samchain/econo-pairs-v1 huggingface dataset:
We must preserve this. I think there are two priorities for international co-operation in the wake of Covid-19: first, keeping supply chains open; second, strengthening digital connectivity. Keeping Supply Chains Open Let me start with supply chains – of trade, transportation, and logistics. The consensus in favour of globalisation was already shifting before the virus hit, with growing concerns that the fruits of free trade and open markets were not shared equitably. Now, with Covid-19, doubts about the pace and scale of global economic integration have intensified. Amid the lockdowns and disruptions in global supply chains, countries are realising how dependent they are on these networks – and hence vulnerable. There is naturally a temptation to shorten supply chains, or bring onshore the production of essential goods, or impose export controls to conserve supplies for 1/4  BIS central bankers' speeches  domestic use. There will likely be a shift in supply chains, with a rebalancing from efficiency to resilience. This is not necessarily bad, knowing what we now know about our vulnerabilities. Building resilience is not about retreating behind our respective borders. Doing so will only diminish our collective resilience to shocks, not enhance it. Resilience is not achieved through insulation or in-shoring. If every country were to try to grab what it could, we will all end up with less. The more effective way to build resilience in a post-Covid world is through greater diversification of supplies and building redundancies in global value chains.

The pandemic has shown how important it is for countries to keep markets open, trade flows smooth, and supply lines intact. But each country will do this only if it has an assurance that others will do the same. We must therefore make a renewed commitment to keeping supply chains open. We must coordinate our actions to minimise disruption and enhance recovery. We must agree on common protocols for re-opening our borders in a safe manner, lifting travel and trade restrictions, and restoring air and shipping routes. We cannot wait for global leadership or multilateral agreements to do this. Like-minded countries must come together, make things happen, and blaze a trail for others to come along. Singapore has been part of such efforts to keep global supply chains open. Together with Australia, Brunei Darussalam, Canada, Chile, Laos, Myanmar, Nauru, New Zealand, the United Arab Emirates, and Uruguay, Singapore issued last month a joint ministerial statement to underline our commitment to maintain open supply chains during the ongoing Covid-19 pandemic. Importantly, it contains a commitment to refrain from export controls, tariffs and nontariff barriers, and remove any trade restrictive measures on essential goods. Singapore is also in active discussion with various countries to develop bilateral arrangements for safe travel between them. We are pleased that our first ‘fast lane’ arrangement has been launched with China -to facilitate essential business and official travel between our two countries.
It is by no means an easy task to make forecasts in such an environment, but one thing is sure: it takes a lot of economic policy wisdom to sail safely in waters that are not exactly tranquil. As one of the most outstanding US presidents, Abraham Lincoln, once said, “The best way to predict your future is to create it”. Thank you for your attention! 4/4  BIS central bankers' speeches

Muhammad bin Ibrahim: ASEAN financial integration, collaboration with Myanmar and other challenges for Malaysia Speech by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Maybank Myanmar Grand Opening, Yangon, Myanmar, 2 October 2015. *  *  *  A very good evening, it is an auspicious occasion. Congratulations to Maybank on the opening of its branch in Yangon, Myanmar. I am very confident that the launching of this first branch marks the beginning of a productive, innovative and meaningful journey for Maybank in contributing to the economic transformation of Myanmar and in particular the development of its financial sector. I am confident that this branch will be the first of many to come. My remarks today will touch on three subjects: Firstly, the importance of ASEAN financial integration; secondly, the close and long-standing friendship between Myanmar and Malaysia; and the role of financial institution as a responsible corporate citizen. ASEAN: Story of the future that begins today Members of ASEAN have adopted an ambitious, unique and comprehensive vision for an economically and financially integrated region. I term it as unique since we are embarking on this process in a phased and gradual manner. Each member country is given the flexibility to progress towards integration based on its state of readiness. It is an inclusive approach and a long term strategic plan to unlock the growth potential of our region in the coming decades. The case for integration is self-evident.
If, for example, a central bank raises interest rates because inflation is edging upwards, it can expect this to have a dampening effect on the economy. At the same time, monetary policy authorities must always bear in mind that monetary policy can only create favourable conditions for growth temporarily; in the long term, expansionary monetary policy cannot achieve a lasting stimulation of aggregate demand. If it nevertheless attempts this, it will have an inflationary impact in the long term, and destabilise the  BIS central bankers’ speeches  1  economy. To avoid this, the central bank must focus on a goal which is achievable with the resources at its disposal, namely ensuring price stability. Price stability is not an end in itself. By ensuring price stability, monetary policy creates conditions favourable for companies and households, and thereby makes an important contribution to stable economic development. Fiscal policy is aimed at ensuring that expenditure and receipts are balanced over the long term. At the same time, budgetary policy has to take account of the state of the economy. This is how the Confederation’s primary fiscal policy goal is set out in the Federal Constitution. 1 These clear principles ensure that fiscal policy can fulfil its important function of stabilising the economy without the soundness of public finances being called into question. If fiscal policy focuses exclusively on encouraging growth and pays no attention to budget soundness, it runs the risk of losing its room for manoeuvre.

