samchain/econo-pairs-v1 huggingface dataset:
”These words of Caffè do not surprise those who knew him and those who have read his works. They express the fundamental inspiration of his professional and public life: it is a duty of economic policy to act so that the economy can get as close as possible to full employment. In 1975, he formulated it more precisely: “The goal of dignified work for all, however, is not compatible either with situations of privilege, which have now become destabilising, nor with excessive labour and social security rights, which results in job opportunities evaporating away”. The issue that Caffè raises here is one of fairness. We find it again today: the international crisis has affected everyone, and young people especially. In the European Union, between 2007 and 2011 the unemployment rate rose by 5.8 percentage points among the 15–24 year olds, by 3.5 points among the 25–34 year olds and by 1.8 points in the 35–64 age range. Qualitatively, the profile is similar almost everywhere; the clear exception is Germany, where the unemployment rate among 15 to 24 year olds in the first quarter of 2012 was 8%; in Italy it was 34.2%, in Spain 50.7% and the euro area average was 21.9%. These trends reflect a fundamental question: they confirm the particular vulnerability of this essential part of our workforce.

Central bank credit to banks has been a complement to – rather than a substitute for – private credit: in the first quarter of this year, the amount of bonds issued was equal to the total issued in 2011 as a whole, which shows that the operations, at least in the first few months of the year, provided the markets with liquidity, reactivating a number of credit channels. The two LTROs removed one of the obstacles – the only one over which the ECB has any influence – to credit, namely a lack of liquidity. The ECB cannot do anything to make up for a lack of capital, to change intermediaries’ risk perceptions, or to remove other structural obstacles present at national level. More generally, the size and complexity of the two LTROs is such that it will take time for all of their positive effects on the euro area economy to be fully felt. However, it is essential for growth and employment that credit institutions regain their ability to provide refinancing to the economy. 8  BIS central bankers’ speeches
Matters to do with world economic development and what should be done - not just to mitigate the short-run effects but also to construct systems and institutions so that similar events can be avoided in the future - have been high on the agenda for economic policy discussions in various fora this autumn. The latest instance is the 1998 Annual Meeting of the International Monetary Fund in Washington D.C. earlier this week. In connection with that meeting, finance ministers and central bank governors from all over the world assembled in various groups to discuss the situation. Background to the global economic problems Just a year or so ago, many observers foresaw a golden future for the world economy. There was talk in some places of a new economic era, with strong growth and permanently low inflation, at least in the United States. Today, the discussion has shifted in general to deliberations about the risks of a world economic slowdown. The challenges the global economy is facing at present are a combined result of several factors. One of these factors is, of course, the situation in Japan, where the economic problems, as I just said, have been at work throughout this decade. The inability to take sufficiently resolute action has led the Japanese economy into a serious decline. Japan has the world’s second largest economy and is of primary importance for the outlook in Asia as a whole. A crisis in other Asian countries then materialised almost a year ago.

When a highly reputable hedge fund, Long-Term Capital Management, was hit by major setbacks, the international banks became even more wary. Investors have fled to assets that are generally regarded as secure. Lending rates to all but the most creditworthy borrowers have therefore risen around the world. In the last few days, moreover, long bond rates have moved up in many countries, which is a sign that investors are increasing the cash component of their portfolios. Expressions like “flight to quality” and “flight to cash” are common in the course of a development such as that we are now experiencing. How great will the repercussions be? Observers throughout the world are now engaged in appraising the global economic effects of the crisis in Southeast Asia, the inability to tackle the problems in the Japanese economy, the uncertainty about the situation in Russia and the risk of contagious effects in Latin America. The world economic impact of the problems in the emerging markets can be divided into effects on real economic activity and influences via financial markets. The latter are transmitted both by falling prices for shares and possibly other assets and by a higher degree of prudence on the part of firms, households and banks. Let me begin with the real economic effects. In the emerging economies that are currently affected, the problems have led to sharply falling demand and output. Imports from the rest of the world are therefore declining, too. At the same time, currency depreciation has improved the competitiveness of exports.
William C Dudley: The spread between primary and secondary mortgage rates – recent trends and prospects Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York and Chairman of the Committee on the Global Financial System (CGFS), at The Spread between Primary and Secondary Mortgage Rates: Recent Trends and Prospects Workshop, jointly sponsored by the Federal Reserve Banks of Boston and New York, New York City, 3 December 2012. *  *  *  Good morning. I’m William Dudley, president of the Federal Reserve Bank of New York. I would like to welcome all of you to the Bank and thank you for participating in today’s workshop. My colleague Eric Rosengren, president of the Federal Reserve Bank of Boston and I asked our staffs to organize this workshop because the topic of the primary-secondary mortgage rate spread is important for current efforts by the Federal Open Market Committee (FOMC) to foster faster economic growth. As I have said on a number of occasions, while the U.S. economy has expanded since mid2009, the pace of the economic recovery has been too slow to make rapid inroads into the spare capacity left over from the recession. As a result the unemployment rate remains unacceptably high. To support a stronger economic recovery in the context of price stability, the FOMC took action at its September meeting to provide additional monetary accommodation.

