samchain/econo-pairs-v1 huggingface dataset:
These could be generated, for example, by a failure of a large and complex financial institution through payment and settlement  BIS Review 91/2001  3  systems and securities markets. We have also considered that the traditionally expressed arguments in favour of separating prudential supervision and central banking would not be very convincing in the specific euro area conditions. For instance, the concern of conflicts of interest with monetary policy and a lack of domestic accountability should not be overstated in our setting where monetary policy is centralised and supervision remains national. Still dispersed retail markets Despite the progress I have mentioned, the markets for retail financial services are still defined quite strongly along national, or even local, lines. In these markets, for instance, interest rates are based on local competitive conditions, as you know very well. However, this does not mean that there is no international competition. The fact that this Association has now existed for thirty years is a clear sign that financial institutions have already been international for a long time. Internationalisation of retail operations Until now, branches and subsidiaries abroad have been preferred to large-scale mergers as a strategy for entering foreign banking markets. The establishment of foreign branches and subsidiaries has increased steadily in the euro area. For example, the number of foreign branches of German banks in the European Union is now 59, almost double that of 1995.

If you get into higher value exports, you  create jobs which will give attractive wages, which will then make it much more likely that people who going to the Middle East, to Korea, to Italy, to wherever they are going now, would prefer to remain at home rather than migrate temporarily without their families, which will help address a number of social problems as well. Page 7 of 17  So it is a question really, of relative wages. If we can create higher paying jobs, and jobs in the export sector tend to be higher paying in other countries, particularly if they are created by FDI. Sri  Lanka does not have a labour shortage problem. It is just that the labour is in the wrong places. We have 27% of our workforce in agriculture, giving us 7% of GDP. It is politically difficult to move people from low-productivity, low-income agriculture to higher productivity, higher income activities, like the export sector. We have 15% of our work force in the Public Sector Service – 1.5 million people. It has increased from 700,000 in 2005 to 1.5  million. So there is plenty of labour. We have to create the  incentives and the types of jobs to get people into the competitive and modern sectors. And that’s to do with relative wages. And so we need to get the investment to get higher value employment. Penetrating global value chains and production sharing networks will also boost industrial exports.
This results in an output potential that over time satisfies demand without generating pressures in the economy. The equilibrium interest rate is determined by long-term phenomena associated with the structure of the economy, while the neutral rate is defined on the basis of its influence on pressures in the economy and thereby on inflation. In the long term, the neutral interest rate will correspond to the longterm equilibrium interest rate in the economy. The long-term equilibrium interest rate is determined by fundamental structural relationships in the economy, such as consumer impatience and the economic growth rate. Rising population growth means that a larger labour force must be equipped with real capital. Fixed investment and saving must increase. Higher population growth will therefore require a higher equilibrium interest rate. The higher productivity growth is, the higher future gains from today’s investments will be. This also provides the basis for a higher equilibrium interest rate. The long-term equilibrium interest rate cannot deviate too much between countries over time. With liberalised capital markets, capital will move towards those countries that can provide the highest return. Substantial interest rate differentials between countries cause fluctuations in the exchange rate and will not be compatible with a long-term equilibrium. Thus, we may refer to a global equilibrium interest rate for open economies, although perhaps with an added national risk premium. The interest rate has thus several roles to play in the economy and these roles should be fairly closely linked.

After 1945, with the introduction of the Bretton Woods system, a number of countries’ currencies were pegged to the US dollar, which was in turn pegged to gold until 1971. In many ways, US monetary policy and nominal interest rate levels functioned as a nominal anchor, and to a large extent governed global interest rates and inflation developments. Inflation has been particularly high in times of war. The 1970s and 1980s were characterised by fairly high inflation following the collapse of the Bretton Woods agreement, the oil price shocks and countercyclical policy. From the end of the 1980s, an inflation target for monetary policy has functioned as a credible nominal anchor in a number of countries, curbing the pace of inflation. To calculate historical real interest rates, an estimate must be made of expected inflation. Figures for actual inflation are normally used. Inflation expectations may deviate from actual inflation, especially in periods when the latter is subject to considerable fluctuation. From 1870 to today, developments in global real interest rates can be roughly divided into 5 periods. In the period 1870 – 1896, the real interest rate ranged between 4 and 5 per cent, and inflation fluctuated around zero. No new major gold finds were made in this period and the economy in general was exhibiting brisk growth. The real interest rate fell to about 1-3 per cent in the period 1897 -1913, reflecting some acceleration in inflation in this period. New discoveries of gold were again made in this period.
At that time the main negotiations between savings banks to draw up the new map of the sector had already taken place, and the FROB had committed its first aid in this connection. But some of the key elements to entrench the reforms and restore external confidence in our financial system were still pending. In fact, only a month later, in July 2010, the results of the stress tests of credit institutions, co-ordinated at the European level, were published; the Banco de España agreed to amend the regime governing accounting provisions; and the government approved a key reform on the legal regime of savings banks. Then, in February 2011, the Royal Decree-Law on the reinforcement of the financial system was enacted, and its rules are currently being applied. This year we can roundly state that the restructuring of savings banks has moved into its final stage. Thereafter, we will have a smaller set of institutions (from 45 original savings banks there are now 18) and one that is more efficient and better capitalised, capable, along with the rest of our banking system, of providing the intermediation services our economy needs for the recovery to take root and to contribute to our citizens’ well-being. *  *  *  The road is undoubtedly proving to be a long and complex one. Far behind us now is the summer of 2007, when the sub-prime mortgage crisis broke, spreading its risks across agents and markets through securitisations and credit derivatives.

