samchain/econo-pairs-v1 huggingface dataset:
It has a complex system of retirement security, with multiple pension schemes in different provinces and for different groups. But China is in the process of reforms, integrating its systems and seeking to provide adequate coverage for all workers, and I think they will be getting there. 19. Even in ASEAN, Thailand is going to begin ageing before long. And the Asian countries that grew quickly a few decades ago are also entering the ageing phase – societies like Japan, Singapore, Korea, Taiwan and Hong Kong. We don’t face quite the same problems as the rest of the world in Singapore – we have a defined contribution pension scheme which doesn’t have 2  BIS central bankers’ speeches  the same problems of sustainability. But this is a global challenge. Low interest rates and societies that are ageing and fortunately living longer will pose challenges to retirement security everywhere. 20. Globally, therefore, we need fundamental reforms. We can’t fix the problem through investment strategies, certainly can’t fix it by monetary policies. It needs fundamental reforms. 21. First, we have to enable people to work for long than they used to, in virtually every society that’s getting older, and make it attractive for older people to work. Fortunately, each new generation of people entering their senior years is also healthier.

Tharman Shanmugaratnam: Challenges and opportunities for the insurance industry Address by Mr Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore, at the International Insurance Society Global Insurance Forum, Singapore, 13 June 2016. *  *  *  Mr Michael Morrissey, President & CEO, International Insurance Society Distinguished delegates 1. Let me first say how pleased we at the MAS are that you have chosen to hold your meeting in Singapore. We are especially humbled by your decision to host the meeting in Singapore in rotation with New York and London, henceforth, so that we meet in Asia, in Singapore, once every three years. 2. It’s a challenging time for the insurance industry, and more broadly, for everyone involved in the business of providing assurance in retirement. But it’s also a time of opportunity, especially in Asia, where the opportunities for insurance are multiplying. I’ll talk a little about the challenges the industry faces before highlighting some opportunities. Ensuring retirement security 3. The challenges come about for reasons that go well beyond the cyclical forces. We are faced with structural trends around the world, that are making the business of insurance and pension funds and everyone concerned with retirement security more difficult. 4. The principle challenge lies in the combination of meeting the needs of societies getting older and living for longer and an environment of low interest rates. 5.
3  BIS Review 39/2000  The Bank has taken a particular interest in the financing of technology-based firms. In October 1996 we published a report, ‘The Financing of Technology-Based Small Firms’. The report acknowledged that these firms often face a number of challenges distinct from those facing the general small business population, particularly at start-up. The complexity of the technology, the intangibility of assets and the unpredictability of cashflows, mean that they are perceived as being especially risky. The banking sector in the United Kingdom is developing ways of better servicing the high technology sector, but debt finance is not usually the answer, at start-up and early stages. Risk capital is often a more suitable option. The report identified the need for more assistance for early stage technology-based firms, particularly in developing financial and other management skills. As we have heard today, the newly launched Small Business Service will hopefully contribute to delivering this. Other important recommendations included, first, encouraging the venture capital industry to review the opportunities as well as the risks of investment in early stage-technology based firms, secondly, developing closer relationships between science and technology departments of universities and business schools; and, thirdly, technology-based small firms taking responsibility for improving their human capital skills, including presentational skills, to instil confidence in potential investors. The Bank hopes to produce, before the end of the year, a follow up to the 1996 report.

