 2023. Proposals include replacing the NSFR with a simpler retail deposit ratio for firms with large retail deposit bases, simplifying liquidity reporting templates (including simplifying the ILAAP template), reducing Pillar 3 disclosure requirements, and removing Pillar 3 disclosure entirely when firms do not have listed financial instruments. 22. PRA CP 5/23 – ‘Remuneration: Enhancing proportionality for small firms’, February 2023. Proposals include removing requirements to apply rules on malus, clawback, and buyouts for eligible firms. 23. On earlier reforms to IRB modelling of mortgage risk, see PRA Policy Statement 13/17 – ‘Residential mortgage risk weights’, June 2017; PRA Policy Statement 7/19 – ‘Credit risk: The definition of default’, March 2019; and PRA Policy Statement 11/20 – ‘Credit risk: Probability of Default and Loss Given Default estimation’, May 2020. 24. For owner-occupier mortgages with LTV ratios below 50%, the gap between risk weights could narrow by between 50% and 70%. 25.
I strongly encourage all financial market participants - commercial and investment banks, domestic and foreign - to approach the issue of disclosure as users of financial statements rather than as issuers. Clearly, a full appreciation of risk cannot be achieved without  BIS Review 32/2000  4  sufficient information. What we need to know about each other to be comfortable and secure in making our credit decisions should drive the debate. While effective bank level management and meaningful market discipline are crucial elements of an overall strategy for promoting and preserving financial stability, neither can substitute for the critical role played by official supervision. While banks perform functions that are indispensable to the success of any market economy, these same functions, by their very nature, introduce risks that are capable of undermining the prospects for such success. This reality was acknowledged by Adam Smith over two centuries ago in his seminal tract The Wealth of Nations. It is with this fundamental reality in mind that governments have long recognized that banking and other financial institutions must be subject to some form of regulation and official oversight. The Gramm-Leach-Bliley supervisory framework The Gramm-Leach-Bliley Act presents major challenges to US supervisors. Under the terms of the Act, the Federal Reserve will continue to serve as the umbrella supervisor of all bank holding companies, including the newly authorized FHCs.

Since the summer of 2007, the total value of our £ notes in circulation has risen from £ to £ Again, I believe this is a pattern seen in the high denomination notes of other currencies. Chart 5 shows the same story, but this time expressing it in terms of the contribution of each denomination to overall growth. The yellow contribution shows the role of the £ This strikes me as pretty good prima facie evidence that there has been an increase in demand for banknotes as a store of value. BIS Review 162/2009  3  So far, I have told the story of trends in demand for banknotes over the last forty years in terms more of the macroeconomics of demand for notes as central bank money. Now I want to turn to the more micro elements of banknote use. The first thing to say here, as Chart 6 illustrates, is that over the last twenty years there has been a major change in the method of distributing banknotes to the public. At the start of the 1990s there were under 20,000 ATMs in the UK, whereas now the number is over 60,000. Since the beginning of the current decade, the major growth has been among the independent ATM deployers, as opposed to financial institution operated machines. 4  BIS Review 162/2009  And as Chart 7 shows, ATM withdrawals now account for around 70% of all cash acquisitions by individuals in the UK, compared with 25% in the early 1990s.