samchain/econo-pairs-v1 huggingface dataset:
Luis M Linde: From restructuring to transformation Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the 6th Financial Meeting “From restructuring to transformation”, organized by Expansión/KPMG, Madrid, 20 October 2015. *  *  *  Firstly, thank you very much for the invitation to open this 6th Financial Meeting organised by Expansión-KPMG. This meeting is now a classic in our calendar and always provides the occasion for interesting reflections and discussions. One year on from the start-up of the Banking Union, the European financial system can be said to have been strengthened, though this clearly does not mean that it is not facing major challenges and problems. I would sum up the key features here in the following six points: 1. First, following the balance sheet analysis and the stress tests of institutions subject to ECB supervision, and the start-up of the Single Supervisory Mechanism, today there is more awareness of Europe’s banking system and of its greater reliability. 2. Second, solvency levels have been shored up: Europe’s banking system is now sounder. 3. Third, in my opinion, is the greater transparency achieved regarding the situation of the major European banks. And this, together with the Single Supervisory Mechanism and the strengthening of solvency levels, has helped pave the way for banking mergers and consolidation, which were far less conceivable before the start-up of the Banking Union. 4.

We will need to consult on elements of change along the way and be responsive to the comments. All this takes time and thought, but the quicker these processes are completed, the quicker the vision will be realised. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  We will best realise our vision to be a responsive and accessible policymaker by continuing to proactively engage with the wider world – both at home and abroad. This will ensure that our prudential framework keeps pace with innovation, and so we identify and best respond to risks at an early stage. We will continue to engage with our counterparts in other jurisdictions, and we will continue to lead policymaking through our membership of international standard-setting bodies such as the Basel Committee. Our key aims remain to ensure that global standards are robust and that regulatory fragmentation for firms is minimised. Strong engagement with Parliament and industry will be essential. We will take seriously our task to understand Parliament’s priorities within the framework of the objectives and ‘have regards’ that Parliament will give to us. And industry input will be particularly important on areas of the regime we are targeting for reform, which brings me to the main subject of this speech. A strong and simple prudential framework for non-systemic banks and building societies I would like to turn my attention now to speak specifically about one particular policy initiative which the PRA is pursuing.
4 A higher labour supply leads to greater competition for vacant jobs, thus restraining the rate of wage increases. My assessment is that there are overarching cyclical forces that suggest wages will rise during the forecast period, but that the rate of increase may remain low despite the high level of resource utilisation. When the effect on the economy from upheavals such as technological advances, demographic changes or increased cross-border trade has worn off, employees should be able to increase their pay again. However, this can take time and, during the transition, the best contribution monetary policy can make is to facilitate, via high resource utilisation and as far as is compatible with the inflation target, the various adjustments demanded by structural transformation and demographics. Education and oversight of competition – to meet the future However, if Sweden as a country is to be able to meet these challenges over the long term, other policy areas than monetary policy will have to be used. Here, I would like to name two important areas: education and oversight of competition. In light of technological developments and population increases, opportunities for life-long education and professional development will be completely decisive. Even well-educated professional groups that have previously had low unemployment have started to become aware of a growing risk of being automated out of work. This applies, for instance, to investment advice, financial accounting and legal support.

Another key difference compared with other advanced monetary unions like the United States is the lack of a central fiscal instrument to act countercyclically at the federal level. I fully acknowledge the political difficulties in building such an instrument in the euro area. Similar difficulties also exist when discussing the completion of the banking union and the establishment of a genuine capital markets union. At the same time, we should remain fully committed to the goal of achieving a genuine Economic and Monetary Union. Ignoring the need to fix the remaining institutional weaknesses of EMU would seriously damage what has already been achieved through the commitment and hard work of everyone involved. As I argued in this Committee eight years ago, we need to show “a clear trajectory for the future evolution” of EMU and thus frame the “expectations of both citizens and financial markets”. Allow me to take a longer-term perspective to draw the last lesson. While the euro area did not have a fiscal policy response comparable with that of other advanced economies, the ECB’s response was fully comparable with that of the other major central banks. Thanks to its independence, the ECB has been able to adapt its policy response and reaction function. Preserving this key asset will allow the ECB to adapt to future circumstances and ensure the effectiveness of its measures. This is all the more important considering that the desirability and relevance of central bank independence are increasingly being challenged around the world.
If the asset managers are lucky, they will manage to predict the period with a positive yield and the rare loss will not become a reality during the period they are being evaluated. This appears more likely the shorter the evaluation period is. Willingness to take risks can increase in a low interest rate environment. Agents may then wish to take more interest rate risk and perhaps come further out on the yield curve, thus becoming more sensitive to rapid interest rate fluctuations. They may also look for new types of investment. The fact that they are evaluated in comparison with others in the market may also lead to asset managers adopting herd behaviour, even if they have a different opinion of the current developments in the financial markets. It is better to lose in good company than to stand alone with an investment that might provide a good return in the long-run, but which results in short-term losses. The word might is central here, as no one can predict market developments and it is therefore difficult to go against a trend. Herd mentality can thus lead to asset prices deviating from fundamental economic conditions during a relatively long period of time. The contagion effects can also increase when the view of the world changes. Herd behaviour among market agents does not only involve investing in the same assets. There are signs that this also includes researching information.

