samchain/econo-pairs-v1 huggingface dataset:
Importance of open and competitive payment and settlement systems To sustain improvements in the efficiency of payment services and lower barriers of entry, competition is vital in the payment landscape. Strategies adopted by Bank Negara Malaysia for payment system development in Malaysia are therefore aimed to foster effective competition among the market players as a key driver to lower costs, enhance quality and innovation, and provide greater choice to the public. An example of this is reflected in Bank Negara Malaysia’s recent reform measures for the payment card market. These measures were introduced in response to inordinate market power to hike prices and the lack of transparency and information in how prices of products and services were being set. The payment card market in Malaysia is sizeable with 453.9 million transactions valued at RM141.5 billion in 2015. The payment card market is dominated by two major international payment card networks which cumulatively controlled about 90% of market share in Malaysia. Prior to the implementation of the reform measures in mid-2015, the growth of payment card terminals from 2013 to 2014 had remained stagnant at 8 terminals per thousand inhabitants. Based on a report published by the World Bank and the IMF in 2013, the higher Merchant Discount Rate or MDR paid by merchants, averaging between 1.5% to 2.5% when accepting payment card transactions, had the impact of pricing out smaller merchants.

Lack of effective competition in the payment card industry had led to higher costs for payment card transactions, which would in turn raise costs for businesses and consumers. Over a period of 14 months from May 2013 to June 2014, interchange fee, that is the wholesale fee paid between banks in a payment card transaction, were hiked several times. As interchange fee is priced into the MDR, the hikes in interchange fee contributed towards an increase in the MDR for merchants. A lack of price transparency and the overall competition further weakened market pressure to lower interchange fee and MDR. BIS central bankers’ speeches  1  The highly concentrated market also discouraged merchants from switching to another payment card network given concerns over losing significant competitive advantage if they did. Clearly, left unchecked, such indiscriminate interchange fee hikes risked bringing about a broad-based increase in MDR which would in turn be passed on to consumers through higher retail prices of goods and services. To curb indiscriminate increases in payment card acceptance cost and foster a competitive payment card market, Bank Negara Malaysia implemented the Payment Card Reform Framework in July 2015. Under the Framework, the interchange fees are subject to objectively-set ceilings, while a market incentive structure was instituted to strengthen the incentives for investments in payment card infrastructure. In addition, measures were also introduced to enhance transparency and competition by prohibiting restrictive trade practices. The results of such measures are very encouraging.
Unlike regular deposit insurance, where the Bank has favoured the UK moving to a degree of pre-funding of the system, it is less clear that such a regime could or should be pre-funded. But, as with regular deposit insurance, the question of whether or not any ex post allocation of costs should somehow be risk based would need to be considered. Indeed, more generally, including perhaps even for liquidity insurance, we need over time to be clearer about the principles that drive whether insurance premiums are risk based and collected up front. This is obviously difficult territory. There are arguments against any approach along those lines. I air it not so much a proposal but in the hope of stimulating serious thinking about what a COLR regime might look like. If a COLR regime could be devised, it would be very important that it was not overused. Private sector backstops should be used first; and they could be better designed. One such approach would be to require banks to take out private capital insurance. This could take a variety of forms. One idea would be straight capital insurance: ie a commitment from investment institutions to subscribe when called upon to do so by a bank. As with possible public sector capital-insurance schemes to be activated only during a systemic crisis, such private insurance could be linked to maintaining a required minimum capital ratio.

