samchain/econo-pairs-v1 huggingface dataset:
Similarly, in our case, the Bank of Thailand recently launched the Financial Sector Master Plan 2, in which we outline the key principles and guidelines for further strengthening of the financial sector over the next five years. Chief among the agenda are our commitments to bring down financial transaction costs through further deregulation and promotion of more competition in the banking industry. The second element of financial soundness is the integrity aspect. That is, financial institutions must be sufficiently immune to “runs”, which I define loosely as correlated and large-scale withdrawals of deposits, triggered by sudden loss of confidence in the solvency of banks concerned. On this, a key lesson for emerging markets from the global financial crisis is that the push for financial market development must be accompanied by constant efforts to review and bolster as necessary the supervisory framework and standards, so that financial soundness can be ensured without compromising the financial system’s integrity. The third and last element of financial soundness is the stability aspect. The financial sector, while playing an important role in supporting the real economy, can at the same time be the source of risk and instability to the real sector. As we know, the spillover effects from financial to real sector can take many forms. For example, the tendency for financial institutions to extend more credit during economic upswings, and scale back lending precisely during downturns, can contribute to the amplitude of the business cycles.

For example, the recent upsurge of capital flows can be a prelude to a number of common shocks to financial stability that can hit in the region in the future. In this environment, a unilateral approach to deal with the issue, through macroprudential policy, can be inefficient and may lead to more volatility as investors engage in regulatory arbitrage  1  Roengpitya and Rungcharoenkitkul (2009) “Measuring Systemic Risk and Financial Linkages in the Thai Banking System”, Bank of Thailand Discussion Paper. 2  BIS Review 143/2010  across different economies. To address this dimension of the challenge, a more coordinated approach to macroprudential measures may be needed. Although steps towards formal coordination have yet to be established, ongoing close cooperation amongst regional economies has already resulted in a number of common platforms through which greater policy coordination can be conducted. For example, the Asean+3 Macroeconomic Research Office (AMRO) to be launched next year is already mandated to conduct economic and financial surveillance across the region. The office will be in a good position to study this type of policy coordination. In the meantime, more discussion among policy makers in the region should be encouraged, as we increasingly are facing common problems that are of a global nature. To this end, I would like to commend Bank Indonesia for organizing this international conference, which contributes tremendously to the region’s discussion and efforts along this line. It is on this note that I would like to end my remark. Thank you. BIS Review 143/2010  3
Distinguished participants, the rapid growth of Islamic finance raises a series of important questions, such as whether Islamic finance should be regulated differently from conventional finance. Because modern Islamic finance is relatively new to most countries, rules for financial accounting, bank governance, and lending standards are continually evolving as business practices become more refined. BIS central bankers’ speeches  1  Ladies and gentlemen, you may wish to note that since October 2008, when the Bank of Zambia hosted the first ever Islamic Banking Conference here in Lusaka, work has been ongoing to develop a regulatory framework for Islamic banking. The Bank has held several consultations both internally and externally and has also subjected the Islamic Banking framework to expert review by internationally renowned Islamic banking experts. The framework is now in its final stages and is expected to become operational before the end of the year. We are aware that the financial sector has waited for so long to start offering Islamic banking products and services. As a central bank, we assure you that the regulatory framework is receiving active attention and the market will be informed once all the formalities have completed. Ladies and gentlemen, although the Muslim Community constitutes only an estimated 12 per cent of Zambia’s population, the community constitutes high value businessmen who control a very significant share of the Zambian economy in various sectors. Their exclusion from the financial sector therefore, has significant impact on the Bank of Zambia efforts on financial inclusion.

Distinguished participants, on behalf of Bank of Zambia, I would like to thank the organizers and presenters of this workshop for recognizing the important role that Islamic commerce and finance plays in an economy like ours. It is my hope that all delegates will engage fully in these discussions and make the most of the wealth of knowledge generated in the house. Ladies and gentlemen, It is now my honour and privilege to declare the Islamic Commerce and Finance Workshop officially open. Thank You. 2  BIS central bankers’ speeches
Thus, notwithstanding our sense of urgency, we are heading here for an evolutionary change: Athena in her helmet will not spring full-grown from the head of Zeus! And, as with all transitions from one era to another, we can expect risks and uncertainties to persist for some years to come. This makes it all the more urgent to get to work on this new architecture right away. Initial steps for a new architecture In fact, a number of significant steps are already under way. At its April meeting, our governing body, the Interim Committee (of Ministers and Central Bank Governors of IMF member countries), set the broad agenda for the IMF’s own work - and its work with others - for the near future. Five areas have been given priority by member governments: •  1  The central role to be played by the IMF in crisis prevention through its surveillance and its role in encouraging members to strengthen their macroeconomic policies and financial sectors.1  Of course, it is clear that for IMF surveillance to be effective, member countries must provide timely, accurate, and comprehensive data to the Fund. The Interim Committee underscored members’ obligation in BIS Review 43/1998  -4-  The Interim Committee suggests that the Fund intensify its work in surveillance of financial sector issues and capital flows, and focus on the risks posed by potentially abrupt reversals of capital flows, especially those of a short-term nature.

