samchain/econo-pairs-v1 huggingface dataset:
In fact, more than 75% of Malaysians find it difficult to raise even RM1,000 of immediate cash for emergencies. The ability to plan for the future and exercise self-control is a crucial life skill that needs to be cultivated and nurtured. In fact, a key predictor of success in life, is to be able to take the longer term perspective. Let’s move on to the issue of debt. Not all debt is bad as any economist would tell you, for borrowing to invest in productive assets or purposes will make one better off in the future. However, when the level of one’s borrowings is too high, it is a cause of concern. Let me illustrate, a significant proportion of youth today are surviving on high borrowings. The statistics are telling, 38% of youths take up personal loans, 47% have expensive credit card borrowings 1/3  BIS central bankers' speeches  and more than 3,400 borrowers between the ages of 20–30 years have sought out AKPK’s financial assistance in 2017, which would likely mean that the actual numbers facing financial difficulties are higher. To those of you today who are making early forays in the working world, it is our collective hope that you will take all active measures to not be part of those statistics. The future ahead of you is bright and the burden of being weighed down by excessive debt is a hindrance to your development and success.

In the journey to find purpose and passion in life, always be curious, take risks and differentiate yourselves from everyone around you. The fact that ‘change is the only constant’ tells us that the world is ever evolving and all of us are constantly addressing curve balls and wildcards that life throws at us. The talk of job displacements, the rise of Artificial Intelligence, FinTech, InsurTech and the New Industrial Revolution will certainly change the world that we live in. In those, there are challenges, but there are opportunities as well. Thus, no matter in what stage of life you are in – you need to stay relevant, always strive to be different by innovating yourself. Above all, I must say, savour the experience and find personal meaning, purpose and enrichment along the way. While many of you embark on your journey of discovery, it is important to take heed of the wisdom of the wise on what may appear as uninteresting lectures on financially planning for your future. As the saying goes failing to plan, is planning to fail. It is alarming that although 40% of Malaysians consider themselves financially ready for retirement, a retiree would need an estimated minimum of RM228,000 in today’s value upon retirement to generate sufficient income to live above the poverty line for the next 20 years. It is even more worrying to see only 18% of Malaysians, that is less than one fifth, actually have that exact sufficient amount of EPF savings.
The rate-setting with regard to the banks’ deposits with the Riksbank is part of the monetary policy transmission mechanism and a means of further cutting interest rates in the Swedish economy so that inflation will continue to rise towards the target. In this way, we contribute to price-setting and wage-formation in society functioning better, which gives the right conditions for a good development of the economy. It may be worth pointing out that the Riksbank is not in any way unique in this context. Our central bank colleagues in, for instance, Switzerland and Denmark have similar systems, although some details differ. For instance, the Swiss central bank has chosen to limit how much of the bank’s deposits should be subject to a negative interest rate and part of the deposits in the Danish central bank is also interest-free. However, the effective interest rate the banks in these countries pay is nevertheless in line with what the Swedish banks pay. 1  The reason why this is 4 per cent of GDP is that the nominal amount of SEK 135 billion had a market value corresponding to SEK 160 billion. BIS central bankers’ speeches  3  I can also note that the four major Swedish banks made profits of almost SEK 44 billion during the first half of the year. In the same period, they have had to pay around SEK 90 million on their deposits with the Riksbank, as a result of the negative interest rates.

Per cent as at 31 Dec 2008 70  70  60  60  50  50  40  40  30  30  20  20  10  10  0  0 Aaa  Aa  A  Baa  Ba  Lower  No rating  9  8  BIS Review 53/2009  Risk premiums for corporate bonds Total premiums Liquidity Uncertainty regarding future losses Credit risk  Source: Bank of England Inflation Report, February 2009 10  Risk – expected tracking error (relative volatility) 200  200  175  175  150  150  125  125  100  100  75  75  50  50  25  25 0  0 99  02  05  08 11  BIS Review 53/2009  9
The opposite  3  Alternative forecasts for the repo rate are published in the Monetary Policy Reports, three times per year. Alternative forecasts for the repo rate are also discussed ahead of the remaining monetary policy meetings, but these are not published in the Monetary Policy Updates. 4  The trend is estimated using a so-called Hodrick-Prescott filter (HP filter). This is a statistical method for dividing the movements of a variable into trend and cyclical components. The method can be described as a weighted double-sided moving average where greater weight is placed on observations close at hand and gradually decreasing weight on more distant observations. The output gap according to the HP method should not necessarily be interpreted as the Riksbank’s overall assessment of resource utilisation. 4  BIS Review 32/2010  applies when the gap is negative. Figure 2.d illustrates the output gap based on the two repo rate paths. Both paths resulted in negative output gaps during the forecast period, that is to say resource utilisation below the normal level. However, using the repo rate path in the main scenario gave a less negative output gap, using this measurement method, than using the repo rate path from December 2008. The lower repo-rate path thus stabilised both CPIF inflation and resource utilisation better than the higher repo rate path.

