samchain/econo-pairs-v1 huggingface dataset:
This is reflected by the fact that risk premiums on the interbank market, for example the TED and basis spreads, have fallen to levels close to those that applied before the outbreak of the  4  BIS Review 111/2009  financial crisis in both Sweden and abroad (see Figure 1). The stock market has also recovered strongly. Swedish companies have gradually found it easier to find funding on the international capital markets. But the situation is still strained. The interest rates offered to Swedish companies are high in comparison to the interest rates for government securities, that is the credit spreads are still high. In addition, corporate demand for export guarantees is much higher at present than has been the case previously. This indicates that the funding situation of the companies is still strained. International economic activity show signs of recovery Since the monetary policy meeting in July, signs have emerged of a slowdown in the economic downturn abroad. In some countries, there are now even signs of a recovery. This can be seen, for example, if we look at world trade, which has now begun to stabilise following the collapse at the start of the year (see Figure 2). Both outcomes and indicators of future economic growth have stabilised or shown an upturn in most regions. In Asia, in particular, growth has clearly picked up during the second quarter of this year (see Figure 3). This is because domestic demand in China has increased, which in turn stimulates exports in the Asian countries.

The problems concerning how measures of resource utilisation relate to the normal level are, however, greater. It is difficult enough to measure resource utilisation, but it is even more difficult to measure what its normal level is. Instead we have to weigh together different measures and indicators in a reasonable way. This of course provides greater scope for a wider range of assessments. The financial crisis has, not least, also raised the question of to what extent monetary policy should take financial stability into account. This is an important question that should be analysed further. Let me conclude by saying that it appears that the fiscal policy and monetary policy stimulation measures that are being implemented throughout the world are beginning to have the desired effects. The situation in the financial sector has improved and an economic recovery is now discernable. But it is still uncertain whether the recovery is stable or whether there is a risk that it will come to a halt as soon as the fiscal policy and monetary policy stimulation measures are phased out. Deciding the appropriate time to begin the phase-out of the now very extensive monetary policy stimulation measures is a major challenge. If the phase-out begins too early there is a risk that the recovery will come to a halt. If we wait too long, there is a risk that we will need to increase the repo rate very quickly in order to meet the inflation target.
Indeed, fintech is to take us beyond payments – faster and cheaper delivery of a far wider range of financial services. Increasing outreach and inclusion. Injection of new competition and transformation of the industry. We see this materialising. There are well over 12,000 start-ups disrupting the financial market globally with fintech investments reaching a record high of $ billion in 2019. The International Monetary Fund (IMF) reported that as of April 2019, there were around 200 fintech start-ups in Malaysia in the areas of payments, blockchain, and lending. CPA Australia apprised that over 75 per cent of Malaysian businesses have embraced at least one fintech product or service over the past 12 months, according to a regional survey. While the disruption continues, traditional financial institutions have been responding. Insights from PW C indicate 77% of traditional financial institutions are increasing internal efforts to innovate, 56% have put disruption at the heart of their strategy, and 31% are already purchasing the services of fintech companies. Many are also partnering with fintech companies. For Bank Negara Malaysia, we have also embraced the fintech agenda, setting up our internal Fintech Working Group in 2016, launching our Fintech Sandbox not long after that and finally, organising our very own industry conference – the MyFintech Week in 2019. To be future ready, we are highly committed to support the digital transformation of the financial sector. Earlier this year, we issued the e-KYC policy document to enable digital on-boarding of customers to occur anytime and anywhere.

It should be possible to develop better routines to reduce the need for collateral. A review of traffic patterns (in particular, for government payments) combined with other appropriate measures (such as exposure limits and collective collateral) should make it possible to reduce the collateral requirement substantially. Changes in the rules for collateralisation are the other promising area for achieving noticeable gains. Present regulations hamper ongoing changes in the amount that can be pledged in favour of Norges Bank. Banks are unable to alter the collateral which has already been furnished (the previous day) in favour of Norges Bank. If it turns out on the day of settlement that too little collateral has been furnished, banks are not able to increase the amount of collateral - even though they have securities available in the VPS.13 This sluggish system - resulting from the Act relating to the Norwegian Central Securities Depository - prevents banks from adjusting their collateral throughout the day. It goes without saying that this is not an optimal situation, which we have already pointed out. The matter is under consideration in the VPS legal commission, and we are hoping that a solution is imminent. Let me now turn to the responsibilities and roles of the central bank and the banks in the payment system. 4. Responsibilities and roles in the payment system  The primary responsibility for the development of the payment system lies with, and must lie with, the banks. Self-regulation is still the rule.
In my opinion, the leverage ratio is a welcome complement to the risk-based capital measure. The Basel Committee’s agreement means that we now have a common method for calculating the leverage ratio, which we did not have before. This is good. The agreement on the leverage ratio is therefore a major step forward. The regulations for the structural liquidity measure, the NSFR, complete Basel III The fourth measure in Basel III is thus the structural liquidity measure, the NSFR. The aim of the NSFR is to ensure that the banks fund their operations with sufficient long-term and stable funding so as to reduce the risk of being hit by funding and liquidity problems. The NSFR thus constitutes an important complement to the short-term LCR measure that aims to protect the banks when, in some sense, liquidity stress is already a fact. The NSFR is the component of the Basel III framework that has not yet been finalised. Finalising the regulations for the NSFR is one of the Committee’s most important priorities for 2014. This will in principle mark the completion of the work with the entire Basel III regulatory framework. As part of this work, the Committee recently published a revised proposal for the NSFR for stakeholders outside the Committee to comment on. In connection with this the Committee reiterated that it intends to introduce the NSFR as a quantitative requirement from 1 January 2018.

