samchain/econo-pairs-v1 huggingface dataset:
Since the introduction of the euro in 1999, the average interest rate on three-month euro deposits has been 3%, while the three-month Swiss franc rate has been 1.4%. If we assume a difference of about 1% in the expected level of inflation between the euro area and Switzerland, the Swiss real interest rate advantage accounts for 60 basis points. •  Switzerland is also a firm believer in flexible exchange rates. Our monetary regime has been unchanged since 1973, when the peg to the US dollar was removed. Today, the Swiss franc is freely determined by market forces. Our last foreign exchange intervention dates back to 1995 – and that was a coordinated action in favour of the US dollar! •  And what about the European issue? As you know, we are not a member of the European Union; nor do I foresee Switzerland joining the EU in the near future. The Swiss people remain sceptical about the efficiency of the Union and are very aware of what they stand to lose in terms of political rights and economic freedom in the event of integration. But our relationship with the EU is of key importance, since Europe accounts for two-thirds of our foreign trade. In order to secure our access to the European market and to avoid discrimination, we concluded two packages of bilateral agreements with the Union – in 2002 and 2004.

Our projections have not changed: the Bank of Albania expects economic activity to improve progressively over the medium-term horizon. This performance will continue to be sustained by stimulating financial conditions and growth of private domestic demand. It will contribute to the improvement of economic and financial equilibriums in Albania and to the return of inflation to target within 2018. BIS central bankers’ speeches  1  The realisation of these objectives requires maintaining the actual mix of economic policies. The monetary policy will maintain the stimulating trend over the medium-term horizon, while the intensity of the monetary stimulus will not decrease for some quarters ahead. On the other hand, the fiscal policy should maintain its consolidating trend. The balance of risks related to expected developments remains on the down side. The expansion of economic activity continues to be decelerated by the unfavourable economic performance in the euro area, which is further complicated by the Brexit, as well as by the behaviour of economic and financial agents, who continue to show reluctance in undertaking long-term business projects. Against this backdrop, the Bank of Albania deems that economic policies and structural reforms should focus on: –  Maintaining and further strengthening the economic and financial stability. –  Accelerating structural reforms, especially with regard to: improving the legal setting and business climate; encouraging domestic and foreign investments, completing the infrastructure; enhancing productivity; and, improving the labour market. –  Expanding crediting, to support the country's medium-term development.
Financial imbalances or a bubble may develop as a result, further complicating policy decisions. Thus, the BOT will continue to closely monitor credit developments and household’s debt servicing ability, especially for the lowerincome group. Another key challenge will be the management of volatile capital flows, and implications of exchange rate movements on the real economy. In meeting this challenge, the BOT has at its disposal various policy options, ready to be deployed under different circumstances. The recently announced Capital Account Liberalization Master Plan was aimed in part to encourage Thai companies to diversify their investments abroad, including towards neighbouring countries, and operating their businesses more efficiently using local currencies. The initiative would help foster more balanced capital flows, and promote financial market development that facilitates the regional integration under the ASEAN Economic Community (AEC) in 2015. We will continue to support businesses in strengthening their abilities to cope with exchange rate fluctuations. Financial institutions policy It is now universally recognized that economic growth and financial institution development must proceed hand in hand. The development of financial institutions in Thailand has indeed seen a significant and continuous progress, which has greatly helped support economic activities over the years. Still, many steps must be taken to further enhance the financial system and promote a more efficient intermediation. To deepen financial access, the BOT will cooperate with relevant agencies to allow commercial banks and non-banks to offer microfinance services, under the business model appropriate for risks and behaviour of the targeted group.

