samchain/econo-pairs-v1 huggingface dataset:
Ravi Menon: Monetary Authority of Singapore's Annual Report 2018/19 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS' Annual Report 2018/19 Media Conference, Singapore, 27 June 2019. * * * Good morning. Welcome to MAS’ Annual Report media conference. GLOBAL ECONOMY The outlook for the global economy has deteriorated in recent months. In April, the IMF revised downwards its forecast for global GDP growth to 3.3%, from 3.7% last October. Last year at this time, at our annual report conference, I said that if the trade conflict between the US and China escalates into a trade war, all three engines of global growth – manufacturing, trade, and investment – will stall. We are now in the throes of a trade (and technology) war, and all three engines have indeed stalled. Global manufacturing is in a synchronised downturn. Last month, the global Purchasing Managers’ Index (PMI) for manufacturing fell to 49.8, its lowest level in more than six years. In the US, new orders are near their weakest levels in three years. In the Eurozone, the downturn in manufacturing is even more severe. In China, the manufacturing PMI is in negative territory. In Asia, manufacturing output is contracting in about half of the economies, including Singapore. Global trade volumes have declined for two quarters in a row – in Q4 2018 and Q1 2019. This consecutive two quarters of contraction in world trade is rare. The last time this occurred was ten years ago.

There was a net increase of about 6,900 jobs in financial services and FinTech in 2018, driven mainly by the banking and insurance industries.2 Over the last three years (2016–18), we saw an average of 4,900 financial services and FinTech jobs created on a net basis per year. This is above our ITM target of 4,000 net jobs growth in financial services and FinTech. 9 / 11  BIS central bankers' speeches  Hiring in the financial sector remains healthy so far this year and job growth is on track to meet the ITM target of 4,000. Sustaining this rate of job growth will not be easy in the face of technological change unless efforts are continually stepped up to upskill the workforce. As digitalisation and automation become more pervasive in the financial industry, jobs will be transformed. Some will inevitably be displaced. MAS, the financial industry, and our tripartite partners are taking this very seriously and undertaking a variety of measures to help prepare the financial sector workforce for a digital future. Last year, more than 20,000 individuals – or about one out of eight workers in the industry – went through MAS/IBF-supported upskilling programmes. Nineteen financial institutions have stepped forward and committed to re-skill close to 4,000 finance professionals and redeploy them in new or expanded roles over the next two years. Some 1,700 of them have already started this journey, and 800 have successfully transited into new roles. CONCLUSION Let me wrap up.
However, unlike in Indonesia, the major creditor countries, particularly the United States, got together and agreed on an orderly roll-over of Korean banks’ short-term debt. This stabilised the situation and enabled the Korean economy to resume growth quickly. Hong Kong Hong Kong and Singapore were the two economies with the least structural problems or foreign borrowings, yet neither could escape the contagion. Hong Kong’s economy benefited from its linkages with China which was relatively unaffected by the regional currency turmoil. But the Hong Kong dollar’s $ peg to the $ caused Hong Kong’s real exchange rate to appreciate significantly when all the other regional currencies fell. The full adjustment to the changed external environment had to be borne internally, through nominal prices of assets and wages. The result was a sharp recession from which Hong Kong is just beginning to emerge. At the same time, the high $ led the markets to assess the risks of a devaluation. Interest rates rose, further squeezing the economy. After several speculative attacks on the currency and “double-play” on the currency and share markets, the HKMA intervened directly to buy shares in August 1998. The speculative attacks were successfully beaten off, but the Hong Kong Government remains extremely concerned over the dangers posed by speculators, and particularly hedge funds, to their economic stability. Singapore Singapore was more directly affected by the crisis than Hong Kong because of our close economic linkages to Thailand, Malaysia and Indonesia. Our growth slowed down drastically, turning negative for several quarters.

