samchain/econo-pairs-v1 huggingface dataset:
Urban Bäckström: Asset markets and monetary policy  Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, at a conference organised by the Riksbank and the Stockholm School of Economics, held in Stockholm, on 16 June 2000. *  *  *  Ladies and gentlemen, it gives me great pleasure to welcome you to this conference on Asset Markets and Monetary Policy that the Riksbank and the Stockholm School of Economics are jointly organising. The Riksbank has the ambition to host a conference every other year on a topical subject. Two years ago we organised a conference jointly with the Institute for International Economic Studies on Monetary Policy Rules. This year I am very pleased to announce that we will again be able to present a set of papers written by scholars of the highest international academic standard and on a subject matter that is extremely topical: asset markets and monetary policy. In my opening remarks two years ago I suggested that the question of monetary policy and asset prices should be a topic for a future conference. The interaction between asset prices, the real economy, and monetary policy is by no means a new matter for central bankers and economists, but the development of asset markets in the last few years has brought the question to the forefront of the policy debate.

In August 2011, in an attempt to counter the exceptionally strong Swiss franc, the SNB narrowed the target range for the Libor to between 0.0% and 0.25%, aiming to keep it as close to zero as possible. It also took steps to expand banks’ sight deposits significantly. 1 These measures were successful up to a point, however in the light of ongoing uncertainty on the financial markets and more bad news from the euro area, upward pressure on the Swiss franc remained high and became more intense still at the beginning of September 2011. The SNB therefore decided to provide the foreign exchange market with clear guidance in the form of a minimum exchange rate for the franc against the euro. On 6 September 2011, it announced that it would no longer tolerate a EUR/CHF exchange rate below CHF 1.20. This exceptional measure enabled the SNB to take a stand against an acute threat to the Swiss economy and to counter the risk of a deflationary trend emanating from the massive overvaluation of the Swiss franc. The minimum exchange rate was introduced as a temporary, emergency measure in a time of extreme turbulence. The franc remained high in the period that followed, yet deflation risk was held in check. Moreover, the minimum exchange rate bought Swiss companies – especially exporters and industries facing competition from imports – some time in which to plan their next steps in a very difficult operating environment.
There are now 14 Asian economies at investment grades, of which, nine are at or above the single A rating. At the same time, the supply side factors are also highly favourable. The huge financing needs of Asia will support a continuous expansion in bond issuance. According to the Asian Development Bank, Asia’ s infrastructure financing needs alone amounted to USD 8 trillion from 2010 to 2020. Equally important is the emergence of new and attractive bond asset classes. The two products that have caught most attention of global investors are the sukuks in Malaysia and the RMB dim sum bonds in Hong Kong. This is rightly so as these products connect the global market with the vast and increasingly prominent financial systems in the Islamic world and China. We have seen very encouraging development of the sukuk market in Malaysia, the symbol of Islamic financing. The amount of outstanding sukuks in Malaysia increased substantially from MYR 146 billion (USD 41.3 billion equivalent) at the end of 2006 to MYR 361 billion (USD 113.9 billion equivalent) at the end of 2011. Meanwhile, the growth of the RMB debt securities market has been phenomenal. In a short space of 5 years, the annual issuance amount lodged with the Central Moneymarkets Unit (CMU) in Hong Kong increased by 16 times from a modest amount of RMB 10 billion (USD 1.4 billion equivalent) in 2007 to RMB 172 billion (USD 27.3 billion equivalent) in 2011.

