samchain/econo-pairs-v1 huggingface dataset:
Opening Remarks Veerathai Santiprabhob, Governor of the Bank of Thailand  ASEAN Banking Cybersecurity Conference 2019 Crystal Hall, 3rd Floor, The Athenee Hotel, Bangkok, Thailand 6 September, 2019  TBA Board of Directors, TBA members, Members of ASEAN banking community, Distinguished guests, Ladies and gentlemen, I am delighted to be here with you this morning, and I would like to thank TB-CERT for inviting me to speak at this event. Technology and the internet have undeniably become integrated into our daily lives. Customers’ behaviors continue to evolve and adapt to the technological progresses. In response, new technologies are developed to serve and accommodate customers’ ever-evolving needs. A prime example is the invention of smartphone over a decade ago, which has completely transformed our ways of lives and increased people’s connectivity to unprecedented levels. The banking industry, too, is undergoing massive digitalization, from the user-facing tools like mobile banking apps to backend infrastructure and essentially everything in between. These developments are the key drivers behind the convenience and productivity that we all enjoy today. But, inherent to any invention, these technological revolutions come with their own form of risk: cyber risks. The more “digital” banks become, the more channels for potential points of attacks from cyber criminals, who are constantly evolving to exploit new loopholes. Even when these loopholes are identified and patches are issued, delayed updates could also pose potential risk. We have repeatedly witnessed that the various—and many times severe—cyberrelated incidents often revolve around financial institutions.

Although the financial sector has made significant progress in terms of cyber resilience, the never-ending development of cyber threats means that we too must continue to improve our defenses. In this regard, there remains many issues which the Bank of Thailand, along with other central banks in the region, intend to drive forward, such as overseeing more comprehensive cyber resilience policies and promoting the development of human resources. In response to cyber-attacks that may target vulnerable customers, it is crucial that we strive to increase consumer technology literacy to nudge them towards safer cyber behaviors and ensure a sufficient level of Cyber Hygiene. Ladies and gentlemen, I would like to take this opportunity to thank the Thai Bankers’ Association and TB-CERT for organizing “ASEAN Banking Cybersecurity Conference 2019” which has brought our ASEAN members together today. This is an opportunity not only to gain knowledge from expertise in different areas, but also to enhance connectivity and collaboration among professionals which is vital to improve our Cyber Resilience going forward. I wish all of you a fruitful conference and an enjoyable stay in Bangkok. Thank you. 4
•  While SME loans tend to be riskier on a standalone basis, as a portfolio the risks are more diversified than loans to larger corporates. •  The Basel Committee recognises this and the current capital framework provides for preferential capital treatment for exposures to SMEs for banks using internal models. •  And the Basel Committee has further proposed applying a lower risk weight for banks’ SME exposures compared to unrated corporate exposures under the revised Standardised Approach. This will help alleviate the cost of SME financing. Conclusion Let me summarise my main points. We have made good progress in bank regulation since the crisis. •  Implementation has been generally good but some areas need more work and some jurisdictions need to close the gaps. •  Overall, the reforms have helped to make banks safer and more resilient. As we finalise the Basel III capital reforms, we must ensure that banks are not only safe but also serve their purpose of supporting the economy. •  We should be mindful of the effects of low profitability on banks’ ability and willingness to lend. •  We should be mindful not to increase significantly the overall level of capital requirements on banks even as we finetune the detailed capital rules. •  And we should be mindful not to unduly penalise lending to important segments of our economies – like trade and SMEs – even as we address the limitations in banks’ internal models.

