samchain/econo-pairs-v1 huggingface dataset:
My colleague Arthur first presented this vision at the Hong Kong Fintech Week last November. On that occasion, we also announced a series of activities to be launched these two years in pursuit of the vision. And today’s event is one of the many activities that we have planned for this year, 2021. 5. In practical terms, how should we go about bringing our Regtech vision into reality? We do recognise that we are starting from a position in which many banking practitioners remain quite unclear about the concept of Regtech. They may be uncertain about what values Regtech might bring, or exactly how they should leverage on Regtech in order to bring about measurable benefits. Here, we see four essential actions that are needed to transform bank attitudes and practices towards Regtech. Four actions towards Regtech 2025 6. The first action is that we at the HKMA mustunderstand the Regtech landscape evolution in Hong Kong. It’s no good launching initiatives that are out of touch with what’s actually happening on the ground. We need to be able to map our progress towards Regtech 2025, and understand where our banks and other ecosystem partners are at in that journey. 7. Our White Paper on Regtech published in November last year provided a very good starting point, supplemented by the Regtech Adoption Index that we have just launched recently. These have shown that most banks here are already using at least some form of Regtech in their operations, most commonly in preventing and detecting financial crimes.

Finally, the fourth action that the HKMA will pursue is to expand the Regtech ecosystem, including in particular the nurturing of talents. 21. We are working on a Regtech skills framework to incorporate Regtech skillsets into a package that banks can adopt in ensuring that their staff are properly equipped for the Regtech journey. We will also translate this into an Enhanced Competency Framework module to encourage current and aspiring practitioners to get qualified and recognised for this area of work. This will hopefully generate momentum among banks in upskilling their banking practitioners to prepare for the Regtech evolution ahead. 22. In addition, we will continue to look for ways to enhance interaction within the ecosystem. The HKMA will organise events like today’s conference to bring together partners in the ecosystem and to foster co-operation. We will also work closely with financial institutions and the tech community, whether they are in Hong Kong or elsewhere, to ensure that new Regtech initiative is widely publicised and actively participated. Summary 23. So there we have it – four actions to realise the Regtech 2025 vision: Understand the Regtech landscape; raise the Regtech awareness; encourage Regtech solutions; and expand the Regtech ecosystem. 24. Everyone here has a part to play in this. I warmly invite you to reflect on what you can offer, and what is on offer for you. I trust that everyone here today will make good use of our networking lounge and virtual booths to connect and exchange ideas and insights.
Likewise, in the modern world, higher productivity enables an economy to grow even with a smaller working-age population, and hence to avoid the demographic trap. If a country can maintain a decent productivity growth even after it has exploited imported technology and an underutilized labor force, that country is likely to succeed in growing its way out of the middle-income trap. Discussion of the myth of Asian miracles also highlights the importance of total factor productivity. Well before the Asian currency crisis of 1997–1998, Paul Krugman argued that the rapid growth of the NIEs or Asian tigers was not sustainable because their high growth was not sufficiently supported by total factor productivity. 8 History vindicated his assessment: the Asian currency crisis was in part an inevitable transition toward more sustainable and balanced growth. Let me confirm this point using data, with the usual disclaimer regarding the large uncertainty associated with estimates of total factor productivity. In graph 6, the vertical axis is per capita GDP growth, while the horizontal axis is total factor productivity growth. In the left panel, which describes the period preceding the Asian currency crisis, the dots representing high growth Asian economies are generally located well above the regression line. This means that their economic growth could be explained relatively more by expansion of inputs, such as demographic bonus and investment boom, than by total factor productivity growth.

