samchain/econo-pairs-v1 huggingface dataset:
My assessment is that the problems we saw in March this year did not spread quite as much as they would have done if Ba-  5 See Board of Governors of the Federal Reserve System (2023). 6 [30]  sel III had not been introduced. The banks now have more capital and more liquidity and are therefore better equipped to withstand various forms of shock.6 However, it should be noted that Basel III is not yet fully implemented.7 Negotiations are currently under way on how the final parts of Basel III will be introduced in the EU and some of the proposals entail less strict rules than those set out in the Basel standards. I would like to take this opportunity to emphasise the importance of full, timely and consistent implementation of all Basel standards in all countries, including the EU. Although the events of March did not hit the EU particularly hard, we need to learn lessons from what has happened in other parts of the world. This is important to ensure that the risks do not materialise in our part of the world as well. So what is new in the current situation and how do the existing global standards for bank regulation compare with this background? First of all, I would like to emphasise that I am not primarily talking about the situation or the regulations in Sweden, but more about the global standards, as it is these that are now being questioned.

Fragmentation in various segments of the financial market has been a major obstacle to the smooth conduct and transmission of monetary policy, and ultimately to our ability to deliver BIS central bankers’ speeches  1  on our mandate. Also owing to determined actions the ECB has taken, fragmentation has receded significantly since the height of the financial crisis. Unsecured money market rates are trading again at reasonable spreads over their secured counterparts. Sovereign bond spreads in the euro area decreased significantly from their peaks in 2012. Together, these developments reflect the gradual return of confidence among investors in the euro area. Yet, we still face a situation where our very accommodative monetary policy stance does not sufficiently reach some final borrowers in the euro area. This is because credit markets in some parts of the euro area are still impaired and show only timid signs of recovery. As a result, credit growth continues to contract and credit conditions – while having eased recently – remain overall tight from a historical perspective. Importantly, costs of bank funding have improved, but are still relatively high in some Member States. Where they are lower, they are not passed on in full to the real economy. The monetary policy measures decided in June and September this year, the Targeted Longer-term Refinancing Operations and the purchase programmes for asset-backed securities and covered bonds, are designed to overcome these obstacles.
For the past few years, Thailand’s growth was filled with imbalances, creating the so-called “two-speed economy.” On the high-speed track, exports of goods and services had been expanding robustly in tandem with improved  2/5  external demand, consistently contributing over half of the GDP growth. The benefits from these growths, however, were felt mostly by those associated with the export sector— especially large exporters—leaving behind the low-speed domestic demand track. Private investment’s gradual growth was also concentrated only within the export sector, while private consumption growth registered well below historical average as strong export growth and pickup in manufacturing did not lead to higher employment and higher household income. Excess production capacity in certain manufacturing sectors and a movement towards automation in manufacturing processes were some of the reasons often cited for this disconnect. In addition, a high level of household debt constrained private consumption growth as households had to use additional income to service their debt obligations rather than spending on goods and services. More recently, even though the imbalances still exist, we started to observe a change in this trend. We begin to see a more broad-based growth in exports, reaching beyond large exporters. We also begin to see steady growth in private consumption and private investment, making the strong growth performance in the first half of 2018 even more meaningful. Along with the recovery in private consumption and private investment was the pick-up in loan growth, particularly consumer and SME loans.

We pray to the almighty Allah that the Kingdom’s citizens will have many returns of this dear and national occasion and that the Custodian of the Two Holy Mosques, HRH the Crown Prince and the Second Deputy Prime Minister will be in good health. May the Kingdom continue to enjoy security and stability, so that the development march will continue under our wise leadership. 2  BIS central bankers’ speeches
To this end, we have comprehensively reformed the financial system since the crisis. Both capital requirements and contingent liquidity have increased ten-fold. The major UK banks now have the balance sheets to withstand a disorderly cliff-edge Brexit, however unlikely that may be. A series of measures have eliminated toxic forms of shadow banking and are transforming the rest into resilient market-based finance. An effective financial system is fair: fair to end-users and fair to the taxpayers who provide the ultimate backstop to the system. Fairness requires markets that are professional and open, in which everyone is accountable for their actions. That is why the UK has led the global effort to address misconduct and restore trust in financial markets. We have sharpened incentives through compensation rules that align risk and reward. The Senior Managers Regime has re-established the link between seniority and accountability. And the private sector is developing standards of market practice that are well understood, widely followed and up-to-date with market developments. 2  An effective financial system is dynamic. With the foundations of resilience and fairness reinforced, the UK financial sector is innovating to serve the changing real economy just as it did during three industrial revolutions and two waves of globalisation. 2  The global FICC Market Standards Board (FMSB) is developing readily understood standards for their markets. And the global FX Committees have published the FX Global Code, the first globally consistent code of conduct for FX markets.

