samchain/econo-pairs-v1 huggingface dataset:
Ravi Menon: FinTech – harnessing its power, managing its risks Panel remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Singapore Forum, Singapore, 2 April 2016. *  *  *  FinTech is fundamentally transforming the financial industry. •  The smartphone is becoming our bank. •  Computer programmes are offering investment advice. •  People can now lend directly to one another online. Technology will replace many jobs in finance but will also create exciting new jobs. •  Calls for new and different skill sets – understanding technology and the ability to work with and harness the power of machines and algorithms  •  As someone in Silicon Valley put it, “the geek shall inherit the earth”. Unregulated FinTech companies are now providing many financial services. They will challenge traditional financial institutions (FIs), disrupt and even displace some of them but will not replace them. •  Banks and insurance companies have something that unregulated entities do not have – trust. Trust based on a track record of performance. •  FIs are not sitting still. –  They are actively harnessing technology to enhance product offerings and improve efficiency. –  They are setting up in-house FinTech units to replicate the start-up mentality. Many global banks have set up “innovation labs” in S’pore: Citibank, StanChart, UBS, HSBC, to name a few. And insurance companies too: Aviva, Aon, AXA, MetLife.

Ardian Fullani: Overview of Albania’s latest economic and financial developments Speech by Mr Ardian Fullani, Governor of the Bank of Albania, on the Monetary Policy Decision-Making of the Bank of Albania’s Supervisory Council, Tirana, 27 February 2013. *  *  *  Today, on 27 February 2013, the Supervisory Council of the Bank of Albania reviewed and approved the monthly Monetary Policy Report. Based on the latest monetary and economic developments in Albania, and following discussions on their future outlook, the Supervisory Council of the Bank of Albania decided to keep the key interest rate unchanged, at 3.75%. The Supervisory Council deems that the monetary conditions are adequate to comply with the medium-term inflation target, providing the necessary monetary stimulus to boost domestic demand. Let me now proceed with an overview of the economic developments and key issues discussed at today’s meeting. *** Annual inflation was 2.7% in January. Higher food prices were the major contributor, about 75%, to inflation formation. In this regard, unprocessed foods, which recorded double-digit growth rates, contributed the most to this formation. The prices of the other consumer basket items fluctuated narrowly, maintaining their low contribution to inflation. In the macroeconomic aspect, inflation was formed by the presence of spare production capacities, while supply-side shocks were absent. The slow growth of production costs and low profit margin for businesses were reflected in low core and headline inflation rates. In addition, the stable exchange rate, anchored inflation expectations and low monetary expansion contributed to maintaining price stability.
This is equally true of monetary policy communication, the presentation and explanation of monetary policy. Monetary policy communication is simpler when it is possible to ignore the exchange rate apart from its effect on inflation, but an imminent systemic change such as financial account liberalisation adds to the complexity. Yet it is important to realise that the problems inherent in such a systemic change will be solved only to a limited degree with improved communication. The uncertainty is real, and the Central Bank cannot create more certainty than it faces itself. Experience shows as well that the market can get ahead of itself even if monetary policy communication is in good order. A number of factors indicate that, to some extent, the market misunderstood the Monetary Policy Committee’s August statement. We must learn from such occurrences, of course, and try to do better in the future. Some appear to have interpreted that statement to mean that plans to lift the capital controls have been abandoned temporarily – even for a period of years – and that this is why interest rates were lowered as much as they were. But to my mind the interest rate cut had more to do with rapidly declining inflation than increased uncertainty about financial account liberalisation, although such uncertainty did of course exist. The statement was made before the September Supreme Court judgment on exchange rate-linked loans and before it came certain that the third review of the IMF programme was not going to be unduly delayed.