The growth momentum is expected to pick up further after China’ s announcement to formalise the use of RMB in foreign direct investment (FDI) in 2011. The upside is very significant as China’ s total FDI amounted to USD 116 billion in 2011, or RMB 750 billion equivalent. Besides facilitating the rapid development of the sukuk and dim sum bond markets, more importantly, the Pilot Platform will contribute significantly to financial stability in the Asian region. With the advanced economies undergoing structural adjustment and fiscal consolidation, the two-speed recovery will continue to entice portfolio flows into Asia. The key challenges for Asia are to channel such flows to productive use, reduce concentration in short-term positions of the more volatile asset classes, and to avoid such flows spiking up a  BIS central bankers’ speeches  1  property price bubble. Channelling the inflows into the bond market will serve these useful purposes as the investors are typically institutional investors who take long-term positions in strategic economic sectors. The global financial crisis has reminded us of the destructive powers of a liquidity crunch and the need for quick access to local currency liquidity in times of stress. In particular, the increased risk aversion arising from the recent financial crises and heightened alertness to the counterparty exposure have raised the demand for secured lending. As an illustration, the average tripartite collateral management deals outstanding administered by Euroclear Bank increased substantially from EUR 76 billion in 2001 to EUR 325 billion in 2011.
Recently, a new risk factor has emerged. Impacts of global warming are high on the international agenda. Policy measures and shifts in consumption patterns and production methods towards lower emissions will reduce demand for fossil fuels. The change to a more climate-friendly policy may have a considerable impact on petroleum prices. 3/4  BIS central bankers' speeches  Looking ahead, Norway must now be prepared for a time when the petroleum industry is no longer expanding, but gradually declining. We will need innovation and growth in other industries to pick up the slack. We have always known that oil and gas activities will be phased out sooner or later. Oil and gas are non-renewable resources. A stricter global climate policy or a greentechnological breakthrough may mean that this will occur sooner than foreseen earlier. In contrast to Norway, Mozambique is at the beginning of its gas era. I hope the lessons from Norway can give you some guidance on your way forward. One main lesson is that depletable natural resources must be viewed as part of a country’s wealth. Revenues from extracting oil and gas is just a transformation of this wealth and should be managed with a long-term prospective. At the same time, the development of oil and gas reserves can have valuable spillovers to the rest of the economy. Not only demand from the petroleum industry, but also innovations and technological skills developed in the industry can be of great value to other sectors.

Since then, Norway has benefitted greatly from the opportunities that the petroleum sector has provided. The spillover effects from the oil sector to the wider Norwegian economy are substantial. Oil-related jobs can be found throughout the country. More than 10 percent of all employed persons in Norway either directly or indirectly work for the oil industry. Innovation and skills development in the industry have also benefitted other sectors. From where Norway stands today, one may get the impression that our history as an oil nation is only a story about success. This is not the case. Chart: Oil and gas revenues and government spending Policymakers’ handling of Norway’s newly discovered petroleum wealth got off to a rather bumpy start. During the first 25 years of oil production, Norway experienced two deep recessions. Both downturns were rooted in wildly optimistic income expectations. In the 1970s, public spending surged before oil export revenue started to kick in. Eventually the government had to tighten fiscal policy. In the 1980s, a credit-fuelled consumption boom in the private sector led to necessary cut-backs after the oil price plunge in 1986. The turbulence made clear how vulnerable a small economy is to terms of trade disturbances. Let that part of our history stand as a warning. But lessons were learned, and formed the basis for the framework that was put in place from 1990 and onwards. During the past 50 years, Norway has experienced how oil prices can change almost overnight in response to international politics, economic disturbances or disruptive technologies.
Instead it is probably the labour market that should be focused when analysing resource utilisation. Another reason for doing so is that in a price analysis at macro level, the weightiest item in costs is wages: total wage costs are equivalent to over two-thirds of GDP. The level of unemployment, although it has been reduced, is still high, particularly compared with the post-war period up to the early 1990s. Seen from that angle, some might say that the Swedish economy has plenty of unutilised resources. Experience from other European countries has taught us, however, that when an economy has been through a severe shock, as happened in the early 1990s, unemployment tends to stick at a high level, at least for a while. This structural or equilibrium unemployment cannot be reduced by means of expansionary economic policies. Attempts to do so simply lead in the end to a higher inflation trend and probably an economy that functions less efficiently. This is because wage costs tend to adjust upwards as the expansionary policy acts on the economy and higher long-term inflation expectations are established. Viewed in this way, unemployment could be divided into two components, structural and cyclical. If the level of structural unemployment could be identified with some precision, it would be easier to gauge how much room the Swedish economy still has for expansion above its potential growth trend. As always when one turns from theory to practical policy, things immediately become much more difficult.