Given this outlook, there was an evident need to restructure the sector and to support the process with an instrument that would help strengthen the solvency of those institutions that decided to pursue plans to improve their efficiency by means of mergers or other integration operations. In July 2009 the FROB was duly created. And over the course of 2010 it granted – or committed itself to – aid amounting to € billion for eight integration processes (although one of these did not finally go ahead when the initial Banco Base project collapsed) and for the restructuring of a non-viable institution, CajaSur, and its integration into BBK. The other savings bank officially intervened due to its lack of viability, Caja Castilla-La Mancha, received aid from the Deposit Guarantee Fund, at a time when the FROB had not yet been created. The year 2010 also saw successive episodes in which the public debt of euro area countries whose finances looked weak was punished. In spring we witnessed the Greek crisis and, at the end of the year, the Irish crisis. Although Spain’s macroeconomic indicators were not in the least comparable with those of Greece and Ireland, these episodes affected Spanish public debt spreads, owing to the uncertainty and to the difficulty ever-present in these situations of correctly assessing the information available. Later, into 2011, the country affected was Portugal, although at this stage of market tensions Spain was able to distance itself from the eye of the storm thanks to its resolute reforms policy.
The complication is that while most financial crises have been preceded by a credit boom, not all credit booms have been followed by a financial crisis. In fact, a credit boom has been followed by a financial crisis in only about 30 percent of the cases.6 Consequently, there are good booms, which don’t end in a crisis, and bad booms, or “booms gone wrong” that do end in a crisis. Given that credit booms often accommodate the real and pressing needs of a growing economy, simply preventing credit booms, if that were even possible, could have the effect of choking off desirable growth and thus be more costly for society over the longer run. Nevertheless, it is difficult a priori to distinguish good and bad booms, and, furthermore, to determine the mechanisms that generate crises when the economy has become vulnerable to one, that is, when the economy has high debt, a weakening macroeconomy, and other such elements. Even so, as previous studies have indicated, debt growth shifts the conditional distribution of economic outcomes to put more weight on events in which debtors must  5  See Borio, Drehmann, and Tstsaronis (2011), Schularick and Taylor (2012), and Reinhart and Rogoff (2011). 6  See Dell’Ariccia, Igan, Laeven, and Tong (2015), and Gorton and Ordonez (2015). BIS central bankers’ speeches  3  unexpectedly cut back their spending plans to repay debt, a vulnerability that is not present in the absence of debt.

The U.S. Treasury and the Federal Deposit Insurance Corporation extended guarantees for money market mutual fund shares, issuance of certain types of debt by bank holding companies and unlimited amounts of deposits in transactions accounts of commercial banks. Later, with the passage of the TARP legislation, the federal government addressed the excessive leverage and shortages of lossbearing capacity through the injections of capital in October 2008 and in April 2009 in conjunction with the Supervisory Capital Assessment Program, or stress test of the major U.S. bank holding companies. Ultimately, the 2007–09 crisis was about both leverage and liquidity in the financial system as a whole, and not only in the tightly supervised sector of banking firms. This suggests that official sector efforts should aim at forward-looking monitoring of financial vulnerability that take both leverage and maturity transformation into account, and to broaden supervision to include broader coverage of the financial sector. In addition to many other efforts, the Federal Reserve is conducting tests of exactly that sort through its capital and liquidity assessments, the Comprehensive Capital Analysis and Review, or CCAR, and the Comprehensive Liquidity Analysis and Review, or CLAR. CCAR is the Federal Reserve’s annual process for evaluating capital adequacy of large and complex financial firms under normal and stressed conditions. CLAR is the Federal Reserve’s annual, horizontal exam to evaluate the liquidity position and liquidity risk management practices of those firms.
The third open is open data because we realize that data will become an important asset. We have recently launched the D-Statement program that allows people to use the information at one bank to apply for financial services at another bank to improve access to services and competition. The other key element in the new financial landscape is sustainability which comprises two key components. One is the sustainability of the household debt. We have recognized that the household debt is very high in Thailand at about 90 percent of GDP, and hence it is crucial to design measures that attempt to put the household debt burden on a more sustainable basis. There is also another aspect of sustainability which is on the green and environmental issues. We are putting in place key building blocks that will be an essential part of the sustainability landscape. They include the green taxonomy and better disclosure to measure progress in the sustainability area. The last part of our financial landscape paper is about a more flexible regulatory framework. I think that this paper is important because it lays out where we see things evolving in the financial sector, and we would welcome your input. The paper is available on our website in both Thai and English. And if we look beyond the financial sector? I have talked about our policy responses to Covid-19 and then some of the longer-term issues we are addressing on the financial front through the financial landscape paper.