Már Guðmundsson: Economic situation and outlook and monetary policy Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at a breakfast meeting of the Iceland Chamber of Commerce, Reykjavík, 5 November 2010. *  *  *  Mr./Madame Chairman, honoured guests, The Iceland Chamber of Commerce has a long tradition of holding a breakfast meeting shortly after the Central Bank has published its new macroeconomic and inflation forecast early each winter. This year and last year, the publication of that forecast has coincided with the announcement of the Monetary Policy Committee’s interest rate decision. The Central Bank welcomes this initiative. It is important to be able to explain monetary policy decisions as fully as possible, and this meeting has always been a good opportunity to do so. It is particularly important at this juncture, when monetary policy is formulated under unusually complex circumstances. Effective, forward-looking monetary policy is always complex, of course, as it is formulated under conditions of uncertainty about the current situation and future prospects for the economy. But in our case, three new factors are added to an already complex situation. First of all, there is great uncertainty about the effect of monetary policy measures on the financial markets and the real economy in the wake of the financial crisis.
For Phillips Curve to work, the loss of welfare from a negative cumulative real wage gap has to be fully compensated first – as a stock measure, not as a flow. The policy implication from this finding is that, for those countries which have not closed their cumulative real wage gap (most of the developed economies), inflation will remain subdued until they close their cumulative wage gap. Distinguished guests, I would like to thank the organizers, Central Banking, for inviting me to speak about a very topical issue: subdued inflation. Inflation has been subdued in the post-crisis years, and the Phillips Curve has failed to explain it. It is probably the greatest mystery of the economic science in the last decade: where has the Phillips Curve gone? There are multiple references to the fact that the Phillips Curve has flattened over the last decade, if not earlier (to mention just a few: Forder (2014), Leduc and Wilson (2017), Borio (2017), Carney (2017), Cunliffe (2017), Praet (2016, 2018), Spencer (2017), Murphy (2018), Bullard (2018)). The flattened Phillips Curve and the lesser link between inflation and unemployment, inflation and output gaps, or inflation and wages, have multiple explanations.

Improving fundamentals led to an upgrade in sovereign ratings, so that Romania is now rated again investment grade by all major rating agencies. This shift in perception is one of the reasons why Romania weathered comparatively well the portfolio rebalancing prompted by the political turmoil in Turkey and is now receiving increased capital inflows, despite its proximity to the Ukraine and the associated geopolitical tensions. Other reasons are probably  BIS central bankers’ speeches  1  related to the relatively low importance of trade with both Russia and Ukraine (less than 5 percent of total exports), as well as the comparatively high degree of self-reliance as regards natural gas consumption – Romania imported in 2013 only 15 percent of its natural gas consumption, far less than most other countries in the European Union. From a financial standpoint, there are no direct links between the Romanian banking system and the Russian and the Ukrainian ones. There is no Russian or Ukrainian capital present in the Romanian banking system, and exposures of Romanian registered banks to entities in the two above-mentioned countries are marginal. However, there are potential indirect spill overs that could materialize through the common lender channel, given the presence of banking units owned by some Austrian and French banking groups in the two systems. The comfortable solvency and liquidity buffers in the Romanian banking system should help alleviate the effects of potential spill overs.
(vi)  According to the new operational structure, overnight interest rates are mainly expected to fluctuate between the Central Bank borrowing interest rate and the interest rate of the liquidity facility submitted to primary dealer banks during the day. However, under normal conditions while determining the amounts of the auctions for repo and reverse repo auctions with a one-week maturity, the Central Bank, will endeavor to prevent both excessive fluctuation of the ISE Repo-Reverse Repo Market overnight interest rates, which is an indicator of secondary money market interest rates, and systematical formation of the said rates significantly below or above the repo auction interest rates. Additionally, with a view to preventing fluctuations in overnight interest rates and enhancing the flexibility of the banks’ liquidity management, the Central Bank may consider options like narrowing the interest rate band of the Late Liquidity Window on the due date of keeping required reserve ratios and allowing the banks to keep a certain amount of the required  14  BIS Review 3/2009  reserves in the following period or rendering the excess amounts to be effective for the following period. In cases where the liquidity shortage in the market increases and becomes permanent, the funding of the liquidity shortage only by repo auctions with a one-week maturity may have adverse effects on longer-term interest rates and the credit mechanism.