David Clementi: The entrepreneurial economy - a collaborative approach  Speech by Mr David Clementi, Deputy Governor of the Bank of England, at the ICAEW Conference, held in London, on 9 May 2000. *  *  *  Ladies and Gentlemen, I am delighted to have the opportunity to address you at the end of - what I am sure has been - a thought-provoking day. For the Bank, this conference has a two-fold importance. First, it has, we hope, helped to promote discussion and, more important, action to strengthen entrepreneurial activity in the UK economy. But secondly, we are delighted to have this opportunity to work closely with the ICAEW, especially given the important role of your President as Chairman of our Non-Executive Directors. The Bank’s interest A good place to start my remarks might be to ask why the Bank of England, as a central bank, is interested in this subject. In fact the Bank has for many years taken a broad interest in the efficient functioning of UK industry, and especially in the provision of finance to industry. This falls within the third of the Bank’s three core purposes. The first of our core purposes is to promote monetary stability in the United Kingdom. A huge number of column inches in the press and elsewhere are now devoted to watching our conduct of monetary policy, as the MPC seeks to meet the Government’s Inflation Target of 2½%.
Fintech, as it is known, seems to be the next big thing. It’s true that, in continental Europe, fintechs still account for just a small share of the markets for banking, payment services and asset management. Still, over the past years, they have received a lot of attention and a lot of funds. Fintechs are on the rise. They have entered the markets, and they are competing with banks – at least in some parts of the value chain. The question is: where will this innovation take us? Is it the end of banking as we know it? Will it create new risks? As I said before, it is hard to guess how innovations will evolve and easy to get it wrong. That said, let us take a very brief look at some potential futures. Scenario one: banks might embrace the digital trend and team up with fintechs. For banks this would be one of the more benign outcomes. And it seems to be happening right now. Scenario two: fintechs might break up the value chain of banking. Banks would end up losing revenue, market share and direct contact with clients. The result might be a more fragmented market where some players operate outside the scope of regulation and supervision. Scenario three: banks might still end up being crowded out. At the same time, however, the fintechs could be swallowed up by big tech companies, such as Google, Amazon and Facebook. The market would become more concentrated, less competitive and less diversified.

With that in mind, policymakers should follow the general principle of “same business, same risks, same rules”. That is important. As banking supervisors, we focus on risks related to banks. In that regard, we are working on a number of projects. Take bank licences, for example. We see a rising number of applications related to fintechs. In response to this, we have teamed up with the national supervisors to work on a joint policy approach. It will ensure that applications are treated in the same manner across the entire euro area. Risks that are specific to fintechs will be assessed appropriately and proportionately. We are also seeing more and more supervisors exploring and setting up mechanisms to facilitate the authorisation process for fintech banks. Innovation hubs and sandboxes are two of the key words here. And we too are seeking to implement a euro area-wide hub for fintechs. We are also assessing the risks that might arise when banks or fintechs outsource data or even entire IT systems. We already carried out some work in this regard; in 2015, we did a cybercrime survey, which was a unique project at the global level. As a follow-up we implemented a data base to track and analyse cyber incidents in large euro area banks. And last but not least, concerning the business models of banks, we will explore potential 2/3  BIS central bankers' speeches  risks that emanate from fintechs and other non-bank competitors. In that regard, fintechs are among our supervisory priorities.
The picture is not as bright as last spring At the time of my previous meeting with the Committee, our discussion was coloured by some relief that the effects of the terrorist attacks on 11 September 2001 had not had a particularly marked impact on the world economy. The uncertainty among firms and households had subsided to some extent and there were signs that economic activity abroad was beginning to improve. An optimistic mood was spreading. Order books seemed to have stabilised and in some cases had even taken a turn for the better. Moreover, an expansionary economic policy in many countries was expected to provide an additional stimulus. At the same time, I pointed out that we could not be entirely certain that world economic activity would pick up. Among other things I mentioned that the economic imbalances in the United States were still large and stock market valuations were high. So there were a number of questions as to whether demand would in fact rise on a broad front. Last spring, the moderate economic slowdown in Sweden had meant that inflation here remained high and resource utilisation was still tight. GDP growth seemed to have bottomed out during the summer of 2001. Unemployment had stopped falling. Inflation had been noticeably above the Riksbank’s 2 per cent target for a time. This was partly because so-called supply shocks had raised the price level and led to temporarily higher inflation.

