samchain/econo-pairs-v1 huggingface dataset:
It did not make sense to export out of the subsidiaries in ASEAN when it was cheaper to buy directly from the plant in Japan. The weaker yen also has a tendency to slow foreign direct investment from Japan, as it is no longer so expensive to produce in Japan. 29. As we are all aware, this combination of Asian monetary problems has recently put tremendous pressure on the financial markets, in particular the foreign exchange markets, in the region. This was compounded by speculators who took advantage of these market developments to set up their attacks, resulting in the currency turmoil in Asian currencies that we have seen. 30. Here I cannot possibly resist the temptation to offer a few comments. There is a common perception that the adoption of more flexible exchange rate regimes by a number of Asian economies implied a failure of fixed exchange rate systems. This is in my view a mistaken perception. As all central bankers are aware, there is no one perfect exchange rate regime. One of the dilemmas of any exchange rate regime is how the exchange rate can reflect the underlying economic conditions, which are constantly changing, so that external balance can be achieved. A fixed exchange rate regime can function well if there is strict financial and fiscal discipline, and flexibility of domestic goods and services markets to adjust for any structural changes in the economy.

But there certainly is a problem with the effectiveness of financial intermediation in this region which is inhibiting the flow of long-term savings into long-term investments. I believe an important factor behind this is the perceived or actual risks inherent in dealing with the products, the intermediaries and the market that are part of the process of financial intermediation. I also believe that monetary authorities have a responsibility, through concerted efforts in prudential regulation and supervision, and the development of the financial infrastructure, to contain these risks to levels more acceptable to those concerned, including themselves as managers of official foreign reserves. The Case for Asian Monetary Co-operation 36. These Asian monetary problems which I have described can seriously undermine the ability of Asian monetary authorities to deal with shocks, and so when shocks do come they will cause much agony in terms of economic disruptions and painful adjustments. The problems are also highly contagious, transmitted through sudden shifts in the same direction in the perception of risks by international investors, as they looked for worrisome similarities amongst Asian economies, as the recent turmoil in Asian currency markets has shown. The fall in one market may also lead them to look for liquidity in other markets, thus contributing further to the contagion. BIS Review 91/1997  -8-  37. We are living in an ever more interdependent region. Increasing trade and investment flows, made possible by trade and financial market liberalization, have bound our fates together.
In the very turbulent and uncertain situation prevailing at that time, the main focus was on quickly making a diagnosis and implementing more or less acute measures – “intensive care” if you like. It was necessary to take rapid and forceful action to safeguard financial stability and to minimise the negative effects of the crisis on economic developments in general. For the Riksbank and many other central banks the "normal” tools have not been sufficient to achieve this. But we have adapted quickly, taken out a whole range of complementary tools from our workboxes, and even constructed some new ones! Now, one year later, the most acute phase of the financial crisis is now hopefully behind us. Although we have not yet climbed out of the trough that turned out to be the worst economic downturn since the war. But there are many indications that we have passed the turning point. In my speech today I intend to provide a brief status report of where we stand today and how we should to proceed. Are we about to land on our feet? How does the economic situation look today from a monetary policy perspective and what lies ahead of us? What is the outlook for the financial system? Have the “extraordinary” measures taken had an effect and how should they be phased out? Even after we have landed properly it will be necessary to keep our balance. But the road ahead may be difficult to negotiate.