A view is sometimes expressed in the monetary policy debate that monetary policy should give consideration to the risks of imbalances resulting from low real interest rates over a long period of time. There is a lot of talk about a low policy rate entailing risks for rapid credit growth that will lead to high leverage and greater risk in the financial sector. However, I consider that there is no theoretical or empirical support for a low policy rate in itself leading, for instance, to excessively high leverage in the Swedish financial system. This is because the Swedish system is dominated by a few major banks and does not have a large difficultto-regulate shadow-banking system of financial intermediaries and broker-dealers. Experiences from different crises indicate that it is not low policy rates in themselves that lead to imbalances and threats to financial stability. It is if the low policy rates lead to an overheated economy that problems arise, such as in Sweden prior to the crisis at the beginning of the 1990s and more recently in Greece, Portugal, Ireland and Spain. It is the overheated economy that entails exaggerated optimism, with for instance property prices being pushed up above levels that are fundamentally motivated, an excessive construction boom and risky investments. It is not the low interest rates in themselves. Low interest rates that do not lead to an overheated, but to a balanced, development in the real economy and inflation do not appear to entail imbalances.
The portfolios for which the expected loss will be higher than current impairment loss are those of loans granted to the retail segment and regional governments. Heterogeneity is higher for banks at individual level, but is not likely to affect their stability considering the substantial surplus in solvency indicators (Figure 17). Starting with this issue of the Report, the NBR Board has decided to contain the number of presented risks to five at most, for two reasons: the opportunity to focus the analysis and draw attention to the most important messages, and the harmonisation with international good practice of central banks that publish financial stability reports, the ECB in particular. A full comparison with the risk map in the previous reports is therefore unfeasible. 3  No severe systemic risk has been identified, but a combination of the identified risks may induce a severe risk, amid unfavourable market conditions. The main risks to financial stability are set out in the table below. Map of risks to financial stability in Romania Deterioration in investor sentiment in emerging economies Tensions surrounding macroeconomic equilibria Higher household indebtedness through both banks and NBFIs Weak payment discipline in the economy, vulnerabilities in firms' balance sheets Faster increase in property prices severe systemic risk high systemic risk moderate systemic risk low systemic risk Note: The colour shows risk intensity. Arrows indicate the outlook for risk in the period ahead.

Our analyses show that in the vast majority of instances the signals and complaints received at the BNB theoretically could have been resolved then and there, at the branches and divisions of your banks, as these did not need to get as far as the head offices and executive directors of the institutions. I would like to emphasize that the BNB had stated its position about the relations between commercial banks and their customers long before this became a hot topic in the media. Allow me to conclude my speech in literally the same words, which I used to speak to you here exactly 4 years ago (back then, in 2006, banking was on the upswing and nobody was talking about crises or difficulties in repaying loans): “…it is in the interest of both consumers and the banking industry to establish between the two sides of the process long-term relations based on transparency of financial services pricing, and on the strict observance of obligations by both parties.” In conclusion, allow me, on behalf of the BNB Governing Council and on my own behalf, to congratulate everyone of you on the occasion of our professional holiday, the Banker’s Day – 6 of December! I wish you a successful 2011 year and much health to your families as well as to the balance sheets of the banks you are running! Happy Banker’s Day, dear colleagues! BIS Review 169/2010  3
But ultimately, it was considered too costly for the state to rely on the effectiveness of market discipline at a time when the reputation of the industry was so sour it was being satirised in novels by Dickens. Indeed, for these reasons the 1870 Act was widely welcomed by professional bodies like the Institute and Faculty of Actuaries 17. The 1870 Act introduced a number of elements aimed at regaining the confidence of policyholders in the insurance sector. First, insurers now had to stump up £ (roughly £ in today’s money) as security before they reached a certain size, which curbed the influx of new companies that, up to this point, had been entering the market at very rapid rates. In addition, accounts and balance sheets had to be published in a prescribed form, thereby introducing a degree of consistency and comparability between different firms. Importantly, firms now had to publish an actuarial report on their financial condition every five years and insurers had to take into account prospective liabilities under existing policies; in other words, they had to look forward. The 1870 Act was clearly a major evolution of the state’s approach to insurance and established many of the building blocks that still underpin the regulation of insurers today – the importance of solvency, the role of the actuary, the interests of current and future policyholders, and a role for financial disclosure.