And this month marks just one year to go to our first key milestone on this journey: to move to the global standard for financial messaging in payments, ISO 20022 (on a like-for-like basis), in June 2022 for CHAPS. We will transition to enhanced ISO 20022 messaging in February 2023. And in September 2023, introduce a state-of-the-art core settlement engine: the heartbeat of the new RTGS service, and of the UK’s financial system. To achieve our milestones and to realise the benefits of RTGS renewal, we – and I mean all of us here today and the payments industry as a whole – must work together to be ready. We must turn excitement into action, following in the footsteps of our Neolithic predecessors to build an infrastructure for the future. An infrastructure that supports the needs of industry, the needs of their customers, and crucially the needs of the end users. The criticality and evolution of payments Payments sit at the heart of the financial system, and whilst the methods and nature of transactions have progressed considerably since the days of barley bartering, their importance has not faltered. Within the UK, payments are a crucial part of everyday life and the past decade especially has seen a transformation in how people pay for goods and services.
In part the explanation for this encouraging development may lie in the dampening effect of the strong exchange rate or in the lower and more stable inflationary expectations we are now seeing. But other possible explanations include exceptional competitive pressure in goods markets, structural changes in labour market behaviour or an underlying improvement in productivity growth, or in some combination of all three. Whatever the underlying cause, it is possible that, at least for a time, we can sustain a higher rate of growth of overall demand and output without inflationary pressure than we could in the past. The jury frankly is still very much out on all of this. The difficulty is that most of these possible developments cannot be directly observed in the data, and, even if they could be, we would still not know whether or not, or for how long, they might persist. BIS Review 98/2000  2  We certainly have not closed our mind to a continuation of such benign “new economy” effects, indeed we make conscious allowance for them as best we can in our projections. But we cannot bank on them. All we can - and do - do is, continuously and meticulously, to monitor the evolving evidence. We watch it, in fact, like a dove. What that means is that while we can’t realistically rule out further interest rate increases, we don’t rule out the possibility that the next move will be downwards either. In the final analysis, Mr President, we have a choice.

Fraziali Ismail: Closing ceremony of the Project Greenback 2.0 Kota Kinabalu Welcoming remarks by Mr Fraziali Ismail, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the closing ceremony of the Project Greenback 2.0 Kota Kinabalu, Kuala Lumpur, 14 February 2020. * * * Before I begin, I would like to convey my deepest condolences to the family members and friends of those who were involved in the boat crash incident near Pulau Tanjung Aru, yesterday. Let us pray for the safety of the victims as well as the search and rescue team. Ladies and gentlemen, After we concluded Project Greenback in Johor Bahru more than two years ago, Bank Negara Malaysia together with the World Bank sat down to choose the second “remittance champion city”. Among others, we considered Ipoh, Butterworth and Kota Kinabalu. We discussed long and hard, and weighed our options. Our assessment suggested that Ipoh and Butterworth would have presented us with a rather similar case study to Johor Bahru. This is in view of the similar profile of the target groups who are largely made up of urban migrants, therefore exhibiting similar remittance behaviors. The odd for success would have been easier and kinder to us. But our intention has never been about replicating our experience in Johor Bahru. Kota Kinabalu offers a much more exciting proposition. This is despite our full cognisance of the challenges ahead of us, such as geographical barriers and connectivity issue.
Pablo Hernández de Cos: Central banks at the frontline of the COVID-19 crisis - weathering the storm, spurring the recovery Welcome address and introductory remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at session 1 of the VI Conference of Mediterranean Central Banks, jointly organised by the Central Bank of Tunisia, the Organisation for Economic Co-operation and Development (OECD), the European Institute of the Mediterranean (IEMed) and the Bank of Spain, 28 June 2021. * * * It is a great pleasure for me to welcome you all to this Conference on Central banks at the frontline of the COVID-19 crisis: weathering the storm, spurring the recovery, jointly organised by the Central Bank of Tunisia, the Organisation for Economic Co-operation and Development (OECD), the European Institute of the Mediterranean (IEMed) and the Banco de España. Let me start by thanking our colleagues from the Central Bank of Tunisia, the OECD and the IEMed and, in particular, Governor El Abassi, Ambassador Florensa and Luiz de Mello for their cooperation in organising this Conference. We could not have asked for better partners to help set up this event. Under the resolute impulse of the IEMed, this Conference is becoming a mainstay among the fora for dialogue and cooperation in economic and financial relationships in the Euro-Mediterranean region.