The effects on the international financial system were thus slight, although the crises affecting both Asia and Russia led to extensive redistribution of wealth and political tumult in the countries concerned. There are probably several reasons why the effects were so limited. One is probably that economic policy has become more predictable in many countries in recent decades, with sound public finances and stable, low inflation. The markets should therefore be less sensitive to shocks. However, another reason is actually that the financial system has become more resilient. The fact that risks have a better spread makes the system more stable. The risks are also transferred to the agents who want them or should have them. There is also the fact that the banks have gained more experience of operating in deregulated financial markets. The development towards more market-based transactions means that banks can now concentrate on the risks they are best at managing. They have also become better at managing them, with well-developed risk management methods and models. So far, so good. A better spread for risks and improved risk management can contribute to better absorption of shocks to the financial system. On the other hand, there can be elements that increase the risk of more serious shocks that also spread throughout the whole system. …or have they become more prone to risk? One such tendency could be an increased propensity among market agents to take greater risks and to copy others’ actions.
These arrangements are laid down in the Basic Law which establishes the post-1997 constitution for Hong Kong. It is based on the “one country, two systems” concept under which Hong Kong shall enjoy a high degree of autonomy as a Special Administrative region of China. In the banking and monetary areas, this means that: Hong Kong shall retain the status of an international financial centre. The Government of Hong Kong shall be responsible for monetary policy and practice in Hong Kong and for regulation of financial markets and institutions. There shall be free flow of capital within, into and out of Hong Kong. The HK dollar, as the local legal tender, shall continue to circulate and remain freely convertible. It must be backed by a 100% reserve fund. The Exchange Fund which holds the foreign currency reserves of Hong Kong shall be managed and controlled by the Government of Hong Kong, primarily for regulating the exchange value of the HK dollar. The framework that will apply after 1997 is therefore quite clear. The question which then follows is whether the framework will be applied in practice. I think that there are a number of good reasons to believe that it will be. In the first place, we now have institutional arrangements in Hong Kong to put the financial sector provisions of the Basic Law into practice.

Economic developments have been driven by wholly exogenous health developments and governments have provided massive fiscal support to incomes, employment, the corporate sector and in some cases like the UK, to housing markets. It remains striking however, that following some of the sharpest economic contractions in modern history and amid great uncertainty and indeed, initially fear, about the future, housing markets have been strong. In the UK, over the 12 months to February, house prices have risen by 9.1%, the highest growth rate since October 2014. This compares to an average annual growth rate of under 4% in the 10 years prior to the pandemic. Mortgage approvals have averaged around 85,000 per month and total transactions 111,000 per month since housing markets opened in June 2020, compared to around 60,000 and 90,000 in the prior decade, respectively. The pre-pandemic decade, however, may not be the right comparator. The 10 years following the financial crisis appear unusual in that over that period house prices grew broadly in line with incomes, having grown at double the rate of income in the previous twenty to thirty years. I want to look today at some of the reasons why house prices growth and housing transactions were, in UK terms, relatively subdued for the 10 years prior to Covid, and at what drives house prices and transactions.
Moreover, the output gap forecast, which was revised upwards owing to the better-than-expected growth outlook for 2013 compared to the figures presented in the July Inflation Report, added 0.1 percentage points to the year-end inflation forecast. Developments in the exchange rate and oil prices were also influential on the revision in the inflation forecast for 2014. When evaluated together with output gap forecasts, we expect these cost-side factors to push the inflation rate in 2014 up by 0.3 percentage points. 4  BIS central bankers’ speeches  Although inflation is estimated to fluctuate in the short term due to the base effect on energy prices, we expect it to remain on a downward track. As the effects of the hike in tobacco prices in January 2013 on annual inflation taper off, we expect inflation to plunge in early 2014, and come down to levels consistent with the target by the last quarter of 2014. In addition to these forecasts, alternative scenarios on the inflation outlook and the global economy are discussed in the Risks section of the Inflation Report. You can examine the Report for details. While concluding my remarks, I would like to thank all my colleagues who contributed to the Report, primarily those at the Research and Monetary Policy Department as well as the members of the Monetary Policy Committee, and thank every one of you for your participation. Chart 1  Chart 2. Global Risk Appetite  Portfolio Flows to Emerging Economies (12-Week Moving Average, Billion USD)  Source: Bloomberg, Credit Suisse.

