samchain/econo-pairs-v1 huggingface dataset:
One point that is particularly relevant to banks that finance companies or projects in countries like China is that the rules of the environmental game can change very quickly. The authorities in China are getting serious about cutting emissions and pollution, as the requirement by the Beijing Municipal Government on the Shougang Steel Group to cut back its output has shown. The problem in China is that regulations are not always strictly enforced. But this can change overnight, resulting in major compliance problems for the companies concerned and increased risk for the banks that have lent to them. Hong Kong banks which lend into China would therefore be well advised to keep this in mind. Finally, banks should pay close regard to their own “corporate ecology”. Banks can contribute to environmental protection by the way in which they manage their use of resources in their own operations. In this way banks can be responsible corporate citizens while at the same time reducing business costs. The type of measures that can be adopted include saving on energy consumption, recycling of paper, waste management, purchasing environmentally friendly products and use of video conferencing to cut down on unnecessary travel. Use of office automation such as email can also help to reduce the consumption of paper, provided of course that staff can be encouraged not to print out the messages.

Pillar II is based on five key principles. The first principle is to ensure a robust banking system that is resilient, committed and able to provide a strong foundation to support the Thai economy at all times. In the second principle, banks will be encouraged to reap the economy of scale by promoting voluntary consolidation to promote competitiveness. At the same time, proper competition policy will also be put in place to ensure fair consumer treatment. The third principle aims to promote competition via the liberalization of branch network and business scope and to enhance the roles of existing players, including banks and niche banks, while the fourth principle will consider new entries based on the value added to the economy. Lastly, the fifth principle will focus on enhancing the role of specialised financial institutions in providing increasing access to financial  BIS Review 133/2008  5  services for the low-income and small business groups and reducing the role of the state in commercial banking. Pillar III, on the other hand, will focus on laying down the foundation for a strong and supportive infrastructure for the medium term development of the financial system. This will be done through further enhancing the market and products which will facilitate banks, own risk management, promoting an effective information system and pushing for the amendments of necessary laws to facilitate risk management. Ladies and Gentlemen, The Thai banking system will continue to face new challenges going forward, both from external developments and domestic factors.
The impulse to demand from these conditions does not depend essentially on monetary policy, which can primarily affect the trade-off between fluctuations in the nominal exchange rate and domestic inflation. Although monetary policy does have a toolkit to smooth shortterm exchange rate fluctuations without jeopardizing price stability – which under some circumstances could justify intervening the foreign exchange market –, the underlying trends of the real exchange rate cannot be dealt with using monetary policy. The second issue has to do with recognizing that this phenomenon has an impact on the competitiveness of certain export-oriented industries whose prices do not increase in dollars and whose domestic costs rise due to pressure on wages. Here we need to distinguish a couple of elements. For one thing, essentially the same phenomenon that is holding the copper price above its long-term level is causing high prices of other commodities, such as foodstuffs. This is why Chinese growth offers such enormous opportunities to countries with agricultural and agribusiness potential, such as Chile. In turn, Chile’s capacity to diversify its exports and avoid specializing in a handful of raw materials requires a substantial effort to promote competitiveness, which is the most critical tool to foster growth and diversification. Support for and training of human capital, increased market competition and flexible labor markets all stand out as important measures to improve competitiveness. All these dimensions point to the fundamental source of productivity gains, which is the creation and development of new enterprises.

Sebastián Claro: Chinese challenges facing Chile and Latin America Speech by Mr Sebastián Claro, Board Member of the Central Bank of Chile, at the 2012 Latin American Cities Conferences “Chile on the path to development”, organized by the Americas Society/Council of the Americas, Santiago, 30 August 2012. *  *  *  I would like to thank Consuelo Edwards and Yan Carrière-Swallow for their help in translating this speech from the original Spanish. Thank you for inviting me to this event that for several years now has been gradually positioning itself – both in Chile and in the rest of Latin America – as a seminar dealing with key issues for the region’s economic development. On this occasion, and at the organizers’ suggestion, I would like to share with you some thoughts on the economic development of China and its implications for Latin America. Rather than focusing on aspects of the Chinese economy – which I will come back to at the end of the presentation –, I would like to focus on those dimensions in which China’s spectacular growth affects the region directly. Let me begin by recalling a widespread debate in the region in the early 2000s. While Europe was boastfully launching its new single currency, Latin America was struggling to leave behind the havoc of successive crises that had hit the region, starting with Mexico in 1994.
True, our baseline scenario contemplates, among other assumptions, that such dynamism will be accompanied by improved agents’ expectations. As we have said before, this is a sensitive point that requires us all to cooperate. We must also bear in mind that the terrible natural disaster that just hit the north of our country will have some effect on the output figures that will be released in the coming months, which at this moment we can only guess and which will be able to assess only as time goes by. Moreover, as we well know, every adjustment process has its costs. In our case, the main associated cost has been higher inflation. In recent months inflation has exceeded forecasts and we estimate that it will remain above 4 percent for a longer time, strongly influenced by the depreciation of the peso, which has been greater and more persistent than previously thought. Thus, although we understand that higher inflation is part of the adjustment process I have described above, I want to be clear that its current levels have exceeded our estimates, and that inflation being above the upper limit of the tolerance range for several months in a row is a situation that does not leave us satisfied.

