samchain/econo-pairs-v1 huggingface dataset:
The growth momentum is expected to pick up further after China’ s announcement to formalise the use of RMB in foreign direct investment (FDI) in 2011. The upside is very significant as China’ s total FDI amounted to USD 116 billion in 2011, or RMB 750 billion equivalent. Besides facilitating the rapid development of the sukuk and dim sum bond markets, more importantly, the Pilot Platform will contribute significantly to financial stability in the Asian region. With the advanced economies undergoing structural adjustment and fiscal consolidation, the two-speed recovery will continue to entice portfolio flows into Asia. The key challenges for Asia are to channel such flows to productive use, reduce concentration in short-term positions of the more volatile asset classes, and to avoid such flows spiking up a  BIS central bankers’ speeches  1  property price bubble. Channelling the inflows into the bond market will serve these useful purposes as the investors are typically institutional investors who take long-term positions in strategic economic sectors. The global financial crisis has reminded us of the destructive powers of a liquidity crunch and the need for quick access to local currency liquidity in times of stress. In particular, the increased risk aversion arising from the recent financial crises and heightened alertness to the counterparty exposure have raised the demand for secured lending. As an illustration, the average tripartite collateral management deals outstanding administered by Euroclear Bank increased substantially from EUR 76 billion in 2001 to EUR 325 billion in 2011.

I see little evidence that inflation expectations might generate the start of a wage-price spiral for example. There are, however, immediate downside risks to the growth outlook. Although my central expectation is that the recent weakness will just be a soft patch, I do worry about a more  8  BIS central bankers’ speeches  prolonged weakness in demand, and in particular, consumer spending. That could knock the recovery off course for a sustained period, shifting the balance of risks around medium-term inflation to the downside. With that risk in mind, putting up Bank Rate could be exactly the wrong thing to do at this precise moment. If it further damaged consumer confidence then it could be the marginal factor that makes a soft patch turn into something worse. Of course, at some point, Bank Rate will have to rise: interest rates will need to normalise if, once the spare capacity in the economy has been eliminated, monetary policy is to be consistent with the 2% target. And because of the lengthy lags involved, Bank Rate will need to start the long journey back to more normal settings well before the degree of spare capacity is eliminated. But for now, I believe there remains time to allow the economy to recover before the eventual tightening begins. I am not trying to give any hints today as to exactly when that will be. I honestly don’t know. I can only continue to assess the data and the outlook as it changes, month by month.
Ladies and Gentlemen, Now let me turn to the issues that directly impact the banking industry: what might be the implications for financial institutions as a result of the measures discussed earlier, and what are the challenges ahead for the banking sector? I would like to point out a few: First, in the new financial landscape following the implementation of the Master Plan, we anticipate a structural change in the banking sector with more industry consolidation and emergence of financial conglomerates, embraced by the “One Presence” principle. Such processes should lead to larger size and falling number of financial institutions. Although not a sure ticket to success, size will allow the working of economies of scale and scope - to eliminate redundancies in administrative and operational functions, reduce costs from more diversified portfolio of clients and enhance income from provision of wider range of services. For the first time ever in the Thai banking history, banks will have the opportunity to do all these and grow through consolidation and/or forming a financial group. Up until now cost cutting and income enhancement, for example, were possible only through reorganization and re-engineering within the same organization. Of course, there were cases of mergers in the history, but they were mainly out of necessity to solve the problem of some weak  BIS Review 43/2004  3  banks, not as a calculated move for growth.

