samchain/econo-pairs-v1 huggingface dataset:
The growth in international trade, inter-linkages of the global financial system and advancement in technology have presented both the risks and opportunity to the private sectors. From the business perspective, this development provides for greater access to the wider global market. From the money laundering perspective, this also means that criminals have greater means and tools to launder their illegal proceeds into a form which appears to be legal. Using the tools provided via the advancement in technology such as the internet banking and wire transfers, these proceeds could subsequently be transferred out and layered into another transactions either in Malaysia or abroad. Changes in the business and economic landscape present a challenge to law enforcement agencies, financial regulators and supervisors. To ensure that we are effective in protecting the financial system and the broader economy from the threats of money laundering and terrorist financing, cooperation and collaboration is not an option but a vital requirement. In this regard, there must be strong working partnerships between all the law enforcement authorities, regulators, supervisors and the private sectors. Without that, our efforts will be futile. In terms of the legal framework, concerted efforts have been taken to ensure that our AML/CFT law and policies are comprehensive. On this note, I am happy to inform that the main law governing the AML/CFT has been passed by the Parliament and gazetted into a law on 29 August this year.

Bandid Nijathaworn: Developing the bond market - a central bank perspective Remarks by Mr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the Asset Forum, Bangkok, 29 March 2005. *  *  *  Distinguished Guests Ladies and Gentlemen Let me first thank the Asset magazine for inviting me to give this luncheon address. It is a pleasure to be here. I also would like to congratulate the organizer for putting up today's event. The bond market in Thailand is now at an important stage of development and a function like this is certainly a positive contribution. For my brief remark today, I want to make a few points on the Thai bond market from the standpoint of the Bank of Thailand. I also want to share with you our plan for developing the bond market this year. From the Bank of Thailand's point of view, the bond market is of exceptional importance to us. This is because it is the market that we operate monetary policy through open market operations and through our operations in the repo market. Therefore, the more developed and efficient the bond market, the more effective the conduct of monetary policy would also be. Also, a vibrant domestic bond market is essential for a robust and efficient financial system. This is important for the development of the economy in the longer-term.
And, we are now undoing that with the so-called slotting approach, which involves putting loans into risk buckets according to key characteristics. Supervisors have taken, broadly, four actions to correct the failings of Basel I and II. First, to raise sharply the capital requirements for trading book and investment banking activities. In doing so, we are changing the terms of trade for investment banking of this sort, and we are, of course, seeing the consequences. No apologies there I’m afraid. Second, we are, as I have just said, taking some assets out of the models regime because they should not have been there in the first place. Third, where assets are in the models regime, we are moving to create floors to prevent low modelled risk weights driving overall capital requirements down to imprudent levels. There is no doubt that an industry has grown up to arbitrage models and we will not in future let that lead to irresponsible practices. Let me take the case of mortgage risk weights, which has attracted recent attention. Prime mortgages are the sorts of assets that should be susceptible to modelling – there are a lot of them and they have been around for a long time. We still require the models calibration to take account of the early 1990s recession. Specifically, we don’t want models to use the relatively benign loan losses of recent years to reduce capital held. Why?

And third, as part of this, we are very focused on understanding business models, how firms make money, the risks they take. This, too, is a feature common to our supervision of banks and insurers. To give you an example, the high return on equity and low cost of equity business model is dead. It should never had been alive, because it could only exist through a misunderstanding of risks. Moreover, banks can alter their cost of equity through the choices they make on risk. Sometimes I hear the cost of equity explained as if it is exogenous, but it is not. Let me turn now to the current situation. I am not going to tell you the answer to whether the UK banks need extra capital, if so, how much of what type, and how rapidly should it be put in. The answer will of course differ for each bank. Let me though set out some of the considerations that shape the answers, and in doing so remember that we have to take into consideration the sizeable increase in capital in the system since 2008. And let me also emphasise that the FPC does need to reach a conclusion on these issues soon, and in doing so reduce one contribution to uncertainty over the future. The first consideration to note is that we face a situation where there is uncertainty around our judgements on the quality of a number of asset classes and their valuation.
That means that with very little spare capacity in the economy, even the unusually weak actual growth of around 1¾% over the forecast horizon – which you can see here in the MPC’s projection for GDP from the latest Inflation Report (Slide 7) – is still sufficient to generate excess demand. There are of course significant risks in both directions to the outlook for productivity. To the downside, there are at least two reasons to think that productivity won’t pick up to its pre-crisis rate. The first is that after such a long period of weak productivity growth it is reasonable to argue that we are in a new paradigm of lower productivity growth, and that is reinforced by the global nature of the weakness. The second is that that the dampening effect of Brexit on productivity growth – both through the effect of uncertainty on business investment in the short run and through the need to anticipate and respond to post-Brexit trading relationships – is likely to continue for some time. To the upside, productivity, although volatile, has tended to grow by around 2% on average for many decades, if not centuries. Productivity could ultimately pick up by more than expected globally and if there is a global upswing in trade and investment that benefits the United Kingdom. Additionally, if there is clarity around the transition and future trading arrangements post-Brexit, this could continue to reduce uncertainty, support business investment and lead to a stronger-than-expected pickup in productivity growth.