This is to ensure that the country’s overall payment system is fully integrated and contributes positively to the overall efficiency of trade and commerce within and outside the country. This in turn will enhance the country’s capacity to face competition and challenges in the international financial and investment environment, at the regional and global levels. Nevertheless, while information technology proceeds at the speed of light, the corresponding legislative reforms take time. The Bank of Thailand, along with other government agencies, is working hard to push forward for the enactment of crucial legislations such as the Electronic Transaction Act, Electronic Digital Law, Electronic Fund Transfer, to name but a few. Technological revolution in the banking and financial world, such as the advent of E-money, have had an impact on fundamental central banking concerns, particularly on the definition of “money”, the transmission mechanism of monetary policy and the traditional intermediation function of banks and deposit taking institutions. These, in turn, will likely make the conduct of monetary policy more difficult and challenging. Monetary authorities will need to stay on top of these developments. Finally, let me conclude by hoping that I have left you with some food for thought for your further deliberation and discussion. May I also take this opportunity to thank the organizers of the Conference on Finance and Capital Markets for inviting me here today. 3  BIS Review 85/2000
Fernando Restoy: The Banking Union – achievements and challenges Speech by Mr Fernando Restoy, Deputy Governor of the Bank of Spain, at the closure of the presentation of the third report on the Banking Union “La Unión Bancaria: suma y sigue”, organised by Centro de Sector Financiero PwC and IE Business School, Madrid, 2 December 2015. * 1. *  *  Introduction  Let me begin by thanking the organisers, both PWC and the Instituto de Empresa, for their kind invitation to participate in the closure of this presentation of the third report on the Banking Union. We can hardly overstate the importance of the Banking Union for the European construction project and, in particular, for ensuring the sound working of Economic and Monetary Union (EMU). A true monetary union among sovereign States is not confined to the use of the same banknotes and coins in each country, nor to the denomination of trade transactions with the same metric. Monetary union requires the conditions in which liquidity is exchanged to be homogeneous across the entire area. Insofar as these exchanges are typically intermediated by financial institutions, by means of whose liabilities trade and financial transactions are settled, the appropriate flow of liquidity within a monetary union demands that the risk associated with these liabilities should not depend on the location of the institution issuing them.

The  BIS Review 30/2009  1  combined effect now is a painful deleveraging process that drives down asset prices, shrinks balance sheets, and feeds straight into the real economy in the form of credit contraction. Adverse feedback loops between the financial system and real economy have become entrenched. The Eurozone, which accounts for the second largest share of global GDP, has deep financial linkages with the US. Through these linkages, financial stresses were transmitted across the Atlantic rapidly. Many banks in Europe, as well as other financial institutions such as insurance companies and asset managers had large exposures to US assets. Many were over-leveraged and dependent on benign conditions for liquidity to continue flowing. So they got sucked into this vortex. We have a similar story of credit evaporating and strains being felt in the real economy. Over in Japan, recovery from a decade of economic growth stagnation has been derailed by the collapse of external demand with serious knock-on effects on domestic activity. Japan’s capacity to support the growth of other advanced and emerging economies is now diminished. So a global recession is now upon us. The three economic giants – the US, Europe and Japan – together accounted for just over 50% of global GDP in 2007. All three cylinders are sputtering. The impact has already been felt worldwide. How long and how deep this recession will be is still an unknown, though many economists are predicting a long L-shaped trajectory.
In general, credit terms should be calibrated to the quality of the information provided by the hedge fund counterparty. To the extent this is done generally across those funds that are less transparent, have weak risk management disciplines and/or inadequate operational infrastructure, they will be able to take on less leverage, which would limit the potential risk they may pose in a disruptive event. As these points suggest, it is not enough to simply manage the firm’s direct potential future credit exposure to hedge funds within prudently low limits. This has to be complimented with a more exacting approach to the evaluation of a firm’s overall vulnerability to market risk that includes full consideration of the potential impact of a large shock, including one that involves hedge funds. Alongside these enhancements to risk management practices, we believe that market participants should also intensify their efforts to improve the underlying infrastructure of the markets in which hedge funds are important. Weaknesses in close-out procedures for OTC derivatives were among the areas singled out by the CRMPG for collective action in the wake of LTCM, and important progress has been made in this area since. In addition, there are potentially valuable efforts underway to standardize documentation and improve the confirmation and execution process in these markets.

But looking forward, given the size of the OTC derivatives markets and the participation of hedge funds in those markets, it is worth reflecting on whether central counterparty clearing arrangements for the more standardized portion of the OTC derivatives market could play a useful role. Certainly, there are many challenges associated with such a project, and its potential to mitigate risks effectively would have to be clearly demonstrated, but surely it is worth looking carefully at whether that or similar efforts could provide meaningful improvements to the core infrastructure of what is undoubtedly a systemically important set of markets. Taken together, these areas of focus are important to ensure that there is adequate capital not just against growing direct exposures to hedge funds, but the indirect exposures that could affect market conditions and firms’ positions in a more stressful environment. We believe that the dealers that act as major counterparties to hedge funds have a collective interest in improving market practice in these areas. This is a good time for them to reassess how practice has evolved against the standards set out by the CRMPG in 1999, and to examine whether the bar established at that time is appropriate for the conditions that exist today. It took a major market event to expose the extent of weaknesses in market practice that prevailed prior to 1998 and to catalyze improvements across the financial community.
From my discussions with my supervisory colleagues in the region I know that they are serious in their efforts and I wish them every success. The lessons for Hong Kong 16. This sentiment recognizes that it is also in Hong Kong’s interest that financial stability returns to the region. As I have already indicated, one of the special features of the Asian disease is that it has been extremely contagious. And although the Hong Kong economy and financial system have remained in pretty good health, they have not been totally immune. This suggests that we too have lessons to learn from the crisis. 17. Hong Kong’s supervisory system does indeed compare well with international standards. A review which we conducted last year showed that we had addressed all the areas covered by the Basle Committee’s Core Principles and that we fully complied with all but a few of them. In the latter cases, we are in partial compliance. This does not however mean that we can be complacent for the following reasons: • First, the Basle Core Principles are, as I have indicated, minimum standards and we should where possible be aiming for best practice • Second, the environment being faced by banks is changing at an accelerating rate and we need to be sure that our supervisory system keeps pace with this • Third, even our robust monetary system can be subject to external shocks and the banks need to take this into account in the way in which they manage their business.

