samchain/econo-pairs-v1 huggingface dataset:
Vítor Constâncio: A European solution for crisis management and bank resolution Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at Sveriges Riksbank and ECB Conference on Bank Resolution, Stockholm, 14 November 2011. *  *  *  Introduction Ladies and gentlemen, It is an honour for me to speak at today’s conference, which has provided a stimulating debate on the challenging topic of bank recovery and resolution. The complexity of developing an effective framework for crisis management and resolution arises from the objective of achieving stability in increasingly integrated financial systems, where the authorities responsible for safeguarding their respective stability are still responsible towards their respective taxpayers. This element of complexity has been taken into account in a number of policy initiatives and suggestions worldwide. Especially in the EU context, I wish to acknowledge the pivotal role played by Lars Nyberg in this domain. His long-time devotion to the design and implementation of EU crisis management arrangements, coupled with his qualities as a central banker, have made Lars a key policy-maker for crisis management in the EU. I would also like to thank Lars for his long-standing and fruitful collaboration with the ECB in this field. Principally in the context of the work carried out by the Banking Supervision Committee, but also as Chairman of the EFC High-Level Working Group on Crisis Management, Lars has very often acted as a catalyst for coordination and cooperation among national authorities and EU institutions.

Third, we are working hard to forge closer international links through co-operation with Islamic finance centres and organisations. Establishing business links is particularly important in face of the challenges brought by the integration of Islamic finance with the international financial system. In this regard, I am pleased to mention that Hong Kong has formed a working group with the Dubai International Financial Centre Authority to promote the mutual development of Islamic finance and financial market infrastructure. Closing remarks In closing, I would like to point you to an analogy often made between the rise of Islamic finance and the renaissance of the Silk Road. Let’s remember the Silk Road, in ancient times, was China’s link to the outside world and a route for trade and exchange of art, music, culture and religion. Today, Hong Kong is right at the heart of the New Silk Road, standing astride East and the West, and providing a gateway to business and financial opportunities. We have already painted a picture of how the financial regulators and industry associations will strive to promote the development of Islamic finance in Hong Kong, and we hope very much that the enormous forces of the market will make the New Silk Road as prosperous and significant as the old one. Thank you very much. 4  BIS Review 59/2008
Bandid Nijathaworn: How strong are Thai banks to weather the turmoil? Keynote address by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the Fitch Thailand’s 2008 Annual Conference, 10 September 2008. *  *  *  Thank you, Chairman. First, let me thank Fitch Thailand for the invitation to address this year’s conference as a keynote speaker. Our topic this morning is “How strong are Thai banks to weather the turmoil?” My answer is short and simple: Thai banks are strong enough to weather the current global turmoil. The sector is also well positioned to support the economy. This is the message I gave six weeks ago when we had a press briefing at the Bank of Thailand. Although conditions in the global economy and financial markets have changed somewhat since then, it is the same message of resiliency and strength that I want to echo to you this morning. I agree with the two previous speakers that global financial market conditions and growth prospects have further weakened especially in the past two months. In financial markets, we continue to see falling share price indices and increased spreads in a large number of US dollar products, including high-quality US corporate bonds, money market spreads, and bank credit default swaps. Doubts about additional losses by banks in major economies also persist and this has made it more difficult for banks to raise capital.