There is more than conventional rhetoric in these words. This mention, in a document essentially devoted to the handling of financial crisis, surely testifies to the recognition by the world’s financial leaders that the success or failure of poor countries in finding their own way toward integration and development in an interdependent world will have a major influence on what the twenty-first century will be. This means that the solidity of our new architecture will crucially depend on the way in which, for the poorest countries, monetary and financial strategies, on the one hand, and poverty alleviation strategies, on the other hand, are made mutually reinforcing. Poverty alleviation is chiefly, of course, the task of the World Bank, the regional development banks and bilateral donors. Among the latter, it is quite encouraging, indeed, to see the energy and enthusiasm with which the British Minister for Development - an MP from Birmingham, as a matter of fact! - Ms. Clare Short, is promoting the DAC Target of reducing by one half the proportion of the world’s population living in extreme poverty by 2015. 3 These objectives are ambitious, but they remain realistic, provided industrial countries join forces in stopping the present decline of development assistance and implement their agreed commitment to support, as needed, countries that truly own their national strategies for sustainable development. Among the latter, I would agree that particular priority be given to post - conflict countries where we must join forces to give new chances to reconciliation, peace and development.
Charles L Evans: The Fed’s dual mandate responsibilities and challenges facing US monetary policy Speech by Charles L Evans, President of the Federal Reserve Bank of Chicago, at the European Economics and Financial Centre, London, 7 September 2011. *  *  *  In the summer of 2009, the U.S. economy began to emerge from its deepest recession since the 1930s. But today, two years later, conditions still aren’t much different from an economy actually in recession. GDP growth was barely positive in the first half of the year. The unemployment rate is 9.1%, much higher than anything we have experienced for decades before the recession. And job gains over the last several months have been barely enough to keep pace with the natural growth in the labor force, so we’ve made virtually no progress in closing the “jobs gap”. The Federal Reserve has responded aggressively to the deep recession and weak recovery, cutting short-term interest rates to essentially zero and purchasing assets that expanded its balance sheet by a factor of three. But since undertaking the so-called QE2 round of asset purchases last fall, the Fed’s aggressive policy actions have been on hold. Some believe that this pause is entirely appropriate. They claim that the economy faces some kind of impediment that limits how much more monetary policy can do to stimulate growth.