Population aging implies a continued decline in the proportion of the working-age population, which in turn poses a challenge to sustaining per-capita income growth, as a given income earner has to transfer a larger share of his or her income to the retirees. Chart 5 shows how diverse the region is in this context, with some countries already facing serious challenges. In this chart, the horizontal axis is changes in working-age population, and the vertical axis is the proportion of the working-age population to the total population. A rise in this proportion is often called a “demographic bonus,” while the opposite is called a “demographic onus.” And the size of the bubble is proportional to the absolute number of the working-age population. As you can see, over such a long period of time, even glacial demographic changes seem dramatic. Japan has already entered deep into the period of demographic onus, with the absolute number of the working-age population declining at a significant pace. The NIEs, China and some ASEAN countries are about to follow Japan in this regard in the not-sodistant future. Meanwhile, India and other Asian countries are expected to enjoy a favorable demographic environment at least until the middle of this century. The third challenge is what I call the “Malthusian trap.” In Malthus’ original work, the existence of a limited resource – land in his case – constrains growth. Likewise, limitations in the supply of natural resources, such as oil, are thought to threaten global growth in the longrun.
This has not only created, regardless of existing differences at the state level, a common legal environment, but also led to harmonised or similar policies in most other areas and not least fostered the development of a common ground of behaviour in economic life. By contrast, the history of the 11 Member States of the euro area was different. Notwithstanding my earlier reference to the integration process over the last decades and the EU institutional set-up for the coordination of economic policies, Europe is still a more heterogeneous area than the United States. The Treaty establishing the European Community does not state how price stability is to be maintained. In other words, it does not define what is called a monetary policy strategy. Therefore, the Eurosystem has designed its own stability-oriented strategy. Apart from the quantitative definition of price stability, it consists of two pillars. The first pillar is a prominent role for a broad monetary aggregate, M3. This is based on the view that inflation is ultimately a monetary phenomenon. A reference value of 4½% for annual M3 growth has been defined. Deviations of actual monetary growth from the reference value will not be corrected mechanically, but will always be analysed with regard to the signals they provide with regard to future price developments. The reason for being cautious is that the introduction of the euro may have changed the behaviour of economic subjects, also their demand for money.

The thought that injections of central bank money can be transmitted to the wider economy through risk premia, as well as through the risk-free rate, goes back at least to Brunner & Meltzer.12 It is precisely how the Monetary Policy Committee, and our international counterparts, regard Quantitative Easing as working – influencing term, liquidity and risk premia.13 And since prices are the “dual” of quantities, it is hard to see why there should be something special about injecting central bank money into the economy by buying assets rather than via our normal policy lever of the overnight interest rate (and expectations about its path). This prompts a number of conjectures. One is that maybe monetary policy did contribute to the widespread search for yield, not just along the yield curve but also, as Rajan suggested in 2005, into credit products to earn a spread compensating for illiquidity or complexity. Another conjecture, perhaps supported by other recent research,14 is that this may have a bearing on the phenomenon of cross-currency carry trades, and thus on the generation of “Global Liquidity”.
That said, as I said already last January, I expect today that we will be at the terminal rate not later than by summer. Summer is a long and beautiful season, which starts in June and ends in September. In the meantime, we have three possible Governing Councils either for hiking or pausing; but don’t deduce a guidance from this or a preference for a given terminal rate. We will remain data driven, looking meeting by meeting at the outlook for headline inflation as well as for the dynamics of underlying inflation and the strength of monetary policy transmission. *** Monetary policy is at work and rest assured, we’ll do the job: we’ll bring inflation back towards 2%. We’ll do it with the necessary patience – looking at the 2025 horizon for full transmission, with persistence – maintaining restrictive interest rates for long enough, and pragmatism – monitoring actual economic data. But once more, monetary policy cannot be the only game in town. Fiscal policies should gradually adjust and consolidate, reducing first and foremost energy subsidies; wage negotiations and mark-up decisions by firms should incorporate the expected decrease in inflation; and still more, structural reforms are needed more than ever to increase the supply-side capacity and flexibility in Europe and  Page 14 sur 14 in France.8 Let us acknowledge it: if we are lagging behind today in Europe, it’s in this domain of supply transformations, and not in monetary policy.

8  François Villeroy de Galhau, Letter to the President of the Republic, « How France and Europe will defeat inflation », April 2023.
The measurement debate tends to start with the simple metric of length: how long are our rules? Our robot has run the numbers on prudential regulation for banks and tells me that there were about 700,000 words in relevant EU rules, the PRA Rulebook (UK rules), and UK guidance (PRA supervisory statements) in 2017. Now I’ve heard Andrew observe previously that that is longer than War and Peace, and others have said that this is longer than the Old Testament.7 The inference, I think, is that our Rulebook might be a rather less good read than Tolstoy or the Bible. But actually it would not surprise me if it turned out that Andrew has our Rulebook in his living room at home and regularly dips into it for a little light refreshment following a hard day’s work at the FCA. But with our new dataset, we can explore other ways the rules have evolved from 2007 and 2017. Here are two examples. First, as well as using a higher volume of words, we’ve actually used a lot more unique words. In 2007 the rules contained about 11,800 unique words. By 2017 this had increased by close to 14 percent, to over 13,400.8 And the rules have become much more conditional. The absolute number of conditional statements  5  Rethinking Financial Stability (Haldane et al, 2018) This is not a new topic, nor unique to the UK.