BIS Review 28/1998  ˝  -5-  18. The latter point needs some further elaboration. As you will be aware, Hong Kong’s monetary policy is built around exchange rate stability in the form of the link between the Hong Kong dollar and the US dollar. This is backed up by the currency board system which requires the monetary base of the banking sector - the notes and coins in circulation and the clearing balances held with the HKMA - to be fully backed by foreign currency. When the Hong Kong dollar is under pressure as it was at the end of October 1997 and again in January of this year, the HKMA buys Hong Kong dollars from the banks in exchange for US dollars and the monetary base shrinks. This tightening of liquidity will in turn cause interest rates to rise, perhaps sharply so. This will choke off the inflows and restore stability to the exchange rate. 19. It is important to realize that this is an automatic process and that the HKMA has no room to maneuver to prevent the rise in interest rates from taking place. To do so would run counter to the basic principle of the currency board and would risk prolonging any attack on the Hong Kong dollar. 20. I think that there is now a better understanding of how the currency board system works. In addition, our determination to adhere to the system and to defend the linked exchange rate has been clearly demonstrated.
On its own, the Act runs to 848 pages – more than 20 Glass-Steagalls. That is just the starting point. For implementation, Dodd-Frank requires an additional almost 400 pieces of detailed rule-making by a variety of US regulatory agencies. As of July this year, two years after the enactment of Dodd-Frank, a third of the required rules had been finalised. Those completed have added a further 8,843 pages to the rulebook. At this rate, once completed Dodd-Frank could comprise 30,000 pages of rulemaking. That is roughly a thousand times larger than its closest legislative cousin, Glass-Steagall. Dodd-Frank makes Glass-Steagall look like throat-clearing. The situation in Europe, while different in detail, is similar in substance. Since the crisis, more than a dozen European regulatory directives or regulations have been initiated, or reviewed, covering capital requirements, crisis management, deposit guarantees, short-selling, market abuse, investment funds, alternative investments, venture capital, OTC derivatives, markets in financial instruments, insurance, auditing and credit ratings. 8  BIS central bankers’ speeches  These are at various stages of completion. So far, they cover over 2000 pages. That total is set to increase dramatically as primary legislation is translated into detailed rule-writing. For example, were that rule-making to occur on a US scale, Europe’s regulatory blanket would cover over 60,000 pages. It would make Dodd-Frank look like a warm-up Act. (c)  The regulatory response  The density and complexity of financial regulation has had predictable consequences for the scale and scope of regulatory resources.

The fiscal surplus has reflected the simultaneous decline of public income and expenditure, respectively 5.3% and 5.5%, year on year. As regards expenditures, capital expenditures decreased whereas current expenditures increased during this period. Foreign trade data point to about 8.7% annual contraction of Albanian exports, in January, while imports annual growth rates slowed down to 4.5%. These developments in the foreign trade were materialised in wider trade deficit, which expanded by about 13.8% from a year  BIS central bankers’ speeches  1  earlier. The performance of this indicator during the first two months of the year may be subject to temporary factors. Its dynamic and developments in the future will be monitored. Foreign demand has been the main driver of our aggregate demand over the last two years and, in Bank of Albania’s view, will continue to provide small positive impact in 2012. Monetary developments were in line with the performance of the real economy. Their analysis confirms the existence of low monetary inflationary pressures on the economy. Broad money, monetary aggregate M3, decelerated its annual growth to 8.1% in January. On the demand side, this performance has been affected by low demand for funds by the public and private sectors in January. Annual private sector credit pursued the downtrend that had started in the last quarter of 2011, settling at 9.9% in January. Its performance has reflected lower demand for credit by both businesses and households.