But we could be sinning by omission, by passiveness. Contrary to a longstanding approach whereby central backs only dialogued with financial specialists, we must now direct our communication at all economic agents,  Page 7 sur 10 including the general public. A better-informed society across categories allows for a better understanding of monetary objectives, and hence a greater efficiency of monetary policy. Tailored and active communication is now a centrepiece of central banks’ actions. In 2021, the “Banque de France listens” initiative included 17 events, with an audience of 300,000. This year, the Banque de France organised its annual National Monetary Policy Forum, reaching an on-line audience of 500,000. It adds up to sustained efforts on financial education: in 2021, almost 40,000 young people benefitted from our actions, and we are stepping up again in 2022. III. Does the international dimension of monetary trust still exist? Whether or not the international dimension of monetary trust can still inspire us is a key question for the IMF, which has sought to embody it since 1944. It has become a painful question, with the ongoing destructive Russian war in Ukraine adding to the other illnesses of multilateralism in the last six years, from Brexit to populism and (poorly-disguised) protectionism. Let us acknowledge it frankly: the G20 is today not in good shape, whereas it had been key to great progress over the last twenty years. And sanctions against Russia divide it.
The interest rate regains its role as a policy instrument After the drop in oil prices and the last devaluation of the krone in 1986, the interest rate had to be set to support our currency. The alternative was further devaluations, high inflation and economic instability. With a binding commitment to a fixed exchange rate policy from early summer 1986, interest rate setting was largely shifted to Norges Bank. 30 High inflation is associated with substantial real economic costs. This came into evidence when we managed to bring inflation under control again in Norway at the end of the 1980s. The fixed exchange rate policy was crucial in this context (see Chart 3). 30  Hermod Skånland dates this to December 1986 (see Skånland (2005)): “Tilbakeblikk på 20 år med ny sentralbanklov” [“A 20 year retrospective on the new Norges Bank Act”], Penger og Kreditt 3/05 (Norwegian only). In my opinion, this shift occurred earlier. 8  BIS Review 154/2010  Perhaps we can say that the pendulum had swung back from the view that prevailed in the early years after the war. At that time, it was not Norges Bank, but on the contrary fiscal policy and the detailed regulatory system that had failed. Norges Bank had to be given a greater role again in promoting a well functioning economy. Later, it would transpire that having brought inflation under control and a series of farreaching structural reforms in the 1980s and early 1990s, would pave the way for two golden decades in the Norwegian economy.

BIS central bankers’ speeches  3  Following our December 2008 meeting, the FOMC announced that it had cut the target range for the fed funds rate to 0-to-1/4 of 1 percent, and being thus “zero bound”, we floated the idea of purchasing longer-term Treasuries in order to provide further monetary accommodation (when we buy Treasuries or MBS and agency debt, we put money into the financial system, substituting for further interest rate cuts). On March 18, 2009, we announced additional purchases of up to $ billion of agency MBS and up to $ billion of agency debt, plus purchases of up to $ billion of longer-term Treasury securities over six months. That day, our balance sheet was marked at $ trillion.
When we probed survey respondents about their understanding of changes to “prices in general” (the Michigan Survey question), we found that a significant fraction believed we were inquiring about the prices they themselves recently paid – often prices that had increased or decreased markedly, such as those for food or gasoline. This tendency to think more about prominent price changes in one’s own experience is less common among respondents with higher financial literacy. By contrast, when we asked about expectations for the “rate of inflation,” respondents tended to think less about a few salient price changes specific to their own experiences and more about price changes across a broader set of items or about changes in the cost of living – a result that aligns more with economists’ definition of inflation as a sustained increase in the overall price level. Asking about the rate of inflation directly therefore produces answers more consistent with the concept of forward inflation expectations of interest to central banks. Chart 4 plots the time series of median responses from our experimental survey to a “prices in general” question and a rate of inflation question. One can see that the median expectation for the rate of inflation question is less variable. We also find that the dispersion of responses is significantly larger with the “prices in general” question.

Chart 3 shows some detail on recent behavior of the forecasts for core PCE inflation from the SPF and dispersion in long-run CPI inflation forecasts. The first panel shows the average of point forecasts since 2007 for the current year and year-ahead core PCE inflation rate. As one would expect, the current year forecast is more variable, and for the most part the yearahead forecast remains above the current year forecast after the financial crisis, consistent with the pull of anchored inflation expectations. However, both sets of forecasts are still below what some have called, based on the Summary of Economic Projections, the mandate consistent range of Federal Open Market Committee participants. 2  BIS central bankers’ speeches  The second panel of Chart 3 shows a measure of uncertainty for these forecasts. Here we can see that uncertainty increased as the financial crisis took hold but has returned to 2007 levels recently. The third panel shows that disagreement across forecasters also increased with the financial crisis and has not returned to pre-crisis levels. Much of this disagreement appears to be related to differing views on the strength of standard Phillips curve dynamics versus other approaches to inflation dynamics. The final panel shows the disagreement in 10-year average CPI forecasts over the last 20 years. As you are aware, one of the great successes of the Federal Reserve in the 1980s and 1990s was a reduction in long-run inflation expectations.
Interest rate developments should at the same time be able to provide a reasonable balance between the path for inflation and the path for overall capacity utilisation in the economy. In the assessment, potential effects of asset prices, such as property prices, equity prices and the krone exchange rate, on stability in output, employment and inflation are also taken into account. The following additional criteria are also useful:  3. The interest rate should normally be altered gradually and in line with the Bank’s previous response pattern. 4. Interest rate developments should result in acceptable developments in inflation and output also under alternative assumptions concerning the economic situation and the functioning of the economy. It should be possible to explain any substantial and systematic deviations from simple, robust monetary policy rules. The loss function  Analyses in the June Monetary Policy Report illustrate what the different criteria signify. The interest rate forecast is the interest rate path that satisfies the criteria above to the farthest possible extent. Expressed mathematically, and obviously not exhaustively, the assessment can be represented by a “loss function”:  The first term in the equation represents criterion 1, where the loss is higher the more actual inflation πt deviates from the inflation target π*. The second term represents criterion 2 and shows that the loss increases with the degree of fluctuation in the level of activity, measured as the gap between actual output yt and the normal level of output yt*.