From that discussion of LOLR as Bagehot would have recognised it 2 , I shall go on to air some developing thinking about two other instruments available to the authorities to address financial system distress: Market Maker of Last Resort, and Capital of Last Resort. The implementation of monetary policy in stressed conditions Most of the time, central bank operations revolve around the implementation of monetary policy. For the Bank of England, in routine circumstances that means, of course, establishing overnight money market interest rates in line with the Monetary Policy Committee’s policy rate (Bank Rate). It is vital that we should be able to achieve that primary rate-setting Objective in stressed conditions, as well as in peacetime. Since mid-decade, the reserves part of the Bank of England’s operational framework has, accordingly, made explicit provision for three broad types of contingency: a bank finding itself temporarily short of reserves at the end of the banking day due to technical problems or frictions in the money markets; a widespread shock to the sector’s demand for reserves; and, thirdly, a pronounced shift in the degree to which banks collectively find themselves needing to manage their reserves directly with the Bank rather than via the money markets. To cater for those eventualities, banks can, first, borrow unlimited amounts overnight against the highest-quality collateral, for a modest premium of 25 basis points, designed to leave intact incentives to manage liquidity in the markets rather than with us.
It also assumes that export volume will grow a little over 1.5% this year, and the rate will double in 2018. Behind this increase is an improved external scenario, which I will discuss in a moment. In this context, the current account deficit will be smaller than projected in December, and 2017 will be better than 2016, due to slower growth in domestic demand and improved terms of trade (table 1). 4  As I said earlier, the greater growth expected in 2018 originates in the economy having no major imbalances, the end of some factors that have hindered growth in recent years— for example, the four-year plunge of mining investment—an expansionary monetary policy stance and a stronger impulse from abroad compared with previous years. As for fiscal policy, it is assumed that the consolidation announced by the Administration will proceed further. The recovery that reflects in the annual figures projected for 2018 should begin during the course of this year, considering the negative impact of the debilitated economic activity at the end of 2016 and early 2017. In fact, the average annual GDP growth of the last quarter of 2016 and the first of this year is somewhat above 0%. Already for the second quarter, in our baseline scenario, it will rise above 1.5% annually, which, on average, will be sustained and increased in the second half of the year.

13  Figure 3 GDP evolution (real annual change, percent)  3,5  3,5  3,0  Other  2,5 2,0  3,0 2,5 2,0  1,5  Total  1,5  1,0  1,0  0,5  0,5  0,0  0,0 14  15  16  Source: Central Bank of Chile. Figure 4 Other sectors (real annual change, percent)  8  Personal services  6  8 6  Trade  4 2  Construction  0  4 2 0  Manufacturing  -2  -2 Business services  -4 14  15  -4  16  Source: Central Bank of Chile. 14  Figure 5 Consumption  GFCF  (real annual change, percent)  (real annual change, percent)  8 8  8  20  Construction and other works  Durable  Non-durable  4 4  10  0  0 0  0  -4  -4-4  -10  4  Machinery & equipment (right axis)  -8  -8-8 14  15  16  -20 14  15  16  Source: Central Bank of Chile.
Table 3: Results for regressions of non-performing loans as % of total loans on the Regulatory-Supervisory Independence Index  Regulatory-Supervisory Independence Index  (1) (a)  (2) (a)  -1.194 ***  -1.300 **  (0.405)  (0.495)  Regulatory-Supervisory Independence Index  -0.970 **  lagged by one year  (0.322)  Observations  29,782  28,002  Adjusted R2  0.227  0.245  (a) The regression equation includes bank fixed effects, country fixed effects, and year fixed effects. Standard errors, which are clustered at the country level, are reported in parentheses. The results are robust under different specifications, including using a set of bank-specific control variables (total assets, z-score, cost-to-income ratio, efficiency ratio, total debt, total liabilities, total gross loans) and country-specific GDP growth. This association is there even as the set of control variables in the regression is varied. The association is also persistent: the coefficient on the reforms lagged by one year is similar in magnitude and statistical significance. The association is also economically significant. A reform that increases the index in a given year is associated with a 1.3 percentage point reduction in the rate non-performing loans and a 0.97 percentage point reduction in the subsequent year, all else equal. These results are consistent with what other papers have found. Dincer and Eichengreen (2012) find that lower non-performing loans relative to GDP in countries in which the supervisor is independent of the government.

But what is the ideal institutional structure that would allow us to update, change and simplify these rules? This is a timely question. Less than a month and a half ago, the UK exited the EU. The implementation period is due to last until the end of this year. While we are in the implementation period, the Government and the regulators will continue to onshore any new financial regulations and standards coming from the EU that take effect this year. And at the end of the implementation period, the UK will be left with the same complex set of EU law and regulations onshored in a way that replicates the rather unique way the EU – as a supranational institution – the area of financial services. The technical detail of the prudential requirements will sit in a dispersed variety of places: primary legislation, a range of statutory instruments, on-shored binding technical standards, and PRA rules and guidance. This ‘patchwork’ naturally makes the framework difficult for firms to navigate – particularly smaller firms with more limited resources to devote to compliance. It is partly for that reason that the previous Chancellor Philip Hammond announced in the 2019 Spring Statement that HM Treasury will be reviewing the post-exit regulatory framework.
9  Let me now turn to the implications of demographic changes for the balance of savings and investment and, thus, for the so-called natural rate of interest, something that for obvious reasons is very closely followed by central banks. Savings are likely to increase with population ageing, as people need to devote more resources to retirement. Moreover, the demand for investment is likely to be lower as the population ages, a trend that will also be made more acute by the nature of the technological changes we are witnessing and that seem to require more intangibles and fewer traditional capital goods. No wonder that most estimates point to a significant decrease in the natural rate of interest in recent decades, one closely associated to demographics: among the main factors potentially behind the course of the natural rate (which also include technological growth and changes in risk premia), it is clearly the demographic component that accounts for its low-frequency changes. This decline in the natural real of interest has significant implications for monetary policy. A low natural real interest rate, together with the deflationary pressures associated with the same demographic and technological factors behind low interest rates, imply a higher probability of nominal policy rates hitting their effective lower bound, or alternatively the socalled reversal rate (i.e. the level below which further rate cuts may become contractionary), thus hampering the ability of conventional monetary policy to stabilise the economy.