13  And the City is leading the underwriting of local  currency green bonds, where annual issuance could range in the hundreds of billions of dollars. For its part, the Bank of England has helped catalyse the private sector’s TCFD. We are working closely with the People’s Bank of China to build domestic and cross-border markets to finance the transition to a low carbon economy. And we are coordinating with fellow central banks and supervisors representing more than a third of global output and emissions to develop supervisory approaches to ensure the financial system is fit for the transition. c) The New Demographics As the world is changing it is ageing. The ratio of the population aged over 65 to those of working age in advanced economies has increased from 15% in 1950 to 30% in 2015, and is projected to rise to 50% over the next twenty years. Over the same period, this ratio is projected to double to over 25% in emerging markets. The macroeconomic consequences of these shifts are already evident, with the large, rapidly growing pool of retirement savings depressing interest rates and pushing up asset prices. 14  The need to manage this growing pool of savings will drive further growth in the wealth management, insurance and pension industries. And it will require new products, for example to meet the unpredictable costs of long-term care. In the process, market-based finance, which has already accounted for almost all corporate credit growth since the crisis, will become even more important.
Productivity in the United States, however, has not been faster than in Sweden. During the first half of the 1990s, Swedish productivity growth was among the most vigorous in the world, which resulted in increased prosperity for Swedish citizens. During the 1950s and 1960s, productivity growth in Sweden increased further. This was partly due to considerable reconstruction needs following the Second World War and the robust demand that resulted from this. In addition, trade was liberalised during this period which led to stiffer competition, and - most of all - capital formation was rapid. The favourable productivity growth during these years furthered Sweden’s prosperity. In 1970, Sweden was in fourth place in the OECD league in terms of GDP per capita, which means that it was one of the four richest countries in the world. During the period that followed, however, productivity growth was appreciably slower and it is widely known that the 1970s and 1980s were bad periods for Sweden. Today, Sweden finds itself in 17th place in the OECD league and is below the average for industrialised countries. What caused this decline then? It may be relevant to look at the reasons behind Sweden’s weak growth during the 20 years up to the mid 1990s. These are mistakes that we need to avoid in the future. When I discuss this unsuccessful period in Sweden I will mainly focus on productivity since it is the measure that determines our standard of living. We then have to somewhat modify the growth formula that I mentioned earlier.

So, as regards net investment, in other words the contribution to capital formation, this was more than halved as a percentage of GDP in the mid 1970s. This meant two things. First, capital growth per employee, or per hour worked, fell. For a number of years, investment dropped so much that capital per employee in the business sector actually declined. In other words, each employee worked with less capital. In order to illustrate what capital per employee means, we can take an extreme example, namely what a lone worker can accomplish when digging with a spade and iron bar compared with a hydraulic excavator. The latter represents considerably more capital per employee than just digging with a spade, as well as substantially less physical effort for the worker. Therefore, we should expect productivity growth to fall when capital per employee declines. But there is also another indirect effect. With new capital, new technology is introduced into the production process. Investment is the means for putting new technology and research into practical production. Through investment, new methods and new technology are ushered into production processes. For this reason, we should expect less technological progress in production when capital formation falls. An excavator is so much more than a large number of spades; it represents entirely new technology that affects the whole production process. Figure 1 shows that capital formation, net investment as a percentage of GDP, fell in the mid 1970s from around 15 per cent of GDP to about 5 per cent.
On this front, a study conducted by the Hong Kong Government in conjunction with TMA earlier concluded that there are no major legal or regulatory obstacles to transactions involving wholesale Islamic financial instruments in Hong Kong. 13. However, there is a need to refine the tax regime in Hong Kong in order to provide a level playing field between sukuk and conventional bonds. Owing to Shariah requirements, structuring sukuk often involves the originator setting up a special purpose vehicle for the purposes of issuing sukuk to sukuk holders, and multiple transfers of underlying assets between the originator and the sukuk issuer in order to generate profits. These complex structures, which are not required for conventional bonds, may incur additional tax and stamp duty expenses for the sukuk issuers. 14. I am pleased to see that an amendment bill to address this issue has been introduced into Hong Kong’s Legislative Council and is now in the final stages of enactment. 3  2  Source: Institute for International Finance. BIS central bankers’ speeches  The bill, once passed, will enable sukuk to enjoy tax treatments similar to those currently afforded to conventional bonds. This would be a significant milestone in the development of a sukuk market in Hong Kong. 15. Apart from providing a level playing field, equally important is the active participation of market players, including non-Islamic arrangers, issuers and investors in the Islamic capital markets, as they will be the ones who lead market development in the future.