In particular, a one-off shift in the level of wages as part of the adjustment to a transitory unexpected increase in the price level does not imply a trend shift in the path of underlying inflation. Moreover, in examining the implications of the current increase in energy prices, it is necessary to take into account the full macroeconomic implications of adverse external shocks and supply shocks in the energy sector, including the associated headwinds for the economic outlook and the negative wealth effect associated with a deterioration in the terms of trade. Through these mechanisms, an energy price shock can simultaneously raise headline inflation but exert downward pressure on the path of underlying inflation. In addition to rate forward guidance, calibrating the volume of asset purchases also plays an important role in ensuring that the monetary stance is sufficiently accommodative to deliver the timely attainment of our medium-term two per cent target. In particular, the compression of term premia through the duration extraction channel plays a quantitatively-significant role in determining longer-term yields and ensuring that financing conditions are sufficiently supportive to be consistent with the delivery of our medium-term inflation objective.2 In conclusion, in addition to learning from the research presented and discussed at this year’s event, I look forward to seeing how this year’s strategy review (and our ongoing implementation of the strategy) shapes the research that will be presented in future editions of this annual conference series. With that, let me offer my best wishes to all conference participants for an exciting two days.
Partly due to very high growth in demand for oil, the average price for Brent Blend oil rose to almost USD 40 per barrel in 2004. Strong economic growth, particularly in the US and China, has resulted in high electricity consumption. So far this year, the price of Brent Blend oil has largely moved between USD 45 and 55 per barrel. In the past few days, it has been close to USD 50 per barrel. Oil futures prices have also increased. Little excess production capacity in OPEC countries, combined with the prospect of lower production in non-OPEC countries, has probably influenced oil prices. At the same time, there are prospects of continued strong demand growth in important oil-importing countries, such as China and some other emerging economies. Diminishing petrol stocks in the US and fears of petrol shortages this summer have contributed to fluctuations in oil prices in the past month. Plans for large-scale development projects resulted in strong growth in petroleum investment in 2004. As a result of persistently high oil prices and expectations that oil prices will remain high, investment in the petroleum sector may reach record levels this year. The investment intentions survey for the petroleum sector points to very high growth. The level is expected to remain high throughout the projection period. Activity in the petroleum sector will have spillover effects on the mainland economy, initially on the shipbuilding industry and the construction sector. BIS Review 27/2005  5  The scale of petroleum investment and its spillover effects are highly uncertain.

This can sorely test the coordination of the exchange of information and the decision making. The Swedish bank’s substantial activities abroad have therefore meant that the Riksbank has entered into a number of agreements on cooperation in the event of financial crises with the central banks in the other Nordic countries and in the Baltic states. There is now also an overall agreement on crisis management at EU level – a Memorandum of Understanding, MoU. This covers central banks, supervisory authorities and finance ministries in all of the member states. Agreements of this nature are valuable because they create orderly forms for cooperation. They create necessary contact networks and not least a common parlance, which can be of great importance when managing a crisis. But these MoUs also have shortcomings. They are often worded in a vague and general manner and are not usually legally binding; more a declaration of intent. But the most serious deficiency is that they do not take into account the conflicts between national interests which may arise in a crisis situation. These should be added to all of the other conflicts which may arise between different interested parties and authorities with different objectives. Conflicts between national interests can be particularly prominent if the socioeconomic costs of a crisis in a cross-border institution are unevenly or unreasonably distributed between different countries. This could in some situations affect the willingness to contribute constructively to an overall solution of the crisis.
Problems can thus spread between banks as an indirect effect, through expectations that other banks may suffer similar problems to the one first affected, or via more well-founded suspicions of the banks' exposures to one another. The contagion risks thus mean that problems in one bank can easily lead to problems for the entire bank system. The costs to society of a crisis that affects the entire bank system may be substantial. The need for a "safety net" The shareholders can never lose more capital than they have invested and individual depositors find it difficult to monitor a bank with widespread operations. They therefore lack sufficient incentives to take protective measures against crises that affect the financial system as a whole. Alongside the need to protect consumers, this is one of the crucial reasons why we now have a financial safety net in the form of special regulations, supervision and a deposit guarantee. It is also the reason why central banks have the possibility to provide various forms of liquidity assistance, that is to act as the “lender of last resort”. Here I should mention that the safety net for financial operations does not have only positive effects. One of the less desirable effects is that it can also lead to less cautious risk behaviour.

Global imbalances laid the foundations for the current crisis If we now move on to the current global financial crisis we can see that there are both similarities and differences compared to the Swedish bank crisis of the 1990s. The circumstances that formed the background to the outbreak of the current crisis in the summer of 2007 included the considerable global imbalances that had developed, with an enduring savings surplus in some countries and deficits in others. The surplus was invested on the global financial markets and the substantial capital flows there helped to push down interest rates. As a result, demand and prices on many asset markets around the world increased explosively and there was a general fall in the premiums for credit risk. The explosion in asset prices was fuelled by a rapid expansion in credit. Money was lent more carelessly than previously. Housing bubbles developed in several parts of the world. In the USA, the development of such bubbles was reinforced by the inadequate regulation of the mortgage market and a political agenda that aimed to promote house ownership among people on low incomes. The search for yield drove investors to borrow more in order to achieve greater leverage in their investments. Financial innovations also helped to drive this development. A steady flow of new and increasingly complex instruments were created to satisfy the demand for investments with a higher yield.
We aim to finalise our policy on Open API for the banking sector around the end of the year. We believe that the wide adoption of an Open API framework would promote collaboration between banks and tech firms, a crucial element for stimulating innovations and improved services for customers in Hong Kong. (F)  Cross-border Collaboration in Fintech  As an international banking and funding centre, Hong Kong must promote the use of fintech in managing cross border financial flows. The HKMA is in close dialogue with several authorities in other jurisdictions to collaborate in this area. As the first step of strengthening our cooperation within the Guangdong-Hong Kong-Macao Bay Area, we are partnering with Shenzhen to promote fintech and talent developments. We are also discussing with other centres in the Bay Area to strengthen collaboration in fintech. More details will be announced later. Separately, the HKMA is working with the banking industry to develop a Distributed Ledger Technology (DLT) platform for digital trade finance. We also hope to be able to announce soon the details of our collaboration with Singapore in linking up our respective trade platforms. This DLT initiative, if implemented, should bring significant benefits to financiers, importers and exporters by enhancing the transparency of cross-border trade finance processes, improving operational efficiency and reducing the risk of frauds.