In short a lot of supply characteristics and relationships with wage changes have changed. At the same time inflation is currently pulling down real wages, suggesting that demand factors are going to weigh on inflation going forward. On the supply side, however, firms operating in non-competitive industries have increased prices to a larger extent than the surge in input costs driven by the energy component. Profits across sectors such as manufacturing, construction, utilities and agriculture have risen beyond the increase in nominal wages. Such behaviour is normally associated with a de-anchoring of price expectations when compared to the recent past when the only prices to go up were energy and logistics related activity. Taking a international perspective, two metrics neatly capture some of the macroeconomic developments currently unfolding. The inflationary pressures unleashed by skyrocketing energy prices sliced the world economies into four groups, as the economic environment faced by net energy exporters or net energy importers changes and substantially if these are advanced economies or Emerging Market and Developing Economies. Indeed, while net energy exporting nations are benefiting from large windfall profits, Emerging Markets and Developing Economies are also facing the pressure from capital outflows driven by the synchronised monetary policy tightening undergoing in many advanced economies. Thus, Emerging Market and Developing Economies that are also energy importers are subject to strong pressures, as they must cope with both high hydrocarbon prices and capital outflows.
Combined with high productivity growth, this has resulted in high corporate earnings and solid growth in employment. At the same time, wage-earners share of corporate value added has been reduced, from around 75 per cent at the end of the 1980s to 70 per cent at the end of the 1990s, and now  BIS Review 122/2007  1  stands at below 65 per cent. Solid productivity growth and high prices for export goods and deliveries to the petroleum sector have contributed to the reduction in the wage share over the past few years. The ample supply of labour has probably had a dampening effect on wage growth. Increased globalisation may have provided greater opportunities for Norwegian enterprises to relocate production to other countries if labour costs become too high. This probably places some restraint on wage demands among workers in sectors where enterprises have such opportunities. Historically, a high wage share has tended to be accompanied by low unemployment. Developments in recent years have provided the basis for strong growth in employment while the wage share has fallen. Is it possible to sustain the combination of low unemployment and a low wage share? First, it partly depends on whether the positive supply-side conditions are sustained. There is probably symmetry here. Should the terms of trade deteriorate, productivity growth slacken and foreign workers return to their home country, the wage share will increase, profits fall and unemployment increase. There is now a prospect of slower global growth.

Bank Negara Malaysia is also particularly focused on corporate governance in the light of regulatory changes that are being pursued for the insurance industry. I am referring to the transition from a rules-based system which regulates a number of aspects of insurance operations, to a more principles-based system. This process has already started with the newer guidelines that we have introduced lately, but there continue to be a number of rules applied to the insurance sector which may have outlived their purpose. We are reviewing these. A precondition for this transition is a significant emphasis on a strong system of corporate governance, and one that is actually working effectively within financial institutions. Ultimately, corporate governance reforms are about improving accountability and control, especially where interests and incentives of stakeholders are not fully aligned. We believe that in Malaysia, we have laid strong foundations for sound governance practices within financial institutions. For the insurance industry, the prudential framework on corporate governance for insurance companies and various other guidelines that have been issued by the Bank establish standards that we expect insurers to operate against to ensure the sound and prudent management of insurers. Our supervisory approach has contributed to promoting better governance in practice. And in the last four years, we have focused on providing important support to directors in performing their roles through education initiatives. Forums such as this contribute to that effort. Our continuing work on corporate governance builds on and strengthens this foundation.
Adequate and consistent information on capital flows will also greatly improve Balance of Payments Statistics for Zambia and serve as an early warning system for Government on potential financial crises and other external shocks. Mr. Chairman, Zambia has adequate technical capacity to collect, analyse and disseminate data and information on foreign private investment. It has, however, lagged behind in terms of the frequency of these surveys compared with some other countries in the region. For instance, while we are now at the third phase of the Survey, Uganda, Tanzania and Malawi are in their eighth, fifth and fourth phases, respectively. This only emphasises the critical need to conduct this enterprise survey more regularly. To this end, I wish to reiterate the Bank of Zambia’s, continued support and commitment in working in close collaboration with Government and other Balance of Payments Statistical Committee member institutions in ensuring that the collection of this vital information is done on an annual basis. Accordingly, it is my hope that participants at this workshop will appreciate the importance of this survey and find the results useful. Distinguished Guests, I am particularly happy to learn that compared to other countries in the region, the Zambian team has conducted this enterprise survey in record time. It shows true commitment and dedication of the team to this project. Please keep up the good work. Be reminded, however, that you have established a benchmark, which can only be improved on.