But a simpler regime, perhaps borrowing from the philosophy of recent moves in Switzerland and the US, could make small firms stronger and more competitive at the same time. This is an area where we may have more room to manoeuvre following Brexit. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  Action I’m worried that this may all sound rather theoretical to some of you, and some distance from the front line of providing banking services. So let’s come right back down to ground level and look at credit unions. Credit unions provide a vital service for their members, often acting as a backstop by allowing those members to access services they might find more difficult to get from banks and building societies. The sector plays an important role in many communities – particularly in Northern Ireland. Now credit unions, including those in Northern Ireland, may be relieved to hear that the hard-working PRA competition robot is not about to be unleashed upon them. As an aside, they may not know that they have been living with another of our robots for some time. A few years back some of our economists from the wider Bank of England teamed up with our credit union supervisors and found out that by using some different analytical techniques to study regulatory returns we could do a better job of predicting which credit unions would get into trouble next.9 This is highly relevant given we oversee around 440 credit unions with a team of 9 staff.
17  The risk of interest rates, and thereby bond prices, developing unfavourably and thereby having a direct impact on the results. This risk increases with the length of the average duration of the investments. 4  BIS Review 33/2006  Summary To summarise, the decisions I and my colleagues make regarding the focus of the Riksbank’s financial asset management ensure that the management complies with the Riksbank's statutory tasks as well as providing good earnings. These tasks require us to hold US and European government bonds to enable us to intervene in the foreign exchange market if necessary. However, we must also limit the financial risk in order to protect the capital allocated to cover potential losses in connection with a financial crisis. We try to limit currency risk, which is the entirely dominant financial risk, by choosing a currency allocation that keeps the fluctuations, as measured in Swedish kronor, low. We endeavour to meet the requirement to generate good earnings by taking credit and interest rate risks and making use of diversification effects in order to reduce any negative impact from these risks. By investing in asset types with credit risk, that is, other fixed-income securities than government bonds, we can increase the risk-adjusted earnings on our investments. This is partly because the actual earnings on assets with credit risk can be higher and partly because the earnings on different types of asset do not usually covary perfectly.

Accordingly, on the ECB Governing Council we have reiterated that we will closely monitor the exchange rate. 8  In short, the fragility of the recovery in the euro area, a medium-term inflation forecast far below our objective and a nominal effective exchange rate that has in recent months countered much of our stimulus all lead to the conclusion that there is no room for complacency. We should retain a significant monetary stimulus until we have a sound recovery in place. Moreover, we stand ready to recalibrate the foregoing measures, or to introduce new ones were it necessary, to fulfil our price stability mandate, understandably always in a symmetrical manner. It is also crucial to retain flexibility in the application of our asset purchase programmes to head off potential financial fragmentation problems. The other national and European economic authorities must appreciate that, given the uncertainty over the future course of the pandemic and, therefore, over the soundness of the economic recovery, it is essential they maintain their stimulus measures, now in a more selective and targeted fashion. An early withdrawal of these measures would harm the euro area productive system and, potentially, our financial system. The extent of such harm would exceed the potential medium-term costs of retaining the measures over time. And depending on how the pandemic and its economic impact evolve, it cannot be ruled out that such measures may need to be expanded.
These efforts of the central banks and of the governments are aiming at permitting the banks to live up to their role in the economy by resuming lending to economic agents. Reasons for a medium-term economic recovery 2009 will be a very difficult year. I have already said this on various occasions. I see however at least four reasons why we can be confident that the world economy and the industrialised nations will recover: •  The vigorous reactions of central banks and governments to the extraordinary situation – not only in Europe, but worldwide – will progressively produce their effects. They may not yet have been sufficiently taken into account in the expectations of private sector participants. •  The growth potential of the emerging market economies, for example, in Asia, is considerable. Their current deceleration of growth is temporary. Many of these countries have an enormous potential to develop domestic demand. •  Technological progress is very rapid and will continue and even accelerate. It is a major source of future long term growth. •  Prices for oil and other commodities have fallen sharply since mid-2008. Their rise was an important factor in the current economic weakness. Their present low levels will be an expansionary contribution to the global economy  For these reasons it seems to be a reasonable working hypothesis that after an exceptionally difficult 2009 we will see an economic recovery in 2010.