And this, coupled with the challenges that lie ahead, has led us to look at ways in which corporate governance among the banks might be further enhanced. If I could sum up our objective, it would be to try to reassert the role of the board of directors in banks. While the day-to-day running of banks should certainly be left in the hands of the management, the board must play a leadership role in approving the objectives, strategy and business plans of the bank, monitoring the performance of management and ensuring that the internal control and risk management systems of the bank are effective. The board must also make sure that the bank conducts its affairs with integrity and in accordance with high ethical standards. The board is part of the system of checks and balances that ensures that neither large shareholders nor management abuse their power and that decisions are taken with the bank’s best interests in mind. If the board does not play its full part, a vacuum in leadership will be created. This vacuum may be filled by the shareholders becoming directly involved in running the bank’s affairs, or by the executive management acting more or less in isolation. In either case, the board of directors is bypassed and checks and balances are lost. The HKMA has recently issued for consultation a draft guideline for banks and other authorized institutions which sets out what the HKMA expects of them in relation to corporate governance. The guideline aims to establish minimum standards.
4  BIS central bankers’ speeches  •  During a property boom, compared to interest rates, expectations of price appreciation may have a greater influence on current prices. •  Kenneth Kuttner and Illhyock Shim estimate that a 100 basis point increase in the short-term interest rate would lower real annualised credit growth by less than 1 percentage point in the following quarter. Such a rate hike will also reduce real housing price growth by only 1 percentage point. •  Using monetary policy to prick a property bubble may therefore require very sharp increases in interest rates to be effective. But this may have unintended spillovers on other parts of the economy. Macroprudential policy: targeting the cracks 30 This brings us to the third approach to securing financial stability: using macroprudential policy, while monetary policy continues to focus on price and output stability. Macro-prudential policies can be more effective for “targeting the cracks” where specific vulnerabilities are concentrated. 31 But what exactly are macroprudential policies? Given its recent rise to prominence, it is still a nebulous concept with differing definitions. Let me offer my thoughts on what macroprudential policy is and what it is not, from the perspective of Singapore, which has been an early experimenter and practitioner in this area. 32 First, it is closely related to yet distinct from microprudential policy. Some have called macroprudential policy “old wine in new bottles”. Yes and no.

45 We should also bear in mind that the current situation is highly unusual. We must not fall into the trap of believing that the innovative policy measures being taken now in response to these unusual conditions represent the basis for a new paradigm in the future. 46 I suspect that when the dust has settled and more normal conditions return, monetary policy regimes will not look drastically different from pre-Crisis days. •  I think more central banks will have an eye to financial stability considerations – at least informally – when setting monetary policy. •  More central banks are also likely to have macroprudential policy toolkits at their disposal, which they will use from time to time but perhaps not on the scale that has been used in Asia in recent years. •  But in essence, monetary policy will remain largely focused on price and output stability – as it should be. 47 Perhaps as T S Eliot puts it, the end of all our exploring is to arrive where we started and know the place for the first time. 48  I wish you a successful conference. Thank you. References Bank for International Settlements (2010), “An assessment of the long-term economic impact of stronger capital and liquidity requirements”, Basel Committee of Banking Supervision. Borio, C and Zhu, H (2012) “Capital regulation, risk-taking and monetary policy: a missing link in the transmission mechanism?” Journal of Financial Stability, Vol. 8(4), pp. 236–251.
Finally, Governor, would you say there is a relationship between EU membership, and by implication EMU, and the deterioration in the current account of the balance of payments in 2004? There is clearly such a relationship, though other special factors have also been at play here, including the large fiscal deficit. For example, we had anticipated that the total liberalisation of trade and capital controls upon accession to the EU would have left their mark both on the current account and on the external reserves. As expected, there has been some adjustment of asset portfolios by households and private corporate investors in response to the wider range of investment products available overseas. On the trade front, the removal of the remaining levies has led to greater consumer demand for imports, particularly of foodstuffs and furniture. There has also been a surge in foreign travel. In 2004, the number of Maltese leaving by air rose sharply by almost 17 per cent, which implied an additional outflow of Lm7 million. Another factor that has undoubtedly served to encourage consumption, and even possibly investment abroad, has been the relative unattractiveness of the traditionally preferred saving outlet, the 12-month fixed deposit. The gradual reduction in the Central Bank of Malta's central intervention rate these last years was followed by more than proportionate cuts in the rates offered by banks on fixed deposits, probably because of the abundant liquidity available at the time.