Even if it would be premature at this stage to try to elaborate further on how to maximize the positive effects of this major innovation, no doubt the new international monetary equilibrium will have to be kept under review as a key element of the new architecture. From the outset, effective means of coordination will have to be found to avoid excessive misalignments and disruptive corrections. The world is fully justified in expecting a responsible leadership from these major currencies blocs, which should be actively mindful of their global responsibility and resist the temptation of “benign neglect”. Each of them. Lastly, at a time when de facto more and more responsibilities are being given to the international financial institutions, and particularly to the IMF, the question of their political accountability will probably be raised with increasing insistence. Indeed, this question already arises from time to time, although not always with full awareness of the nature of our institutions and of the powerful checks and balances already enshrined in their Articles of Agreement. In this context, and as far as the IMF is concerned, is there anything that could be done to strengthen what one might call the political accountability or legitimacy of our institutions? At this stage, this would require at least a few organizational changes, which would make more explicit the tie that binds us to the governments we depend on.
Coupled with extremely accommodative monetary conditions globally, we can expect increasing inflow of funds to many emerging economies, including those in Asia, in search of yields. Managing this inflow so that it supports growth, and not drive excessive asset inflation, will be challenging. Policymakers will need a variety of tools. Economic restructuring in Asia Beyond the immediate challenges, the second set of issues that Asian policymakers will have to grapple with relates to the re-structuring of their economies. Business-as-usual policy will not work. The world has enjoyed a positive supply-shock with the entry of emerging economies into the global economy. We have had a period of Great Moderation. But this supply shock also creates new competitive dynamics, which will drive changes in the patterns of trade, production and growth in the coming years. The adjustments to these changes will be neither easy nor smooth. As unemployment in some advanced economies mount, the risk of trade and financial protectionism rises. Rapid changes in the real economy will generate greater uncertainty, and potentially greater volatility in financial markets. Over the next few years, Asia is likely to grow more slowly compared to pre-crisis days, when external demand from advanced economies weakens. To sustain growth, Asian economies with big domestic markets will need to continue with structural reforms to boost domestic demand. Smaller Asian economies will have to re-orientate their economies to respond to new opportunities in these markets.

For example, the unexpectedly strong productivity growth, combined with moderate wage increases, has contributed to inflation being below target in recent years. Wage formation will remain a focal point in the monetary policy analyses, particularly next year when the majority of the collective wage agreements are due to be renegotiated. The level of capacity utilisation and the impact it has on wage formation are also important and topical issues. The OECD calculates what is known as the GDP gap. Their interpretation is that capacity utilisation in the Swedish economy is already higher this year than is compatible with a low and stable inflation rate. However, calculating the GDP gap and similar measures is a very uncertain process. Nor are the measures stable; they change over time. The National Institute of Economic Research (NIER) calculates the labour market gap and equilibrium unemployment. The calculation in the most recent wage formation report shows the labour market gap as being close to zero in 2007 and then becoming slightly positive in 2008 and 2009. Equilibrium unemployment is calculated at 4.5 per cent; it is predicted that this level will be reached next year and that open unemployment will thereafter be slightly below equilibrium level. However, according to the NIER, the social partners have the possibility in the central wage negotiations next year to choose different alternative actions that could either reduce or increase equilibrium unemployment.
Given the Bank’s somewhat chequered record on gender diversity up to that point, it was rather unfortunately named CHAPS. And indeed still is. In 1993, the Bank stepped-in to rescue a flagging project to upgrade the securities settlement process in the UK. The Bank designed and built a new, safety-first, system which again exists to this day. Fortunately, we did not call this one BLOKES, but rather the gender-neutral CREST. Most recently, in the light of the crisis, the Bank has been at the forefront of the debate about re-organising the structure of banking, with a ring-fence or firewall between the basic retail and investment banking sides of the business. This structural approach is increasingly finding favour both in the UK (through the proposals of the Vickers Commission) and internationally (for example, through the Volcker proposals in the US and the recent Liikanen proposals in Europe). 9  Sayers (1976). 10  Sayers op cit. BIS central bankers’ speeches  5  For the past half-century, the Bank’s structural agenda has become a central feature. But at the time it marked a radical departure from the Bank’s past. Designing what are in effect financial public goods is a front-foot activity. The Bank had grown a new limb, augmenting its crisis-management right arm with a crisis-prevention left arm. Stitching it all together So far, I have made no real mention of monetary policy. That is because, for much of its life up to the early 1970s, monetary control at the Bank of England was pretty simple.