Last year alone, oil revenues in the Gulf Cooperation Council countries were estimated to be about $ billion.3 Mainland China has been one of their favourite investment destinations given its strong economic growth and emerging market opportunities. 9. On the other side, Mainland China is facing huge funding needs for infrastructure development projects. As China’s global financial centre, Hong Kong is an important conduit for Mainland companies to access the international markets and the preferred offshore capital raising centre for Mainland issuers over the past decade. This is apparent from the fact that over half of our stock market capitalisation is Mainland-related and from the high participation of Mainland entities in our dim sum bond market. 10. Against this backdrop, we believe Hong Kong is well-placed to meet the strong investment demand from the Middle East and other parts of the world for Mainland-related Islamic financial products. At the same time, Hong Kong can also provide an ideal platform for issuers from the Mainland and other parts of Asia to issue Islamic financial instruments for satisfying their funding needs. Bringing Islamic capital markets to the mainstream 11. Addressing one of the key issues to be discussed today, Hong Kong’s involvement in Islamic finance will also help to bring Islamic capital markets to the mainstream in two ways: provide a level playing field and encourage market participation in Islamic finance. 12. To bring Islamic financial products to the mainstream, a key task would be to level the playing field with their conventional counterparts.
This is especially true for low value transactions and cross-border remittances, where fees can be as high as 13% of the value of funds transferred.4 These high costs impede not only remittances but also bilateral trade and investment. We therefore need to work on solutions that will promote competition and innovations, making these services more affordable. While a complete solution for cross-border transfers is yet to emerge, significant progress has been made with respect to payment solutions within each GMS country. In Vietnam, OnePay allows customers to make financial transactions on e-commerce websites, as well as deposit funds into their bank accounts without visiting a physical bank branch. Wing in Cambodia, BCEL in Laos and Wave Money in Myanmar all provide instant money payments and transfers through mobile phones to recipients who do not have bank accounts. In Thailand, PromptPay is a modern, faster payment system that provides free transfer services for transactions up to 5,000 baht (or about 150 US dollars), one of the cheapest rates in the world. PromptPay allows individuals and businesses to transfer money between banks and e-wallets using their mobile phone or citizen ID numbers.