Moreover, the collapse of the investment bank Lehman Brothers demonstrated how difficult it is to manage very large institutions that experiences problems and to avoid the problems spreading to other banks and having negative repercussions on the financial markets. The intention is that Basel III should capture the risks in the banking system better than the previous regulatory frameworks and thereby reduce the likelihood of new financial crises. Basel III is thus a reaction to the fact that previous regulations were inadequate. The Basel III regulatory framework was published for the first time in its entirety in December 2010. Since then, the Basel Committee has worked to finalise the regulations. Beginning in 2013, Basel  BIS central bankers’ speeches  1  III will gradually replace earlier Basel regulatory frameworks. In Sweden, Basel III will be incorporated through EU legislation. More capital and larger liquidity buffers will increase resilience Put simply, Basel III is founded on four measures that act as instruments for assessing various risks in the banks. On the basis of these measures, the framework then stipulates certain minimum requirements, for example how much capital a bank must hold. The first measure is the risk-based capital measure, which is what we normally refer to when we speak about capital requirements. The risk-based capital measure was already a part of previous regulatory frameworks, but in Basel III it has been made much stricter. In addition to this there are three new measures: a complementary capital measure, the leverage ratio, and two liquidity measures.
1  4  Regional Indexes of Coincident Economic Indicators  BIS central bankers’ speeches  This has happened without much help from the securities industry (Wall Street), a key driving force behind past local economic recoveries. The strongest job growth has been in professional and business services, leisure and hospitality, and – importantly for the Bronx – education and health services. Although closely linked to the rest of the city, the borough has its own vibrant economy. Some manufacturing takes place here, particularly in food, apparel and textiles. In addition, Hunts Point may be the world’s largest food distribution center. However, the largest sectors – health and education services – account for nearly half of all private jobs in the borough. In education, the Bronx hosts Fordham University and the Albert Einstein College of Medicine, among others. As for health services, numerous facilities include the Montefiore Medical Center, now the borough’s largest employer. I am pleased to report that the Bronx, unlike the nation and the city overall, sustained almost no net job loss during the recession. While national employment remains well below its prerecession peak, the Bronx has added 10,000 jobs since the recession began. Some of this resilience is due to the borough’s concentration in health and education – the only sectors that grew nationally during the recession. Another factor is that Bronx residents largely rent their homes, so they were less vulnerable to the fallout from the housing crisis. This is not to say that all is well here.

