samchain/econo-pairs-v1 huggingface dataset:
SIBA therefore plays a very important role in complementing MAS to ensure that high standards and best practices are upheld in the market. I am therefore very glad that SIBA has taken this role seriously. In Aug 2004, SIBA released the Due Diligence Guidelines, which set out the basic principles on due diligence to be performed by issuer managers for initial public offerings. The Guidelines raise the professional standards of issue managers, and help maintain investors' confidence in the quality of the issue. MAS endorses these Guidelines as a valuable guide to issue managers and underwriters on the level of due diligence expected of them as professional advisers and in meeting their obligations under the Securities and Futures Act and SGX listing manual. MAS appreciates that SIBA is now currently working to release a Code of Best Practices on Debt Issuance. This Code will serve as guidance on debt issuance. I believe this will enable issue managers to discharge their mandates better, and to address potential concerns of investors. Such a code will be beneficial to issuers and issue managers, as well as to investors. Developing deep expertise The second key factor in developing our market is expertise. Investment banking is a knowledge-intensive, innovation-driven industry. A deep pool of highly trained and committed professionals is critical to enable the industry to thrive. The nurturing of these professionals should start from academic education, where knowledge and theories of investment banking could be imparted.

For instance, equity derivatives is a rapidly growing area, as it offers a more flexible alternative to investing in the underlying assets. This is especially attractive to institutional investors and hedge fund managers. To this end, SIBA is establishing a task force to explore the potential of equities derivatives and structured products. I understand the task force will identify the range of derivative products that Singapore could focus on, study the competitiveness of Singapore as an equity derivative centre, and determine the infrastructure necessary to support the growth of this industry. I look forward to the active participation of SIBA members in helping to grow the product offerings available here. Conclusion Over the last 30 years, SIBA has made significant contributions to the development of Singapore's investment banking industry and capital markets. Going forward, it is vital for the association to remain relevant in the ever-changing market environment in order to ensure its continued success. MAS is committed to working in partnership with SIBA, to develop Singapore's financial sector and to raise industry standards and best practices. We look forward to working closely with SIBA, and trust that SIBA will emerge as an even stronger industry champion of investment banking activities in Singapore in the years to come. Thank you. 3/3
The International Monetary Fund has adapted to these changes, seeking to respond in its capacity as the guardian of international monetary stability to the new problems that have arisen. It has evolved from focusing essentially on monetary stability and on countries’ external transactions and the management of their exchange rates, to areas more related to the overall quality of macroeconomic policies and to the design of structural policies and sound institutions. More recently, the Fund has devoted particular attention to financial stability. To a certain extent, central banks have also undergone changes similar to those at the Fund. Developments in macroeconomic theory and the experience built up over the years have forged an increasingly broad consensus on the need to apply stability-oriented macroeconomic policies and, in particular, to conduct an independent monetary policy with the primary objective of achieving and maintaining price stability, which is vital for sustained economic growth. Central banks have also focused increasingly on financial stability issues, both in countries where the central bank is the supervisor of the banking system and in those where such functions are entrusted to a different supervisory agency. In the case of the Banco de España, these transformations have also been induced by far-reaching changes in our environment and in the role of the central bank, including most notably the adoption of the euro as the single currency for an ample group of European Union countries.