3 Thus, the actual goal of monetary policy – price stability – can be achieved (cf. chart 4). In the fiscal policy domain, the “rules versus discretion” debate is of much newer vintage. Whereas, in 1990, there were only five countries with fiscal rules (Germany, Indonesia, Japan, Luxembourg and the US), today there are 81. 4 The current financial crisis and the associated debt crisis have highlighted the importance of fiscal rules. In principle, fiscal policy can be implemented by means of automatic stabilisers and discretionary measures. To be effective, discretionary measures have to fulfil a number of conditions. These can be  2  Cf. Friedman (1948). 3  Cf. Kydland and Prescott (1977), and Barro and Gordon (1983). 4  Cf. Budina et al (2012). BIS central bankers’ speeches  3  summed up as the three T-criteria: timely, targeted and temporary. 5 In other words, discretionary measures have to take effect in good time, to avoid them having a procyclical effect. This risk arises, in particular, from the fact that discretionary measures require political decisions. So their implementation can take a lot of time. Second, such measures need to be targeted, so that support can be given to the sectors and industries affected. Third, they must be temporary, so as not to permanently weigh on public finances. Experience has shown that, in the upswing, budget deficits are not offset by surpluses, and that discretionary measures therefore often result in government finances being burdened even beyond the downswing.
Without question, the Accord  5  BIS Review 32/2000  was a milestone achievement - for the first time, supervisors in G-10 countries were able to use a common yardstick for assessing banks’ capital adequacy. But the Accord has a number of serious shortcomings. It does not adequately differentiate among degrees of credit risk and, as a result, banks have had incentives to take on higher risk exposures within broad risk categories. Banks have also tended to engage in transactions that lower regulatory capital requirements without reducing economic risk. For example, through asset securitization a bank may physically transfer assets off its balance sheet, but still retain some or even all of the associated risk. In addition, it has proved difficult to incorporate into the Accord’s simple risk-weighting scheme the innovations of the last decade in the way banks manage and mitigate risk. As credit risk management techniques advanced, and as the importance of managing operational risk has been increasingly recognized, the long run relevance and efficacy of the Basel Accord has been eroded. In June of last year, the Basel Committee released a Consultative Paper laying out its vision for a new, more refined capital adequacy framework - one that more accurately distinguishes degrees of credit risk, and that is appropriate for banks of varying levels of sophistication.

The rate of increase of household consumption, one of the most dynamic items in that period, will foreseeably slacken, in line with the diminished growth rate of earnings and the lower contribution of other sources of income, in particular those stemming from general government measures. The response of consumption is expected to be consistent with a declining trajectory of the saving ratio, in step with the changes observed since the start of the year, after almost two years of successive increases in this ratio. It is very likely the other domestic demand components will continue to reflect the  BIS Review 129/2010  3  weakness of their main determinants. In the case of investment in equipment, this will be due to the excess capacity built up during the crisis and the still-prevailing uncertainty over financing conditions; and in that of residential investment, to the need to complete the adjustment set in train back in 2006. In contrast, net external demand is expected to be more buoyant once the high growth rates of imports of the previous quarters ease, rates which were linked largely to the bringing forward of certain spending decisions, and exports continue on their rising course. For this to occur, perseverance will be needed in anchoring the cost- and price-competitiveness improvements obtained in recent quarters and entrenching them with genuine productivity gains.
This has increased at the same time as we have witnessed a relatively substantial decline in the value of household net wealth. In recent years, household indebtedness has risen sharply and is now approaching the levels seen shortly before the banking crisis at the beginning of the 1990s. The interest ratio, i.e. post-tax interest expenses in relation to disposable income, is however at a relatively low level historically. So far the Riksbank has not judged these developments to be a problem for financial stability, at least not as long as any future rise in interest rates is accompanied by an increase in growth and income. But it is clear that households' scope for consumption in the near future will be limited by their levels of debt and that this could subdue the recovery. As capacity utilisation in the economy today is relatively low, stronger growth is not expected to constitute a more acute problem with regard to inflation. But when growth exceeds its potential, this normally leads to a gradual intensification of inflationary pressures. Since our last assessment of the situation, some new data has shown, for example, that inflation in August was higher than we previously thought, owing mainly to electricity prices remaining higher than expected. Nonetheless, it is likely that inflation will continue to fall rather sharply over the coming six months. Monetary policy is focused on inflation a couple of years ahead, however.