The logical question to ask here is how do we ensure that these positive developments will maintain their momentum and that the banking sector will remain strong and sound amidst a more liberalized environment, fierce domestic and external competition, and the advent of more advanced technology and financial innovation? We can wait passively for external forces to inflict changes on us, or we can chart our own path of development in anticipation of any change. The Asian crisis brought it to the fore that complacency when met with abrupt and radical reforms as a result of external forces could entail enormous output loss and social cost. Thus, we must do what we can to ensure that the banking system is up to meeting any challenge. This brings us to the second point I want to make - what the authorities intend to do to enhance the financial system’s competitiveness and its capability to withstand forces of change in this age of globalization. The authorities are quick to grasp the opportunity of healthy economic and banking conditions conducive to embarking on a structural reform, with the announcement of the Financial Sector Master Plan. Thorough discussion on the Master Plan will require a separate session of its own. So, let me just pick some of its key features that will have the most significant impacts on the structure and efficiency of the banking industry.
8 For example, the central banks in Chile, the Czech Republic, Israel and Mexico have been able to fulfil their tasks despite having worked with negative equity for long periods of time (Archer and Moser-Boehm, 2013). 4 [12]  Both the Riksbank’s own interest rate forecasts and the statistical methods suggest that the term premiums are now very low, and maybe even negative. Chart 3 shows the Riksbank’s and the Swedish National Debt Office's estimations of the term premium on ten-year government bonds based on similar statistical methods. These statistical methods, as I have said, produce fairly uncertain results, but they clearly indicate that premiums have fallen sharply in the last decade. 9 Both the Debt Office's and the Riksbank’s estimates indicate that the term premium is negative. If the premium really is negative, the Riksbank is expected to lose money on purchasing bonds and funding them at the repo rate. The Riksbank’s estimate points to the term premium currently being around -0.7 per cent on bonds with long maturities. 10 This would mean that the loss is expected to be around 0.7 per cent of the purchase price for each year of maturity. Since the average maturity on the bonds is about five years, this would mean that the losses are expected to be 3.5 per cent of the purchase price. Chart 3.

14 The Riksbank has communicated that the interval of 3.5 – 4.5 per cent is a reasonable assumption for the level of the long-term normal repo rate (Sveriges Riksbank, 2010). There is a great deal to suggest, however, that the normal level of interest rates has fallen (see, for instance, Armelius et al., 2014, and Holston, Laubach and Williams, 2016). For example, members of the US central bank’s monetary policy committee, the FOMC, have recently lowered their assessment of the level of the long-term US policy rate from just over 4 per cent to just under 3 per cent. 7 [12]  Chart 5. Yield in accordance with the forward curve but funding at the repo rate Per cent 4  4 Repo rate Forward curve  3  3  2  2  1  1  0  0  -1  -1 12  14  16  18  20  22  24  26  Note. Projection of the repo rate extended from the forecast in the Monetary Policy Report in Oc tober 2016. The forward curve is estimated on 26 October 2016. Source: The Riksbank  Changed interest rate environment directly impacts the Riksbank’s profit and dividend Up to now, the bond purchases have thus been profitable for the Riksbank. There are, however, good reasons to anticipate counteracting losses in the period ahead, but it is still unclear what the total effects on the Riksbank’s financial position will be.
The Bank is also reviewing the role of signing actuaries of general insurers which may be expanded to support the more robust management of risks by insurers, particularly with respect to underwriting and solvency assessments. The regulatory framework for takaful operators will also be significantly strengthened with the issuance of the Takaful Operating Framework by the end of this year. These developments will further strengthen the preconditions for the wider adoption of more principle-based regulations in the insurance and takaful sector. This will include our plans to proceed with the liberalisation of operating cost control limits as set out under our Financial Sector Masterplan. This move will usher in a more competitive environment within a stronger framework of governance, market transparency and prudential safeguards that has already been put in place. Finally, the work on amagalmating and modernizing the existing legislation governing financial institutions and intermediaries under the purview of the Central Bank is now in its final stages. A key extension of the proposed new legislation involves putting in place a more comprehensive framework for the effective regulation and supervision of financial conglomerates. This will include proposals to cover financial holding companies under an appropriate prudential regulatory and supervisory regime to ensure that the evolution of such complex financial groups does not, over time, pose a threat to financial stability and the safety and soundness of regulated institutions. The proposed new legislation will also provide strengthened legal powers to support more effective market conduct regulation and supervision. IV.