The recent period of low inflation may appear surprising from a cyclical perspective given that we have seen positive economic growth over the past four years, supporting a steady and gradual absorption of economic slack. This has raised the question of 1/4  BIS central bankers' speeches  which factors, cyclical or structural, may have played a role in the growth-inflation relationship. A comprehensive analysis by the Eurosystem has concluded that adverse cyclical factors have played a crucial role in explaining low underlying inflation. These notably consisted of dampened economic activity and high unemployment in the aftermath of the sovereign debt crisis, and subsequently subdued foreign demand and low oil prices.2 Yet, these factors are of a temporary nature and should not affect inflation over a medium-term horizon, even though they might impact on the speed of adjustment in inflation. Moreover, given the uncertainty surrounding the measurement of economic slack, the true amount may be larger than estimated, which could slow down the emergence of price pressures. This is particularly visible in the labour market, where wage growth has remained subdued despite strong employment gains. Nonetheless, these factors should wane as the economic expansion continues and unemployment further declines. In fact, wage growth in the euro area has already picked up recently and the labour market is expected to improve further.
As such, it is important for the industry to be aware of the trade-offs that come with adoption of these technologies. In pushing the boundaries of innovation, the industry needs to understand the risks that they pose. One example is the rise of mobile banking, e-payments and virtual assets. In Malaysia, mobile banking transactions have multiplied greatly, from around 500 million transactions in 2016 to almost 1.3 trillion transactions in August this year. The ubiquity of mobile internet and increasing dependency on our smartphones is expected to increase the importance of this medium. This technology fosters financial inclusion and offers potential for greater customer engagement. One such potential is in meeting and strengthening know-your-customer requirements. By leveraging on technology, financial institutions will be able to conduct e-KYC with greater efficiency while making the customer experience more seamless. One such solution is being tested in the Bank’s FinTech sandbox. Another area of growth comes from virtual assets. Between the end of 2016 to date, market capitalisation of virtual assets have grown by an extraordinary rate of over 1000% from around USD 20 billion to around USD 200 billion. While the technologies behind virtual assets may present great potential to revolutionise the way we conduct finance, the risks associated with virtual assets is an area that deserves much scrutiny. Features that may allow anonymous or pseudonymous transactions and easier crossborder transfers of values carry money laundering and terrorism financing risks that need to be addressed.

However, if we scale it to the country’s GDP, it was in the range between 6.1 to 6.9% over the past five years. Thus, despite the headway we have made in advancing e-payments, the persistency of cash among the public and small and medium sized businesses remains high. This opens up the economy to risks as cash is still being used by criminals to launder illegal proceeds, as we 3/5  BIS central bankers' speeches  have seen from some high-profile cases over the past year or so. Similarly, this is the preferred mode to finance terrorist activities, which will involve transacting in cash. Therefore, it is timely for us to look at ways to strengthen the controls to mitigate financial crime; namely the cash threshold reporting requirement. When we compare Malaysia with other countries, our current threshold is too high and disconnected from the size of our economy, especially relative to our purchasing power. Hence, it needs to be updated. In this regard, we would like to announce that we will be lowering the daily cash threshold report to RM25,000 effective 1 January 2019. This will bring the cash threshold report in Malaysia to be more at par with other countries. We do not anticipate any impact in terms of economic activity but an increase in effectiveness in taming the black economy that is still heavily reliant on cash transactions.
Zeti Akhtar Aziz: Global Findex Database 2014 – measuring financial inclusion around the world Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the World Bank’s Asian Region Launch of the “Global Findex Database 2014: Measuring Financial Inclusion around the World”, Kuala Lumpur, 20 August 2015. *  *  *  It is my great pleasure to be at this World Bank Asian Region launch of the “Global Findex Database 2014”. The Global Findex is one of the most comprehensive and authoritative source of financial inclusion data, that offers valuable insights into the state of financial inclusion in the world today. We are most honoured that the World Bank Group has selected our cosmopolitan city of Kuala Lumpur to host the Asian regional launch of the Global Findex. Financial inclusion, the provision of cost effective and quality financial services to all segments of society, has been acknowledged as an important structural enabler for economic development and progress. There is also a greater appreciation that development which empowers every individual to achieve their full potential raises the aggregate productivity and income, which in turn, supports a more dynamic and durable economic growth. Therefore, financial inclusion needs to be pursued more extensively beyond the underserved to achieve a more effective participation in the financial system and thus unlocking the further potential to contribute towards the overall growth and development of economies.

