samchain/econo-pairs-v1 huggingface dataset:
But these same exchange rate regimes were in place when the funds were flowing in, which suggests that they were not viewed as a serious structural flaw by investors at that time. Similarly, the underlying weaknesses in many Asian economies that so many observers (with the benefit of hindsight) now point to — ‘crony capitalism’, inadequate risk management, speculative lending to the property sector — were all present at the time when the funds were pouring into the region. Not only did these weaknesses fail to deter investors on the way in: the abundance of inward investment prior to the crisis tended to exacerbate the problems, rather than act as a corrective force on policies. More recently, we have witnessed what appears to be the start of a new wave of capital flowing back into the region, even though it is far from clear that these structural problems have been fully addressed. I think it is not going too far to say that these ‘hot’ capital flows not only failed to act in a way that policed policies effectively, but actually became a powerful destabilising force in their own right. The huge swings in interest rates and exchange rates that resulted from capital flight in this region did far-reaching damage to corporate, financial, and government sectors, which, in turn, reinforced the initial withdrawal of capital.

We are very satisfied with our strategy and with the fact that it has given appropriate and effective guidance to monetary policy decisions. Let me also assure you that there will be no change in our firm commitment to our overriding objective of maintaining price stability over the medium term, i.e. avoiding both inflation and deflation. Indeed, this could not be otherwise, since the achievement of the price stability objective is at the core of our mandate in the Treaty. 2. The ECB Recommendation on the adjustment of voting modalities in the Governing Council  On 3 February 2003, the Governing Council adopted a recommendation on the adjustment of its voting modalities, which will prepare the Governing Council for a future expansion of the euro area. With the timely submission of this recommendation, and a hopefully rapid completion of the overall procedure, we hope to preclude any uncertainty about the continued effectiveness of the ECB's governance structures in view of a future expansion of the euro area. In this context, I should like to emphasise how much I appreciate your Committee's efforts to respect an ambitious timetable in order to present in good time the Opinion of the European Parliament as foreseen by the Treaty. As you are aware, the task of coming up with a new voting system presented the Governing Council with a formidable challenge.
Together, these forces are reducing the cost of providing traditional financial services and are paving the way for new ways to channel savings and manage risks. Structural developments in the financial sector can be important for monetary and financial stability. Central bankers thus follow developments with great interest. Today I will examine some aspects of the changes taking place and their potential consequences for monetary and financial stability. Let me run through the structure of my speech. First, I’d like to touch upon some characteristics of the Nordic economies as a background to the financial sector issues I will discuss later. Second, I will define the two stability terms that I have just introduced. Third, I will discuss the growing importance of securities markets. I will then reflect upon cross-border integration in the banking sector and consequences of the Internet. Finally, I will take a quick look at what challenges structural changes may pose to the authorities, and then conclude. 2. Some characteristics of the Nordic economies  The economies of the four largest Nordic countries have some well-known features that distinguish them from most other developed countries. 1  BIS Review 78/2000  For a start, they all have fairly large public sectors, as illustrated by the level of public sector employment. Compared with Anglo-Saxon countries, the differences are striking. The large public sectors are the result of a deliberate choice to ensure equal access to certain services like health care.

For many other countries with less economic policy discipline, traditional fixed exchange rate regimes have proved fatal. Internationally, there is a tendency of a shift away from the traditional fixed exchange rate regime. Countries that place overriding emphasis on exchange rate stability must bind themselves more firmly to the mast either by establishing a currency board or by abandoning their national currency. Other countries allow their currency to float and establish a nominal anchor such as an inflation target. 4. The growing importance of securities markets  Let me now turn to an important structural development in the financial sector: the growing importance of securities markets. 1  Japan in the late 1980s has been mentioned as one example. Cf. Bernanke, Ben and Mark Gertler: Monetary policy and asset price volatility, and Yamaguchi, Yutaka: Asset price and monetary policy: Japan’s experience, in New challenges for monetary policy, Federal Reserve Bank of Kansas City (1999). 5  BIS Review 78/2000  Chart 5 Swedish households’ gross financial assets by instrument. Per cent  In most developed countries, securities markets are growing at the expense of financial intermediation. In the Nordic countries, this trend is most obvious in the savings market. Sweden is an example. Deposit savings have been reduced, whereas savings directly or indirectly in securities markets have increased. This affects banks’ earnings and funding structure. The trend is similar in Norway. In the euro area, there has been a sharp growth in issues of private securities after the introduction of the single currency.
The first is that deeper fiscal integration between members can play an important role in smoothing shocks that affect only part of the currency area.23 It is no coincidence that effective currency unions tend to have centralised fiscal authorities whose spending is a sizeable share of GDP – averaging over a quarter of GDP for advanced countries outside the euro area (table 5). That offers scope for a significant degree of stabilisation, much of it happening automatically as slowing growth in one part of the union causes tax revenues there to fall and welfare spending to increase. Those automatic fiscal stabilisers are important within the UK – it is estimated that for every £ that output falls the reduction in taxes and increases in transfers are together worth about 50 pence.24 What matters for individuals is the extent to which this risk sharing insulates their disposable income from shocks. In the UK there is evidence that around a fifth of variation in regional personal income relative to the national average is stabilised by central government transfers. That is probably an important factor in accounting for the close harmonisation of economic performance within the UK. The degree of stabilisation in France and the US is similar, with a slightly lower figure for Canada.25 Fiscal stabilisation is particularly important in a currency union because it helps mitigate the loss of exchange rate flexibility.