At the moment, the disruption of the global value chains globally and the growth of costs are creating interruptions in certain industries and are one of the major risks to the expected economic recovery. Hence, timely monitoring of all risks and their timely identification is a current priority, in order to reduce the burden on the banks' balance sheets. According to the latest EIB survey, some of the banks in the wider CESEE region expect a certain increase in nonperforming loans in the period ahead. Upward shifts are also possible in our country, but for the time being the stress tests show sufficient resilience of the banking system, in conditions of a strong regulatory framework, cautious behavior of banks and signs of economic recovery. The central bank's policy is currently relaxed, thereby contributing to favorable conditions of financing and economic recovery, in circumstances when we have enough comfort in the foreign reserves to respond to possible shocks. Of course, given the uncertain environment, we constantly and carefully follow the trends of all indicators, relevant to the monetary policy. At the moment, almost in all countries, the growth of savings increases the sources of funding for banks and their capacity to support the economy, especially at the points that will meet the new post-pandemic requirements and will increase the growth potential. The transition to a green economy is undoubtedly one of the issues that with the pandemic has moved from the margins to the core of priorities.
Zeti Akhtar Aziz: Mobilising ASEAN - building the future through partnership Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Wharton Global Forum Kuala Lumpur 2016 “Mobilising ASEAN: Building the Future Through Partnership”, Sasana Kijang, Kuala Lumpur, 11 March 2016. *  *  *  It is my very great pleasure to welcome you to Kuala Lumpur, Malaysia for the Wharton Global Forum 2016. Over the years, the Wharton community has very much recognised the potential of the ASEAN region as a growing force in the global economy. Indeed, in the recent five years, Malaysia is the third country in ASEAN to host this Global Forum (Bangkok in 2015 and Jakarta in 2012) and while central bankers have been a recurring feature at the Wharton Forum, I do however believe that this is possibly the first time a Central Bank is the venue and host to the Wharton Global Forum. We are really delighted to have this opportunity to be the host for this year’s Wharton Forum. I am particularly pleased to welcome you to Sasana Kijang, our Central Bank’s centre of excellence for learning and international cooperation. Indeed, the word ‘Sasana’ is a Sanskrit word that means a meeting place. The building Sasana Kijang which opened its doors in 2011 was envisioned to be a global meeting place for learning, international knowledge exchange, collaboration and cooperation.