The floor system makes it easy to ensure that money market rates track key rate decisions. However, the system has proved to have undesirable side-effects. It makes banks passive. The market for short-term unsecured liquidity becomes very limited or disappears. The pricing mechanism – or the rates set in the money market – contains information that will not emerge if a public actor such as the central bank takes the market’s place. Consequently, we now need to set clearer boundaries between the central bank’s role as lender of last resort and settlement bank and the role of the market. In order to stimulate money market activity and reduce demand for central bank reserves, it should be more expensive for banks to hold substantial deposits in the central bank. We are therefore working on changes in our lending and deposit facilities. There are also other weaknesses in Norway’s money market. When setting household and corporate interest rates, banks not only take into account movements in the key rate, but also give weight to the money market rate, i.e. the Norwegian InterBank Offered Rate (NIBOR). In our opinion, there are shortcomings in the way this rate is set. The basis for setting the rate can be made more transparent for the benefit of other participants and it is calculated using information from only six large participants. This group does not include Norway’s largest saving banks or any international banks. We will take the initiative for improving the structure for setting NIBOR.
However, the fallout from the crisis has brought to the fore the need to further enhance the regulatory framework by adopting and fortifying supervisory and regulatory practices which ensure prompt and effective policy responses to developments in the financial system. Ladies and Gentlemen, the introduction of credit reference services in Zambia was necessitated by the poor credit culture, which was identified as one of the weaknesses in the financial sector, under the FSDP. Bank of Zambia licensed the first ever credit reference bureau, in 2006, following the introduction of the Credit Reference Services (Licensing) Guidelines and Credit Data (Privacy Code) 2006. The substantive operations of the CRB commenced in the fourth quarter of 2008 after a Directive was issued by the Bank of Zambia on 10 December 2008 mandating all credit providers to use the services of a credit reference agency before issuing any loan and to provide credit data to a credit reference agency. However in spite of these efforts, the credit reference system still faces problems, largely relating to the coverage of sectors, as the current legislation is limited to the financial sector. In view of this, the Bank of Zambia is currently developing a comprehensive credit reference law that, amongst other things, will have jurisdiction over all credit providers and data sources and will provide for the treatment of credit data.

Distinguished delegates, previously, supervision of cross-border banks placed significant reliance on the ultimate home country supervisor to ensure the soundness of the overall institution. This implied that other regulatory authorities could only provide input to the supervisory process in the home country. Hence, it was considered appropriate for global firms to gain the benefits of global approaches to the management of their business and had significant flexibility in the use of legal entities to book transactions and to manage liquidity globally. Therefore, the global inter-connectedness made it very difficult for individual national entities to survive group failure even though they are subsidiaries, given the huge importance of confidence factors in funding markets. The challenge is how to develop regulatory and supervisory approaches which will minimize the likelihood of cross-border failures and to reduce the severity of that impact in the event of a failure materializing. It would appear that an appropriate response would have to combine both greater coordination among supervisors and actions aimed at specifically addressing national concerns. On its part, the Bank of Zambia is currently settling Memoranda of Understanding with various central banks for effective supervision of entities with cross-border operations. This is also necessary for enhancing cooperation among the various regulatory authorities in the financial system in Zambia such as the Pensions and Insurance Authority and the Securities and Exchange Commission. Chairperson, in the wake of the financial crisis, there has been renewed interest in macroprudential supervision.
Typically, potential output is divided into a contribution from the stock of capital – how much physical capacity there is in the economy – and something called “total factor productivity”, or TFP. The stock of capital is much bigger than the flow of new investment that adds to it, and it therefore evolves relatively slowly. And, while TFP is a catch-all for all sorts of factors, many associate it with relatively slow-moving things like the state of technological knowledge or average educational attainment. On this basis it’s hard to see how the overall rate of potential output growth – and, a fortiori, our estimates of that trend – could change much over any short period of time. Indeed, I think we can go further than this – not only can the view that changes in supply are gradual make sense in principle, I think it’s usually true empirically as well. Over shorter-run cyclical horizons, most movements in economic growth appear driven by demand, not supply. That’s why inflation tends to be higher in upturns than downturns. But that doesn’t mean such short-term hits to productivity are inconceivable. We saw a sharp step down in productivity growth after the financial crisis. And I think there are things involved in Brexit that, once one digs below the macro-economic surface, could potentially do the same. I’m thinking in particular of allocative effects.