The Federal Reserve’s role is to ensure that the institution has the necessary strong processes in place to achieve this objective. As risks emerge, supervisors intervene, within the realms of their safety and soundness mandates, to require that banks take corrective actions as necessary. Supervision can reduce the chance that a financial firm fails, but it can never provide a guarantee against failure. Supervisory policies have undergone important changes over the past few years, especially in the context of the largest financial institutions. Banking supervision no longer focuses solely on the safety and soundness of individual institutions – so-called micro-prudential supervision – but now also focuses on the implications for financial stability more generally. The evolving supervisory framework has resulted in a number of organizational changes in the way supervision is conducted at the New York Fed and in the Federal Reserve System more broadly. A very important change in the Federal Reserve System is that supervision of the largest, most systemically important financial institutions are now coordinated across districts through the Large Institution Supervision Coordinating Committee (LISCC). The LISCC is a System-wide committee, chaired by the director of the Board of Governors of the Federal Reserve’s Division of Banking Supervision and Regulation, and composed of senior officers at the Board and Reserve Banks. In addition, the Federal Reserve has instituted three major horizontal evaluations, which are a key element of the new enhanced supervisory framework for large banking companies.
Ardian Fullani: Educating and inspiring Albania’s young generation Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 2011 end-year reception, Tirana, 21 December 2011. *  *  *  Honourable Minister, Your Excellencies Ambassadors, Honourable Members of Parliament, Dear representatives of the banking system and the media, Dear participants, I would like to welcome and thank you for your participation. Your presence today is a special pleasure for me personally and the Bank of Albania. My special thanks go to the former members of the Supervisory Council of the Bank of Albania, whose term in office has ended. I personally appreciate the seriousness and commitment they have dedicated to their work, a precious contribution to Bank of Albania’s institutional furtherance. Thanking them once again for their professional work, allow me to welcome the newly appointed members of the Supervisory Council of the Bank of Albania, renowned public figures with an unquestionable professional career. They come from diverse fields of professional careers and will bring in added value to the Bank of Albania, contributing to a wider coverage of the institution’s functions. I am confident that the Bank of Albania, in its activity, will continue to incorporate best international standards as regards decision-making, independence, accountability, transparency and governance. I believe that a healthy economy that generates stable growth needs a developed financial sector in terms of its depth and width; a flexible banking system, which manages public’s deposits cautiously and channels them efficiently to fund the economy.

It means being able to integrate and think critically when there are only pieces of information. It means being able to provide breadth of perspective anchored by depth. For us in Bank Negara Malaysia, mastery of economics and finance is what helps us differentiate the ‘signal’ and the ‘noise’ in economic policymaking and financial regulation. It also helps us to differentiate the symptom and the root cause in the supervision of financial institutions. It also means learning the lessons from history and avoiding the same mistakes within the context of our operating environment. Thus, I encourage you to focus and follow your curiosity in exploring the depths of your field of study. There is no end to learning, and may your thirst for knowledge drive you on. Have the humility to recognise that we never stop learning. As a Chinese proverb goes, “Learning is a treasure that will follow its owner everywhere.” Second, on adaptability. Charles Darwin famously reminded us that, “It is not the strongest of the species that survives, nor the most intelligent, it is the one that is most adaptable to change.” This means one must be able to constantly learn new things. One must also unlearn things that have become outdated. No one can really be certain on the precise impact of automation, artificial intelligence and the new industrial revolution 4.0 on future jobs and the complexion of society.
In taking this action, the Bank has sought to prevent the emergence of a self-sustaining vicious spiral of collateral calls, forced sales and disappearing liquidity from emerging in a core segment of the financial markets. Restoring market functioning helps reduce any risks from contagion to credit conditions for UK households and businesses. Such actions preserve the effective transmission of monetary policy. But crucially they are not monetary policy actions in themselves. Were monetary policy to be re-oriented towards serving financial stability ends, not only would it be less effective in addressing dysfunction than more temporary and targeted interventions in specific dis-orderly market segments, but it would also be distracted from its central task of maintaining price stability and returning inflation to the 2% target. At the time of writing, this distinction between monetary policy actions and actions taken by the Bank to support financial stability has been recognised and priced by market participants. 4/8  BIS - Central bankers' speeches  In the face of a substantial re-pricing of financial assets a few weeks ago, markets originally anticipated that Bank Rate – the active instrument of monetary policy in the eyes of the MPC – might be changed at an ad hoc meeting outside the regular schedule of MPC decisions.

