samchain/econo-pairs-v1 huggingface dataset:
You have heard today of the important contribution that can be made by both formal and informal venture capital, as well as the role of financial institutions such as the London Stock Exchange. The accountancy profession itself also has a key role to play. As the Governor said in his speech to the Institute’s Annual Dinner on 28 March - I hasten to add in the serious part - we could not do without  1  BIS Review 39/2000  accountants. The accountancy profession provides financial information and frequently more general company advice to small firms. Alongside this there are various channels of government support. As outlined by David Irwin, the Small Business Service - in partnership with others - will provide this service in England and Wales. The role of small firms in creating the entrepreneurial economy It is now widely acknowledged small firms are a source of dynamism, wealth creation and employment. As such, they have not only made a significant and direct contribution to UK growth in the last 10 years but also to the development of a more flexible labour market, and the introduction of new technology and ideas. Market failures in the provision of finance to small firms could potentially, therefore, have far reaching consequences for economic performance. All firms need to work hard to overcome the information asymmetry which is inherent in any bank lending relationship, but which is especially challenging perhaps for the small company sector.

Invest wisely As we build up our savings, some of us may wish to invest part of it to obtain higher returns. Investments in bonds, equities, mutual funds (or unit trusts) and other financial products typically yield higher returns than bank deposit rates over the medium to long term. But they also carry higher risks.   For the majority of financial investments, neither the returns nor the principal amount invested are guaranteed. This means we could potentially get less than what we have put in. MAS has set stringent disclosure requirements for financial products. We also require that information be provided in a clear and concise manner, through the use of Product Highlight Sheets, for example. But the responsibility ultimately lies with the investor. Every month, MAS receives, on average, about 10 complaints from the public involving the sale of investment products. To be sure, some of them involve mis-selling or poor disclosure, for which the financial adviser or institution is responsible. But there many others – sad stories of people who have lost their money because they did not exercise basic due diligence:   people who were attracted by the lure of high returns and purchased investment products without realising their risks;    people who listened to tips about “sure-to-win” investments and invested large sums of money in them without reading the product documentation;    people who signed blank sheets understanding what they were buying.
Adherence to this requirement will inject transparency, accountability and ensure the integrity of the financial system. It will prevent criminals from hiding their ownership of companies and assets through complex methods and vehicles. I last spoke at this conference in 2011. The theme of the 2011 conference was “Raising the bar in enforcement and compliance”. Looking back and taking stock of the present state, I am glad to see that the whole industry has matured and progressed in such a significant way. This is validated by the NCC report that the sector’s control measures for both money laundering and terrorism financing are strong. Further, fines imposed by the Bank on financial institutions has decreased over the past few years, reflecting the progress made by institutions in ensuring adequate controls. I hope the industry continues to strengthen its capability to fight crime. Another area in which progress has been made is the priority accorded within each institution to compliance. The focus of the compliance function has developed to become more comprehensive as financial institutions have a better understanding of the threats and risks involved. With increasing awareness of the direct and indirect costs of non-compliance, the compliance function is no longer viewed only as adherence to rules set by regulators, but is instead, an integral part of the organisation’s culture. The very fact that the theme of this 4/5  BIS central bankers' speeches  conference is on reshaping the future, governance and transparency is a testament to this.