Beyond the single monetary policy, there are various areas of European co-ordination in IMF-related matters although, as is well known, the different European states are represented on an individual basis in the Bretton Woods institutions. Spain, which adhered to the New Arrangements to Borrow (NAB) as from their creation in 1998, is today an IMF creditor country. And though we continue to benefit from the Fund’s excellent technical advice, we also provide technical assistance, in some cases in collaboration with the Fund, to other countries in the process of implementing systems or procedures in which we have a certain comparative advantage. Moreover, the Spanish authorities and, in particular, the Banco de España, co-operate increasingly closely with the Fund on matters relating to national and international financial stability. As I indicated earlier, this issue is becoming more and more important, and the objectives and the interests of the Fund tend to coincide in this connection with those of the competent national authorities. The reasons why national and international authorities pay greater attention to financial stability can be found in the crises a significant number of countries have undergone in recent years. These have highlighted the complex linkages between the real sector and the financial sector and the risk that the latter may not only be a source of instability, but also amplify the imbalances or shocks generated in other sectors of the economy.
There could be sound reasons for this, although opinion is divided on the matter. Let us examine Iceland’s current interest rates more closely, ignoring for the moment the problems associated with pursuing independent monetary policy in small, open economies with unrestricted capital flows, which I will mention later. Let us also assume that inflation expectations remain at target, as they are at present. The question of whether or not a nominal policy rate of 5.25% is appropriate then centres on what is considered to be the equilibrium real policy rate; i.e., the interest rate that would keep inflation at target when the economy is in balance. With inflation expectations at 2½%, the real policy rate is currently just over 2½%. Before the financial crisis, the equilibrium policy rate was estimated to be quite a bit higher. As is the case elsewhere, it has probably fallen in the wake of the crisis. Furthermore, recent success in monetary policy may mean that we do not need as high an interest rate as before to keep inflation at target. We do not know how much the equilibrium rate has fallen, although the subject has been under close scrutiny within the Bank and has been discussed repeatedly at Monetary Policy Committee meetings. The newest research on the assessment of the equilibrium real rate will be presented at a seminar held at the Central Bank on 29 November. Perhaps there will be scope in the future to lower the short-term real rate as measured by inflation expectations somewhat further.

It is my view that return and profit  3  Source: IMF (2010), “Lessons and Policy Implications from the Global Financial Crisis “, IMF Working Paper No. 10/44. 4  Source: Jean-Claude Trichet, Interview with The Wall Street Journal, January 2010. 4  BIS Review 33/2010  calculations should be made over the medium to long run and properly adjusted for risk and leverage. As an example: When returns-to-equity figures are used to boast about the efficiency of an institution they should be adjusted for leverage if the speaker does not want to be guilty of intellectual fraud. IV. Conclusion  We have lived through several months of intense turbulence in the national and international financial markets. The more violent storms that raged in 2008 and the first part of 2009 receded a little in the second half of 2009. A certain degree of calm has returned but the wind has not died down completely yet. The years ahead will be ones of transformation. A priority for fiscal as well as monetary policy will be a return to normality. Equally important will be to learn the right lessons from these turbulent times and to act firmly to address the shortcomings identified in the financial system.
Global growth will also influence oil prices and developments in prices for other commodities. Oil prices are high and futures prices indicate that they will remain so. The price of Brent Blend has averaged close to USD 70 per barrel so far this year. In recent months, the price has been well above this level. Gas prices have also increased in recent years, reflecting the rise in oil prices and gas shortages in Europe. Gas prices fell somewhat in the first half of 2007, partly as a result of the decline in UK gas prices and the fall in oil prices in the first half of 2007. Both UK gas prices and oil prices have risen again this autumn. Gas prices are expected to remain at a high level, and the price of Norwegian gas may rise in the period ahead. A long period of high oil prices has boosted investment in oil and gas activities, leading to a strong increase in domestic activity in recent years. The level of petroleum investment is historically high and the outlook is favourable. The discovery rate on the Norwegian continental shelf appears to be high this year. The number of applicants for new exploration activities is unusually high. Coupled with high oil prices, these factors will contribute to increased activity on the Norwegian continental shelf in coming years. At the same time, the composition of production is changing. Oil production is on the decline and has not been lower since 1994.

But capital ratios have declined and leverage has risen. Immediately prior to the crisis, leverage in the banking system of the industrialised world had increased to astronomical levels. Simple leverage ratios of close to 50 or more could be found in the US, UK, and the continent of Europe, driven in part by the expansion of trading books (Brennan, Haldane and Madouros, 2010). And banks resorted to using more short-term, wholesale funding. The average maturity of wholesale funding issued by banks has declined by two thirds in the UK and by around three quarters in the US over the past thirty years – at the same time as reliance on wholesale funding has increased. As a result, they have run a higher degree of maturity mismatch between their long-dated assets and short-term funding. To cap it all, they held a lower proportion of liquid assets on their balance sheets, so they were more exposed if some of the short-term funding dried up. In less than fifty years, the share of highly liquid assets that UK banks hold has declined from around a third of their assets to less than 2% last year (Bank of England, 2009). Banks tested the limits of where the risk-return trade-off was located, in all parts of their operations. As John Kay wrote about his experience on the board of HBoS, the problems began “on the day it was decided that treasury should be a profit centre in its own right rather than an ancillary activity” (Kay, 2008).
BIS Review 68/2010  10 0  20 0  1209  0609  12 08  80 0608  0 1207  0110  0109  0108  0107  0106  0105  0104  0103  0 0102  -6 0101  0.5  0100  -4  06 07  -2  *Average of the values that emerging market currencies take against the currency basket of 1 US dollar and 1 Euro. Equals 100 on June 2007 and an upward movement denotes depreciation of emerging market currencies. Source: Bloomberg. 3  9. The rate cut cycle that was initiated by the central banks of both advanced and the emerging countries at the height of the global crisis during the final quarter of 2008, continued in the first quarter of 2009, albeit with less pace. Monetary easing cycle in advanced economies, which significantly slowed down in the second quarter of 2009, ceased completely in the third quarter. Emerging market central banks, on the other hand, continued to cut policy rates at a reduced pace to contain the impact of the global crisis on economic activity. 10. As of year-end, most central banks kept policy rates at low levels and continued to implement expansionary monetary policy to stimulate economic activity by using unconventional monetary policy tools. In the first quarter of 2010, a limited number of central banks tightened their monetary policy stance by increasing policy rates, while most of them kept their rates unchanged at low levels.

