samchain/econo-pairs-v1 huggingface dataset:
The value of liabilities (green bars) is lower from early 2009 onwards, which on its own pushes the fund towards surplus, but working against that there is now much less of a recovery in equities, while the value of bond holdings is also lower. The overall path of the deficit is very similar, as can be seen more clearly in Chart 6, which just shows the two deficits together. So the bottom line is that QE is broadly neutral for a fund that starts in balance, with the overall movement in assets broadly matching the movement in liabilities. Not all funds, however, started 2007 in balance. Indeed, the Purple Book, published by the Pension Protection Fund and the Pensions Regulator, suggests that the average pension fund deficit was equal to about 30% of total liabilities, calculated on a full buy-out basis. The consequence of this is to shrink the red and blue bars in Charts 4 and 5 by 30% (the time profiles are otherwise the same), reflecting the shortage of assets to meet such a fund's obligations. The implications for the deficit, with and without QE, are shown in Chart 7. Now QE widens the deficit from the start of our purchases in early 2009 onwards, and by the end of the period has raised it by about 10% of initial liabilities.

Percent 88  88  2001  86  ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  86  84  84  82  82  80  80  78  78 76  76  an  p  Ja  da  UK  na  Ca  US  nd  la  Fin  p.  ds  ark  e n nm h R herla De t Ne  c ze  C  ed  en  Sw  ay  rw  No  Source: OECD  Chart 17b No longer at the top of the employment chart. Employment. Share of population aged 25-54.1) Percent 88  88  Now  86  86  84  84  82  82  80  80  78  78 76  76  US De  nm  ark  Fin  d lan  Ca  n  a ad  No  r  y wa  UK  rla  the  Ne  s nd  Ja  n pa  en Rep. ed h w S ec Cz  1) Latest observations. Source: OECD  Those outside the labour market share a number of characteristics.8 One is weak formal qualifications. Among them, we find recently arrived immigrants and young persons who have dropped out of school. Another is poor language skills. Moreover, it is worrying that disability rates are rising, particularly among young people (Chart 18).
Joseph Yam, JP: The Hong Kong Monetary Authority’s main initiatives in the area of banking supervision Speech by Mr Joseph Yam, JP, Chief Executive of the Hong Kong Monetary Authority (HKMA), at a lunch with representatives of the Finance Constituency organised by Dr David Li, held in Hong Kong on 15 January 2001. The speech outlines the latest state of play on the HKMA’s current initiatives in the area of banking supervision, as well as responding to some points raised by Dr Li on behalf of the Finance Constituency. *  *  *  1. I would like to thank David Li for arranging today’s lunch with representatives of the Finance Constituency. The number of live issues in the realm of bank supervision, some of which have been set down in David’s letter in advance of this lunch, is currently quite considerable, so it is useful to have this opportunity to get together to exchange views. As you will know, it is very much our style to work in close collaboration with the banking industry on developing our policies rather than to adopt a confrontational approach, and long may this continue. 2. Let me run through what I see as the HKMA’s main initiatives in the bank supervision area in the next twelve months, in the course of which I will try to pick up some of the points made in David’s letter.

That is one element of uncertainty in climate change within the gift of governments to solve, and many are working hard to do so. I will be speaking later this week at the Green Swan Conference where I will set out in more detail the work the Bank has done on climate change and where we go from here. As we look ahead to a decade that climate science tells us must deliver real climate action, I can promise you this, the Bank of England will continue to play its part. I am grateful to Zane Jamal, Ryan Barrett, Sarah Breeden, Theresa Löber, Matthew Trott, and Karen Jude for their assistance in helping me prepare these remarks.​ 1 The share of manufacturing output in GDP has fallen from around 17% in 1990 to around 9% more recently,  while the share of services has increased from around 70% to around 81% over the same period. Further details here: GDP output approach – low-level aggregatesOpens in a new window 2 See payment volume trends by type in UK Payments Market Report 2020Opens in a new window, UK Finance 3 FSB Global Monitoring Report on Non-Bank Financial Intermediation 2020Opens in a new window 4 Climate Change Act 2008 (Order 2019) 5 See Chapter 6 of The Sixth Carbon Budget: The UK’s path to Net-ZeroOpens in a new window, the Committee  on Climate Change 6 As an example of damage exacerbated by climate change – a recent study from Strauss, B.H., Orton, P.M.,  Bittermann, K. et al.
Conclusion I would like to conclude my speech by quoting Bill Gates: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”3 The Banque de France tries to heed this warning. Although we do belong to the (very) “old world” – the Banque de France was created more than 200 years ago by Napoleon –, as any incumbent, we need to adjust and adapt to the “new world”. In order to do so: We have adapted our organisation and governance with the creation of a Fintech hub within our supervisory function, the appointments of a Chief Digital Officer and a Chief Data Officer, and the launch of a Lab to foster innovation within the Banque. We experiment with new technologies: the Banque de France was the first central bank to implement a full-scale project based on DLT which is fully operational 4 and we successfully run eight artificial intelligence projects. We also host discussions between regulators, academics and industry: for example, the ACPR task force on artificial intelligence delivered an issue paper last December for a twomonth consultation period (ending 28 February). But this call for action is addressed to everyone, and especially to you, the new generation.