Specifically, return on assets (ROA) stood at 0.67% (up on the -0.21% of 2020 and on the 0.51% of 2019). The main driver of the improvement in ordinary profit was the reduction in impairment losses on financial assets. 21  The average loan-to-value (LTV) and loan-to-price (LTP) ratios, which measure borrowers’ indebtedness in new mortgage loans, remained stable in 2021. At the same time, there were no significant variations in the proportion of loans with a higher level of leverage (those with an LTV or LTP ratio of more than 80%). As regards the loan-to-income (LTI) ratio, which reflects the relationship between the mortgage principal and the borrowers’ income when the loan is originated, most new lending was concentrated in loans with a low LTI ratio (below 3) and a high LTI ratio (above 4.5). 23  The average cost of liabilities at banks declined in the last two years, meaning a lower level at end-2021 (0.5%) than prior to the pandemic (slightly above 1%). The cost of capital stood at 8.1% in December 2021, lower than the sector’s ROE (10.5%) even without factoring in extraordinary items (9%). Moreover, the CET1 capital ratio held relatively steady in 2021, after increasing in 2020, so the health crisis has not lessened the banking sector’s overall capacity to absorb unexpected losses. The stress tests conducted by the Banco de España show that the banking sector maintains its correct aggregate resilience to the macro-financial risks identified in the present setting, albeit unevenly across banks.
Likewise, cheques declined at a faster pace of 9.8% or 10 million cheques for the first half of 2014 compared to 2% or 2 million cheques for the same period last year. While the data suggests some improvements, more need to be done. A particular area that requires huge efforts is the distortions in the debit card usage in Malaysia. Despite a seemingly high debit card penetration of about 19.2 million “active” debit cards in contrast with 5.5 million “active” credit cards, the per capita debit card transaction is only 1.7 compared to 11.3 for credit card in 2013, indicating a ratio of 1 debit card transaction to about 6 credit card transactions. Acquirers charge merchants the same merchant discount rate (MDR) for the acceptance of debit and credit cards despite their differing cost structure, which makes debit cards just as expensive as credit cards. It is difficult to comprehend the charges imposed on debit cards, which have ready cash in them, is similar to the charges on credit cards. There has also been a slowdown in the growth rate of POS terminals in Malaysia since 2012, which indicates a potential saturation of POS terminals at those merchants who can afford the MDR. This is further compounded by increases in interchange fees which are likely to cause the MDR to be raised to even higher levels on a system-wide basis, thus hindering the wider expansion of the POS network and depriving society from the convenience of using costeffective payment cards.

The rate-setting with regard to the banks’ deposits with the Riksbank is part of the monetary policy transmission mechanism and a means of further cutting interest rates in the Swedish economy so that inflation will continue to rise towards the target. In this way, we contribute to price-setting and wage-formation in society functioning better, which gives the right conditions for a good development of the economy. It may be worth pointing out that the Riksbank is not in any way unique in this context. Our central bank colleagues in, for instance, Switzerland and Denmark have similar systems, although some details differ. For instance, the Swiss central bank has chosen to limit how much of the bank’s deposits should be subject to a negative interest rate and part of the deposits in the Danish central bank is also interest-free. However, the effective interest rate the banks in these countries pay is nevertheless in line with what the Swedish banks pay. 1  The reason why this is 4 per cent of GDP is that the nominal amount of SEK 135 billion had a market value corresponding to SEK 160 billion. BIS central bankers’ speeches  3  I can also note that the four major Swedish banks made profits of almost SEK 44 billion during the first half of the year. In the same period, they have had to pay around SEK 90 million on their deposits with the Riksbank, as a result of the negative interest rates.
As for supply, identifiable news about future productivity is rare – we don’t often see things that cause people to reassess their forecasts of trend growth. In any case, it’s often assumed that any changes in underlying supply are sufficiently gradual that demand changes along with it, without the need for any prompting from monetary policy. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  But the point we were trying to get across, when  Chart 2: Demand and the exchange rate  we used that phrase, is that Brexit has the capacity to move these things both significantly and, to an unusual extent, independently of each other. Today I want to pick out a couple of aspects of this. One involves supply. As I say, economists often presume that changes in an economy’s underlying productivity occur only slowly. If so, it’s unlikely that any particular event – Brexit included – could change one’s view of short-term trends in underlying supply growth. Sources: ONS, BIS, and Bank calculations. But in one respect, at least, a sharp reduction in the degree of openness could have a more immediate impact. Suppose, plausibly, it results in a sudden shift in the demand for domestically produced output, away from what we’ve been exporting and towards goods and services we’ve hitherto been able to import.