In the short term, a financial institution that is seen condoning money laundering and terrorism activities will lose public confidence and the confidence of their depositors. The institution will also face higher liquidity risks as funds derived from illegal activities tend to be less stable. Ultimately, in the long term, coupled with higher cost of doing business, the institution’s ability to perform its important economic intermediation process will also be affected. Understanding of money laundering and terrorism financing risks is key for an effective AML/CFT measures For an AML/CFT measure to be effective, we need to understand our money laundering and terrorism financing risks and vulnerabilities. Understanding of the risks will facilitate our efforts in channeling our resources and priority towards areas that would pose the greatest risks to the country and the institutions. Recognising these needs and in line with the requirements of the FATF Standards, at the country level, we had conducted a national risk assessment (or the NRA) to identify, assess and understand specific money laundering and terrorism financing threats in the country, in particular the scale, sources and methods of those threats, as well as the vulnerabilities and risks across various sectors. We will share with you shortly the result of the NRA so that you will have better understanding of the risks at the country’s level. Subsequently, the results of this NRA needs to be translated into your institution’s own policies, procedures and risk controls. Effective AML/CFT regime is important.
The more established the surplus target is perceived to be, the higher will be the credibility of Swedish fiscal policy and the lower will be the future interest rates on Sweden’s central government debt. There is a clear parallel here with the Riksbank’s inflation target. 5 The more certain households and companies are that inflation will be close to the inflation target, the less time and energy they will need to devote to adapting their savings, investments and wages to inflation, and the fairer price setting in the economy will be. From the Riksbank’s perspective, it is also clear that monetary policy will be more efficient the more predictable developments in public finances are, and the greater the confidence in the sustainability of fiscal policy. Predictability is important to us as our forecasts for fiscal policy affect our assessments of resource utilisation and future inflationary pressures. Confidence in the sustainability of fiscal policy is important as otherwise it will be the market participants’ demands for risk premiums, which often vary substantially, rather than our repo rate path, which determine interest rates. For these reasons the Riksbank has, in its response to a consultative document from the government in March this year, expressed its support for making the surplus target obligatory by incorporating it into the Budget Act. We have also declared that we share the assessment that general government net lending over the next 10 years should once again average 1 per cent of GDP.

There should be ways for countries to cope with bank runs on the international scale. There should be opportunity for countries to renegotiate their debts with the foreign creditors, without imposing an insurmountable handicap that will prevent them from returning to the market in future. In the case of Thailand, had such mechanism existed during the Asian crisis, our non-performing loan ratio would have been less. Actually we paid back all foreign debts owed by the government and by the banks in full, with interests. We never needed any hair cut, we just needed time. But many foreign banks did not roll over the debts that fell due, despite the fact that the authority guaranteed all foreign debts of the banks. The continuous repayment caused the currency to weaken more than it should. The exchange loss was therefore greater than should have been, and hence the non-performing loan ratio. At the same time, our weak currency also created pressure on the exchange rates of our neighbors, causing the interest rate to be kept high for longer than necessary, which in turn also fed into the non-performing loan ratio. 2  BIS Review 52/2002  I am therefore attaching a lot of hope to the Sovereign Debt Restructuring Mechanism now being deliberated by the IMF members. I do hope that it will offer better solutions for this kind of problems in the future. I will close by saying this. Globalization is a two way street. Relationship in the international financial market benefits both ways.
This entails assessing the solvency of the resulting institution, analysing the impact on overall financial stability and overseeing the execution of the merger to ensure that the potential synergies are indeed harnessed. Transnational European mergers would be particularly positive. They would deepen the Banking Union, reduce the sovereign-bank risk nexus, and provide greater potential for diversification. They would also help establish broader customer bases, so that the cost of investment in technology could be more widely distributed, although the immediate impact on cost-cutting would be more limited. In this respect, the ECB Guide on the supervisory approach to consolidation in the banking sector aims precisely to provide the market with greater predictability of supervisory actions, to help banks design merger plans that are sound from a prudential standpoint and ensure that the resulting institution has a business plan that, when executed correctly, will add value. However, banks should also seek to enhance their efficiency by improving the use they make of the information they hold. This requires significant investment in digitalisation and also the incorporation of new data processing technologies to allow them to change their business model while controlling their risk profile. And this is why it is so important that the “quick fix” has brought European prudential regulations on this kind of investment much closer in line with those already in place in the United States and Switzerland.