Urban Bäckström: The monetary policy situation in Sweden Speech by Mr Urban Bäckström, Governor of Sveriges Riksbank, to the Riksdag’s Finance Committee, Stockholm, 17 October 2002. *  *  *  First I want to express my thanks to the members of the Finance Committee for the invitation to discuss the Swedish economy and monetary policy. As this looks like being the Committee’s last public hearing in which I shall be participating as Riksbank Governor, I want to take the opportunity of expressing my thanks for all the occasions the Riksbank has been given over the years of coming here and talking about monetary policy. By my count, this is the fourteenth time I have had such an opportunity. It was also customary earlier for the Riksbank Governor to appear before the Committee but those meetings were closed. It was therefore with great pleasure that I received the first invitation, in spring 1994, to have a public dialogue with the members of the Finance Committee. A monetary policy that is conducted with an inflation target and a variable exchange rate is a policy based on assessments. And as assessments are always debatable, they need to be discussed. So what could be more natural than that these discussions are held at least twice a year with representatives for the Riksbank’s principal in this Committee.
Banks may therefore have less incentive to monitor credit risk properly and may provide too many loans to non-profitable business. Over time, such misallocation of financial resources would undermine overall productivity and depress growth and employment. The third challenge is that protracted monetary accommodation may fuel bubbles in house prices and other asset markets. As the crisis has painfully demonstrated, the bursting of such bubbles inflicts large costs for the real economy. In this context, a natural question is whether monetary policy should be used actively to contain asset price booms and bubbles – a response known as “leaning against the wind”. Thanks to our monetary policy strategy, implicitly we do this to some extent. We focus on the medium-term horizon and take account of monetary developments in assessing risks to price stability. Having said that, let us be clear that changes in policy interest rates are normally not the first best instrument for addressing financial imbalances. They should be considered only under very special circumstances, for example when a widespread rise in asset prices threatens price stability in the euro area as a whole. In the absence of such imbalances relevant from a euro area perspective, the appropriate tools to counter imbalances in the financial sector and possible asset price misalignments are at the country level. To avoid the build-up of excessive risks in the financial system or housing markets, national authorities have appropriate tax and supervisory instruments at their disposal.

But it will also be seen that in certain periods the return has deviated rather markedly from the trend. That raises the question of how long the horizon needs to be for a diversified 13 portfolio to actually yield a good return. The third diagram plots the highest and lowest real returns for rolling investment horizons of different duration between 1918 and 1996 (Diagram 3). It will be seen that with a five-year horizon in this period, the best average annual return has been 26 per cent; with an unfavourable initial year, however, the average annual return could be as poor as –9 per cent; moreover, even such a long horizon as twenty or thirty years did not guarantee a return on a par with the trend. The return is admittedly positive for all the rolling periods but even for such a long horizon as twenty years the return on equity was worse than for bonds and bank deposits in 5 per cent of the cases. This raises the issue of timing, that is, when to start saving in shares. Doing so at a time when stock market prices are high may entail a long – in some cases very long – wait for a return that is even in the vicinity of the trend. One way, used by many people, of coping with the problem of timing is to spread the investments over time.
For VBI to work, the desired collaboration has to bring in not just our market players, but also other non-financial stakeholders, to pool critical skills and infrastructure that reside beyond our terrain. By expanding our network, we will be better able to deliver far greater values that otherwise could not be achieved if we were to depend on limited capabilities within the financial industry alone. With stronger collaboration, I believe there will be much more that each individual can learn from one another. In this context, the Community of Practitioners comprising committed Islamic banks, will be instrumental in pioneering advancements in VBI. The Community of Practitioners will serve as the nucleus for other collaborative efforts. Networks to be formed will comprise a diverse group, from ventures and corporates to knowledge and advocacy institutions. Through the exchange of knowledge and experiences, as well as coordinated actions to address implementation issues, the Community of Practitioners can help accelerate the execution and amplify the benefits of VBI. I would also like to thank the panel members that will take part in the Panel Discussion today, which also includes representatives from the Community of Practitioners. We can certainly gain greater insights from the panel members who will elaborate further on the VBI approach and provide interesting perspectives on its implementation. In conclusion, while the Malaysian Islamic financial sector has made great strides since its inception over 30 years ago, the next growth frontier in Islamic finance is in realising its potential to create greater socio-economic impact.

Encik Abdul Rasheed Ghaffour: Value-Based Intermediation (VBI) propelling Islamic finance Address by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Value-Based Intermediation (VBI) Dialogue, Kuala Lumpur, 24 August 2017. * * * Over the years, finance has lifted the lives of many, enabled businesses to grow and helped to fund the construction of public infrastructure that we now depend on. Yet, as the global economy transforms and society evolves, the question as to whether the financial sector is sufficiently serving the needs of the real economy continues to be debated. The evidence from the global financial crisis underlines the need for the financial sector to restore its balance with the real economy. There is a need to rethink, reassess and re-strategise the role and contribution of the financial industry. Undoubtedly, there is an increasing expectation for the financial sector to deliver greater impact to the economy and society. I am pleased to be here with you today and be part of this important milestone in our Islamic finance journey. The issuance of the Value-Based Intermediation (VBI) Strategy Paper by Bank Negara Malaysia marks the next step to realising the full potential of Islamic finance. On behalf of the Bank, I wish to thank all of you who have devoted time and effort to work with us in this important initiative.
There are already some examples of voluntary debt-for-equity exchanges among companies. For example, Chelsea Football Club recently announced a large-scale swap, which accounts for their plummit down the debt league table. In principle, mortgage contracts could also be adapted to lessen the burden on over-indebted households by allowing lenders to convert their loan into an equity stake, as suggested, for example, by the charity Shelter. 16 Preventing tomorrow’s debt hangover Once today’s debt hangover is solved, how is tomorrow’s to be prevented? As debt crises have been with us for a millennium, it is fanciful to think they could be eliminated. But could the party be moderated in frequency and scale? In seeking new ways to tackle this old problem, two possible avenues would be the re-orientation of regulatory policy on the one hand and better designed debt contracts on the other. First, regulatory policy. Since at least the 1970s, public policy has not sought actively to moderate fluctuations in the credit cycle in most G7 economies. Moderating the business cycle was believed sufficient to hold credit in check. The experience of the past decade, in the UK and elsewhere, has called that into question. In the UK, credit grew at three times the rate of money spending over that period, sowing the seeds of the credit crisis, while inflation and growth remained remarkably stable. In tackling this problem, one option is a re-orientation of regulatory policy towards curbing the cycle in credit supply.