Historical data does not always predict the future and so we should not place too much confidence in models. A floor may be  BIS central bankers’ speeches  5  necessary to prevent the combination of low risk weights and high leverage from becoming unreasonable. Most of what I have been saying here has been said by us at the Riksbank for some time. We have encountered both counterarguments and cries of encouragement. We have also been asked if we couldn’t be more precise. Consequently, I thought I would wrap up by telling you a little about what will be happening in the immediate future. The Riksbank will clarify its recommendations soon When motorway junctions are planned, the traffic planners take many factors into account to ensure that the traffic flows smoothly and safely. Benefit is balanced against cost – and safety is given a high priority. We at the Riksbank take the same approach when we and other authorities are considering how to implement Basel III in Sweden. The Riksbank will soon announce its view of the measures that should be adopted. One example is how much higher we think that the capital adequacy requirements for the major banks should be – in addition to the minimum levels in Basel III. One important step is this year’s second Financial Stability Report, to be published on 29 November. In connection with this, we will also publish a report analysing the economically appropriate capital adequacy requirements for the major Swedish banks.
Further solid fundamentals include the relatively low rate of inflation, the low levels of unemployment, the high rate of savings and the manageable levels of external debt with the majority of debt in medium- to long-term tenures and with more than 40% of the external debt being denominated in ringgit. This, together with the ample international reserves, accords the economy with the policy flexibility to manage external risks. The combination of these factors will cumulatively enable a more effective policy response to mitigate the impact of any external shocks on domestic demand. While monetary policy has remained accommodative and access to financing has been enhanced, wide-ranging measures including macro prudential and tax measures have been implemented to rein in excessive leverage and excessive risk-taking to ensure growth is achieved without compromising our future prospects. Malaysia’s new investment landscape As Malaysia progresses, so has the nature and profile of our investments. Compared to the 1990s, the current investment landscape is driven by the private sector, is geographically and sectorally more diverse, and is focused on high value-added activities and new growth areas. Since 2010, Malaysia has experienced an investment renaissance and continues to benefit from a long-standing track record of being a profit centre for large multinational companies. Malaysia continues to be a recipient of foreign direct investment (FDI). This is also reinforced by a high level of capital spending undertaken by Malaysian companies.

In addition to these measures, the conditions for the Liquidity Support Facility offered to banks under extraordinary conditions were revised. Now, I would like to once more underline that if problems in international markets further deepen and adversely affect domestic financial markets, the Central Bank will continue to take additional measures and to employ other policy instruments. Esteemed Guests, Inflation expectations displayed a downward trend in the first quarter of 2009 in line with decelerating inflation. As the incoming information on inflation and economic activity confirmed our forecasts and vindicated the CBT’s monetary policy decisions, inflation expectations also responded favorably following a low course in the second quarter of 2009. BIS Review 67/2009  9  Though inflation expectations for every term fall compared to the previous Inflation Report period, the decline in short-term inflation expectations appears to be more evident since April 2009 (Figures 15 and 16). Figure 15: 12 and 24-Month Ahead* CPI Figure 16: Inflation Expectations Curve* Expectations (Annual Percentage Change) (Annual Percentage Change) 10  10  9 8  6.86  7 6  8  7.55 6.71  7  6.45  5 12 Months  3  5  24 Months  4 01 04 07 10 01 04 07 10 01 04 07 10 01 04 06 06 06 06 07 07 07 07 08 08 08 08 09 09  * Second survey term expectations of the CBT Expectations Survey. Source: CBT.
The Government may therefore raise the question of membership of the fixed exchange rate mechanism when future participation in the monetary union is judged to be imminent. Government decides exchange rate system, the Riksbank its application As regards ERM2, what are the Government and the Riksbank, respectively, responsible for? The Riksbank Act, amended as of 1999, states that the exchange rate system is decided by the Government and applied by the Riksbank. This is the same arrangement as in virtually the whole of Europe. The decision as to whether and when the krona is to be linked to ERM2 is thus a matter for the Government. The Riksbank in turn determines how the exchange rate system chosen by the Government is to be applied, which involves setting the central rate and band width in a fixed exchange rate system and deciding any interventions. In practice, if Sweden is to participate in ERM2, the law requires the involvement of both the Government and the Riksbank. They must also agree on the conditions. Moreover, ERM2 membership would not be decided unilaterally by Sweden; it is something that has to be negotiated with the other EU countries. n the event of Sweden wishing to join ERM2, what would be the procedure? The negotiations would be conducted in the Economic and Financial Committee, which has succeeded the Monetary Committee. Each country is represented there at the level of under-secretary in the Finance Ministry and central bank deputy governor.