A fair comparison of the accuracy of different forecasts should take into account the fact that the forecasts are made at different points in time and that different forecasters therefore do not have the same information available to them. In the comparison of forecasts made in the material for the assessment of monetary policy, a method is used that takes such differences into account. 9 Figure 10 shows an adjusted absolute average error for the inflation forecasts for the period 1999–2009, that is the absolute forecasting error for CPI inflation adjusting for differences in the forecast horizon. 10 The shorter the bar, the smaller the forecasting error and the higher the accuracy of the forecast. 9  See M. Andersson and T. Aranki, “A comparison of different forecasters’ ability given the publication date effect”, Sveriges Riksbank Economic Review, No.1, 2009. 10  The average error is calculated as the mean value of the forecaster's forecasting errors during the forecast period. The absolute average error means that the sign of the individual forecast deviations is not taken into account. 14  BIS Review 32/2010  The major forecasters – the Swedish Ministry of Finance, the National Institute of Economic Research and the Riksbank – are reported individually, while the others are reported as an average. It may be worth noting that the Riksbank’s forecasts up to the third Inflation Report of 2005 were based on the assumption of an unchanged repo rate during the forecasting period. This may have hampered the accuracy.
It is not mumbo jumbo that a productivity level of around 1.5 per cent and an inflation target of 2 per cent are incompatible with wage rises of 4 per cent. The scope for wage rises is a maximum of 3.5 per cent at normal profit levels. Our assessment of wage developments in the coming two years is around 4 per cent, i.e. a level that is not compatible with the inflation target, unless productivity develops better than expected. Higher wage increases than expected were one of the causes behind the Riksbank’s two interest rate hikes in March and April. However, wage increases differ between the different sectors and different professional categories. Particularly high wage rises can be noted in the service industries. In some parts of these industries the wages for white-collar workers have increased more rapidly than those for blue-collar workers. This, together with considerable problems in attracting qualified personnel to certain parts of the public sector, entails a risk of a greater wage drift, particularly in a situation where economic activity has improved. Relative wage changes are a normal element in a dynamic economy, but the Swedish labour market has previously shown that large relative changes often lead to a compensatory wage drift. Some large groups have had wage rises of around 5 per cent - this applies to the service industries, the construction sector and white-collar workers in industry - but no large group has received less than the 3.5 per cent that would be necessary to achieve the inflation target.

The fact that industrial nations enter an economic downturn together has been a rule rather than an exception. The decline at the beginning of the 1990s was different, because it was due to different types of disturbance. The German reunification meant that Germany and Europe went their own way to some extent. Bank crises hit different countries at different points in time. In Sweden there was also a very large increase in real interest rates following in the footsteps of the change in the inflation rate and the defence of the fixed exchange rate, which contributed to the crisis in Sweden becoming deeper than those in most other industrial nations and, in addition, the worst recession Sweden had experienced since the 1930s. The downturn we have just experienced has been unusual in that the decline in production in the USA and Germany was lower than usual and in many European countries there has been no decline in growth at all. In Sweden, too, the slowdown appears to have been one of the mildest during the postwar period. Growth is not expected to decline for a single quarter. During all of the previous downturns in economic activity there has been at least one quarter with a negative result for growth and since 1970 economic downturns have always led to a decline in production over an average of four quarters. Households’ consumption has been relatively strong in many countries during the downturn and this is also the explanation why countries have avoided a decline in production altogether.
It is still far too early to be drawing strong conclusions on the precise path of the UK economy from here. At present, we have only the smallest trail of data breadcrumbs on which to base any assessment of how companies and consumers are responding to the referendum news. The Monetary Policy Committee will have a chance to offer its own comprehensive macroeconomic assessment in a month’s time, with the August Inflation Report. But let me offer a few general reflections on the likely economic path ahead. First, and in some ways most importantly, this is not (underlined, italicised, capitalised and repeated in bold) a re-run of the financial crisis of 2008/09. Then, the fault-line was an undercapitalised and illiquid banking system which, having folded under pressure, then pulled the credit rug out from under the feet of companies and consumers. When the banks sneezed in 2008, the whole economy caught a cold – and atishoo, atishoo, we all fell down. The situation today could not be more different. The UK banking system is, by an order of magnitude, better capitalised and more liquid than then. That is in large part a reflection of the post-crisis regulatory reform agenda which has strengthened banks’ capital and liquidity standards. Since the referendum, the Bank of England has augmented these capital and liquidity buffers by making available more than £ billion of liquidity and by lowering banks’ Counter-Cyclical Capital Buffer to facilitate an extra £ billion of lending.