Achieving fiscal surpluses in expansionary phases, as established under the new budgetary stability laws, not only proves suitable for easing demand pressures, but also for retaining sufficient room for manoeuvre in the face of potential deviations from the scenario of economic dynamism and, naturally, for further restructuring public finances in order to absorb the future consequences of population ageing. This is, unquestionably, the main challenge for public finances in the medium term. The agreement reached last year under the Toledo Pact also addresses the goal of ensuring the sustainability of the pensions system, although the measures adopted are still of limited scope. It should be recalled, however, that the high growth of public revenue has a difficult-to-estimate temporary component that is linked in part to the strength of the real estate sector. Accordingly, budgetary consolidation may require an additional effort to control primary spending. The collaboration of regional and local government is vital in this connection, as they are responsible for major spending components such as public investment, health and education. This consolidation strategy should, moreover, be compatible with an improvement in the quality of public finances, since that is essential for raising incentives and for helping overcome the shortfalls in education, innovation and productivity.
To prevent farmers from resorting to out-selling for short-term price benefits, buyers on many occasions agreed to raise the contract price to assure them an uninterrupted supply line. However, it is encouraging to note that the established farmers could not be lured by these temporary gains and preferred to enjoy long-run relationships with buyers. 10  BIS Review 22/2008  credit and continuous government patronage to cross the poverty line and join the mainstream of the economy, the Central Bank’s Isuru Project, coupled with the forward sale contract system, has been able to establish a more effective poverty alleviation system through the market mechanism. The success of the Isuru Project in this respect is due to the following features unique to the project: •  Selection of beneficiaries was free from political or other elitist interference and done by the beneficiaries themselves through a self selection process. Hence, undeserving elements were kept out of the project activities. •  Interest rates were deliberately set above the normal market rates so as to compel the borrowers to reckon the cost of funds in their project planning and avoid the misuse of funds. •  Lending was done on easy terms and procedures similar to the systems followed by informal money lenders. The objective was to eliminate money lenders competitively by providing a better service at a lower rate. •  Thrift and savings preceded lending to inculcate proper conservation habits among beneficiaries.

The underlying rationale is that a person who does not know how to save does not know how to spend money too. •  Beneficiaries were socially mobilised prior to providing funding so as to create solid customers for banks. This provided a permanent resolve to beneficiaries to go through the hard path of moving out of poverty. •  The group lending system consolidated into Development Societies at the village level and People’s Companies at the district level enabled the project to set up very vital networks in the form effective social capital. It also helped the project to ensure the sustainability of the project when both the foreign funding and Central Bank’s patronage were withdrawn. •  Skills and capacity development of the beneficiaries were conducted continuously in order to make them better entrepreneurs and bankable customers. This helped them to receive a continuous flow of funds for meeting their working capital and investment capital requirements. •  The group savings fund set up under each group helped to provide insurance to the beneficiaries in the event of unforeseen emergencies. In this manner, the beneficiaries were taught the vital lesson of self-reliance and self-accountability. •  The forward sale contract scheme introduced along with the project helped the beneficiaries who borrowed for agricultural purposes to enjoy a stable price system for major crops and be free from disastrous price fluctuations. References APRACA, Self Help Groups as Informal Financial Intermediaries, (1992), APRACA Publications, Bangkok.
Asia’s urban population has risen from 33% of total population in 1990 to 43% in 2010. The United Nations projects that Asia’s urbanisation rate would rise to 56% in 2030, and further to 64% in 2050. Accompanying this urbanisation has been the growth of mega-cities with populations exceeding 10 million. Twelve of the world’s 21 mega-cities are in Asia, including Tokyo, Delhi, Mumbai and Shanghai to name a few. Urbanisation has become particularly more pronounced in Malaysia during this period. The proportion of the Malaysian population living in urban areas has increased from less than 50 percent in 1990 to more than 70 percent in 2010, and is expected to rise further to 75 percent in 2020. The improved education and higher income levels that has come with urbanisation has enhanced opportunities for greater access to financial products and services. Indeed, financial institutions and markets have responded to the changing profile of financial consumers by offering a broader range of financial instruments and providing convenient access to meet the changing consumer preferences. It is recognised however that economic growth and development, no matter how stellar, will begin to fade when inequality sets in and when income disparities widen. Balanced growth is therefore an important imperative if socio-economic progress is to be achieved and if conditions that limit opportunities for employment and which deepen inequalities of income and wealth are to be avoided.