Their aggregated profit, down 36% compared with 2010 to 14 billion euro was substantially higher than the 2008 and 2009 level, and this allowed them to significantly bolster their own funds and to continue financing the French economy. The ACP’s vigilance has been decisive in helping the banks to maintain a satisfactory liquidity and solvency situation. In 2011, the ACP conducted 136 on-site inspections; the risk profiles of 700 institutions were analysed according to a harmonised procedure with, notably, a sustained pace of meetings with the senior managers and heads of the main business  BIS central bankers’ speeches  1  lines, thereby allowing the ACP to draw up detailed maps of the main risks to which they are exposed. During 2011, the two principal dimensions of prudential supervision – monitoring credit institution liquidity and solvency – required particular vigilance by the ACP. Credit institutions’ liquidity levels were monitored more closely, particularly in its dollar resources dimension; this is an area where the rationale behind the ACP’s being placed under the aegis of the Banque de France – which is responsible for central bank refinancing – is clearly demonstrated. By ensuring that the adequate risk provisioning, the reduction of management’s and market participants’ compensation and the allocation of the bulk of profits to strengthen own funds, the ACP has managed to ensure – over the longer term – the solvency of the French banking sector. Today, all the major banking groups have Core Tier 1 own funds ratios above 9%.
Jaime Caruana: The importance of transparency and market discipline approaches in the New Capital Accord Keynote speech by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Market Discipline Conference, Federal Reserve Bank of Chicago and BIS, Chicago, 1 November 2003. *  *  *  Overview Good morning. I would like to thank President Moskow, Malcolm Knight, and the staff of the Federal Reserve Bank of Chicago and of the Bank for International Settlements for organising and hosting this timely conference. It is a pleasure for me to join your discussion in Chicago today. I can think of few venues better situated to talk about markets and to explore the links between transparency, corporate governance, and the role markets can play to encourage prudent risk taking. Bank regulators in recent years have begun to view markets as an ally to our system of supervision. We have consequently sought to incorporate market discipline directly into the supervisory framework. Markets value well capitalised and well managed institutions as much as supervisors do, and can create rewards for banks that manage their risks appropriately. Yet banks can be very complex institutions and no market discipline is possible without widespread public access to timely, accurate, and comprehensive information on a bank’s exposures, its risk management processes, and its outlook for the future.

We have made a considerable effort to see that the narrower focus of Pillar 3 does not conflict with the broader accounting requirements, and we have liaised closely with our colleagues in the International Accounting Standards Board in pursuit of this objective. In fact, the Committee views Pillar 3 as a further refinement of the accounting standards requirements as they should apply to banks in the light of the specific risks that they face. The Committee is convinced that such specificity is both appropriate and necessary for prudential reasons. Market discipline, and hence financial stability, is strengthened when accounting and disclosure requirements reflect sound risk management principles and represent the control practices that banks adopt. Consequently, we recognise our responsibility to participate actively in the development of national and international accounting standards. When designing standards for the disclosure of components of capital, for loan reporting, and for other topics of mutual concern, we have sought out the views of accounting standards-setting bodies. This dialogue will continue. Where regulatory and accounting principles may not yet be fully consistent, we have sought to align our requirements as best as possible with international accounting standards and to resolve other matters reasonably and based on our understanding of the potential direction that accounting standards might take in the future. Because we recognise that there is still much to be done in this area we will continue to monitor pillar 3 in the light of accounting and market developments.
Many of these instruments, such as providing liquidity, are inherent or traditional while others, such as regulating and watching over payment systems, have developed in recent decades. The experience of the last few years has suggested a need to review or update the available instruments and to generate the operational conditions in which they can be used without delay when needed. During this latest crisis, for example, many central banks were not operationally prepared to receive collateral that was not in habitual use. It has also been suggested that there is a need to incorporate new instruments, principally with a macroprudential approach. However, in the case of some of these instruments – specifically, the use of regulation for countercyclical purposes – evidence is scarce and debate as yet inconclusive. However, beyond the contribution that a central bank can make, financial stability requires a comprehensive framework of financial institutions, policies and practices. The solidity of this framework and its consistency are crucial. Regulation and supervision, whether or not in the hands of the central bank, are critical, but so too are monetary and fiscal policy. The recent sovereign debt crisis in Europe, for example, has demonstrated the importance of fiscal conditions for financial stability. Market discipline and institutions’ management, although discredited by the crisis, are factors that can, with an appropriate regulatory framework and incentives, contribute to stability. The efficiency of regulation and supervision should, in the end, be reflected in good behavior by institutions and the proper functioning of markets.