Erdem Başçi: Recent economic and financial developments in Turkey Speech by Mr Erdem Başçi, Governor of the Central Bank of the Republic of Turkey, at the press conference for the presentation of the October 2013 Inflation Report, Ankara, 31 October 2013. *  *  *  Distinguished Guests, Welcome to the press conference held to convey the main messages of the Inflation Report. I will now present an overview of the report, which will be published on our website soon. The report typically summarizes the economic outlook underlying monetary policy decisions, shares our evaluations on macroeconomic developments and presents our medium-term inflation forecasts, which were revised in view of the developments in the last quarter, along with our monetary policy stance. In addition to the main text, the report includes ten boxes entailing interesting and up-to-date analyses on various topics. I strongly recommend that you read these boxes, which will soon be published on our website. Now, I would like to convey the main messages of the report. Firstly, I will review the global economic outlook given its undeniable influence on our policies. Global monetary policy developments continued to influence financial markets in the third quarter of the year. Ongoing concerns over global growth led to expectations that the US Federal Reserve might soon start trimming its bond purchases, while the pullback on bond purchases was postponed later on, causing the global risk appetite to remain volatile (Chart 1.1).
Against the background of this interest to higher education in economics, the VUZF University gained a reputation as one of the most attractive higher education establishments for young people seeking the optimum combination between theoretical knowledge and practical training. One of the reasons is that VUZF University is known for its policy of attracting as priority professors of great experience, acclaimed as practiced professionals in their area of expertise. This is very gratifying for me, because as an employer in large financial institutions since 1997 I have been aware that the discrepancy between theoretical knowledge and practice is a serious issue facing newly-minted economists upon their graduation. And practical experience gives a great momentum at the beginning of any young person’s career – because it not only teaches them specific professional skills, but also develops their comprehensive qualities, such as team work skills, efficient time management, motivation to seek alternative solutions in a competitive environment, etc. VUZF University however is not just a place of education, it is a centre of research, discussions and generation of ideas. Today’s forum is another proof of this. A year ago, again before the audience of a scientific conference organized by VUZF University, I expressed my purely professional dissatisfaction with the fact that we rarely hear the prudent voice of the Bulgarian academia.

Another big myth about Bulgaria was the imminent “collapse” of our banking system (because of the “avalanche” of bad loans and the “dependence” on foreign banks which would have run away in panic and withdrawn their capital from Bulgaria). None of all these apocalyptic prophecies has happened. Our banking system kept sizable buffers and demonstrated impressive for the whole EU ratios of capital adequacy and liquidity. Given the high level of domestic depositors’ trust (only in one year, until March, total deposits increased by over BGN 5 billion), the dependence on foreign sources of funding diminished considerably – at end-March less than 13% of total attracted resources comes from parent banks abroad, as opposed to nearly 1/4 at end-2008. Ultimately, unlike some of the more advanced economies, no bank in Bulgaria needed to be rescued. And the very frequent headlines about “bad” loans do not reveal the true picture in Bulgaria as compared with the other economies in the EU. The reason is that the legal framework, financial reporting standards and regulatory practices in the various countries are rarely the same, and this seriously hampers any comparisons across countries (as an example, some countries directly write off and keep off-balance sheet a large part of their non-performing loans).
Pessoa (2016) finds similar results for the UK in the years following China’s accession to the WTO. Further, even if people are re-employed relatively quickly after an industry shrinks, there’s no guarantee they’ll get the same wage. Economics certainly doesn’t say rising import penetration means permanently fewer jobs, but it does suggest that, if you suddenly open up trade with a country with a plentiful supply of 7  unskilled labour, that can reduce the wages of less-skilled people at home . The Pessoa (2016) study finds that, among the bottom 10% of earners in the UK, those in industries more exposed to trade with China saw a drop of around 4% in their total earnings (relative to others) over the following few years. This is partly the  6 7  Autor et al (2013). Stolper and Samuelson (1941) 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  result of slightly longer periods of non-employment. It’s also because they got less well paid in their new 8  jobs . More generally, the growth in trade with developing economies has been suggested as one possible explanation of the widening dispersion of wage and income inequality in the United States (the red line in Chart 10).