Over the same period, core CPI inflation has fallen from average annual rates of over 6% to 2%. One important sign of underlying change is that the volatility of economic fluctuations has declined since the mid-1980s, evidenced by the fact that there has been only one recession in the United States in the past 17 years. Improved macroeconomic policy management and such positive supply factors as generally lower commodity prices certainly have contributed to the strong performance of the US economy in recent years. Also critical has been the emergence of new technologies, specifically the adoption of “just-in-time” inventory systems, which we copied from Japan. Research at the Federal Reserve Bank of New York suggests that these new inventory systems have helped account for a significant reduction in the magnitude of inventory swings and hence less volatile growth of the US economy. The spate of recent announcements of new resource management systems by auto companies, retailers, and others suggests that we have not yet exhausted the potential benefits from such inventory and production systems. These inventory and production management techniques are just one aspect of the most significant factor that has characterized the improved performance of the US economy, which is non-farm business productivity growth. As I have noted, this had averaged about 1½% a year over the previous 20 years, but since 1995 has improved steadily.
Thus, a central bank providing emergency liquidity assistance must base its decision on the possibility of a loss. Given the uncertainty about the ultimate cost of emergency liquidity assistance and the central banks’ national mandates, conflicts of interest are likely to emerge in a decision to grant emergency liquidity assistance to a bank with major cross-border activities. It is not difficult to see how these conflicts could complicate crisis management, in particular if the bank is systemically important in any of the host countries. In the present situation, the home country’s authorities are likely to have the principal responsibility, at least if it is organised according to a branch structure. If the bank is systemic in the home country, the decision to provide emergency liquidity assistance may not be so difficult; the risk of incurring a loss may be worth it to avoid a systemic crisis in the home country. But if the bank is not systemic in the home country, but systemic in the host country, there may be some hesitation on behalf of the home country’s authorities to provide liquidity assistance. If the bank has a branch structure, the demise of the bank means that the foreign branch goes down with it, and, because it’s systemic in the host country, financial stability may be at risk and greater social costs are incurred at the host than in the home country.

We applied them because the external conditions throughout 2015 were persistently challenging, even extraordinary, and really required the Bank of Russia to take special substandard measures. The Bank of Russia used special-purpose refinancing instruments which somewhat backed up the real sector in the fields where the market failed: project financing, non-commodity exports, and small business. BIS central bankers’ speeches  1  Now, the upcoming transition to structural liquidity surplus is putting the expansion of specialpurpose instruments on hold. The efficiency of these instruments varies, that is why we will focus on fine-tuning them. Thereby, we have revised the criteria for driving non-commodity exports in order to focus on technological and manufacturing projects. As for project financing, we will refinance liabilities only for the projects already selected by the Interdepartmental Commission. The use of allocated limits only slightly exceeds 70% or 97 billion rubles. To solve the issue of external debt repayments, FX refinancing instruments were used. As a result, the external debt shrank by $ billion, i.e. by 16%, in 2015. The total debt reduction for the two years was 30%. It means that the debt burden for our economy has decreased considerably. Banks’ demand for foreign currency, provided by the Bank of Russia, was sinking noticeably over the past year and we are gradually abandoning these instruments. We expect banks to redeem the FX debt by the end of next year. We offered banks temporary regulatory easing to support the financial system.
Major variation between different groups  Cashflow effect on disposable household income of a rate increase of 1 percentage point 7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  All borrower households (DTI ≈ 2.6)  10 per cent most highly indebted (DTI ≈ 8.7)  0  Note. Per cent. Refers to the average for each group. Within each group, the figure in paranthesis refers to the average debt-to-income (DTI) ratio. Source: The Riksbank  This variation among households can also have a bearing on the total effects on consumption. If the most highly indebted households adapt their consumption mostly in the event of a given change in income, the total effect will also be greater. As the interest rate affects housing prices, it can also affect the scope of households to consume by borrowing against their home as collateral. Currently, many households not only have high debts in relation to their disposable income but also in relation to the value of their home. But in order to ascertain how differences among households can affect total consumption, we would need better data on household assets. 15 From this perspective, there is therefore reason to proceed cautiously with rate rises, in light of the uncertainty surrounding how the most highly indebted households will act.

Importantly, this development will be critically dependent on insurance and takaful companies building strong internal underwriting and risk pricing practices to ensure the sustainability of the business, particularly in the highly competitive motor insurance segment. Let me re-emphasis the importance this development to our market and the criticality to remove the current market distortions that undermine the long term sustainability of motor insurance. The industry cannot afford to take a short term view; it must keep its sights on building the foundations for operating in a more diverse and mature market, with stronger value propositions for consumers. Presently, with the high volume of vehicles referred to by the industry, the Malaysian Motor Insurance Pool has a life of its own and I was told the MMIP is the 9th largest general insurer in Malaysia. This was never the intent. Let’s revert to its original mandate as a mechanism to insure the highest risks motor vehicles. In tandem with these developments, insurers and takaful operators must be fully accountable for the conduct of their intermediaries in ensuring that customers receive proper advice and quality service throughout the duration of the policy. It is important that adequate training is provided and the right remuneration and incentive structure is implemented to promote a committed and professional agency force. With this expectation there is increased demand for a full time and professional agency force.