The weakness of and uncertainty around the path of UK productivity is a key driver of these unusual developments, and is therefore a key consideration for monetary policy. 1  For example Carney (2016) In this speech I use total value added per hour of work to measure of productivity. There are other measures of productivity, but this one is the most commonly used, and quoted, measure. 2  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  Recent developments in UK productivity  With that in mind, I thought I could best serve the panel by setting out some of the key characteristics of the weakness in productivity growth. It’s important to distinguish between two elements to UK productivity since the global financial crisis. First, the level of productivity fell during the crisis, which history tells us isn’t 3  particularly surprising in the wake of a financial crisis. Second, productivity growth has remained weak since the crisis, and much weaker than the pre-crisis growth trend. Annual productivity growth has averaged around ½pp since 2010, compared with an average growth rate of around 2% in the decade prior to the crisis (Slide 3). Productivity growth has also been weaker than expected for other advanced economies. 4  For this reason I’ll focus on productivity growth, as this is where the challenge lies. Productivity data can be sliced and diced in various different ways, providing different angles from which to understand and assess the recent weakness in productivity growth.
The minutes from the monetary policy meetings will now include the names of the Executive Board members in relation to the discussion and not merely if they enter a reservation against the majority decision. In this way it will be easier and clearer to examine the motives behind the monetary policy decisions and therefore also to form an impression of future decisions. These and all of the other changes we have made in recent years are intended to create the best possible opportunities to understand, evaluate and debate monetary policy. The debate on monetary policy is important and useful for us. It contributes to developing the way we work. The Riksbank’s openness, which we are now increasing further, enables a qualified public debate, which in turn is a part of how we can ensure accountability in a democracy. Thank you! BIS Review 54/2007  5

Michael C Bonello: Validating Malta’s strategy to create an international financial centre Remarks by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the opening of the Mediterranean Bank plc, Valletta, 29 September 2006. *  *  *  I should first of all like to thank the management of Mediterranean Bank plc for inviting me to officiate at the opening of these premises. Mediterranean Bank is a welcome addition to Malta’s growing financial sector. Its focus on private banking, in particular on portfolio and wealth management services, represents a niche activity which offers much scope for further development. On this occasion I would like to reflect on two particularly significant aspects of Mediterranean Bank’s decision to locate in Malta with a view to servicing clients in the Mediterranean basin. The first is that it represents a further validation of Malta’s strategy to create an international financial centre as a major pillar of its economy. Here, I would like to salute the vision and pragmatism of those politicians and technocrats who in the early 1990s steered this project to a successful conclusion. Today, financial intermediation activities alone directly contribute between 6% and 7% of the country’s GDP. This success is a unique example of what a bipartisan approach to strategic economic choices can achieve. It should indeed serve as an encouragement to our political leaders to tackle to-day’s much needed reforms in a similar manner. Allow me to recall some facts to underline the impressive growth of the financial sector.
But no one acted to make the financial system more resilient to those vulnerabilities. This was not just an intellectual failure, as is widely discussed and recognized now. It was also partly a failure of machinery. The FSB has been encouraging new machinery to survey and head off risks. The FSB itself has created a vulnerabilities group. It is probably the least prominent part of the Financial Stability Board’s effort to date, but it could have enduring significance over the years and decades. It is paralleled in various regions. Europe is setting up a Systemic Risk Board, which will be supported by the ECB but involve all of the EU. The USA is setting up a Systemic Oversight Council; and in the UK, the government is establishing a macroprudential Financial Policy Committee in the Bank of England. Maybe something is needed in Asia, too. Martin [Wolf] talked about complacency; for the machinery I have described to make any difference, people will have to stick to it year in and year out. 2. Supervision of individual firms  One of the things that should not be neglected is that the severity of this crisis was as great as it was partly because a large handful of individual massive firms failed due to poor management and weak balance sheets. Part of the solution lies, therefore, in much better microprudential supervision and regulation of individual firms. The Basel Committee has had Core Principles for Effective Banking Supervision for some considerable time now.