If I tell you to shoplift, then I am committing an unethical act - and so are you, if you follow my instruction. “I was only following orders” is not a legitimate defence. There is, if you like, a double-lock on unethical instructions within a wholly human environment - on the part of the instructor and the instructed. This is one reason why firms and regulators are so determined to promote ‘good’ cultures, including, for example, ‘speak up’ cultures, and robust whistle-blowing. But there is no such double-lock for AI/ML. You cannot tell a machine to “do the right thing” without somehow first telling it what “right” is - nor can a machine be a whistle-blower of its own learning algorithm. In a world of machines, the burden of correct corporate and ethical behaviour is shifted further in the direction of the board, but also potentially further towards more junior, technical staff. In the round this could mean less weight being placed on the judgements of front-office middle management. 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  There have been some initial steps to promote the ethical use of big data and AI/ML in financial services. Notably, for example, in Singapore,7 and – more broadly – within the EU.8 In the UK, the Centre for Data Ethics and Innovation is looking at maximising the benefits of AI,9 and many consider them leaders in this field. Principles-based expectations have focused on areas such as fairness, ethics, accountability and transparency.
There is substantial scope in the region for brokers to better understand the risk profiles of SMEs – specifically how they are affected by loss events and what it would take for them to recover – and to work with insurance providers to lower the costs of insurance through innovative solutions and better data. A key focus of Bank Negara Malaysia in the coming years will be to provide an enabling environment for insurance brokers in Malaysia to develop the technical, financial and operational capacity that will enable them to effectively support businesses in both mainstream and niche areas under the new economic landscape. In this connection, the Bank will be introducing new measures to foster greater competition, and expand opportunities for brokers to forge strategic partnerships for long term growth. This will include specific measures with respect to foreign participation in the insurance and takaful broking industry in line with the recommendation of the Bank’s Financial Sector Blueprint 2011 – 2020. The Bank expects to make further announcements on this in due course. BIS central bankers’ speeches  3  The evolution of insurance broking also raises important questions for managing conflicts of interest. Insurance brokers are often well placed to offer a broad range of services that may go beyond advising on and securing insurance solutions. These include an expanded role in risk consulting and management, the administration of employee benefit schemes, and claims handling services provided for a fee.

Jessica Chew Cheng Lian: The insurance broking sector – threshold of an exciting but challenging future? Keynote address by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 3rd Asia Insurance Brokers’ Summit, Kuala Lumpur, 3 March 2015. *  *  *  It is my great pleasure to be a part of this 3rd Asia Insurance Brokers’ Summit which is being held for the first time in Malaysia. I would also like to take this opportunity to congratulate MITBA as they celebrate 40 years in service of insurance and takaful brokers in Malaysia. In that time, the domestic insurance industry has seen significant change – beginning with an overhaul of the legal and regulatory framework when the industry was brought under the regulatory oversight of Bank Negara Malaysia, followed by a series of successive reforms that have served to strengthen the industry and promote its healthy development to first and foremost meet the needs of individuals and businesses. This continues to be a journey that the Bank and industry are committed to taking forward, mindful that as the Malaysian economy is progressively transformed, so too will demands of the industry evolve. Throughout this journey, associations like MITBA have played an important role in helping members adjust to the changing environment, by providing a platform to examine issues, make representations, communicate with stakeholders, and implement collective responses.