That said, it is equally important for policymakers to ensure that mechanisms for swift NPL resolution remain appropriate, not only to prevent an accumulation of legacy NPLs in the banking sector but also to provide borrowers impacted by this pandemic an opportunity to bounce back once the crisis abates. Such a balanced approach helps to preserve the value and productive capacity of borrowers in turn limiting long-term damage to the economy. For Malaysia, work is underway to strengthen legislation which will expand the coverage of businesses that can benefit from court-sanctioned recovery mechanisms. This will help flatten the insolvency curve and avoid more permanent scarring, if NPL cases were to spike. Admittedly, this is an area where there are opportunities to do more and one where all of us can potentially learn from each other. Concluding remarks Let me conclude. Looking ahead, we are cautiously optimistic that the tide may be finally turning in this crisis. However, we certainly can’t conclude that the COVID-19 pandemic is firmly behind us. We humbly admit that the virus has wrong footed us several times. The hallmark of good policymakers is to, as the saying goes, “hope for the best, but prepare for the worst”.
One solution to this problem is to base the analysis on a theoretical model where everything is linked – what is known as a general equilibrium model. Analyses in the Riksbank’s general equilibrium model Ramses imply that the weakening of the krona has had considerable effects on inflation in particular but also on production. Calculations imply that the weakening of the krona contributed to the quarterly growth in GDP being a percentage point or so higher, while inflation was several percentage points higher than it would have been without the weaker krona. 13 The fact that inflation became so much higher would normally have led to a monetary policy response in the form of a higher repo rate. But in the situation we were then experiencing, inflation was falling below zero and thus risked far undershooting the inflation target. During this unusual period the weakening of the krona thus contributed to bringing inflation closer to the target. Difficult to forecast the krona Developments in exchange rates are thus important to developments in production and inflation in Sweden. The Riksbank’s monetary policy decisions and interest rate path are based on forecasts of economic developments in Sweden over the coming years. In this context, the forecast for the krona is important. However, making good exchange rate forecasts is one of the most difficult aspects of macro economics. Figure 2 shows the Riksbank’s forecasts at the beginning of each year since 1996 for the krona’s trade-weighted exchange rate measured in terms of the TCW index.

A simple rough estimate can provide an impression of the effects on prices of a 15-per cent depreciation in the krona. Let us assume a pass-through to import prices equivalent to half of the change in the exchange rate. This means that they will rise by 7.5 per cent. 9 If one assumes that these prices constitute 30 per cent of the consumer price index (CPI), this means that consumer prices will rise by just over 2 per cent as a consequence of the change in the exchange rate. According to this rough estimate, the pass-through from the nominal exchange rate on the CPI is thus around 15 per cent. 10 As the exchange rate fluctuates substantially, it may nevertheless entail fairly large effects on inflation, although the calculations in the example can be taken with a pinch of salt. 11  9  We assume here that prices of imported goods in the consumer sector rise by 7.5 per cent. 10  A 50-per cent impact on import prices, which comprise around 30 per cent of the CPI, gives a 15-per cent exchange rate pass-through to the CPI. 11  See also the article “The path of the krona and inflation” in IR06:1  4  BIS Review 3/2010  The effects of the exchange rate on the real economy One can usually expect a weakening of the exchange rate to lead to a positive effect on net exports.