Experience has also shown that financial crisis and economic recession entrenches the cycle of poverty. During a financial crisis, the poor lose their income by several times more compared with the average household. We saw this happen during the recent Global Financial Crisis, and we also saw how many that were displaced suffered "hysteresis" thus deeply affecting their income prospects. We also risk facing a severe setback in our fight against poverty. In the more recent years, the international community has accorded greater attention to addressing this agenda and to achieving more balanced and inclusive growth. Malaysia, while achieving growth and progress since the 1960s has always given attention for it to be a shared prosperity. Given the role of the financial system in facilitating this, Bank Negara Malaysia has always given priority to the financial inclusion agenda to not only bring the underserved segments of society into the financial mainstream but to promote a more effective participation in the financial system which will in turn strengthen the potential for enhancing economic well-being. Before I conclude my remarks, allow me to congratulate the World Bank Group on its many achievements realised in the Asian Region. Bank Negara Malaysia is pleased to partner the World Bank Group in its initiatives in the region.
Under the auspices of the Basel Committee on Banking Supervision of the BIS, a wide-ranging set of reforms has been introduced progressively, including the recent finalization of the Basel III reforms.11 Tighter regulation of international banks must be complemented by effective supervision, and much progress has been made in improving home/host supervisory cooperation. In a local context, cross-border supervisory coordination has taken on increased importance as Brazilian banks have expanded internationally in recent years. Still, greater clarity around how large global banks will be resolved is required if we are to successfully end “too big to fail.” Finally, it is increasingly clear to me that we also need to develop a better shared understanding of the proper role of exchange rate policies and reserve accumulation in a healthy and fair global trading system. To be sure, in a world of volatile capital flows, experience has shown that having adequate reserve cushions has helped many emerging market economies ward off costly instability. Indeed, Brazil’s large stock of foreign exchange reserves has been a key pillar of stability through turbulent periods. But, reserves are a relatively expensive form of insurance, and excessive reserve accumulation can undermine global adjustment, shift burdens onto trading partners, and erode political support for continued trade openness.

There are various measures available in current trade agreements, such as antidumping measures and countervailing duties for dealing with “unfair” trade, as well as escape clauses that provide safeguards for industries that face a sudden surge of imports. Again, the challenge is to ensure that such measures are effective, that they help facilitate rather than retard adjustment, and that they are not abused so as to avoid foreign competition. But, both sanctions and temporary relief have been provided for in global trade rules. We should be willing to use them when their use would lead to more equitable outcomes and would help sustain political support for a more open trade regime. Financial Globalization Is Also Important Financial globalization—the flow of capital across national borders—is also an important issue that must be considered. These flows help to support global economic integration in the trade of goods and services. This is a large, complex subject—and one the Central Bank of Brazil is well acquainted with, having successfully managed the pressures of heavy capital inflows as well as outflows during periods of stress. The tremendous damage of the global financial crisis underscores the importance of this issue. As with issues related to trade, achieving effective financial globalization requires robust and mutually supportive measures at both the domestic and international levels.
If the Swiss franc were to appreciate rapidly, the National Bank would react appropriately. Today’s increase in the three-month Libor was generally expected. Why did financial markets anticipate this move? The answer is simple. The moderate increase in the interest rate is compatible with our strategy of making gradual corrections to a very expansionary monetary policy, while taking into account economic recovery. Let me clarify this statement. Economic activity At our monetary policy assessment in mid-September, we addressed the factors indicating an economic improvement in the second quarter. We expected that this trend would strengthen in the second half of the year. The movements in economic indicators over the last three months confirm this scenario. According to estimates by the State Secretariat for Economic Affairs (seco), real GDP in the third quarter exceeded the previous quarter by an annualised figure of 4.3%. With respect to the year-back level, it was up by 2.3%. Together with the GDP figures for the third quarter, seco also presented revised figures for the first two quarters. The new figures are substantially higher than before, even after the considerable increase in the figure for the first quarter that was presented in September. Most observers were surprised by the size of the growth estimate for the third quarter. What is more, the retrospective revisions have considerably modified the perception of the economic situation in the first half of the year.