In the case of foreign trade, it can require the repatriation and liquidation of export revenues and set a term for import coverage while, in the case of financial flows, it can impose reserve requirements as it, in fact, did in the 1990s. The BCCH is also authorized to accumulate and maintain international reserves. This has a direct impact on the country’s international liquidity position and, in the last instance, on the stability of cross-border financial flows and, therefore, the normal functioning of the domestic financial system. Since the BCCH’s origins, banking regulation and supervision have been entrusted to the Superintendency of Banks and Financial Institutions (SBIF) which depends on the government through the Finance Ministry. There is also a supervisor for securities and insurance and for pensions. This institutional arrangement has, in general, worked well over the years. In order to ensure the necessary coordination and communication between the different authorities, a committee was created a few years ago that brings together all the financial sector supervisors and in which the BCCH also participates. It has allowed the BCCH to make its view on issues of systemic importance known to the supervisors. Numerous initiatives implemented by the BCCH over the past decade underline its firm commitment to financial stability.
Actually, GDP data for the first half of the year and other indicators of economic activity suggest that demand for investment loans is on the rise and this outlook is consistent with the recovery in credit demand for investment purposes. Despite the relatively robust course of domestic demand, external demand remains subdued in line with the signals for a sluggish recovery in global economy. In other words, lingering problems in the global economy further accentuate decoupling between the pace of recovery in domestic and external demand. In this framework, the negative contribution of net exports  BIS Review 159/2010  9  in growth is predicted to increase. Moreover, forecasts for global economic activity, which have been revised in the last three months, indicate that there has been no significant improvement in the growth outlook of our trade partners (Figure 24). Therefore, revised forecasts were based on the assumption that external demand conditions would not display a significant change compared to the previous Report. Dear Guests, Continued recovery in economic activity fuelled by rapid growth in domestic demand underpins the improvement in employment conditions. Although the rapid recovery observed in non-farm employment since the second quarter of 2009 halted in the third quarter of 2010, leading indicators suggest that this is only temporary (Figure 25). Nevertheless, we expect unemployment rates to remain high for quite some time compared to the pre-crisis period due to the relative slowdown employment growth and high labor force participation rates (Figure 26).

At the wake after 2008 global financial crisis, regulators actively strengthened regulatory frameworks by reforming agenda such as strengthen market infrastructure, effective supervision, resolution and addressing systemic important institutions. From the banks’ point of view, the implementation of the new stronger regulations at the time of post-crisis has undoubtedly caused burdens to implementation. From the Centre for the  BIS central bankers’ speeches  1  Study of Financial Innovation (CSFI) survey, it indicated that, “regulation” is the greatest threat to the banking industry (from the survey, it climbed up from no. 6 in 2012 to no. 1 this year). As banks have encountered the higher costs to run businesses, some may seek for less regulated sectors and some seek for changes in their business models to deal with such a situation. It might be implied here that regulation is the key influence to changes. Therefore, it illustrates the need to find the right balance. As a consequence, regulators have to respond to those changes, updating and revising their regulatory frameworks to be more advance to keep up with the business models; hence, the regulatory schemes run consistently with the shifts of bank business models. 3. The main drivers  i. Current innovation and growth of banking sector  What is the main driver? I would like to pinpoint here that current innovation and growth of banking sector is one of the main drivers.
House prices increased faster than people’s incomes – from five times earnings in 2000 to over eight times earnings by 2007. As most people borrow to buy houses, this drove up outstanding household mortgage debt from 50% of GDP to around 85%. Household debt as a whole went from around 110% of household income to over 165%. Commercial property prices doubled and lending to support commercial property investment trebled. Should the Bank have tried to rein this in? The MPC’s objectives made no mention of financial stability. Much of the international thinking at the time was that central banks should not try to use monetary policy tools like interest rates to address asset bubbles and financial stability risks. Rather they should deal with the consequences of such risks if they crystallised. Or, in the jargon of the day, not to “pop bubbles”, but to “mop up” the mess if and when they burst. Responsibility for financial stability at the time was shared jointly the Bank, HM Treasury and the Financial Services Authority, the latter body responsible at the time for regulating banks and building societies. True, the Bank as whole did have an objective to contribute to the maintenance of the stability of the financial system as a whole. But it had no formal powers with which to do this. The FSA had powers but its focus was on individual institutions rather than vulnerabilities building across the system as a whole.

Monetary policy, may, as Jeremy Stein said when he was at the Federal Reserve, be effective in tempering financial stability risks because when we change interest rates it “gets in all the cracks”. But because it gets in all of the cracks across all of the economy, using interest rates to deal with financial stability risks can carry a high cost. It is a very blunt instrument that affects the economy as a whole. So although it is an effective line of defence, it should be seen as one of the last lines of defence. The question then becomes how do we ensure that it does not – because we lack other instruments – have to be used as a first line of defence? Here the financial crisis and recession has led to the development of what is now called “macroprudential policy”. 2  BIS central bankers’ speeches  In essence, macroprudential policy means using the regulatory “stance”, the underlying settings of the regulation of the financial sector, first to reduce the probability and impact of systemic crisis and then, by varying those settings, to counter emerging threats to financial stability. The Bank now has a sister committee to the Monetary Policy Committee, the Financial Policy Committee (FPC), with extensive powers to set and change the regulatory stance for the financial system as a whole in order to safeguard financial stability.