They are expected to adhere to ethically-driven values that reflect Shariah principles. They should be regarded as the true exemplars of Islamic finance. In short, they are the embodiment of what is good about Islamic finance. The establishment of CIIF is therefore a significant milestone in our collaborative efforts to raise the bar for professionalism and ethics in the industry. We aspire for CIIF to become the global body for professionals in Islamic finance. As we envisage CIIF as the leading driver and advocator of professionalism and ethical conduct, we should expect the new body to adopt global best practices of similar professional institutions. BIS central bankers’ speeches  1  CIIF will embark on a task that is both revolving and rewarding. A key imperative for CIIF to advance in its quest, as the advocator of the highest degree of professionalism and ethical conduct amongst Islamic finance professionals, is for the professional body to receive strong and continuous support and recognition from the industry. The industry cannot be a passive player. It must be an activist. Together with CIIF, it must be a strong advocator of professionalism and ethics. The signing of a first of its kind industry-led charter between The Association of Islamic Banking Institutions Malaysia (AIBIM), Malaysian Takaful Association (MTA), The Malaysian Investment Banking Association (MIBA) and CIIF is a very strong reflection of the industry’s support. This public commitment by AIBIM, MTA and MIBA acknowledges the noble intent of CIIF.
Some parts of the subregion sometimes have problems with floods, but in many parts there is permanent lack of even drinking water. Macedonia’s track record within the relations with the World Bank, can be assessed as quite successful. The World Bank has been one of the most important partners in the process of designing and implementing important structural reforms. The strong focus of the World Bank programs on the financial and the enterprise sectors, public administration, and business environment, has proved to be an important trigger and contributor to the productivity gains and real convergence of the economy. Personally, I am deeply grateful to the World Bank and the IMF for the contribution they have made in overcoming our existential problems. It is my personal opinion, however, that our need for the cooperation with and support of the World Bank is more than necessary. We have made some progress, but we have also encountered a lot of problems. The global crisis emphasized a number of structural issues that are bottleneck for the growth of the Macedonian economy. A comparative analysis shows that Macedonia has pretty low level of investments (on average about 15% of GDP during 1997–2007). Thus, further support which will lead to higher investments and higher stock of capital will play an important role for the long-term growth. We substantially lag behind those we want to keep up with. The unemployment rate is still staggering (32.4%).

Income per capita is only half of the highest GNI in the group, or only 33% of the average GDP per capita (PPP terms) of the 27 EU countries. We have a strong need of funds and permanent technical assistance in order to continue with and accelerate our structural reforms. The Greek example is a newest lesson. European and other funds, without all the painful and grave structural reforms, could not protect the country from facing the present crisis. However, it seems that, without structural reforms, they just boost the illusion. The recent crisis has highlighted the need for the international financial institutions to have adequate level of resources and flexible, innovative and swift technical infrastructure. It is a prerequisite for a well targeted, timely, coordinated and efficient response to global shocks. The strong increase of IBRD disbursements, policy based lending and advisory services in 2009, the dominance of social protections programs, on the background of the social implications of the crisis, pinpoint the rapid and well targeted adjustments in the lending policy and expertise provided by the World Bank. The share of the World Bank financial support to the region in the total WB financing in 2009 rose to 20% (compared to the average of 16% for the previous three years). Significant weight was put on the enhanced social protection, regulation adjustment for the purpose of trade promotion, financial sector reforms and improved governance. Dear guests, Let me once more repeat that looking forward, the role of the World Bank becomes even more pronounced.
At the same time, we can conclude the opposite with regard to the inflation forecasts (OH 2 inflation forecasts 1998-2002), which we have been forced to revise upwards again and again. If we are right that a recovery is now beginning both in Sweden and abroad, we can conclude that the economic downturn was one of the mildest of the post-war period, partly as a result of resolute stabilisation policy. However, the slowdown in Sweden and the rest of the world during 2001 was unexpectedly severe in relation to the forecasts made in 2000. The fact that forecasters miss turning points in the economic cycle is not unique to this particular downturn, but quite a common phenomenon. I will return to the current situation, but first a look back in time. Historical patterns are repeated Is it possible to learn lessons from history? Both yes and no. If one studies economic slowdowns over the past three decades, one can see that they differ considerably both with regard to causes, sequence of events and recovery. There is no simple, cyclical pattern that is automatically repeated. At the same time, it is clear that what we have experienced now has elements in common with 1 previous cycles. In some industrial nations, including the USA, the economic downturns during the 1990s have become milder compared with the downturns during the 1970s and early 1980s. Deep recessions have been unusual and arisen in combination with major structural problems, such as bank crises.