Fixed gross capital formation, outcomes and Riksbank forecasts Percentage 12-month change 12  12  10  10  Outcome RB Oct 02 (IR02:3) RB June 03 (IR03:2)  8  8  6  6  4  4  2  2  0  0  -2  -2  -4 1997  -4 1998  1999  2000  2001  2002  2003  2004  Sources: Statistics Sweden and the Riksbank. Chart 4. Index for electricity in HICP Percentage 12-month change 30  30  25  Sweden  25  20  Euro area  20  15  15  10  10  5  5  0  0  -5  -5  -10 1996  -10 1997  1998  1999  2000  2001  2002  2003  Source: Eurostat. 6  BIS Review 42/2003  Chart 5. Population growth 16-64 years, actual and forecast 2003-2050 1.0  1.0  0.8  0.8  0.6  0.6  0.4  0.4  0.2  0.2  0.0  0.0  -0.2  -0.2 -0.4  -0.4 1990  1995  2000  2005  2010  2015  2020  2025  2030  Source: Statistics Sweden. BIS Review 42/2003  7
I will argue that the new set of liquidity requirements is expected to have an impact on how monetary policy is implemented in normal times. It is important to understand how this new requirement may impact the current operational framework, especially for the Eurosystem, and the functioning of money markets. The second issue regards lending of last resort. It is commonly accepted that central banks have to act as lenders of last resort (LOLR) towards banks during a crisis period, when liquidity can dry up. But it is also well known that such intervention can generate moral hazard in the banking system, lead central banks to take unwarranted credit risk and, in some extreme cases, interfere with their primary mandate – price stability. Are the new liquidity ratios, in combination with the revised capital ratios, sufficient to prevent the central bank from becoming the lender of first resort? Based on recent academic research, to which researchers of this university have significantly contributed, I will argue that liquidity regulation can ensure that central bank intervention remains exceptional, and be designed in a way that is compatible with sound incentives in the banking system. Rationale for liquidity regulation I would like to begin by briefly highlighting the micro- and macro-prudential benefits that will derive from a new set of liquidity standards. In particular, they should lead to an increase in individual credit institutions’ liquidity buffers, and reduce the risks posed by maturity transformation. The recent financial crisis provided a dramatic illustration of how liquidity risk materialises.

Incentives on the liability side of banks’ balance sheet Having discussed how a bank can operate on the asset side of its balance sheet to improve LCR compliance, I now turn to the liability side of its balance sheet. A bank that faces the possibility of a LCR shortfall has the incentive to (i) decrease its reliance on short-term unsecured funding, (ii) decrease the 30 days net cash outflow, and (iii) to replace it by longer-term funding or, if this is too difficult or too expensive, by secured funding. Since outflow rates are zero for secured funding obtained from the central bank, but higher for secured funding obtained from other sources, the bank is more likely to borrow from the central bank by pledging non-HQLA assets, either in tender operations or in the marginal lending facility.14 As a result, this lessens the need of banks to seek funds in the short-term interbank market to ensure that the LCR requirement is met.15 A reduction in the reliance on short-term unsecured funding is an intended consequence of the LCR. However, the implementation of the LCR might then lead to an overall decline in unsecured money market activity, which could be problematic for the euro area. Money markets play a central role for monetary policy transmission in the euro area. This is because the euro area financial system is largely bank-based, and interbank money market interest rates represent the marginal cost of funding bank loans.
It is nevertheless conceivable that in a situation with a high rate of inflation and weak economic developments, Norges Bank may decide to apply a somewhat longer time horizon than two years to reach the target of 2½ per cent. Nor do we need to be in any hurry to raise the level of inflation in a situation where inflation is very low, while economic activity is high. By influencing inflation over time, monetary policy will not in itself cause unnecessary disturbances in the economy. A precondition for applying a longer time horizon is that financial market participants have strong confidence in low and stable inflation over time, and that wage formation has a nominal anchor. Flexible inflation targeting provides a framework for the use of monetary policy instruments that both ensures that the economy has a nominal anchor and allows monetary policy to smooth fluctuations in the economy that are due to changes in demand for goods and services. At the same time, the budgetary guidelines state that “...[in fiscal policy] considerable emphasis must be placed on stabilising fluctuations in the economy with a view to ensuring appropriate capacity utilisation and low 2 unemployment.” We can see here that there is an overlap between the tasks monetary policy and fiscal policy are intended to perform. This naturally raises the issue of whether there is after all a need to coordinate fiscal and monetary policy decisions.