The Banque de France’s approach to all these new trends in financial intermediation is to harness the Fintech opportunities while preserving the financial safety nets and a level playing field 3/6  BIS central bankers' speeches  (A) Managing the financial stability risks stemming from a more diversified intermediation model pleads for advancing sound principles and for tightening the links between financial and nonfinancial regulation. In that respect, the Banque de France’s stance is threefold: First, well-articulated and complementary regulation and supervision ranging from microprudential to macro-prudential, and from prudential to consumer protection, anti-money laundering, data protection and anti-trust laws; Secondly, a technology-neutral stance, which accommodates Fintech innovation while preserving financial stability. In this respect, finding the right balance implies an open-minded approach and an in-depth understanding of innovation. That is why in 2016 we created a specific Fintech-innovation hub at the ACPR to engage in a dialogue with innovators: around 400 of them contacted us through this dedicated channel; Thirdly, an activity-based regulation and supervision, to ensure a level playing field between all entities pursuing the same financial activity. The current multiplication of licensing categories to reflect the diversification of business models entails the risk of a loss of regulatory clarity and regulatory arbitrage which needs to be addressed. (B) Of course, the financial stability implications of the morphing of financial intermediation that is underway are not limited to France, and cross-border challenges need to be answered. Doing so requires the smooth articulation of national initiatives, European convergence and international cooperation.
We may have suspended listings on the equity or debt we have immobilised – in some jurisdictions instruments and listings might be cancelled altogether – but it does not mean we can escape making some disclosure on the condition of the firm in the intervening period. We want, at FSB level, to think this through so as to have a path for bail-in execution, that works domestically and cross-border, meets securities law requirements and is transparent to shape and manage market expectations. 3  4  The UK’s consultation on the minimum requirement for eligible funds and liabilities, through which the UK will implement the TLAC standard for relevant firms, was published on 11 December 2015. See Bank of England (2015) ‘The Bank of England’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL)’. BIS central bankers’ speeches  I have described how, on the Monday morning of the resolution, by pointing to the debt that we have available to bail in, we can communicate that the G-SIB has sufficient resources to be recapped and carry on. Indeed part of the Monday morning announcement will be confirmation by relevant regulators that, at operating company level at least, all relevant entities continue to meet their capital requirements. But while TLAC is necessary to achieve this, it is not in itself sufficient. What else, then, is required to stabilise a firm in resolution, to make it resolvable?