Page 5 of 14  1.2 The cyclical causes The primary mission of central banks, and of the European Central Bank (ECB) in particular, is to ensure price stability, notably by “smoothing” fluctuations in the economic cycle. They do this by setting the level of shortterm interest rates. In 1998, the ECB established a quantitative definition of price stability that it went on to clarify in 2003: to maintain inflation rates below, but close to, 2% over the medium term. More recently, other central banks have adopted this 2% inflation target, for example the US Fed in 2012 or the Bank of Japan in 2013. Our monetary policy has pursued this inflation target since 1999, with tangible results: inflation has remained close to target at an average of 1.7%. Page 6 of 14 Source: Eurostat  In the past decade, however, euro area inflation has been too low: 1.3% on average between 2011 and 2019, and 1.3% today [Core inflationv is also at 1.3%]. This weakness in inflation, which can be observed in the majority of advanced economies, has reignited the debate over the 2% target. Some, such as one of my great predecessors, Jacques de Larosière, say we should be content with the current 1%. Others, on the contrary, such as Olivier Blanchard, former chief economist at the IMF, are arguing for a higher target of up to 4%, which would leave more room to lower interest rates at the bottom of the cycle. It is tempting simply to ignore these arguments.
The other question mark concerns the differences between countries, with inflation of 1.7% in Germany. However, following a temporary peak in the first quarter, German inflation is expected to remain under 2% on average throughout 2017. Moreover the inflation differences between countries are consistent with their different national economic situations: growth and employment are also stronger in Germany; and these differences could even contribute, via their impact on relative wages, to correcting the imbalances, hence achieving greater convergence within the euro area. I can naturally grasp the concern of German savers in the face of low interest rates. It is not our aim to keep interest rates low for too long: low interest rates are not a goal in themselves; they are merely the necessary condition today for gradually returning towards our inflation target, and ensuring lastingly higher interest rates in the future, as Mario Draghi himself has put it. This movement has already started for long-term interest rates, with the 10-year Bund gaining nearly 60 basis points since the end of September. In December, in view of the progress achieved, we decided to reduce the volume of our monthly asset purchases from 80 to 60 billion euro. I also repeat that although I am convinced that negative interest rates have their use, they have clear limitations. But, although QE will obviously not last forever, we clearly did not discuss tapering or any exit strategy.

The euro area as a whole must aim for stronger and more lasting growth. Monetary policy naturally plays a vital role: it ensures the price stability required for growth; this is my first point. However, on its own, it can never be enough. To accelerate growth, the other economic policy levers must be brought into play; I shall come back to this later. Lastly, I will share some thoughts on the new international environment that heightens the urgency of taking action in Europe. ** 1. Our monetary policy is an asset for the euro area. I am perfectly aware that the ECB’s monetary policy is the subject of lively debate in Germany. I would first like to explain the reasons for this policy and what the situation is today. a) Why have we been pursuing this monetary policy? Our European Central Bank, it should be remembered, was constructed on solid foundations shaped according to the model of the Bundesbank and its successes. And I sincerely believe that our present monetary policy is very much in accordance with the German values that I fully share: independence, respect of the Treaties, price stability and a long-term approach. Contrary to what some critics suggest, our monetary policy is not some sort of Latin fantasy. It is decided collectively by the Council of Governors and we take the mission entrusted to us – ensuring price stability – very seriously. This means ensuring that inflation is neither too high nor too low.
And the City has continued to play a very active part in developing market activity in the new currency ever since. In many respects the City is already an integral part of the Eurozone. There were those who argued that the City would suffer if the UK failed to join from the outset. That clearly has not so far happened - quite the reverse. The argument now is that we will suffer if we don’t join reasonably soon. That’s not something you can actually prove either way. It’s not a general point about the City’s competitiveness. It’s euro-specific, with the implication that somehow or other obstacles will be put in our way. That possibility cannot be altogether excluded, but it would be illogical. Most of the people that I talk with recognise the positive contribution the City is making to the development of euro financial markets - it is in fact the most positive contribution that we can make from the outside. Of course it represents competition with other European financial centres, but at the macro-economic level such competition is a positive - not a zero - sum game from which borrowers and lenders and market intermediaries collectively all stand to gain. Certainly the City has benefited from the euro’s introduction, but not at the expense of other centres, rather alongside them.