It needs to break out of the shadows of insurance by evolving new business and operating models. Concepts in takaful with rich potential, such as mutual takaful remain largely untested. The mutual model has a long history. It is also enjoying a resurgence with the rise of new online, peer-to-peer insurers in other countries. This is just one model. There might be others. Boards and senior management should lead the way in exploring these developments and charting new territory. This will require more active engagement of shareholders to develop a clear vision for the company and enlist support for bold strategies that will change the status quo for the better. 4/6  BIS central bankers' speeches  Various programmes such as FIDE and FIDE Forum already include content to help prepare directors in future proofing their institutions. The focus will be even stronger going forward. We are also pleased to announce that a specialised executive Islamic finance education programme tailored for directors of Islamic banks and takaful operators will be launched in the first half of this year. It will equip directors with an appreciation and knowledge of Islamic finance by incorporating practical business perspectives. With this, directors are better able to contribute towards growth and innovation, beyond their roles in ensuring that their institutions operate within sound Shariah and risk management parameters. At the level of employees, the reality is that good talent is in short supply. And so, the industry must take a longer view in its human capital strategies.
It had been clear for a relatively long time that if the share of human labour in output was only one-third, Solow’s model would provide a very good picture of reality in international comparison. To overcome this inconsistency, however, it was necessary to come up with the idea of introducing a new variable in the model that would represent human capital. Although this may seem obvious today – as such things always seem to be as soon as someone else thinks of them – it was a novelty in the late 1980s. It was another Nobel Prize Laureate in economics Robert Lucas who divided human labour into a part reflecting people’s general capacity for work, and the contribution of human capital that was a result of previous investment in education. What Lucas did was very simple from today’s point of view. Using the extensive structure of US economic data, he chose the average wage of people with basic education as a basic remuneration of people’s capacity for work. Then he gradually added the average wage of  BIS Review 81/2008  1  other people after each finished year of education. The results showed that every additional year of education up to the level of a bachelor’s degree increases the wage by 8% on average.

If, instead, the Riksbank’s monetary stance is unduly restrictive, that is, if the repo rate is set too high, the result may be declining demand, a weaker price trend and unsatisfactory growth. The full effect of an interest rate adjustment takes between twelve and twenty-four months to materialise. This means that the interest rate has to be set on the basis of the Riksbank’s assessment of the macroeconomic trend and inflation prospects in that period. However, the inflation assessments are subject to uncertainty and this risk spectrum has to be considered too. Since December 1997 the Riksbank’s inflation forecast includes what is known as an uncertainty interval. This interval represents the Riksbank’s assessment of the uncertainties in the forecast. 1  BIS Review 90/1999  Targeting CPI inflation, however, has certain drawbacks. At the beginning of this year the Executive Board of the Riksbank therefore clarified the inflation target in some respects, stating that, under certain specific circumstances, the Riksbank may have grounds for interpreting the CPI target more flexibly. Price formation in the past three years, for example, has been affected by some clearly identifiable price movements that monetary policy neither can nor shall aim to counter in full. This applies mainly to decreased indirect taxes and the direct effects that the Riksbank’s own interest rate adjustments exert on interest expenditure and thereby on CPI inflation. The economic situation in Sweden Labour market As I mentioned earlier, monetary policy’s primary contribution to the development of employment lies in creating conditions for a stable economic trend.