Consumers would benefit from a wider offering of products and services at competitive prices. Taking a more strategic and proactive approach to development Third, we adopted a more strategic and pro-active approach to developing the financial sector. We actively went out to attract new business here. For institutions already in Singapore, we tried to anchor them more firmly, and encouraged them to expand and introduce new activities here. BIS Review 62/2002  1  Enhancing monetary policy effectiveness Finally, we had to enhance the effectiveness of our monetary policy. Free capital flows and complex derivative products had made it impossible to completely insulate the Singapore dollar against attack. Our approach had been to operate an inscrutable monetary policy and impose comprehensive restrictions on non-resident borrowing of Singapore dollars. This was not only becoming untenable, but was also hampering the growth of our financial markets. We needed a more explicit and transparent monetary policy stance, and more precisely targeted safeguards against the risks of internationalising the Singapore dollar. III. The changes in the financial and economic landscape  We launched these major changes just as the Asian Crisis was breaking. But we did not foresee how difficult the next five years would be. Southeast Asian countries became mired in political difficulties triggered by the crisis. Malaysia dismissed its Minister of Finance and imposed exchange controls. Indonesia saw the fall of the Suharto government, only to be succeeded by a totally different dispensation.
The central bank’s role is to create an enabling environment for innovation to mushroom. In this environment, many will flourish but bankers who will really thrive will be those who are agile, pragmatic and flexible. I am optimistic, as bankers in Malaysia are well placed to do this. Most bankers are highly skilled. As at end of 2017, high-skilled workers formed around 75% of the banking workforce. The salaries of bankers are also supported by relatively high levels of productivity. If there is any profession that is able to quickly adapt for the future, I believe it is the banking sector. This is proven by data. Over the last three years, the banking sector has created close to 20,000 jobs, reflecting its continued ability to anticipate and address shifts in the workforce needs. As job functions evolve, some will be dislocated. In this respect, it is critical for the industry to have in place mechanisms that support workforce transition, through retraining, reskilling and outplacement assistance. To facilitate this, in collaboration with the industry, Bank Negara Malaysia will be working to formulate an assessment of the current and future state of the banking workforce. A report is expected to be published by the end of the year. The assessment will include identifying the quantum and nature of jobs that are potentially at risk of displacement in the coming years. This should assist the industry in evolving complementary job roles, and formulating strategies to facilitate staff transition to new roles.

This is indeed an ambitious and complex project, and we need your support and cooperation. I am very optimistic on this venture as the collective body of professional bankers in this room today can achieve great things if we act with professionalism, courage and vigour in our respective roles. I believe that all of you here today, the brightest minds of the banking sector, will rise confidently to the challenges and opportunities that lie ahead, armed with a strong foundation in banking knowledge with a renewed commitment to the nobility of the banking profession. 3/4  BIS central bankers' speeches  Before I end, let me say a few words about the post-election environment that we are in. The Monetary Policy Committee of Bank Negara Malaysia last Thursday, the 10th of May, and we reaffirmed that the outlook of the Malaysian economy remains strong, healthy and robust. Moving ahead, the Bank will continue to ensure orderly conditions in the onshore financial markets. Malaysia is no stranger to short term volatility given that we are an open economy that is highly integrated with global markets. Our experience tells us that we must be careful not to overreact to market noises, especially when it is caused by factors which are temporary in nature. The negative but much reduced influence of the NDF market should not detract the ringgit movements over the longer term. In the medium and long term, the ringgit will reflect Malaysia’s strong economic fundamentals.
There are many areas in which the industry could benefit from the latest in technology. 1. Firstly, the enhancement of transaction monitoring and reporting system through the use of advanced big data mining and analysis method. The advancement in artificial intelligence and machine learning enables us to collect and analyse data in a way that was not possible before. This allows us to gain new and important insights that will contribute significantly to the prevention of financial crimes. Furthermore, the ability to tap into vast amount of information also helps promote better client management which would encourage wider 1/4  BIS central bankers' speeches  financial inclusion and tailored customer service; 2. Secondly, the use of technology to complement and support the compliance function especially in the area of higher risk. A good example of this is demonstrated through the use of digital verification to overcome challenges surrounding non-face-to-face verification and transaction. Online identification recognition and biometric verification such as facial, voice and fingerprints recognition offer a new layer of security and potential increase in efficiency for the financial sector. Such advanced systems have the potential to strengthen the existing framework and process to minimise fraud and error. It is all too common to view technology as a disruption and a threat to the way we are used to doing things. Nevertheless, when technological change is managed appropriately and its related risks are mitigated, we can turn it into an enabler of progress for the financial industry.