Inflation remains very high relative both to our 2% target and by the historical standards of the past 40 years. Even if the energy price guarantee has reduced inflation relative to what would have otherwise have seen this autumn, most people's 'lived experience' is a rise in October's headline inflation rate as utility prices increase. While we have good estimates of how the EPG will affect the household utility bills that enter the consumer price index directly, the impact of government relief for the corporate sector on consumer prices is more difficult to assess, as firms seek to re-establish margins and the incidence of the energy price support feeds through the price pipeline. In this context, medium-term measures of inflation compensation from financial markets have moved around since August, and current market volatility makes them difficult to interpret over recent weeks. But the sustained (and reassuring) downward trend that in market inflation expectations that emerged from early April appears to have come to an end, at least for now. Household and corporate surveys of inflation expectations at various horizons – although subject to methodological shortcomings and offering sometimes inconsistent messages – have, on balance, moved in an unfavourable direction, especially if one points weight on the distribution of views not just the median. And third, the labour market. Yesterday's labour market data showed the unemployment rate falling to 3.5%, the lowest level observed since 1974.
Recently, Jeanne and Rancière 2 provided a “quantitative normative framework” to infer an optimal level for foreign exchange reserves in order to mitigate the impact of sudden stops of capital inflows. Their model, based on welfare criteria, suggests that the build-up of reserves has been excessive in Asian countries since 1997-1998. To be sure, the Asian crisis may have prompted emerging economies to reassess the magnitude of potential sudden stops and the subsequent output loss. Under widespread uncertainty, assessing an optimal level for foreign reserves confronts us with the problem of catastrophic events. In other words, even if the likelihood of a financial crisis may be very small, the potential consequences may be so dramatic that emerging countries could rationally accumulate very large reserves. 1  Dooley, M., Garber, P., and Folkerts-Landau, D. (2003) – An Essay on the Revived Bretton Woods System, NBER working paper ; (2007) – The Two Crises of international Economics, NBER working paper. 2  Jeanne, O. and Rancière, R. (2006) – The Optimal Level of International Reserves For Emerging Market Countries : Formulas and Applications, IMF working paper. 2  BIS Review 119/2007  Nonetheless, Jeanne and Rancière’s standard approach suggests that the level of reserves is in some countries excessive with respect to the self-insurance motive. Domestic monetary implications Excessive accumulation of foreign assets may lead to domestic financial imbalances. These can be caused by incomplete or ineffective sterilisation 3 .

There are two external advisors who serve on the committee, providing independent thoughts and perspectives. The committee meets every six weeks on a pre-announced schedule. The main responsibilities of MPC comprises of: •  setting the direction of the monetary policy with the objective of maintaining price stability,  •  examining and approving the monetary conditions and policy stance report, and,  •  overseeing the quarterly Inflation Report. Why did we adopt and implement inflation targeting as our new policy anchor? As the fixed exchange rate was abandoned after the crisis, it was then necessary to have a new nominal anchor. At first the Bank of Thailand used monetary aggregates as its policy target under the IMF program. The Bank targeted domestic money supply in order to ensure macroeconomic consistency in order to obtain price stability. However, as in many countries in recent years, using money supply as a target did not work well with the Thai economy as the relationship between monetary aggregates and output became increasingly unstable. This was due to changes in people's spending behavior and the popularity of new money-related innovations, such as credit cards and electronic cash cards. After studies and experimental implementation, the Bank of Thailand formally adopted the inflation-targeting regime starting from May 2000. The new nominal anchor allows the Bank of Thailand to set an explicit target of core inflation in order to stabilize price condition. Since its adoption, a target of core inflation had been set at a range of 0-3.5 percent and remains so.