This has presented greater investor demand, paving the way for the growth of Asia’s capital markets and asset management sectors. These developments will help drive a new chapter in Asian finance. We will continue to ensure that we have adequate supply of premium infrastructure to support the sustained growth of the business financial centre here. Our office rental rates in Singapore remain competitive. Based on CBRE’s Q1 2012 Singapore Market View, the average monthly rental for Grade A office space dipped by 4.7% quarter-on-quarter to $ per square feet (compared to the 3.6 % fall in Q1 2012). (This is well priced compared to premium office space in Hong Kong and Tokyo, at about 50% and 70% of their costs, respectively. Occupancy rates for Core CBD in Singapore remain healthy at about 92% (in Q2 2012). The increase in premium office space at competitive rental rates bodes well for Singapore, and will strengthen our role as a competitive business hub in Asia and globally. Conclusion I congratulate all those who have played a role in making this new development possible. I am optimistic that the two towers of One Raffles Place will remain as one of the most recognised business addresses in the historic Raffles Place and will continue to contribute to Singapore’s success story. 2  BIS central bankers’ speeches
Today I am going to reflect on what I consider that different economic agents should do during a macroeconomic adjustment phase like the one we are currently experiencing in Spain. It seems to me that it would be useful for us all to understand what is happening and what we can do to get through this phase at the lowest possible cost. Admittedly each agent has a different degree of freedom of action, but it is important to remember that it is not only the authorities (governments, parliaments, the ECB, etc.) who can help our economy to return to a high growth path as soon as possible. *** To start with, I should like to point out that the most important thing is not to fall into the temptation of adopting policies that try to avoid the adjustment, since that would only prolong it and prevent the economy rebuilding the foundations for fresh growth. It is understandable that firms for which oil is an important input should appeal to governments to reduce the cost of energy through some mechanism, such as subsidies or lower taxes, as likewise it is understandable that businessmen and financial institutions that can no longer obtain low-cost, long-term funds on the market think that the State could provide them with larger volumes of financing and on better terms than the market.

The contention is that higher liquidity costs and more frequent illiquidity events will, over time, drive up the borrowing costs of households, businesses and the U.S. government; and that this is a substantial, largely unintended cost imposed by tougher regulation. Thus, the argument concludes, the regulatory burden should be rolled back. This is a noteworthy assertion and would have significant implications for regulatory policy if it were correct. However, as I will lay out in my remarks, I don’t think the hypothesis is wellsupported by the available evidence. First, the evidence to date that liquidity has diminished markedly is, at best, mixed. Second, even if one were to interpret the evidence as indicating that liquidity has been reduced, it is not clear whether regulation is the primary driver, as other changes have played important roles as well. Moreover, even if higher capital and new liquidity requirements were found to result in greater transaction costs, these costs would need to be assessed against the benefits of having a more robust and resilient financial system and a reduced risk of financial crises in the future. That said, more work should be undertaken to fully assess this issue. There is much that is still unknown. The available market liquidity data primarily focus on the inter-dealer markets and thus do not shed light on possible liquidity changes between dealers and customers. In addition, the financial system is adjusting in complex ways in reaction to regulatory, technological and other changes.
Interest rates which determine savings and investment decisions and therefore have a stronger impact on the economy typically have longer maturities. In order to impact the economy, monetary policy impulses must therefore first be transmitted from the money market to the capital market. The money market and the capital market are linked by expectations. Neglecting transaction costs and risk premiums, the expectations theory of the term structure views the long-term interest rate as an average of the shortterm interest rates expected to prevail until the maturity of the respective bond. Although current shortterm interest rates have some effect on longer-term bond yields, the expectations theory of the term structure tells us that it is primarily expected future short-term interest rates which determine bond yields. In practice, due to uncertainty about the future evolution of short-term interest rates and due to time-varying risk premiums, the longer the maturity, the weaker the link between current short-term rates and long-term rates. Therefore, in practice, a central bank would often find it difficult to guide longer-term interest rates to a level commensurate with what it considers to be the optimal monetary policy stance. Assuming a flexible exchange rate regime, the exchange rate is arguably the quickest transmission channel for monetary policy, particularly in open economies. Exchange rate movements rapidly affect prices (via import prices) and subsequently demand (by boosting imports and slowing down exports, or vice versa). In theory, monetary policy impacts exchange rates via the yield curve and from there via interest rate parity relations.