Indeed, given the scale of the exchange rate shock, it is possible inflation could overshoot this target in the period ahead. In principle, this combination of inflation-above-target and output-below-capacity poses a dilemma for monetary policy. Tighten to counter the first or loosen to cushion the second? In practice, in my personal view, there is no real policy dilemma here and little ambiguity about the appropriate monetary policy response, either in direction (easing) or scale (significant). One reason for saying that is because I do not think the risk of higher inflation becoming entrenched is especially great. Even before the events of the past month, the Phillips curve here in the UK (the relationship between wages/prices and unemployment/output) was as flat as a pancake. In a world of potentially stalling output and rising unemployment, I find it hard to imagine wage and price pressures will intensify greatly in the period ahead. Indeed, it is striking that despite the sharp fall in the exchange rate and the temporary boost this will provide to inflation, there are no indications so far of this having dislodged mediumterm inflation expectations. The most direct measure we have is from financial markets where they have shown few signs of ticking-up (Chart 32). Indeed, at longer maturities inflation expectations have nudged down from already fairly low levels. With household and company measures of inflation expectations also at historically low levels, in my personal view the risk of inflation expectations being dislodged to the downside is greater than on the upside.
30 It is interesting to assess those proposals using the framework developed here. 29  European Commission (2010), CFTC-SEC (2011). 30  CFTC-SEC (2011). 12  BIS central bankers’ speeches  (i) Market-making guidelines: In principle, a commitment by market-makers to provide liquidity, whatever the state of the market, would go to the heart of potential price discontinuity problems. Market-making commitments would not forestall the arms race. But they would lessen the chances of liquidity droughts and associated fat tails and persistence in prices. They would, in effect, lower the impact of H. Perhaps for that reason, there have been proposals in both the US and Europe for such a set of market-making commitments. 31 The difficulty appears, first, in specifying these commitments in a precise enough fashion; and, relatedly and just as importantly, enforcing them. In a sense, even the market-makers offering their stub quotes on 6 May were fulfilling a market-making commitment, albeit a paper-thin one. If hard law commitments are too difficult to define or enforce, an alternative may be a set of soft law guidelines. A number of electronic broking platforms, notably in foreign exchange markets, have codes or rules of conduct – for example, around pricemaking and price-taking which control the extent to which any one firm can steal a technological march on others. If these codes were extended across trading platforms and assets, perhaps in time market-making behaviour might adapt. (ii) Circuit-breakers: Circuit-breakers already exist on US and Europe exchanges.

That is what we appear, increasingly, to find in financial market prices in practice, whether in volatility and correlation or in fat tails and persistence. This change in price dynamics will in turn influence market-making behaviour. Consider the problem facing an HFT market-maker. They face inventory risk from market fluctuations and information risk from adverse selection. Pricing these risks means forming a guess about the future path of prices. The greater the potential range of future prices, the larger the insurance premium they will demand. The future price range (maximum – minimum) for a price series at some future date T, R(T), can be written generically as: 20 (1) where κ is a constant and σT is the standard deviation of the process up to time T. H is our old friend the Hurst coefficient, dredged up from the Nile; it can be thought to summarise the degree of fat-tailedness and persistence in prices. When the holding period is short (say T=1), as with HFT, the future price range is the volatility of the series magnified by the Hurst coefficient. In other words, the fatter and more persistent the tails (H), the greater the market risk and the wider the bid-ask spread of the HFT. This has implications for the dynamics of bid-ask spreads, and hence liquidity, among HFT firms. During a market crash, the volatility of prices (σ) is likely to spike. From equation (1), fractality heightens the risk-sensitivity of HFT bid-ask spreads to such a volatility event.
The reason is because a child engages in so-called “divergent” thinking – that is to say, thinking untethered by convention and education. It is too late for anyone in this room to recreate their childhood brain, I’m afraid. But we could all do the next best thing, which is to create “divergent thinking” within and across our organisations. That means building teams rich and diverse in their backgrounds, personalities and thought processes – if you like, creating your very own mini-Medici effect. This is very much the ethos in some of the world’s most innovative companies. The benefits of diversity do not end with innovation and creativity. Diversity has also been shown to make organisations more resilient to stresses and strains, including the frailties of human decision-making. Human decisions are riddled with biases like hubris and groupthink. These impair judgement and make for  6  Haldane (2016), ‘The Sneetches’ sets this out in greater detail. 3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  sub-optimal decision-making. And we do not need to look far for examples. Hubris was the reason some banks failed in 2008. But groupthink was the reason most banks (as well as many regulators, central banks 7  and academics) failed in 2008. As lack of diversity was the cause of these failures, greater diversity can be the antidote to them recurring in future. Plato argued that necessity is the mother of all invention. The evidence, accumulated over the centuries since, suggests Plato may have been only half right.