The predicted values are from a regression of daily changes in UK 3-year nominal spot interest rates on near-term surprises in economic data, from the UK and a range of other countries. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  That uncertainty about wage formation may have been one thing that tempered the market’s reaction to stronger-than-expected economic data. But I suspect there was something else at work as well – and that’s Brexit. There’s been a persistent strain of opinion that EU withdrawal is something that necessarily means lower interest rates, or at least that it’s a reason to avoid putting them up. If so, then I think the belief has been overdone. It’s not that the opposite is true. I’m certainly not going to argue here that interest rates will inevitably rise as Brexit proceeds. Apart from anything else, it isn’t the only show in town. Economic shocks come along all the time, in both directions. For example, one of the things that has sustained the UK economy over the past year or so, and to that extent contributed to the recent decision on interest rates, is the strength of the global recovery. On a UK-weighted basis, the world economy looks to have grown by almost 3% in the year to Q3, faster than for many years. This has nothing to do with Brexit and, if global growth were to falter, that too would have implications for the UK.
Cross-jurisdictional payments enjoy growing interest all over the world, not only because of their potential as a test bed for new technologies, but also due to the growing relevance of e-commerce, international trade and migration.5 Indeed, according to the CPMI Chair, Sir Jon Cunliffe, global financial transfers amounted to well over $ trillion in 2019 and are expected to hit $ trillion by 2022.6 Other aspects, such as addressing front-end fragmentation in the common market, swiftly achieving a greater scale and securing stronger European governance, also explain why this topic is becoming an increasing concern for the euro area. Given their differences both in scope and goals I think it is best, for the sake of clarity, if I walk you through these various projects one by one. Starting with the latter case, I would like to mention the recent decision by 16 major European banks in various Member States to launch the European Payment Initiative or EPI. This project builds on the success of the Single Euro Payments Area -SEPA- which laid the foundations for a truly cohesive cashless euro payments space and has made an essential contribution to the efficiency and competitiveness of the European economy. However, despite all the efforts, SEPA fell short in delivering full integration at the point of sale, thus leaving the door open for alternative proposals such as the EPI.

Rather, it encourages combining these new technologies with more traditional measures and advocates establishing a sound shared vision as a first step in the laying of the necessary foundations.10 This implies that to really achieve a profound transformation, an ambitious range of actions is required, beyond the mere operational or technical aspects, like the development of international guidelines, improvement of surveillance practices or the removal of obstacles to the exchange of data, just to name a few. Nevertheless, the importance of digital technology in this context should not be underplayed, even though its full potential may only be realised in the long run. Indeed, it is worth mentioning that a number of the enhancements foreseen as part of this action plan  7  “Enhancing Cross-border Payments: Stage 1 report to the G20”, Financial Stability Board, April 2020. [https://www.fsb.org/wp-content/uploads/P090420-1.pdf] 8  “Enhancing cross-border payments: building blocks of a global roadmap: Stage 2 report to the G20”, Committee on Payments and Market Infrastructures, CPMI Papers, No 193, July 2020. [https://www.bis.org/cpmi/publ/d193.pdf] 9  See footnote 8. 10  Indeed, one such measure is devoted to the potential issuance of a CBDC/stablecoins. This underlines my key message, i.e. that emerging technologies offer us an opportunity to address old problems in novel and, eventually, more effective ways. 5  are ultimately designed to help knock down some of the existing barriers to the emergence of new cross-border payment infrastructures and arrangements. Conclusion I would like to conclude by sharing some final thoughts with you.