Nevertheless, efforts are made constantly for fulfilling the necessary legal framework and procedures, covering all possible directions of its activity. Simultaneously, there is worked in terms of organizing the structure, increasing the institution’s staff number and training. Emphasis is laid on the DIA’s cooperation with the Bank of Albania, the supervisory authority, so that the DIA carries out its functions effectively. At the same time, the relation with the Ministry of Finance is taken into consideration in organizing the Deposit Insurance Agency’s structure, so as to have the solid presence of the state in it. The forms of this cooperation are numerous, but all of them should be first consolidated under normal conditions of the banking system activity. The main elements of this cooperation are: •  Exchange of information on supervisory practices and observance of regulatory requirements by the insured entities;  •  Organization of joint trainings in getting acquainted with respective functions;  •  Acquaintance with and discussion on manuals and procedures requiring the commitment of both institutions in certain cases, and the testing of these procedures. The Bank of Albania and the Deposit Insurance Agency are working for enhancing this cooperation constantly. 2/3  A number of legal and regulatory alterations that are being prepared in parallel by both our institutions, and the exchange of information, as well as more frequent contacts between both institutions serve this purpose.
Moreover, our international reserves are ample at about three times the size of short-term external debt. Non-residents holding of Thai bonds is less than 10 percent of total bond outstanding, a level much lower than our peers. Although the NPL ratio is rising moderately, banks’ balance sheets are healthy, with a capital adequacy ratio of over 18 percent and low currency mismatch. Meanwhile, inflation returned to our target range in December and will continue to be in the range as the effects of falling oil price dissipate and the output gap narrows. It is also worth noting that the past decade has seen exponential growth in Thailand’s economic ties with the ASEAN peers, especially the CLMV neighbors. The growth rates of trade and investment have been impressive. Since 2005, Thailand’s export value to the CLMV has increased more than fourfold and is now making up over 10 percent of our exports, comparable to the size of our exports to the EU. During that same period, Thailand’s direct investment into these countries has increased by about sixfold, highlighting the opportunities that businesses foresee. Certainly, businesses have benefited from Thailand’s proximity to these markets, and it is our goal as a central bank to encourage greater financial connectivity with the CLMV and the ASEAN partners as a whole. I will elaborate on this issue when discussing Bank of Thailand’s policy later on.

Actual membership in the Banking Union will further deepen our partnership with the ECB, the Single Supervisory Mechanism and the Single Resolution Mechanism. Regarding supervision, according to the European Central Bank’s rules the ECB will supervise the biggest banks in Bulgaria and the BNB’s experts will participate in joint supervisory teams. This joint work will cover the off-site supervision aimed at on-going risk monitoring and assessment and also the on-site examinations in banks operating in Bulgaria. The other banks in Bulgaria will remain under the BNB’s supervision, but supervisory information about them will be exchanged with the ECB continuously. The joint work with the ECB will also cover many spheres of the practical organisation and operation of banking supervision. For example, the BNB’s experts will have direct access to the overall analytical expertise in the Single Supervisory Mechanism. Historical experience shows that the accession to this mechanism generates new synergy between the national competent authorities and the ECB, and it is a two-way process. Along with joining the Single Supervisory Mechanism, Bulgaria will also join the Single Resolution Mechanism. This would imply distribution of responsibilities and powers between the Single Resolution Board and the BNB as the national authority for resolution of credit institutions. Bulgaria’s legal framework for joining the Single Resolution Mechanism is already in place. The preparation for joining the Single Resolution Fund, including for calculating banks’ contributions to the Fund, and the preparation of the bank resolution planning process after joining the Single Resolution Mechanism are very advanced.