Diversity is not only about our physiological identity – our gender, ethnicity. It is also about our sociological identity – our background, experience – and our neurological identity – our personalities, how our brains are wired. When I joined the Bank of England 26 years ago, I was physiologically similar to others at the Bank, but quite different along these broader sociological and neurological dimensions. In fact, I was the beneficiary of one of the Bank’s first waves of diversity initiatives. And I am delighted to say that, following a sequence of initiatives over the years, the Bank today is a significantly more diverse place along all these dimensions. So too, I am sure, are all of your organisations. The numbers here speak for themselves with a steadily rising trend, over several decades now, of female and ethnic minority representation in the workplace and, admittedly more limited, evidence of a rising trend at senior executive and board level. That is good 3  progress, spurred on by initiatives such as Helena’s 30% Club , Jayne-Anne’s review of gender diversity 4  5  earlier this year and John Parker’s review of ethnic diversity just last week. But can we rest on our laurels? My answer to that – and I imagine Helena’s, Jayne-Anne’s and John’s too - is a resounding no. Many of our organisations have diversity policies, champions and initiatives. Yet this is still a subject owned by the HR department rather than the Boardroom or Executive Suite in many firms.
Conclusion Our banknotes serve as repositories of the country’s collective memory, promoting awareness of the United Kingdom’ glorious history and highlighting the contributions of its greatest citizens. That tradition continues with the new £ As Austen herself advised us “You must learn some of my philosophy. Think only of the past as its remembrance gives you pleasure.” Today, we look forward to the launch of the new £ note, graced by Jane Austen, as we look back to her life and celebrate the joy she has brought, and is yet to bring, to all those who read her work. 7  The advantage of using the engraving, rather than the original portrait, is that it has sufficient detail that it can be used without requiring any alterations to the image. 8 This image is from a drawing by Isabel Bishop (1902-1988), who illustrated E. P. Dutton & Company’s 1976 edition of Pride and Prejudice. 9 Miss Bingley, Chapter XI. 10 Other features of Bank of England banknotes that aid the visually impaired include the tiered sizing of different denominations and bold numerals. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4

While there are few ILS deals sponsored by Asian insurers, we expect to see more interest as insurers become increasingly sophisticated and focused on efficient management of risk and capital. MAS is developing a regulatory framework for ILS and will consult the industry in due course. Development of more advanced risk management techniques has to be supported by more sophisticated research. For example, more reliable estimates of catastrophic losses will allow insurers to better price and write larger risks. For ILS to be priced and rated, more robust risk models are needed. Singapore is well-placed to serve as a centre for Asian insurance research. We therefore encourage the industry to deepen its ties and collaboration with academia, and identify the relevant areas where greater research can make a difference. MAS is prepared to consider supporting worthy projects financially. Conclusion Ladies and gentleman, the success of our initiatives to grow the insurance industry is contingent upon active participation from the industry. As new products are introduced and more players enter the market, there will be greater vibrancy in our insurance industry. There will be greater cross-fertilisation of ideas and upgrading of skills, which will underpin the continued growth of Singapore into a thriving insurance marketplace. MAS and GIA have enjoyed an excellent working relationship over the years, and we look forward to many years of close and fruitful cooperation. It is our collective aim to continue to grow the vibrant insurance industry in Singapore and to bring it to even greater heights. Thank you.
Failing to support monetary policy in efforts to achieve the intended results would be an act of surrender and have dire consequences. 6  BIS Review 111/2007

26 May 2022  Keynote Speech at ASIFMA China Capital Markets Conference Edmond Lau, Deputy Chief Executive, Hong Kong Monetary Authority Onshore Market Development 1. Good morning. I’m delighted to join you virtually at this year’s China Capital Markets Conference. First of all, let me take this opportunity to thank ASIFMA for organising this event and inviting me to speak. 2. Today’s agenda focuses on onshore market developments. I would like to share my thoughts on the significance of recent developments in onshore capital markets, as well as the opportunities for international investors. 3. Mainland capital markets are experiencing a period of significant growth, with onshore equity and fixed income markets currently the second largest in the world. However, international investors’ exposure to China’s capital markets remains relatively small. Only around 4% of onshore equities and 3% of onshore bonds are owned by foreign investors, which is low by international standards and far smaller than China’s weight in the global economy. 4. We are pleased to see the Mainland’s continued commitment to open up onshore capital markets in recent years. The latest developments to facilitate foreign investors’ access to the onshore markets and adopt international standards have been encouraging and welcomed by the industry. Let me highlight a few of them here. 5. First, with the removal of foreign ownership limits, global financial institutions are able to further expand their footprint in China by taking majority or full ownership in their onshore subsidiaries.