This was because the ASEAN economies did not have the preconditions to achieve such a monetary union and that the effort to achieve such preconditions would involve immense costs to the economies. It was therefore concluded that the region would instead be better served by greater regional financial integration to achieve the very same objectives of a greater shared economic prosperity for the region. Additionally, in Europe, the integration process is facilitated by a more centralised governance structure led by supra-national institutions while ASEAN has built on institutional arrangements and mechanisms that would facilitate financial integration that leverages on a network of committees for the governance process. ASEAN has also adopted a more flexible path that allows member countries to participate in the financial integration process based on the state of readiness. Of particular focus is the harmonisation of regulatory standards and supervisory practices, which is reinforced by capacity building initiatives and technical assistance to bring all member states to a similar level. This inclusive approach ensures that all member states mutually benefit from the integration process. Additionally, regional cooperation in the areas of surveillance arrangements, financial safety nets, and crisis management has been intensified to secure financial stability during the integration process. While much remains to be done, significant achievements in regional financial integration have already been met in recent years.
In this regard, Bank Negara Malaysia has constantly strived to improve the payment system infrastructure in this country. Payment system efficiency has contributed towards making Malaysia a competitive and efficient economy. Cheque truncation Bank Negara’s effort in improving the payment infrastructure has been continuous. A significant milestone was achieved in 2009 when the e-SPICK system, an image-based cheque-clearing system was introduced. This modernized cheque processing in Malaysia. In essence, e-SPICK is a cheque truncation system which converted paper-based processing to electronic processing of cheques. Physical cheques are no longer sent to the issuing bank and the cheque clearing center for processing. Instead, images of cheques are sent electronically. Cheques which previously took up to 8 business days to clear (or T+8) can now be cleared within 2 business days (or T+2). This was done at a time when the country’s broadband penetration rate was low at 32% compared to 67% today. The move to transmit cheques electronically not only shortened the clearing times for cheques, but also contributed to a significant reduction in the banks’ cheque processing cost from RM6 to about RM3 per  BIS central bankers’ speeches  1  cheque1 today. With the lower cheque processing cost, the cost savings for the banking industry is estimated at about RM600 million2 per year. Migration to chip payment cards Another notable achievement in the country’s payment system infrastructure is in the migration from magnetic stripe payment cards to chip payment cards, where Malaysia was the first country in the Asia Pacific region to do so.

But to realize these benefits, we require more enhancements in payment infrastructure and a change of behaviour from users of payment systems. Global trend Globally, cheque numbers are falling. Based on the World Payments Report 2013, cheque usage in the mature Asia Pacific countries3 has registered the biggest decline. Over the period from 2010 to 2012, the average annual rate of decline was 10%. In Australia, cheque usage had declined by 60% in the past decade and at the current rate of decline, it is expected to reach near zero by 2018. In some European countries, like Norway and Sweden, cheques barely exist. Even in the US, which is sometimes referred to as the “Promised Land of the Cheque,” cheque usage has been declining at an average annual rate of 7% since 2003. 1  The cost saving is achieved mainly in the transportation cost to send the physical cheques to and from the clearing centres. 2  Refers to the average cost savings per year from 2010 to 2012, calculated based on the difference between the total cheque processing costs before and after the introduction of eSPICK. 3  Japan, Singapore, Australia and South Korea. 2  BIS central bankers’ speeches  Malaysia Malaysia however, remains a high user of cheques and cash despite the progress that has been achieved in the electronic payment infrastructure and the increasing sophistication of the Malaysian economy. Malaysia’s usage of cheques per capita is 6.9 compared to 0.2 in advanced countries4.
Andrew Bailey: Modern challenges for the modern central bank perspectives from the Bank of England Speech by Mr Andrew Bailey, Governor of the Bank of England, at the LSE German Symposium, virtual event, 5 February 2020. * * * It is a great pleasure to participate in the LSE German Symposium, and congratulations to the organisers for such an interesting programme. I want to take the opportunity today to step back a little and offer some thoughts on the context and framework of monetary policy. It is fast approaching twenty five years since the UK decisively changed its monetary policy framework and embraced the idea of an independent central bank with a mandate to maintain price stability in the form of an inflation target. Now, 25 years may not seem long in the broad sweep of history, but the history of UK monetary regimes points to a quarter of a century representing a relatively long-established one. Long may it last, because it has been successful, and it has delivered the much desired price stability. But the context in which policy is made does not stand still. The first decade of the MPC was with hindsight very benign – the impact of demand shocks to the economy was small, and supply shocks were typically in a favourable direction. The next decade and more has been quite different, with much larger shocks – a mix of both demand shocks and more adverse supply shocks.

The changes in the Swedish credit markets at the end of the 1980s and EU membership in 1995 made it easier for Swedish banks to expand onto an international market than it had been before. With hindsight, we can observe that  2 [12]  this took place at the same time as the existing bank regulation was not always able to adapt to new situations sufficiently fast. Financial crises are costly and affect us all Reducing the risk of financial crises is something the Basel Committee has worked on from the start. This work is important to all of us, as financial crises lead to substantial costs for society and often to permanent falls in GDP and employment. All too often it takes a very long time to recover from such crises. Even today, almost 10 years after the most recent financial crisis broke out, many countries are struggling with low growth, high unemployment and excessively low inflation. Looking at the historical development of GDP in Sweden, we see two clear falls: during the financial crisis in the early 1990s and during the most recent global financial crisis. The size of the fall after the most recent financial crisis corresponds to the total expenditure of all of Sweden’s county councils during one year. 1 Having said this, the conclusion is of course that the work on avoiding financial crises in the future is very important, not least to safeguard essential functions in society such as care and welfare, which we often take for granted.