So, this must be good news – apart from the inconvenient questions one asks from time to time about “How long will it last?” or “Is it sustainable?” For Emerging Market Economies, we have all witnessed the inflow of capital at the initial stages of the QEs, which drove up asset prices and inflationary pressure. This is not surprising as investors have no choice but to take aggressive steps to search for yields globally. This results in a misallocation of resources, as the abnormally low interest rates distort investment decisions by allocating capital away from productive real investment into risky assets that yield higher returns. The lack of real investment in turn reduces medium-term potential growth. Indeed, business investment growth in the US has been lacklustre since the economy recovered from the global financial crisis. The misallocation of resources aside, the search for yield behaviour also leads to a mispricing of risks across a wide spectrum of asset classes. In the US, junk bond issuance has risen sharply in the past few years, accounting for about 24% of all bond issuances so far in 2013, while the average high-yield spread has fallen below 5%. While the buoyancy in the asset markets helps support the economy in the short term, imbalances could build up in the economy and the financial system that may pose a threat to systemic stability when the unconventional monetary policies begin to unwind. 13.
in the best case these people were not particularly gifted or responsible bankers, and as a result they triggered the collapse of their credit institutions. Here we are faced with a question about which objectives and targets the Association can deliver 1/4  BIS central bankers' speeches  on. Should it set standards (including ethical ones) for the banking sector; should it be the voice of the banking community in dialogue with the regulator or should it stand up for ‘bad’ banks? I would like to place special emphasis on the fact that when the Bank of Russia withdraws unstable or fraudulent credit institutions from the market, it first, protects the interests of depositors and creditors, and only thereafter is interested in protecting the interests of scrupulous banks. The clearing of the banking sector is yet to be completed, therefore corporate customers will not just choose from banks offering products and services they need, but seek to mitigate the risk of losing money. In particular, it also manifests itself in the authorities’ efforts to determine specific criteria for banks, or a list of banks, which can be entrusted with budget funds and the funds of public companies. The ARB raised the point that these criteria restrict competition. Let me repeat, competition is undermined by fraudulent banks which remain on the market, while attempts to limit risk by means of registers and criteria are just a corollary.

The relative dearth of such moves may help explain the lack of technological trickle-down to the long tail. Taken together, the evidence here points to a two-tailed labour market. The upper tail in-crowd attracts the most skilled managers and the best-connected boards, amplifying their strengths. And in-crowd workers swim mostly in the pool of in-crowd companies. By contrast, out-crowd companies in the lower tail have less-skilled managers, less connected boards and workers who swim largely in less productive company pools. This bifurcated labour market seems unlikely to support technological diffusion to the long tail. (d)  Institutional Infrastructure  There is a well-established school of thought linking improvements in the quantity and quality of institutions to rises in living standards. Countries with high-quality institutions tend, on average, to grow more rapidly and to have higher levels of productivity and living standards. Those without tend to be subject to larger and more frequent breakdowns in economic, financial and social order, which holds back significantly their growth, productivity and living standards. 42  Institutions matter. One of the channels through which institutions support growth is by nurturing investment and innovation. For example, upholding the rule of law and enforcing property rights is typically found to be crucial in supporting business investment and innovation. 43  Having those rights well-established reduces concerns among firms  that their assets might otherwise be expropriated, either by the state or another company. Security of 44  property rights encourages a mass flourishing of investment and entrepreneurship.
When goods are transported to consumers via our physical infrastructure, such as the road network or by air, the payment for the product is sent to the end recipient by means of the “financial infrastructure”. If the financial infrastructure did not function, the economy would more or less grind to a halt. The financial system also makes it possible to manage various risks that can arise in the financial markets. This is important to both households and companies. Another important function is to be able to save and borrow money via the financial system. This gives households and companies the possibility to distribute incomes and consumption over time. The funds that are saved can be borrowed by companies and households to finance various investments which can then create employment and growth. When there is distrust and disturbances in the financial system, this function may be impaired, which can  BIS Review 138/2008  1  lead to a credit crunch. First the financial sector is affected, but then it gradually becomes more difficult for households and companies to borrow, too. Consumption and investment then decline, which can lead to a substantial economic downturn. A credit market that functions well is thus an important condition for good growth. To summarise, one can say that the financial system’s functions are very important for economic development. It is important that the system is stable for our society to function properly on the whole. But financial stability is something that most people probably often take for granted.

Broken lines refer to the Riksbank’s forecasts  18  07  08  09  10  11  12  Source: The Riksbank  BIS Review 138/2008  Uncertainty in the forecasts    Global economic activity and financial crisis worsen    Higher inflationary pressures    Weaker krona    Poorer impact initially  Repo rate with uncertainty bands Per cent, quarterly averages 7  6  5  7 90% 75% 50% Repo rate Forecast  6  5  4  4  3  3  2  2  1  1  0 jan-04  0 jan-05  jan-06  jan-07  Note. Broken lines represent the Riksbank’s forecast. BIS Review 138/2008  jan-08  jan-09  jan-10  jan-11  Source: The Riksbank  19  A concluding reflection  In the early 1990s  Bank Support Authority and a crisis created mainly on home ground  This experience provides better resilience now    Shortcomings in the global financial system   M easures in both short and long term   Fix what is broken so it will work better in  the future! 20  BIS Review 138/2008