Abdulrahman A Al-Hamidy: Risk strategies for Basel III compliance and beyond – extracting business value from regulatory change Speech by His Excellency Dr Abdulrahman A Al-Hamidy, Vice Governor of the Saudi Arabian Monetary Agency (SAMA), at The Institute of Banking/Moody’s Analytics Symposium, Riyadh, 30 November 2011. *  *  *  Distinguished Participants, I am pleased to be here today to share my thoughts on “Risk Strategies for Basel III Compliance and Beyond”. Given the lingering global financial crisis with ongoing impact on a number of economies and financial markets, this is a relevant and timely subject to deliberate upon. I appreciate the efforts of the Institute of Banking and the Moody’s Analytics to organize this Symposium for the benefit of the bankers and supervisors in the Kingdom. I have seen the list of topics to be covered today and the impressive list of speakers and I am confident that all of you would greatly benefit from the discussions. The world today has not yet recovered from the global financial crisis that started in 2007. While the governments, central banks, supervisory authorities and international organizations have been working hard to revive and revitalize financial markets and financial institutions in many advanced markets, the recovery has been slow. Following the financial crisis the lessons learned exercise had attributed the main causes to include a long period of easy monetary policy that fueled accelerated economic growth accompanied by lax and light supervision in a number of advanced markets.
Looking forward, we face as a nation a number of very important policy questions. This financial crisis, as all past crises, has highlighted vulnerabilities that require action. No economy is stronger than its financial system, and as we continue to focus on the immediate challenges of financial repair and supporting economic growth, we need to begin the process of building consensus on a comprehensive set of change to our regulatory framework. In addition to a stronger set of protections for consumers, the overwhelming imperative of reform must be to put in place a stronger framework for financial stability. Our objective should be a system that preserves the unique strengths of our financial markets in providing individuals and entrepreneurs access to capital and credit, but with a greater capacity to withstand stress. 8  BIS Review 39/20086  This will require significant changes to regulatory policy and the supervisory framework. And the focus has to be on changing the incentives that all financial market participants face in managing the risk in exposure to adverse outcomes. In my view, there are a set of important objectives and principles that should guide this effort. •  We need to ensure there is a stronger set of shock absorbers, in terms of capital and liquidity, in those institutions, banks and a limited number of the largest investment banks, that are critical to market functioning and economic health, with a stronger form of consolidated supervision over those institutions.

Philipp Hildebrand: Swiss monetary policy and financial markets Summary of a speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Autumn forecast of the Swiss Institute for Business Cycle Research, Zurich, 5 October 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch)  *  *  *  Transparency and communication enhance the impact and the precision of monetary policy. Monetary policy functions through expectations. This means that it is first and foremost expectation management. Central banks strive for transparency regarding their methods and approaches. All in all, the current economic and, in particular, the structural uncertainties are resulting in a greater range of possible economic scenarios and thus also in an increase in the range of expectations regarding our future monetary policy. In other words, being transparent does not automatically mean being predictable. Therefore, the Swiss National Bank (SNB) considers it particularly important to communicate its monetary policy concept to the markets and the public. This allows them to arrive at similar conclusions to those reached by the SNB. BIS Review 92/2006  1
BIS Review 46/2009  1  This Conference is therefore, aimed at enhancing financial inclusion by equipping practitioners and regulators with tools to promote financial literacy and to expand the provision of financial services. Chairperson: Allow me to give some highlights of the status of financial inclusion in Zambia. Like in many other developing countries, the financial sector in Zambia still faces a number of challenges. The joint IMF/World Bank, Financial Sector Assessment Programme (FSAP) Report of 2002, highlighted a number of these, including limited access to financial services by the rural and peri-urban population and doubtful sustainability of financial services in Zambia. In light of these findings, and in recognition of the strategic importance of the development of the financial sector in contributing to sustainable economic growth and poverty reduction, the Government of the Republic of Zambia developed and launched the Financial Sector Development Plan (FSDP) in 2004. The FSDP is a comprehensive five year strategy to build and strengthen the financial sector infrastructure to enable it to support economic diversification and sustainable growth. Under the FSDP, two important studies, namely, the FinScope™ Surveys of 2005 and 2007, on the demand for and supply of financial services in Zambia have been undertaken. These studies have augmented the earlier findings of the FSAP with respect to the key developmental challenges for the financial sector in Zambia.