Given the small and externally-oriented nature of the Hong Kong economy and its role as an international financial centre, maintaining exchange rate stability against the US dollar, which is the most commonly used currency for conducting international trade and finance, is conducive to the long-term economic development of Hong Kong. Second, on linking the Hong Kong dollar to the renminbi instead of the US dollar: this is inappropriate and technically not feasible. The US dollar is still the most appropriate anchor currency for the Hong Kong dollar, taking into account factors such as international usage, business cycle synchronisation between Hong Kong and the US being higher than that between Hong Kong and the Mainland, the different stages of economic development between Hong Kong and the Mainland, and the fact that the renminbi is not freely convertible. Third, on inflation and the linked exchange rate system: it is true that the weakness of the US dollar and the strength of the renminbi may increase inflationary pressures in Hong Kong, but rapid growth in productivity in Hong Kong and diversification of sources of imports can in part mitigate the inflationary pressure. HKMA research showed that a 10% appreciation in the renminbi would increase Hong Kong’s inflation rate, as measured by the CCPI, by roughly 0.4 percentage points. Furthermore, only about 9-17% of imports retained in Hong Kong come from the Mainland.
Our current account surplus has been in the positive for five consecutive years and is projected to be around at 34.5 billion USD this year, or around 6.4 percent of GDP. In addition, the economy has low dependency on external financing, with external debt to GDP ratio below the median level of emerging market economies2. (2) The banking sector is robust, with high capital adequacy ratio and stable domestic funding. At the end of 2018, the capital adequacy ratio of the banking system stood at 18.3 percent, a level well above minimum international requirement and among the highest in the region. Meanwhile, loan growth has picked up in line with our economic expansion while level of non-performing loans has stabilized. (3) The fiscal position remains strong and has sufficient space to support the economy in case of downturn. Public debt to GDP is around 2 Thailand’s external debt to GDP is 35.3 percent as of 2018 vs the median of 37.8 percent for EM economies. IMF data calculated by BOT  5/9  42 percent, a level below the commonly accepted threshold of 60 percent. Meanwhile, the enactment of Fiscal Responsibility Act would ensure fiscal discipline through improvement in spending transparency and limit conduct of open-ended populist policies. (4) Domestic price pressure remains moderated and stable, largely as a result of slow recovery in the global oil price and positive structural factors, such as globalization and technological advancement. Low and stable domestic price pressure will continue to provide favorable environment conducive for economic activity.

Zeti Akhtar Aziz: Enhancing the soundness of the banking sector The New Capital Accord Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Risk Management Seminar on the New Capital Accord (Basel II), Kuala Lumpur, 15 April 2004. *  *  *  Distinguished guests, Ladies and Gentlemen, It is my pleasure to welcome you to the Risk Management seminar on Basel II organized for the directors and senior management of banking institutions. The objective of this seminar is to promote greater understanding of the impending changes to the international capital adequacy regulation. Given the importance of the subject and its implications on the banking industry, it is important for the industry to understand the intentions and the challenges arising from these changes so that the necessary action may be taken in a manner in which the benefits to be derived from it can be maximised. While there has been global acceptance of the broad principles of the new accord, differing implementation approaches are being adopted by different countries. I will take the opportunity to discuss the new Accord from our perspective and the approach that will be adopted for Malaysia. This seminar will provide you with the opportunity to engage in discussions on the issues concerning the new Accord. Philosophy and objective of capital regulation A well functioning and efficient banking sector is vital to the economic growth process. The banking institutions perform the important intermediation function of mobilizing funds to finance productive activities.
One is that I had difficulty in accepting the idea that economic relations we have observed for decades, perhaps even centuries, could suddenly cease to hold. Technologies do change, very quickly at times, but the fundamental economic relationships are not easily overturned. Another reason is that history shows that talk of a new economy tends to coincide with periods of strong economic 1 speculation. Information technology will be a major engine for growth The fact remains, however, that in recent decades we have seen notable technological breakthroughs with far-reaching economic impacts. To understand what this has meant, we need to go back further than to the birth of the internet. The crucial advance occurred perhaps in the 1970s, when it was suddenly possible to construct a complete computer as a tiny chip - a microprocessor. Microprocessors in turn were the fruit of development work lasting several decades. Today computers have innumerable applications, partly because they have become so much cheaper. In the past four decades computer prices have dropped by an average of around 20 per cent a year. So a computer with a price tag of 10,000 kronor today would have cost almost 50 million kronor in the early Sixties. 1  See Shiller, J. (2000), Irrational Exuberance, Princeton University Press, Chichester, West Sussex. BIS Review 10/2001  1  This has paved the way for computerisation in a wide variety of fields, besides involving something of a revolution in methods of production and patterns of consumption.