The specificities of the changes brought about by the digital revolution and in particular the multinational scope of the resulting network effects also require us to advocate for a reinforcement of international cooperation between authorities in order to ensure a better coherence of the national regulatory frameworks and to propose changes that affect global governance. To illustrate this point, I will choose an example outside the financial sector: that of the general regulation on the protection of personal data (RGPD). By setting up a common framework for the protection and circulation of personal data, the European Union has not only harmonised its regulations and reaffirmed its own values, but has also defined a global 2/4  BIS central bankers' speeches  reference in this area, raising interest among many partners, in particular the United States, shaken by repeated scandals whose symbol remains Cambridge Analytica. In my view, our proposals and actions should be guided by two principles. First of all, we need to think in terms of an open system. We must take into account the development of interactions of all kinds between the participants in the various “ecosystems” on which the development of financial services is now based. It is a prerequisite for being able  to legitimately claim to regulate interconnections. It is also a prerequisite for ensuring an appropriate perimeter for the regulations to be adapted as well as the coordination and coherence at national, European and international level of these adaptations.
This, in turn, induces pressures for depreciation. However, one must recognize that these are not very significant effects because, in a floating regime, the pass-through coefficient from the exchange rate to inflation is limited. 4 Emerging economies may feel tempted, after a long history of crises caused by exchange rate misalignments, to keep their currencies depreciated. Managing the exchange rate is, apart from hardly feasible in the medium to long term, risky. In the first place, in less flexible  4  For a recent discussion on the Chilean evidence see De Gregorio (2009b). BIS Review 113/2009  3  exchange rate regimes, the pass-through from exchange rates to inflation increases, because the level of the exchange rate may become a coordinator of price expectations, given the policymakers’ commitment to exchange rate stability. This, in turn, feeds back to increased pressures to keep the exchange rate stable, thus aggravating the problem. Secondly, a commitment of the authority with exchange rate stability may create perverse incentives to financial risk taking, by artificially lowering the cost of borrowing abroad. This reinforces fear of floating (Calvo and Reinhart, 2002), creating a spiral towards exchange rate rigidity, and deriving in currency mismatches and exchange rate misalignments that the policies were intended to prevent in the first place. I am not saying that attention must not be paid to the exchange rate beyond its effects on inflation. The exchange rate is an important determinant of resource allocation, and hence, excessive deviations from fundamentals may create distortions.

José De Gregorio: Monetary policy and financial stability – an emerging markets perspective Presentation by Mr José De Gregorio, Governor of the Central Bank of Chile, at the Brookings Institution, Washington DC, 17 September 2009. *  *  *  It is a pleasure to participate in this meeting and to speak about the lessons for monetary policy the current crisis is teaching us. The big difference between the current crisis with previous ones in emerging economies is that this time “it was not our fault.” The evidence on the performance of emerging countries facing an unprecedented global downturn shows that some lessons have been properly learned. Today I would like to concentrate on inflation targets, especially in the context of strongly rising and strongly falling commodity prices, financial stability and exchange rate fluctuations. Many of the issues I will be discussing today I have covered in recent presentations elsewhere. Indeed, there is not much new material, but I think those are important issues in conducting monetary policy in emerging countries. 1. The causes of the crisis: was it monetary policy or was it financial fragility? The argument blaming monetary policy for the current crisis claims that low interest rates combined with large current account surpluses in emerging economies, particularly Asian and oil-exporting ones, created an abundance of liquidity that triggered excessive increases in asset prices (bubbles). This was particularly acute in the housing market. When the bubble burst, the crisis erupted.