I have three key messages on GMS connectivity to share with you today and would like to invite you to be a part of this exciting journey: Let’s think of the young vibrant graduate I mentioned, there is so much potential and opportunity she can explore. She can broaden her skills and horizon as she gains experience and professional networks over time. She will unavoidably face some challenges along the way. But with support from her peers, together with technological advancement, she will be able to stay on course for success. This is similar for our vibrant GMS. First: The GMS is a region full of opportunities. This is owing to its geography, complementarity and connectivity among its members and with other regions; Second: GMS’s endowments and opportunities can be expanded through enhancing financial connectivity, technology and innovation; and Third: Despite many challenges, policymakers and their private-sector partners can make a difference to the GMS region. ***  1  1. Why do I say that the GMS is a region of opportunities? Over the past 25 years, integration within the GMS has deepened, integrating a diverse group of members through physical, trade, investment as well as people-to-people connectivity. Even more remarkable is the recent growth momentum of the GMS.
Second, it seems reasonable to wait and observe potential ripple effects of TLTRO III repayments in bond markets before starting the bond portfolio run-off, as it will allow us to assess the effective impact of balance sheet reduction on financial conditions. After first allowing markets to absorb significant TLTRO III repayments, the normalisation of the ECB’s balance sheet could be followed by ending full reinvestment of the APP portfolio. As announced by President Lagarde last month, we will decide on the key principles of the reduction of our APP portfolio at our December monetary policy meeting. And why we should end APP reinvestments before PEPP reinvestments? In my opinion, a “first-in-first-out” staggered approach is preferable for at least two reasons. First, PEPP reinvestments remain an important line of defence against (pandemic-related) fragmentation episodes, so they are potentially pledged for reallocation across jurisdictions while the lasting vulnerabilities caused by the pandemic continue to pose a risk to the smooth transmission of our monetary policy. Second, we previously declared that PEPP reinvestments will not end up until at least the end of 2024, while our forward guidance on APP reinvestments was open-ended. We have clearly stated our intention to continue APP reinvestments for an extended period of time past the date when we started raising the key ECB interest rates. Moreover, our balance sheet policy will depend too on the operational framework that we adopt for the foreseeable future.

It had lowered its DFR all the way to zero and had even begun to reduce it further, reaching an annual interest rate of -0.2% in late 2014. But even at these very low interest rates, the economy remained sluggish, and inflation stayed persistently below the ECB’s target (at the time, an inflation rate below, but close to, 2%), even falling occasionally into negative territory. In these circumstances, the ECB had to reach for new, “unconventional” tools to meet its inflation target. In particular, the ECB initiated a rapid expansion of its balance sheet, both  4  By way o f illustratio n, in the latest SMA, the median respo ndent anticipated that the DFR wo uld reach 2.5% in the seco nd quarter o f 2023. 5  While the central bank can set any interbank interest rate abo ve zero , it canno t set that rate far belo w this thresho ld, because then ho useholds would simply hold o nto cash – thereby receiving a 0% interest rate – rather than save at negative rates, and banks wo uld start co nverting their electro nic reserves – yielding a negative return – into currency. Banks can o ffer depo sits at zero rates to avo id this risk of ‘financial disintermediation’, thus absorbing the adverse impact o f negative interbank rates themselves. In the lo ng run, this may reduce banks’ pro fitability, which may h amper the bank mo netary po licy transmissio n channel.
These are examples of leading practice, and they are not at this point standard operating procedure across the range of institutions where they should be. Systematically assessing the evolving frontier of leading risk management practice is a useful way to ensure that we continue to build on the significant improvements in the overall stability and resilience of the U.S. financial system that have been achieved over the past two decades. This is important to do on a continuing basis to strengthen the shock absorbers in the financial system. It is important to do even when, or perhaps particularly when the overall economic environment looks quite favorable, as it does today. We look forward to working with the foreign banking community to continue to identify ways in which risk management practices can be strengthened. It is in our mutual interest to insure that the practices employed broadly by the industry continue to move towards the frontier of risk management practices. Thank you. BIS Review 36/2004  3

Therefore, my first conclusion is that from the economic perspective the dilemma between deepening and enlarging is rather imaginary. In fact, both these processes are going on around us at every moment, and the authorities have a limited ability to choose between these two aspects of integration. The political dimension makes the question much more complex. Despite the aforementioned conclusion that economic integration is relatively independent of political will, an appropriate institutional framework is undoubtedly important for the pace of integration and the future shape of European markets. But politicians are caught between their vision of an integrated Europe and pressure from many of their voters to defend their current positions. Their inability to explain the benefits of integration to the electorate is a source of frustration and puts limits on any further political deepening and enlarging of the more and more economically integrated area. This may lead to a temptation to use the argument of an imaginary choice between deepening and enlarging. But businesses will not ask politicians for permission to move to Balkan countries or Turkey, or to continue concentrating their activities inside the present EU. The role of the authorities is to support, not hamper these processes. Therefore, my second conclusion is that frustration with the inability to politically consolidate the existing area should not become a reason for constraining its political expansion. In the end, business would find its way through, but Europe would lose. BIS Review 50/2006  1