Leigh-Pemberton, R. (1989), Speech given at the Ernest Sykes Memorial, 24 May 1989 available from Bank of England Archive, ref. 7A320/10. Mahate, A A (1994), “Contagion Effects of Three Late Nineteenth Century British Bank Failures”, Business and Economic History available at http://www.thebhc.org/publications/ BEHprint/v023n1/p0102-p0115.pdf Norman, B, Shaw, R and Speight, G (2001), “The history of interbank settlement arrangements: exploring central banks’ role in the payment system”, Bank of England Working Paper No. 412. Orbell, J (1985), “Baring Brothers & Co., Limited. A History to 1939”, Butler & Tanner Ltd. Roberts, R and Kynaston, D (1995), “The Bank of England: Money, Power and Influence 1694–1994”, Oxford, Clarendon Press. Roberts, R, Reading, B and Skene, L (2009), “Sovereign Rescues: How the forgotten financial crisis of 1914 compares with 2008–2009”, Lombard Street Research, Special Report. Saw, R (1944), “The Bank of England, 1694–1944”, George G Harrap & Co Ltd. Sayers, R S (1976), “The Bank of England 1891–1944 (Volumes I–III)”, Cambridge University Press. Wood, G (1999), “Great Crashes in History, Have they lessons for today?” Oxford Review of Economic Policy, 15 (3), pp 98–109. BIS central bankers’ speeches  9
24.11.2020  The impact of the pandemic on the Spanish business sector’s financial situation 1st International Management Congress. APD. Purposeful Business Pablo Hernández de Cos Governor  *English translation of the original speech in Spanish  Good afternoon, ladies and gentlemen. First, let me begin by thanking the organisers for kindly inviting me to take part in this Congress. My presentation today will focus on the impact of the COVID-19 crisis on the Spanish business sector’s financial situation and on the role that economic policy is currently playing and should continue to play to mitigate that impact. Business activity has been particularly affected by the crisis. Many of the economic policy measures adopted have been designed precisely to minimise that effect. These measures are and will continue to be crucial, to prevent the temporary shock caused by the pandemic from resulting in the closure of many businesses and, ultimately, in persistent damage to our productive capacity. However, despite the policy measures taken, many businesses have seen their financial situation deteriorate since the start of the crisis, and how we address this deterioration will have important repercussions for the macroeconomic outlook in the short and medium term. Firms that are most financially vulnerable generally invest less and hire fewer employees than those that are financially sound.1 At the same time, there are now signs that the pandemic may give rise to some structural changes in consumer demand.

During 2013, consumer spending increased by 2.2%, while housing investment – which includes both the construction of new dwellings and the value added in the facilitation of housing transactions – rose by almost 10%. Together, these two factors accounted for around two thirds of the rise in activity, though note that is in line with their overall share in GDP. This pickup in household spending has not so far been driven in the main by faster growth in incomes: real household income after tax rose by just 1% in the year to 2013 Q3. Press reports sometimes characterise the rise in spending as being fuelled by borrowing and so destined to end in tears. This is not really the case. It is true that unsecured lending growth has picked up over the past year, but the pace of growth is still well below the levels prevailing during the pre-crisis period. And while there has been an expansion in gross mortgage lending accompanying higher housing activity, there is little sign that this has been used to release housing equity in order to finance higher consumer spending. The rise in spending has, though, been associated with a reduction in the fraction of income that is saved. This rose sharply in the aftermath of the collapse of Lehman Brothers as households responded to the increased uncertainty about income and job prospects by building up extra savings, or reducing their debts, as a precaution.
What role was played by the supervisory authorities and the design of regulatory systems in preventing serious effects on the real economy from asset price bubbles? Share prices have now fallen considerably since the middle of 2000. Recently the very inflated dollar rate has weakened considerably. Contrary to what many analysts feared earlier, the repercussions on the real economy nevertheless appear to be slight. Most economic analysts believe in a normal rate of recovery, after only one year of weak growth. Why has the fall in share prices had so little effect on the real economy? And what are the risks of lasting financial imbalances creating problems in the future? These are questions I intend to discuss in my speech. Why worry about asset prices? A fundamental issue is why fluctuations in asset prices should comprise cause for concern. In a market economy the prices of both financial assets and goods and services have the role of providing information. They shall give signals regarding the distribution of resources in the economy. This means that fluctuations in share prices and exchange rates are useful as long as they reflect changes in expectations regarding the fundamental development of the economy. Optimistic expectations of future growth in the entire economy or in a particular industry can be expressed, for instance, in the form of rising share prices, as there are then expectations of a strong development in profits and a  BIS Review 43/2002  1  high real return on investment.