6  BIS Review 36/2004  Both the formulation of a precise inflation target and the aim of striking a balance between the objectives of stable output and inflation could invite a repeat of earlier attempts at fine-tuning. But here it is important to adhere to the lessons drawn from the 1970s and 1980s. The uncertainty underlying the decisions taken must not be underestimated. There is uncertainty as to the current state of the economy, the underlying driving forces and the economy’s functioning, including expectations formation and the impact of monetary policy. Economic models are tools that help us address some of this uncertainty. Inflation targeting places new demands on our models and our use of models. In an uncertain world, risk analysis is a very important part of the work. The aim is as much to understand the economics of the forecast as to produce quantitative estimates. In central banks, dramatic developments in macroeconomic modelling have taken place over the past 10 years. At Norges Bank, we have started work on developing modelling tools for inflation targeting. We are inspired by and work closely with other central banks and the IMF and draw on our long experience of model building in Norway. We are working on several different models and we are assessing other building blocks that we need to support our work in setting interest rates under an inflation targeting regime.
But, one thing I would flag is that, on my read, recent fiscal announcements will, on balance, provide a stimulus to demand relative to supply in the short to medium term. We will come to our more complete assessment in November. But I recognise that, as of today, November might seem a long time away. For algorithmic traders, even nanoseconds can represent a long time. The media or political cycle operates over a matter of hours. And, as we saw yesterday, acting to sustain orderly markets may also require action at short order. But monetary policy needs to be framed on a more considered or lower frequency basis, reflecting both the famously ‘long and variable lags’ in the transmission of monetary policy to price developments, as well as the need to distinguish signal from noise in the flow of incoming data and analysis. So the following question arises: if we need to wait for November for our comprehensive assessment, what happens in the meantime? Page 6  During the intervening period, we need to rely on our communication about the economic and policy outlook through remarks like these, and its transmission to market developments, the real economy and wage and price setting behaviour, via market participants’ expectations. That process, in turn, relies on the underlying macro and market institutional framework. Essential to maintaining a credible and stable institutional framework within which the Bank’s monetary policy can operate effectively are: clearly defined responsibilities; clearly identified objectives; and respect for institutional independence.

I have received helpful comments from Andrew Bailey, Sarah Breeden, Hugh Burns, Fabrizio Cadamagnani, Jon Cunliffe, Josh Jones, Andrew Hauser, Dave Ramsden, Martin Seneca, Fergal Shortall, Daniel Walker, and Sam Woods for which I am most grateful. The responsibility for all remaining errors is my own.
As we can see, both theory and practice have moved, in the last two decades, full-circle: from managed float to corner solutions and back again. Under these circumstances, the best a policymaker can do is to stay open-minded and assess the merits of each individual theory in the context of the country’s particularities. 3. Capital controls vs. free movement of capital flows  Now let me briefly turn to capital flows and related issues. The crisis that broke out in 2007 entailed a massive reduction in private capital flows, which had previously generated developments that led to the accumulation of imbalances conducive to the crisis itself. These imbalances were manifest in the overheating of emerging market economies, the over-appreciation of currencies, the swelling private foreign debt, credit and asset prices, as  4  BIS central bankers’ speeches  well as in the wider current account deficits and the larger currency mismatches in the private sector. However, towards end-2009, the global economy looked poised to exit the financial crisis and capital flows to emerging market economies in Latin America, Asia and Central and Eastern Europe seemed to rebound. This trend looked set to strengthen and expand, in Romania as well, in the early months of 2011. Against this background, the idea of introducing capital controls in emerging market economies has gained increasing support. Even the IMF, which has historically opposed controls, has softened its hard-line approach.

The last three topics are especially relevant in the context of the financial crisis, referring to the consequences of having a majority foreign-owned banking system, the rethinking of central bank objectives with special attention paid to financial stability and, finally, the choice of the optimal inflation target. 1. From monetary anchors to inflation targeting  During the nineties, giving up the intermediate objective as an anti-inflationary anchor in favor of direct inflation targeting marked a major change in the way of thinking the monetary policy framework around the world. BIS central bankers’ speeches  1  Monetary strategies based on a nominal anchor, be it the exchange rate or a monetary aggregate, still prevailed in the early nineties. While exchange rate pegs are currently still in place in some countries (and I will come back to this later), monetary targeting slid into oblivion. But, at the time when the National Bank of Romania had to choose a strategy for conducting its monetary policy, monetary targeting was not yet out of fashion. Moreover, this strategy was adopted and implemented in the context of the stand-by arrangements signed by the Romanian authorities with the IMF, which stipulated the monitoring of monetary aggregates developments. The same as with fiscal and income policies and with structural reforms, the programs agreed upon with the IMF were a strong anchor for coherent policies in the nineties. Another reason for choosing monetary targeting was that the alternative strategy, i.e.
Under normal circumstances, we can respond by adjusting interest rates, without intervening directly in the foreign exchange market. This approach has proved to be useful and, in terms of our mandate, suited to the purpose. It allows the SNB to conduct a monetary policy that is optimally tailored to the country’s needs. Despite the positive experience with flexible exchange rates, in certain situations it may be necessary for the SNB to intervene in the foreign exchange market, in order to influence exchange rate movements directly. This is the case when the interest rate as a tool proves insufficient to ward off a threat to macroeconomic stability in Switzerland (cf. chart 10). The difficult but crucial task of the SNB is to identify under which circumstances a Swiss franc appreciation may lead to a destabilisation. A key element in this evaluation is the speed and magnitude of the appreciation. A rapid and sharp appreciation can result in a substantial fall in the price level in Switzerland. Such a price decline can also cause longer-term inflation expectations to turn negative. Expectations of longer-term price declines can, in turn, lead to inflation being persistently negative or – in the worst case – to a downward price spiral. This is particularly a risk when the speed of an appreciation leaves companies virtually no time to adjust, and the appreciation is thus combined with widespread upheaval in the real economy. These destabilisation risks are all the more severe if the global economy is in crisis.