By the end of 2014, the combined fund management business here reached a record high of $ trillion, an increase of more than 10% over 2013. Today, there are more than 1,150 licensed asset management companies operating in Hong Kong; and, more than 60 out of the top 100 global money managers have operations here. I think these are quite impressive statistics and reflect well on our status as an international financial centre. BIS central bankers’ speeches  1  5. Thirdly, the promotion of private equity funds. The HKMA proposed, and then worked with the Government, to extend the exemption on profits tax to offshore private equity funds. The legislation, which was passed last year, enables the operating structure of private equity funds to be streamlined, and also broadens private equity managers’ ability to conduct asset management activities in Hong Kong. This is attracting more private equity firms to set up or expand their business here. 6. Fourthly, the promotion of Islamic finance. Legislation was enacted in 2013 to provide a level playing field in terms of tax for sukuk vis-à-vis conventional bonds. Two sukuk were successfully launched by the Government in 2014 and 2015 using two different structures of ijarah and wakalah. We hope their success will have the effect of attracting more entities to issue sukuk in Hong Kong. Up till now, 10 global sukuk (including the two government ones I mentioned) have been listed on the Hong Kong Stock Exchange. 7.
And, in my view, there are certain features of U.S. law that might give rise to conflict between organizational values and FCPA compliance. The Foreign Corrupt Practices Act was enacted in 1977, and it represents a Congressional response to revelations of widespread bribery of foreign officials by U.S. companies. One purpose of this legislation is stopping official corruption. Then, and continuing to the present time, the United States led the world in enacting laws designed to stop official corruption, and perhaps more importantly, in enforcing these laws. Let me say that, as an American lawyer who spends significant time outside the United States, this is a part of our legal infrastructure that I take pride in. With all of that said, there is one part of the FCPA that makes me uncomfortable. The FCPA’s bribery prohibition, and the compliance officers in the audience will know this well, contains a narrow exception for “facilitating or expediting payments” made in furtherance of 2  BIS central bankers’ speeches  routine governmental action. Some of the cynical among you might know this provision as permitting so-called “grease” payments for non-discretionary acts, like processing visas or providing phone service. But, let us face it, this statutory exception permits a certain limited form of governmental corruption. While I understand that the exception is grounded in a practical reality, I feel that zero tolerance for official corruption would have been a better choice.

The Iranian sanctions are designed to stifle the Iranian regime’s nuclear ambitions. The Cuban sanctions are intended to hinder the advancement of communism in the Americas and to change an oppressive regime through a trade embargo. For U.S. financial institutions, which operate on the basis of a public charter issued in the United States, the public purposes supporting economic sanctions and the detailed sanctions regulations are in harmony. With respect to rule compliance, the staff will follow those rules not simply because they are required to but also because they want to. While I am not here to speak for foreign institutions that have committed sanctions evasion, including BNPP, my sense from the evidence is that these institutions looked at economic sanctions very differently. They looked at economic sanctions as technical “American” rules that were not seen as consistent with the organization’s and the home country’s larger value system. In Europe, they found no similar sanctions, and there it was perfectly legal at the  BIS central bankers’ speeches  1  time to do business with these sanctioned jurisdictions. Some European bankers almost naturally adopted the view that there was no value system underlying the technical American legal rule. The foreign institutions saw the situation as providing financial services to just another country; not to a country committing genocide; not to a country building a nuclear weapon; and not to a country fostering a dehumanizing ideology. This failure to correlate the rule with the value is the root of real mischief.
C.  The need to preserve the stability of the financial system in order to prevent the emergence of “tail risks” to price stability  The best illustration of tail risks to price stability on the downside associated with financial crises comes from the historical experience of the United States during the Great Depression which followed the collapse of the stockmarket and housing bubbles of the second half of the 1920s, and by that of Japan following the collapse of the real estate bubble of the second half of the 1980s. In both cases a dramatic expansion of credit fuelled bubbles which pushed asset prices to dizzying heights. In the case of the 1920s United States, in particular, such credit expansion was associated with a wave of euphoria caused by “new-era” thinking  2  See Richard Dale (2004), The First Crash: Lessons from the South Sea Bubble, Princeton University Press. 3  See Irving Fisher (1933), “The Debt-Deflation Theory of Great Depressions”, Econometrica, Vol. 1(4), pp. 337–357. 2  BIS Review 158/2010  which, in turn, had been ignited by the dramatic wave of technological innovation which swept across the country during that decade. 4 The attempt, on the part of young Federal Reserve, to gently deflate asset prices via interest rates increases backfired, and the result was the 1929 crash, with the associated destruction of a staggering amount of financial wealth, and the injection into the economy of a significant extent of uncertainty.