I have no doubt at all that the City has the professional and technical capacity, and the self-confidence, to make a major contribution to this process. Let me touch, finally, Chairman, on financial globalisation more generally. As we have seen, the increasingly free flow of capital internationally has the capacity to contribute massively to the expansion of the world economy; but it can become distorted, with the risk of destructive volatility, which in turn can pose a significant threat to financial stability on a world-wide basis. Since the sudden onset of the Asia crisis some three years ago with its global repercussions there has been a 3  BIS Review 49/2000  huge international effort to reduce the risk of volatility. This has involved drawing up codes of best practice - covering everything from fiscal and monetary prudence, external balance sheet and liquidity management and greater transparency, to increased financial regulation as well as higher legal, accounting and corporate governance standards - which national governments particularly in capital importing countries, are being encouraged to apply. It has involved extensive and ongoing reviews of the financial infrastructure and regulatory practice also in creditor countries. And it has involved a continuing review of the role of the international financial institutions in preventing and managing international debt crises.
It would ensure regular supply of international liquidity, but could only provide partial protection against exchange rate volatility and valuation losses. There is an important trade off, there, which is the essence of a new “Triffin dilemma” and which cannot be avoided when looking at the public supply of international liquidity, whether by one nation or within a multilateral framework.   More fundamentally, a new currency which would provide a reliable store of value would, in fact, grant its holders a collective guarantee against exchange risk. That guarantee would benefit surplus countries and would be given by deficit countries. This issue was intensely debated when the substitution account was discussed and negotiated within the IMF, more than 25 years ago. It became clear, at the time that it would not be accepted by many countries unless some explicit, binding and symmetric rules on balance of payment adjustments were agreed upon simultaneously. Most likely, those questions would be raised again today and the creation of a new reserve currency would have to be part of a broader framework. Conclusion and provisional policy lessons Looking at the next decade, one can project two alternative – and polar – scenarios for the evolution of the international financial system. First, a scenario of progressive and partial fragmentation: no significant capital account opening would occur in many parts of the world.

A successful person is someone whose life is filled with purpose and joy, something that can be felt, shared and remembered not only by his family and loved ones but also by people around him. 9. Four decades ago, I was just like you: a young passenger, filled with hopes, curiosity and anxiety on what might lie ahead of me in this train journey. I have worked very hard in all these years. I have had a great ride and learned many things in this long and fascinating train journey, which by the way is still continuing. 2  BIS central bankers’ speeches  10. My fellow graduates, let me conclude by asking you this simple question: are you ready to embark on this fascinating train journey? If you are, hold on to your tickets and board the train, find yourself a good seat and fasten your seat belt. The train is about to depart now. Thank you very much. BIS central bankers’ speeches  3
Every firm that signs up to the FLS will be able to borrow an amount equal to at least 5% of their initial stock of lending on a standard definition for which the Bank already collects data.4 If the firm expands its lending over the period until end-2013, they will be able to borrow an equivalent additional amount too. There are therefore strong incentives for banks to boost lending because every pound of additional lending increases the amount that a bank can borrow cheaply by a pound.5 If a firm’s lending stock contracts, however, they can only access up to that 5% allocation and the price of the scheme will also be higher – rising linearly to a maximum of 150 basis points if their lending contracts by 5% or more. You might reasonably ask some questions: •  Why have we set this minimum access amount and complicated pivot in the price? •  How can we be sure that any increase in credit flows to where it may be most needed? In particular to SME businesses and to first-time home buyers. •  What if there just isn’t sufficient demand for credit? •  Won’t the banks just pocket the benefits of the cheap funding? Indeed those are some of the questions I am most often asked and where I want to put some answers on the record today.

I will leave this for the presentation by Kate Sweetman, the main author of this study. Broadly, the Asian Leadership Index demystifies that attributes leaders in Asia must develop if they are to engage the people they lead. The Asian Leadership Index does not propose a new leadership model. Rather, it identifies a number of areas for behavioural change that are needed based on the attributes that respondents indicated are currently missing in their leaders, reinforced with suggestions on how leaders might move forward with greater influence and impact. In conducting this research, it is hoped that it generates thinking on these leadership issues and contribute towards the development of the new generation of effective leaders in Asia. BIS central bankers’ speeches  1