This implies that, when joining the EU, the new Member States will have to comply with all of the requirements outlined in the acquis communautaire which relate to European Economic and Monetary Union (EMU). Moreover, following accession, they shall each have to prepare themselves for the eventual adoption of the euro. Thus it is clear that the accession process and the entry of new members into the EU will have deep and wide-ranging consequences for the ECB and the Eurosystem. Of course, meeting the Maastricht convergence criteria is not a prerequisite for joining the EU. However, the introduction of the euro certainly puts some pressure on accession countries to make progress towards fulfilling the convergence criteria. In fact, we might consider their progress towards adopting the euro as part of a continuum, encompassing three distinct stages and crucial steps. These are: EU membership, participation in ERM II, and eventual adoption of the euro. The first of these steps requires implementation of the EMU-related acquis communautaire. Then, on the date of accession, new Member States will join EMU with the status of “countries with a derogation”. From this point onwards, they will be expected not only to treat their economic policies as a matter of common concern, but also to be committed to the eventual adoption of the euro, which should be an objective both of monetary and of other economic policies. This is a direct result of the fact that, as I mentioned earlier, no new opt-out clauses are to be granted to the accession countries.
of PopulaBanking PopulaBanking Outlets tion per tion Density Branch (All ('00,000) Banks) *  Province  Banking Population Density per Branch  1  Colombo  415  24.56  16.90  5,918.07  2  Gampaha  174  21.40  8.13  12,298.85  3  Kalutara  89  11.11  8.01  12,483.15  4  Matale  38  4.77  7.97  12,552.63  5  Kandy  96  13.80  6.96  14,375.00  6  Nuwara Eliya  46  7.42  6.20  16,130.43  7  Galle  78  10.52  7.41  13,487.18  8  Matara  70  8.13  8.61  11,614.29  9  Hambantota  50  5.52  9.06  11,040.00  10  Jaffna  40  5.99  6.68  14,975.00  11  Killinochchi  4  1.46  2.74  36,500.00  12  Mullativu  4  1.47  2.72  36,750.00  13  Mannar  5  1.01  4.95  20,200.00  14  Vavuniya  8  1.66  4.82  20,750.00  15  Ampara  42  6.15  6.83  14,642.86  16  Batticaloa  20  5.23  3.82  26,150.00  17  Trincomalee  18  3.55  5.07  19,722.22  18  Kurunegala  101  15.24  6.63  15,089.11  19  Puttalam  53  7.52  7.05  14,188.68  20  Anuradhapura  66  8.01  8.24  12,136.36  21  Polonnaruwa  34  3.95  8.61  11,617.65  22  Badulla  71  8.50  8.35  11,971.83  23  Monaragala  35  4.25  8.24  12,142.86  24  Kegalle  68  8.02  8.48  7.42 13,485.71  25  Ratnapura  72  10.86  6.63  11,794.12 Sabaragamuw a 15,083.33  1,697  200.10  8.48  11,791.40  8.48 11,791.40  Total * Branches only  BIS Review 40/2008  Western  11.88  8,417.40  Central  6.93 14,438.89  Southern  8.19 12,207.07  Northern  5.26 19,000.00  Eastern  5.36 18,662.50  North Western  6.77 14,779.22  North Central  8.36 11,960.00  Uva  8.31 12,028.30  Source: Central Bank of Sri Lanka  3  Table I shows that as at the end of 2007, there were 678 banking outlets in the Western Province out of a total branch network of 1,697 in the whole country.

Today the benchmark portfolio is more diversified and includes a large number of countries globally. 8  BIS Review 44/2010  In 2008 it was decided to increase the share of emerging market assets in the Fund’s benchmark portfolio. Thus, investments in these markets have grown. The government has stated that the expected annual return on the Fund will be close to 4 per cent over time. Since its establishment, the average return has been 2.7 per cent. It was only a little more than a year ago that we witnessed the steepest fall in global capital markets in our time. By maintaining the Fund’s risk profile it is fairly probable that the average return will gradually approach 4 per cent again. Last year was the best in the Fund’s history. Gains in international equity and fixed income markets led to a record annual return of 25.6 per cent in 2009. 3 However, developments in  3  Government Pension Fund Global – Annual Report 2009. BIS Review 44/2010  9  2009 must to a large extent be viewed in light of the financial crisis and are mainly due to a reversal of the negative results in 2007 and 2008. Multilateral approach to global challenges Finally, let me turn to the international economic order and developments in multilateral institutions over the past few years.