This is after: Deducting $ billion of expenses from domestic money market and other operations; and Contributing $ billion to the Government’s Consolidated Fund, as payment in lieu of corporate income tax. This year, MAS will return half of its profits – $ billion – to the Government while the remainder will be added to MAS’ reserves. CONCLUSION Let me sum up. The economic situation remains dire. We are not at the beginning of the end, but rather at the end of the beginning. Growth rates will pick up – as you would expect coming from a very low base; but the level of activity will remain below pre-crisis levels for quite a while. The recovery is likely to be slow and uneven, weighed down by renewed outbreaks of infection here or abroad. Unemployment and corporate bankruptcies are likely to increase in the months ahead. We will enter 2021 with higher levels of debt, in both the corporate and household sectors, which will act as a further drag on growth and could become a source of vulnerability. MAS’ priorities will be to ensure monetary and financial stability. We will keep the exchange rate stable, to provide an anchor of confidence. We will keep the funding markets liquid, to ensure credit remains available to the economy. We will ensure the financial system remains sound and resilient. We will ensure that our systemically important financial institutions continue to have healthy buffers to absorb any unexpected losses.
While we have observed positive and progressive improvements by the DNFBP sectors, overall AML/CFT compliance, however, remains relatively inadequate, mainly attributed to the lack of awareness and understanding of AML/CFT obligations and risks. Bank Negara Malaysia has, increasingly over the years, taken more stringent enforcement actions on reporting institutions for non-compliances with AML/CFT requirements. While the focus so far has been on financial institutions, Bank Negara Malaysia will continue to pursue enforcement actions against all reporting institutions, where warranted. In this regard, it is of utmost importance for the DNFBP sectors to understand the vulnerabilities of its sector to ML and TF risks that its products or services may be exploited by criminals to advance ML and TF related crimes, and be vigilant in protecting themselves from being abused or inadvertently facilitating ML or TF activities. In this manner, the DNFBPs in general and legal professionals in particular, are in a position to detect irregularities in the transactions and discharge their obligation in submission of suspicious transaction reports to Bank Negara Malaysia, in a timely manner. So, how can we mitigate the risk of inadvertently facilitating ML and TF activities?

As a result, Malaysia was accorded full FATF membership status in 2016, which not only demonstrates a strong commitment to combat money laundering and financing of terrorism, but also reflects a safe business environment in Malaysia. 1/3  BIS central bankers' speeches  Importantly, this recognition enables Malaysia to better participate in the international financial system without qualifications and sanctions, enabling our business and economy to transact and exchange freely with the rest of the world. Such a recognition is priceless for an open and trading economy like ours. Maintaining the integrity of the financial system and safeguarding legitimate business activities is thus paramount in ensuring that this recognition is preserved and that we have a thriving and conducive business environment. Preventing and combating financial crime is a shared responsibility of all stakeholders. Hence, it is imperative that all DNFBP sectors including legal professionals play an important complementary role to financial institutions in safeguarding this by preventing the proceeds from unlawful activities and funding of terrorism from penetrating into our financial system, while facilitating investigations and prosecution of these financial crimes. The legal fraternity also plays a crucial role in the public sphere as an instrumental component in the administration of justice as well as in upholding the rule of law. In many financial transactions or exchanges, the legal fraternity also acts as a gatekeeper, or intermediary arising from their position of trust.