Price stability is not sufficient for financial stability  The two decades leading up to the financial crisis had been characterized, across the developed world, by low and stable inflation, and, by historical standards, by exceptionally stable output growth. It is not by chance, indeed, that macroeconomists labeled those years as the “Great Moderation” era. At the same time, however, as extensively documented in particular by the BIS in several perceptive, early papers, 1 those years had been also characterized, compared with the previous portion of the post-WWII era, by a significantly more frequent occurrence of asset price bubbles and subsequent crashes. A longer-term perspective clearly shows that the occurrence of asset prices booms and busts under conditions of price stability, far from being a “fluke” of the Great Moderation era, had been, in fact, quite common. Until the outbreak of World War I, indeed, metallic standards had dominated for centuries, guaranteeing an extent of price stability which is, by today’s standards, virtually unimaginable. Just to mention a single example, the price level in England in 1661, five years before the Great Fire of London, had been virtually the same as that prevailing in 1913, one year before the collapse of the international Gold Standard. In spite of such remarkable price stability, however, metallic standards had been recurrently plagued by financial crises and asset prices booms and busts, from the South Sea bubble of  1  See in particular Claudio Borio and William White (2003), “Wither Monetary and Financial Stability?
In both cases, though, the same enabling mechanism is at work: culture. Culture—within a firm or across an industry—is not determined primarily by rules or laws, though certainly rules and laws can amplify good or bad attributes. Culture comprises, instead, what people observe and do, resulting in accepted and mostly unspoken norms. Mostly, people look for what succeeds and what does not, and they try to align themselves with the former. If we want to improve culture and conduct, we need to start by being realists about human behavior. At the New York Fed’s culture conference last October, Dame Minouche Shafik observed pragmatically that an end to all misconduct is not the goal of reform. There will always be a few bad apples. Rather, the goals should be far fewer instances of misconduct and far less scope, magnitude and duration when such misconduct inevitably occurs. I submit that the best way to keep problems small is to encourage a culture that spots issues and raises concerns early. In my view, the most dangerous type of culture in finance occurs when people see something wrong but do not say something. I think back to the chat room transcripts from the LIBOR and FX scandals. The way traders communicated so openly about their manipulation of markets makes it hard to imagine that others in their firms did not know what was happening. So, why didn’t those people say something? There are understandable, human tendencies that can cause each of us to avoid rocking the boat.

The adverse effects of the reduction in output are meanwhile compounded by higher consumption, which tends to crowd out investment expenditure and exert adverse pressures on price levels and the external balance of payments. The desirable outcomes of policies intended to meet population ageing are, therefore, not hard to identify. Such policies must aim at producing an increase in productive capacity and output, and stimulating saving and investment, thereby alleviating pressures on inflation, fiscal resources and the external account. Indeed, these outcomes are desirable independently of population ageing, but are rendered even more urgent by the onset of the phenomenon. It is the way in which this strategy is to be implemented that is often subject to contention. Opinions tend to diverge because it is not always appreciated that any course of action chosen, including a passive stance, involves sacrifices. An increase in resources devoted to pensions must imply higher taxation, a reduction in funds allocated to other equally worthy causes, or burdens on society as a whole in terms of higher inflation and interest rates. On the other hand, reforms that should engender a win-win situation in the long run could perhaps impose sacrifices on a number of individuals in the short term. It is, therefore, important to promote an informed debate which takes account of the costs and benefits involved in any course of action, with a view to reaching agreement on viable solutions.
However, the outlook was complicated by a marked weakening of the krona, which could have a contrary effect on inflation. The exchange rate influences inflation via the level of resource utilisation and via the development of import prices; in the past two years the impact has come mainly from the first of these two mechanisms. As the effects on import prices should be regarded as transitory, they are of secondary importance for the monetary stance provided they do not alter expectations of inflation in the medium term. In other words, exchange rate movements are relevant only if they affect inflation’s future trend though, for a small, open economy, exchange rate stability is, indeed, desirable. In September and part of October last year, immediately before and after the publication of the Report, the monetary policy environment was turbulent and difficult to assess. Besides the international unrest, it was uncertain how fiscal policy would be constructed after the general election. All this prompted the Riksbank to keep the repo rate unchanged. The possibility of a repo rate cut would be considered when inflation prospects had become clearer. During the autumn the financial unrest grew. The suspension of debt payments by the Russian government in mid-August, followed by the problems in the US hedge fund Long-Term Capital Management that came to light at the end of September, contributed to the markedly more nervous mood. Stock markets fell around the world and the financial crisis spread to other emerging markets that had previously not been hit.

I am, indeed, convinced that each of the six members will aim for as collegiate an attitude as possible. To me, this is already evident from the work to date. But it is also the case that, in making monetary policy, a variety of factors have to be weighted into an overall assessment of inflation’s future path. In weighing up the odds, different people may reach different conclusions, which need not be an entirely bad thing. It might even have the advantage of demonstrating that decisions on the monetary policy stance tend to involve assessments that are complex and tricky. From interviews and comments in the press, it is already evident that members of the Executive Board voice somewhat different shades of opinion in their inflation assessments. This, too, is something that all those who follow monetary policy will have to get used to. It is, moreover, an assurance that our discussions in the Riksbank will be properly informed about aspects of the BIS Review 14/1999  –2–  monetary policy stance. It is also consistent with the transparency that the Riksbank is striving for and which is a basic condition for the new legislation. The monetary policy situation Sweden’s economy in perspective In the years since the crisis in the early 1990s, economic development in Sweden has been rather good. Growth has been relatively high, yet inflation has been kept at a low level. Since summer 1993, annual GDP growth has averaged almost 3%.