However, the aid measures promised so far have not succeeded in reassuring the markets. 3  See Reinhart and Rogoff (2010). BIS Review 56/2010  3  Several other countries also have serious problems with their public finances Other countries are also experiencing serious problems. Among the euro countries, apart from Greece, these are mainly Portugal, Italy, Ireland and Spain. Critical conditions for assessing how these countries shall attain a sustainable development of their public finances in the future are the current size of the public sector debt in relation to GDP, the credibility of their future fiscal policy and the conditions for growth in domestic and external demand. The larger a country’s debt in relation to its GDP, the greater its interest expenditure and the closer it is to an untenable situation. Among the countries I just mentioned, Italy has the largest burden of debt, with a gross public debt similar to that of Greece at just over 100 per cent of GDP. The other countries are not quite so vulnerable, but their debts are rising rapidly. (Slide: Gross public debt in Portugal, Ireland, Italy and Spain). The credibility of their future fiscal policy is a decisive factor, not least for the rate of interest they are forced to pay on their public debt. Here, earlier patterns of balance or deficit play an important role, as does, of course, the content of their fiscal policy consolidation programme.
The crisis has also highlighted the advisability of designing and setting in place a macro-prudential supervisory framework concerned with overall stability and which thus complements individual bank-focused microprudential supervisory conduct. Macroeconomic strategies should likewise be reviewed in light of the shortcomings they have evidenced, in order to detect and correct in time the imbalances I referred to earlier. In the case of fiscal policies, greater emphasis on the sustainability of public finances in the medium and long term would have provided a more powerful countercyclical component to offset excessive private-sector spending. As regards monetary policy strategy, careful analysis should be made of the role to be played by the identification and appropriate coverage of risks to stability that originate, develop and, in the worst-case scenario, materialise in financial markets. Fiscal and monetary authorities also share the substantial challenge of designing “exit strategies”. These allow, once the crisis has been overcome, for the winding down of the various measures that central banks and governments have adopted in the face of the risk that this crisis might bring the world economy to the verge of a depressive spiral with grave consequences. The raft of measures adopted has been wide-ranging, and many are based on common principles jointly agreed upon in different international fora. Multilateral cooperation is crucial for successfully tackling a global crisis. Further headway must thus be made along these lines, harnessing opportunities such as that provided by the G20 meeting in London last April.

Bank customers can process an e-Cheque any time. II. As physical boundaries and barriers are no more, both payers and payees can enjoy the e-Cheque service with the convenience of mobile phones or Internet banking platforms anywhere. III. E-cheques are quick and easy to use. In just a few simple steps, the payer can issue an e-Cheque via an Internet banking platform. Upon receiving the e-Cheque, Adopting a highly secure digital signature, e-Cheques remove the need for the payer’s handwritten signature as required with paper cheques, reducing the risk of forgery. V.  Unlike certain electronic payments or funds transfers, the payee does not need to disclose his bank account number to the payer in order to receive an e-Cheque payment, which means greater privacy protection. For those payees who have more than one account, he can also enjoy the flexibility of deciding which account to deposit an e-Cheque into. VI. Corporates and institutions which issue a huge volume of paper cheques can save substantial sums on printing, processing and mailing those cheques. In Hong Kong, listed companies process over 2 million physical cheques each year for dividend payments. Both paper consumption and mailing costs can be reduced substantially each year if shareholders agree switchinig to e-Cheques to receive these payments. Looking forward 4. The e-Cheque is only at the beginning of its development.