Brexit and interest rates Speech given by Ben Broadbent, Deputy Governor Monetary Policy  London School of Economics 15 November 2017  I’d like to thank Mette E. Nielsen and Konstantinos Theodoridis for their valuable research assistance. I am also grateful for helpful comments from other colleagues. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Monetary Policy Committee. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction and summary Hello! It’s a real pleasure to come to the LSE to give this talk. It’s a great institution; I’m fortunate to have many friends here; last, but not least, it’s barely a hop and a skip from my office. So thank you for having me. It won’t have escaped your attention that the MPC raised interest rates earlier this month. It did so, in part, because of the referendum-related decline in sterling’s exchange rate. That has pushed up CPI inflation and will continue to do for some time yet, as the rise in import costs is passed through to retail prices. Our remit says we can accommodate such effects, and take our time in bringing inflation back to target, but only so long we also think there’s spare capacity in the economy. As unemployment has declined that position has become harder to maintain. We’ve been communicating this message for some time now.
This is because long-term lending is inherently riskier than short-term lending, as short-term interest rates (and, hence, the opportunity cost of long-term lending) may perform quite differently to what was previously anticipated by market participants. By p urchasing government bonds in secondary markets, the central bank absorbs part of that long-term risk, through what is called the duration extraction channel. This leaves less duration risk for private markets to absorb, so the term premium falls, driving down the long-term interest rate. Third, there is the risk that a bond issuer will default on its future payment obligations, and investors demand a default premium to compensate them for this risk. As in the case of the term premium, central bank purchases shift this risk from private investors to the central bank, which reduces default premium and, therefore, yields – a channel called default risk extraction. All three of these asset purchase channels reduce long-term rates and thereby stimulate the economy. Indeed, according to many empirical studies, the ECB's APP made a significant contribution to boosting euro area economic activity and supporting the convergence of inflation to its aim. 6 The existing evidence also shows that in the case of PEPP 7 - that was designed to permit flexibility in the allocation of purchases across jurisdictions, as well as  6  A number o f academic studies have examined empirically the effects o f this unconventional po licy.

If the loops don’t communicate, we fall short of the network opportunities that checks, debit and credit cards, and ATM cards offer. The tremendous potential in mobile lies in the eventual speed and quality of the end-to-end experience and in the security of any information on the device or in transit, tough challenges simultaneously to engineer. And beyond mobile payments, achieving the speed and general availability of faster payments seen or planned for in the United Kingdom, Australia and other countries requires tremendous coordination across the payments industry. So, how does the Federal Reserve fit into this period of extraordinary change and challenge? BIS central bankers’ speeches  1  The Federal Reserve has long championed access, including nationwide connection, coordination, as well as the security, efficiency and resiliency of the nation’s principal payments mechanisms. In light of the tremendous increase in payments innovation, last fall the Federal Reserve Banks launched a new strategic plan for Federal Reserve Financial Services. We’re asking how our services may need to change to facilitate the direction of the payments market and how we could enable existing and future innovation by the payments industry. The Federal Reserve Banks are actively engaged in adjusting our planning, our product development and our resources to address innovation in the marketplace. To do that, however, we need to build consensus within the industry around a broad direction, around the benefits of access and connectivity across the nation, and about understanding and managing the risks of new technologies and new business models that emerge.
These two forces have created uncertainty and triggered a readjustment of portfolios to accommodate falling prices of financial assets and commodities, higher risk premiums and a generalized depreciation of emerging market currencies against the dollar. Overall, all these factors combined may have exacerbated the process of market adjustments, making it difficult to distinguish whether these are temporary or permanent in nature (figure 2). Although the aforesaid adjustments in the world are good news in the sense that they signal a transition towards a more balanced configuration of the global economy, for this year and next a less favorable international scenario for the Chilean economy is being configured. Accordingly, our growth projections for our trading partners are revised downwards, with higher credit costs and lower terms of trade than previously expected. The baseline scenario incorporates prices of $ and $ per pound for 2013 and 2014, respectively. This is quite lower than what we anticipated just a few months ago, when we projected prices of $ and $ per pound for those years. These elements add to the normalization that is being observed in domestic demand. Our economy is on a good standing to face the transition to this new configuration of the external scenario. The recent depreciation of the real exchange rate facilitates the adjustment of the Chilean economy, and monetary policy is available to make adjustments if required.