Risk is less concentrated in the banking system, where moral hazard concerns and other classic market failures are more likely to be an issue, and spread more broadly across a greater diversity of institutions. And yet this overall judgment, that both financial efficiency and stability have improved, requires some qualification. Writing a decade ago about the history of the financial shocks of the 1980s and early 1990s, Jerry Corrigan wrote that these same changes in financial markets we see today, though less pronounced then than now, created the possibility that financial shocks would be less frequent, but in some contexts they could be more damaging. This judgment, that systemic financial crises are less probable, but, in the event they occur could be harder to manage, should be the principal preoccupation of market participants and policymakers today. What factors might contribute to this risk, a risk that could be described as the possibility of longer, fatter tails? One reason is a consequence of consolidation. The major banks are larger and stronger today, and it would take a much larger shock to make them vulnerable than was true in the past. But in that event, the consequence of their failure could be greater for markets. Another reason is the consequence of leverage.
This will not – and should not – diminish the happiness of the occasion. Indeed, much of the history of Bank Negara Malaysia is the history of timely, productive, and often courageous response to crisis, and examining that history gives cause for optimism in our present circumstances. In my comments today, I shall touch only briefly the current crisis. Instead, I shall reflect on the achievements of Bank Negara during the decade or so that followed the last great crisis – the Asian financial crisis of 1997-8. As I hope I shall demonstrate, these achievements are more than of merely historical interest. It is clear to any observer that Bank Negara Malaysia has been a driving force in the building of this country. To speak only of its purely central-banking functions, Bank Negara has fully discharged its responsibilities through keeping inflation under control and maintaining stable interest and exchange rates, despite rapid economic growth. This has been crucial in supporting rising living standards and an increasingly diverse external trade. As adviser to the Government, the Bank has played a key role in formulating economic policies. The Bank has also been at the forefront of financial-sector development, in particular through building efficient and advanced payment systems. This work has stimulated a diverse financial system, with impressive growth in stock-market capitalisation and other non-bank activity. All of this is indeed impressive, and reason enough for celebration. But Bank Negara's contributions to the well-being of the country go somewhat beyond the more conventional central bank functions.

This is important, not just because of the growing influence of these economies – nor even because the leading international forums are currently dominated by the very economies that are now in the deepest trouble – but because the ordinary people of developing economies are usually the ones who suffer most in a global financial crisis. International co-operation will also, I hope, act as a countervailing influence against any repeat of the disastrous mistakes that were made in the 1930s. There has so far been a resistance to trade protectionism, although the idea has begun to gain some ground as a  BIS Review 12/2009  3  spurious answer to economic distress. There is a risk that the idea will spread to the financial sector, particularly if there is political pressure to include protectionist measures in rescue packages for troubled banking systems in the developed economies. I need hardly point out that – no less than trade protectionism – such a trend would deepen the hardship of the developing economies, many of which rely heavily on international finance. It would also be a matter for serious concern in financial markets across the world. One of the central aims in building a more robust international financial architecture must be to ensure that there can be no excuse for resorting to financial protectionism as a solution to global or national crisis. This will be a year of hardship and anxiety throughout the world. Much effort will be spent in fire-fighting and managing expectations.