BIS Review 50/2002  5  Labour costs in Norway and among trading partners1) Percentage growth  7  7  6  6  Norway  5  5  4  4  3  3 Trading partners  2 1  1  0  0 1993  1)  2  1995  1997  1999  2001  2003  Hourly labour costs in manufacturing  Source: Statistics Norway, TRCIS/IMF and Norges Bank  Fafo og Makt- og demokratiutredningen 6. september 2002  For a long time, a stable exchange rate and labour costs among our trading partners formed an anchor for wage determination. Since 1998, however, the rise in labour costs in Norway has been around 2 percentage points higher than that of our trading partners. High wage growth, combined with the global downturn and a strong krone, is having a severe impact on manufacturing. Sustainable wage growth • The 'Solidarity Alternative' (Aukrust model) Wage growth among trading partners  3-4 per cent  (+Productivity growth in Norway - productivity growth abroad 0 = Scope for wage growth in Norway  3-4 per cent  • Inflation target The Government's inflation target  2½ per cent  + "Normal" productivity growth  2 per cent  = Scope for wage growth in Norway  4½ per cent  Fafo og Makt- og demokratiutredningen 6. september 2002  Over time, growth in real wages must be consistent with growth in labour productivity.
In any case, the latest data for the euro area show that, after some stabilisation of the growth dynamics in Q3, activity remains subdued and fragile, with 0.1% GDP growth in Q4 and with French and Italian growth rates in negative territory. In the same vein, after some improvement in the balance of risks to the euro area growth outlook, since some of the uncertainty surrounding international trade seems to be receding, the Coronavirus outbreak in China – with a negative impact on the global economy that is still difficult to estimate –  2  has compounded other geopolitical factors and vulnerabilities in emerging markets, keeping this balance of risks on the downside. In this context, monetary policy is expected to remain highly accommodative for a prolonged period of time. This aims to support a firm recovery in inflation towards our medium-term objective. Our forward guidance on the key ECB interest rates will ensure that financial conditions adjust in accordance with changes to the inflation outlook. And, in any event, the Governing Council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with our commitment to symmetry. In this context of “low growth”, “low inflation” and, as a result, “low for longer” interest rates scenario, other policies – in particular, macroprudential policy and micro supervision – will have to remain vigilant and poised to address and mitigate any future forces posing a challenge to financial stability.

Against this background, central banks responded by further easing monetary conditions. In the euro area, the Governing Council of the European Central Bank (ECB) resolved at our September meeting to launch a package of measures. These included cutting the deposit facility interest rate by 10 basis points (bp) to -0.50%, strengthening forward guidance on  1  interest rates and improving the financing conditions of quarterly targeted longer-term refinancing operations (TLTRO-III). We also decided to resume net purchases under the asset purchase programme at a monthly pace of € billion as from 1 November and without a defined time limit. This additional global monetary accommodation is serving to stimulate growth and inflation. For instance, the IMF argues in its last WEO update that “the 2019 global growth estimate and 2020 projection would have been 0.5 percentage point lower in each year without monetary stimulus”. In the case of the euro area, it is estimated that the ECB’s measures since 2014, including negative interest rates, have been pivotal to easing financial conditions and, ultimately, to stimulating growth and inflation dynamics. Our analysis shows that the introduction of last September’s package is underpinning favourable financing conditions for all sectors of the economy. In turn, lower financing costs for households and firms are supporting consumer spending and business investment. This will sustain the euro area expansion, the build-up of domestic price pressures and, thus, the robust convergence of inflation on our mediumterm aim.
In my view, regional cooperation can and should serve as a forerunner to European integration. Lastly, my special thanks and highest appreciation for Mr. Mersch for the fruitful cooperation between our institutions during his mandate as the Governor of the central bank of Luxembourg, and now as an Executive Board member of the European Central Bank and, above all, as a friend of ours. Thank you for your attention! BIS central bankers’ speeches  3

In addition, Malaysia’s economic flexibility has allowed us to shift resources from industries in which we no longer have comparative advantage to new areas of growth. It is these factors that will continue to underpin the positive growth outlook of the Malaysian economy into the near to medium term. Key Imperatives to prepare for the new global landscape The changing global landscape presents significant new challenges for both the developed and emerging economies. Important is to be well-positioned to manage the new risks and to build the necessary capability and capacity to have the agility and flexibility to adjust to the rapidly changing conditions. As the emerging economies aspire towards achieving higher levels of income and living standards, a different path from that which led the way for the advanced economies will now need to be considered. The current global financial crisis and the Asian financial crisis have provided us with many important lessons that should form the underpinnings for our business models and our policies for growth and development. A key priority of policy should be to balance the need of ensuring sustained stability while having in place the necessary foundations to secure long-term development. Avoiding and preventing the build-up of excesses is a critical imperative. The recent crisis has forcefully shown that markets cannot be exclusively relied on to rein in excesses. Market discipline needs to be complemented by policy interventions to effectively manage the build-up of imbalances in the financial sector and in the economy.