In practice, however, the weak krona has not affected either import or consumer prices as much as the Riksbank had anticipated. There may be a number of explanations for this. • •  One may be that the Riksbank has overestimated resource utilisation and hence demand pressure in the economy. A weaker demand situation probably makes it less possible for firms to let the weak exchange rate pass through to consumer prices. Another factor may be downward price pressure from the increased international competition. Although the price effects of this are presumably of a one-off nature in principle, they may affect inflation over a long period in that it takes time for them to work through the economy. 1  BIS Review 48/1999  •  A further explanation may be that the move to a flexible exchange rate has altered pricing behaviour. When the krona was devalued in the Seventies and Eighties, the new exchange rate was perceived as permanent and prices were set in relation to its weaker level. Since 1992, many of the krona’s depreciations have probably been perceived as transient and therefore resulted in more limited price adjustments. Not a mechanical relationship The relationship between the exchange rate and inflation prospects has evidently changed over time. No straightforward mechanical link can be said to exist between the exchange rate, inflation prospects and the repo rate.
Andrew Bailey: The case for an open financial system Speech by Mr Andrew Bailey, Governor of the Bank of England, at the Financial and Professional Services Address, Mansion House, London, 10 February 2021. * * * As we look forward – and for so many reasons we must look forward – it is important to focus on the future of financial services, and the important role they play in our economy and internationally. This will be my focus today. I am going to look forward with the benefit of history and context and set out why open financial markets are in the interests of all – home and abroad – and something we should always strive for. I want to start with the Bretton Woods agreement towards the end of the Second World War. This was a fundamental and decisive commitment to an open world economy. This commitment did not come free at the time – the adjustment was hard for this country – and of course the more formal Bretton Woods system broke down in the 1970s. But that breakdown did not compromise the commitment shared broadly across nations to an open world economy. There have been times when the commitment has been sorely tested, but it has not been abandoned. What followed the breakdown was a shift of emphasis, not a free for all.

These conclusions reinforce the findings of the papers presented in Session 1, which I have discussed before, that the Baltic states and the South-East European economies have probably already reached or even overshot the equilibrium level of credit to GDP. The paper prepared by IMF economists, in turn, addresses the issue of sustainability by focusing on capital flows. Within a dynamic stochastic general equilibrium model, it analyses the short- and mid-term risks arising from the opening up to capital flows and alleviating of credit constraints for the case of a small converging economy. Both papers prepared by economists from international financial institutions and presented in Session 6 offer recommendations for policymakers in such economies, which can reduce vulnerabilities and risks in the face of rapid credit growth. Under such circumstances, it is crucial that macroeconomic policies do not add to the existing demand pressures – tightening fiscal policies is often a must-do – and that steps are taken to strengthen the health of the financial system. This can be achieved by tightening regulatory measures, raising prudential standards and enhancing supervisory coordination and cooperation, as well as by supporting a better understanding of financial risks by the general public, e.g. by means of public awareness campaigns.
But what this will inevitably mean is a worsening of the balance of payments on current accounts of the industrial countries, individually and collectively, reflecting the imbalance between external and domestic demand growth in our economies. That imbalance clearly will need to be reversed at some point as the flow of international capital is restored to a more sustainable level. The pressures can in the meantime be mitigated by official international financing, but private flows may take a while to settle down. For the time being, though, the directly and indirectly internationally exposed sectors, not just of the UK economy but throughout the industrial world, will continue to operate in a highly competitive environment. All in all this is an uncertain and difficult prospect. It will be an exceptionally challenging period for both international and domestic monetary policy management in both the UK and the eurozone as well as in the rest of the industrial world. And it will, I know, be a challenging period for many of you – even though the excessive strength of the exchange rate has now started to ease. But our economy as a whole starts from a position of relative strength compared with the past, and our own financial underpinnings, including both corporate and personal sector balance sheets, are relatively robust. We are currently seeing an overall slowdown – as we needed to do. That slowdown could go further.

If Singapore did not have political stability, good infrastructure, and a conducive business environment, MAS’ strategies to grow the financial centre also would not have worked as well. In a world where central banks typically keep a distance from the rest of government, it is amazing how closely MAS works with other government agencies in Singapore – macroeconomic surveillance and national economic policies and strategies combating money laundering risks and investigating financial crimes promoting jobs, skills development, and labour market policies advancing technology initiatives ranging from e-payments to digital identity These partnerships have made a decisive difference to the outcomes for MAS, the financial industry and the Singapore economy. MAS has achieved what it has also because of the close partnership it has enjoyed with the financial industry. In a world, where many regulators are aloof at best and hostile at worst when dealing with the industry, the relationship MAS has with the industry is special. To be sure, we are a no-nonsense supervisor, not averse to setting high prudential standards, imposing tough remedial measures, and occasionally shutting down a bank or two. But MAS has always believed that working with the industry, rather than against it, is the best way to achieve our shared objectives: keeping the system safe and growing the business. In this, MAS has been fortunate to have an industry – banking, insurance, asset management, and capital markets – that has actively supported us through thick and thin.