Good hedging, indeed! I will not review all the themes addressed in the book, but would like to touch on a few key issues that can help us get a better understanding of what has happened over the last ten years and how the euro is likely to develop over the next ten. David Marsh is cautious when assessing the euro’s first ten years. In his introduction, he even sounds Solomonic, suggesting that: “It’s too early to say”. There is nothing wrong with such skepticism, and it’s always better to be prudent. Such prudence nevertheless reminds me of the answer that Chinese Premier Zhou Enlai gave in the mid 1970’s to a question about the impact of the French revolution of 1789. He too remarked: “It’s too early to say”. Today, I would like to start by presenting some facts about the last ten years. Then I’ll consider the main hidden message of the book, which is that monetary union is a political union. Finally, I will try to give my own perspective on the next ten years. Facts of the last decade Any assessment of the first ten years of the euro should consider what the objectives were at the start of Monetary Union. In particular, we should avoid attributing to the euro merits or demerits it should not have or never aspired to. Let me consider some of the objectives of the euro and the expectations it gave rise to.
Whether it’s the increases in risk weights of certain types of exposures, or the overall imposition of leverage constraints, the new capital rules are designed to build a more resilient financial system that is better prepared to handle and weather the next crisis. The capital requirements for large banks are supplemented by a liquidity framework. Thinking back to the financial crisis it’s fairly clear from the experiences of most firms during that period of time that liquidity was essential in survival. Those firms that didn’t have sufficient liquidity suffered greatly. Here, too, the Basel Committee has played an important role in developing and implementing an internationally-agreed-to-framework for enhancing liquidity across large international firms. The new framework currently includes a short-term requirement – the Liquidity Coverage Ratio (LCR) and discussions are underway to include a longer-term requirement – the Net Stable Funding Ratio (NSFR). While capital and liquidity rules for large financial institutions are in the process of being implemented – and significant progress has already been made in bolstering levels of both capital and liquidity in banking organizations – there are still areas within the financial system where additional focus on building resilience continues to evolve. In particular, enhanced risk management standards for financial market utilities have been adopted by international  2  BIS central bankers’ speeches  standard setters and, in the U.S., the agencies have recently proposed new rules to adopt these standards for U.S. firms.

Earlier this year, the Federal Reserve issued guidance for the largest firms that outlined five “capabilities” that should be at the top of the list of “to dos”: •  Collateral management: firms should have effective processes for managing, identifying and valuing collateral it receives;  •  Effective management information systems (MIS) around payment, clearing and settlement activities: firms should have a comprehensive understanding of obligations and exposures associated with payment, clearing and settlement activities;  •  Stronger analytics around funding: firms should have the ability to analyze funding sources, uses and risks of each material entity and critical operation, including under stress;  •  MIS by legal entity: firms should have demonstrated MIS capabilities for producing key data on a legal entity basis; and,  •  Arrangements for shared or outsourced services: firms should have robust arrangements in place for the continued provision of shared or outsourced services needed to maintain critical operations. While there are many other areas that supervisors/regulators and legislators need to continue to work on to make cross-border resolution a reality, these five areas are ones that we have highlighted for near-term focus by firms. Another important element to preventing the failure of a firm is ensuring that firms can respond to any weakness by having recovery plans that are implemented well before resolution becomes necessary.
While market failures in provision of small company finance will never wholly be removed, there is very little evidence to show that at least in the United Kingdom they are important in practice today. Nonetheless, it can only be helpful to improve the flow of information between business owners and finance providers, thereby ensuring a better appreciation by both of the relevant risks and rewards attached to particular business plans. The Bank has long been interested in the financing needs of small and medium-sized enterprises. Going back some way, an example of the Bank’s early involvement was our instrumental role following the Second World War in the formation of the Industrial and Commercial Finance Corporation - which evolved into 3i. We would not have described that then as seeking to promote the entrepreneurial economy, but that is precisely what it was. Our role has, of course, evolved since then, in particular highlighting the importance of information sharing and increased understanding between the relevant parties. The Governor has, since 1993, hosted an annual meeting bringing together some of the key players in the SME market. Finance providers, policymakers, business representatives and advisers join together to discuss the key issues relating to the financing of small firms. The main themes to arise from these meetings are published, under the editorship of Adrian Piper and his team, in our annual reports on ‘Finance for Small Firms’. The seventh such report was published in January this year.

Since China has been an important economic partner of Thailand and the region. To further strengthen these flows of trades and investments, close financial cooperation is the key. The Renminbi / Baht Bilateral Swap Agreement (or BSA in short) and the establishment of the Renminbi Clearing Bank here in Bangkok are the great examples. 6. The BSA is designed to be a backstop liquidity facility, which will help boost confidence of the private sector in using the local currency in trade and investment settlement. After the first signing of the BSA in 2010, the use of the Chinese Renminbi in trade and investment settlement between Thailand and China has grown remarkably. The share of trade settlement in Renminbi quadruples between 2010 and 2014. As for investment  BIS central bankers’ speeches  1  settlement, the share climbs up dramatically from a mere 1% in 2010 to 14% in 2014. In spite of the rapid increases, the volumes are still small compared to other major currencies. 7. The Renminbi Clearing bank is the next important step from the BSA. Its Renminbi settlement mechanism is the sequencing plan of the Renminbi scalability. I could see its merit which fundamentally paves the way for further Renminbi internationalization as well as the role of Renminbi in global financial markets that will become increasingly prominent in the near future. 8. There is, however, some room for improvement in order to realize the full economic benefits between Thailand and China.