Headway is most visible in our improved competitiveness, and more incipient in the recomposition of the contribution of domestic demand to activity, or in the reallocation of productive and financial resources towards industries with higher growth potential. The Spanish economy grew slightly in the third quarter – the first rise in output since the opening quarter of 2011 – amid a somewhat more favourable external setting, and with financial tensions lifting and confidence indicators improving. As in the rest of the euro area, the coming quarters will foreseeably see a prolongation of the path of gradual recovery, which is expected in its initial phases to continue to be driven by the external sector. In recent quarters, net external demand has played a key role in sustaining activity, owing to the sound export performance, the weakness of imports and the highly favourable tourism figures. Moreover, the decline in private domestic demand is being checked as a result of the rise in investment in equipment and of the stabilising of private consumption. The adjustment in competitiveness, in its various different strands, is playing a central role. In Spain, this has been done through what is known as “internal devaluation”, the direct containment of costs and margins, not through the nominal depreciation mechanism, which  BIS central bankers’ speeches  3  was the normal device prior to our joining the monetary union. Internal devaluation is, evidently, more complicated and slower than nominal depreciation; but, in turn, the gains to be had are more durable.
Shorter transaction chains: Expanding direct access to non-bank PSPs, FMIs and foreign banks will reduce the number of intermediaries involved in a cross-border transaction, thereby making payments quicker and more transparent. 2. Enhanced competition and lower cost: Expanding access can level the playing field between banks and other PSPs and foster greater competition and innovation to give customers a greater choice of services and potentially lower prices. 3. Improved financial stability due to reduced tiering risk: The risk of spillovers of a direct participant’s default due to the transactions of indirect participants decreases. Page 5  These benefits needs to be balanced against risks such as additional counterparty credit risk and operational risk that central banks needs to be aware of and safeguard against when considering expanding access. The report discusses how these can be mitigated, for example setting minimum standards of resilience and security, and how to overcome potential barriers such as national legislation. How extending RTGS operating hours across jurisdictions can help improve cross-border payments The Building block 12 report examines RTGS operating hours. Limited RTGS operating hours across jurisdictions can lead to a delay in cross-border settlement, especially between countries with significant time zone differences. The report identifies the current “global settlement window”, between 06:00 to 11:00 (UK time) when the highest number of RTGS systems across jurisdictions are concurrently open allowing cross-border transactions to settle across those jurisdictions without delays.

Page 7  Towards an international effort – central banks, industry and public authorities rowing in unison In a highly connected and networked industry such as payments, we can only make a real difference if we work together in a coordinated way. We need to row together in unison to reach our destination of faster, cheaper, more transparent and more inclusive cross-border payment services. So what are the concrete actions that each of the groups – central banks, industry and public authorities - need to take? The role of central banks Central banks, both as operators and supervisors, of payment infrastructure, we have a key role to play. We build infrastructure, add new functionality and set standards and policies to underpin safe and efficient economic and social activity. Central banks need to start changing policies and enhancing core payment systems in line with the best practices, assessments and analysis that are developed as part of the work on the 19 building blocks. To do so effectively, we need to listen to and collaborate with industry, involving them in outreach and consultations and updating them on latest developments. And we also need to share our learnings and experiences with our peers, and beyond. This could be done through the establishment of communities of practice, through which central banks can discuss challenges and barriers with peers and find ways to overcome them. The role of industry The payments industry is another key, and wide range group including correspondent banks, FMIs and the non-bank FinTech.