At the same time, I take this opportunity to reiterate that the incidence of the specific products in question on the final result of inflation is minor and does not alter the inflation outlook presented on this occasion or that we have presented in the past (figure 3). BIS central bankers’ speeches  3  The world economy has begun moving towards a more balanced configuration in many dimensions, including a narrowing of the growth gap between developed and emerging economies, the normalization of financial conditions and the prices of commodities. On the output side, the slowdown of emerging economies, partly offset by stronger growth of some developed ones, results in a downward revision to Chile’s main trading partners’ growth forecast by two and five tenths of one point in 2013 and 2014, respectively, as compared with our March Monetary Policy Report (table 1). In the developed world, the performance of the United States stands out. Its upturn has been accompanied by growing private consumption and a gradual recovery of real estate, with positive numbers from the labor market, credit growth and consumer confidence. Plus the momentum of investment in the energy sector that are pulling costs down. The Japanese economy grew strongly in the first quarter of the year and short-term prospects have risen in response to the current policies of fiscal and monetary stimulus, but the sustainability of this improvement is yet to be seen. The outlook for the Eurozone continues to point to a contraction this year.
This means that in the light of new FinTech risks, the current supervisory frameworks will evolve in a manner that ensures appropriate oversight of banking and non-banking service provider’s activity as well as new payment systems based on DLT solutions while avoiding innovation hindering. Different countries may follow different supervisory regimes, which includes direct oversight of the new market players, then establishing innovation hubs, accelerators and regulatory sandboxes. The role of Regtech in enhancing regulatory and compliance challenges Digital finance raises new risks and new areas of vulnerability might develop because of new financial products (virtual cryptocurrencies) and new technologies (distributed ledger based on anonymous users and on decentralized governance without accountability). Digital finance gives rise to an increasing number of financial players and eases cross-border transactions, which makes the monitoring of transactions more complex for financial institutions and public authorities. Finally, while new financial players are reshaping the financial sector, they may be outside the scope of banking sector regulation and subject to less stringent AML/CFT rules than are banks. New technologies may support greater efficiency for staying compliant. Regtech companies are especially keen to provide banks with more effective ways to improve their compliance and risk management, through outsourcing or insourcing processes. They may open up opportunities for digital transformation of control and support functions within banks (risk, compliance, legal, finance, IT). Regtech could address a wide array of requirements related to regulatory reporting, financial crime, operational risk (including cyber-security and fraud detection), consumer protection and data protection regulation.

For Africa, Islamic finance has tremendous opportunities to support the nation’s development and economic needs. I end my remarks with these words: “Actions Speak Louder Than Words” Thank you. BIS central bankers’ speeches  3
It may also reflect the frustration of some key countries with what they see as a slow evolution of the decision-making bodies of the IMF in response to changes in the composition of the world economy and the rise of new economic powers. International policy cooperation has thus moved out of statutory bodies and into groups of a select few, bypassing established channels and fora. Other countries do not participate, directly or indirectly, but are called upon to contribute to efforts that others have agreed. The G20 discusses and aims to agree on changes in IMF governance. The vast majority of the membership of the IMF has no voice or representation in these discussions, including all lowincome countries and most emerging economies. If they are not addressed effectively, the large and growing global imbalances that contributed to the current crisis are likely to widen anew. This would again put at risk the stability of the global economy. Linked to these prospects are the continued rigidity of important exchange rates and excessive reserve accumulation leading to the build-up of unsustainable debt. I agree with those who have said that in recent years, the international monetary system failed to promote timely and orderly economic adjustment. 7 Global capital markets failed to channel surplus savings in emerging market economies into profitable longterm investment in wealthier countries. It would seem that we still risk repeating recent failures. Let me also mention another concern. Mercantilist attitudes may also gain ground in surplus countries.

Lower variability in output growth and inflation, lower inflation persistence, apparently weaker pass through of demand pressures – all told, this points to the importance of identifying and understanding the complex combination of structural changes affecting our economy. Today, I plan to give a broad overview of some of them, as they confront policymakers. Our standard tools of economic analysis – in particular, statistical modelling – are not especially well-suited to real-time detection or quantification of the underlying forces of change. They can, though, alert us to puzzles when the data persistently deviate from past patterns. Business managers, by contrast, are exposed to the reality of change day by day. Unable to shield yourselves from change, businesses can indeed succeed by embracing it – shaping your environment as well as responding to it. That underlines the value of the Bank’s dialogue with business, facilitated and led by our regional Agents across the UK. Colloquially, you enrich our grasp of what is ‘going on out there’. 1  My thanks to Peter Andrews, Ian Bond, Spencer Dale, Neal Hatch, John Whitley and Tony Yates for comments; to Damien Lynch for comments and research and to Sandra Bannister for secretarial support. 2  Benati L. (2004), ‘UK Monetary Regimes and Macroeconomic Stylised Facts’, mimeo, Bank of England. BIS Review 16/2005  1  Economic analysis then helps us to match your various real-world stories to puzzles we see in the data.