samchain/econo-pairs-v1 huggingface dataset:
Imports and exports of goods have, however, behaved pretty much as expected. For example, the decline in our share of the market for exports of goods appears to have been halted (Chart 2). The real disappointment has instead been in exports of services, where our market share – which had been rising strongly before the crisis – has flattened off, rather than accelerating. A large part of that reflects a decline in the demand for financial services globally as a result of the crisis, but that alone is not sufficient to explain the weakness. Along with the surprising robustness of employment, the disappointing performance of net trade is yet another puzzling aspect of this particular downturn. One possibility is that the lags have  1  See e.g. Bean (2002) and King (2000, 2006). BIS central bankers’ speeches  1  been elongated, perhaps because heightened uncertainty has inhibited the necessary investment to move into new markets. If that is the case, then net exports can be expected to perform better as recovery here and abroad proceeds. But another possibility is that the demand for, and supply of, exports have become less responsive to relative price signals, perhaps reflecting the nature of the goods and services we have a comparative advantage in. That would imply a less optimistic outlook. Let me now venture further afield, to the euro area.

In addition, some emerging economy governments engaged in the accumulation of foreign reserves, in order both to sustain export-led development and to insure against sudden capital outflows of the sort seen in 1997–8. So capital flowed uphill, rather than downhill as in the euro area. Moreover, there was a strong desire to hold these savings in safe assets, such as US Treasuries. The counterpart to this “savings glut” was downward pressure on the interest rates on those safe assets in the advanced economies. Faced with these lower returns on safe assets, investors then sought to generate higher returns in other ways, including packaging securities in ways that appeared to combine yield with safety. And a long period of benign economic outcomes – the Great Moderation – lulled investors into a false sense of security. The consequent buoyancy in asset prices and easy availability of credit then helped sustain demand. But all this came to an end when investors realised the true nature of their exposures, leading to a scramble for safety, a drying-up of credit and a sharp reduction in spending by households and businesses. This analysis focuses on the net capital flows between countries, but in passing it is worth noting that gross capital flows can be just as, if not more, important. 3 The pre-crisis leveraged search for yield resulted in an unprecedented expansion of debt within and across countries' financial systems (Chart 10).
the Sarbanes – Oxley Act in the USA and similar laws and/or regulations all over the world were quickly introduced in a possible attempt to prevent such scandals and failures in future, and to soothe the nervous minds of investors, both local and international. But, while the “big stick” was being brandished and freely wielded, the modern thinking and realization that has been quickly but firmly evolving simultaneously has been that, achieving an outcome of good corporate behavior needs more than just a long list of rules, regulations, and big sticks. In fact, we all have now begun to learn and understand that corporate scandals and failures are a bit like the flu. Regulators, researchers and stakeholders regularly “discover” or “invent” new vaccines to combat the menace, but the virus mutates and surfaces again in a different form or under a different strain. In the same way, notwithstanding many initiatives of the 1990s and the early 2000s, after several rounds of corporate scandals around the globe, from Enron to WorldCom to Parmalat to Daewoo to so many others, new vaccines and treatment methods had to be quickly researched, hastily prescribed, and widely administered. After the dust has settled however, we now find, when we pensively reflect, that some treatment may have been too strong or has been causing too many adverse side-effects. Some pills may have been too bitter. Some tablets may have been too expensive. Some disease management techniques may even have been more harmful than the disease!

Donald Joshua Jaganathan: Digitization of remittances for migrant workers in Malaysia Welcoming remarks by Mr Donald Joshua Jaganathan, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Project Greenback 2.0 Kota Kinabalu Dinner, Kota Kinabalu, 3 November 2018. * * * Yang Berbahagia Datuk Yeo Boon Hai, Datuk Bandar, Dewan Bandaraya Kota Kinabalu, Dr. Firas Raad, Country Manager for Malaysia, World Bank Group, It is a pleasure for me to be here this evening. On behalf of Bank Negara Malaysia, I would like to express my appreciation to Dewan Bandaraya Kota Kinabalu for hosting Project Greenback 2.0 in this beautiful city; our Project partner, the World Bank, for your continued support and commitment to this important initiative; and to all of you who are gathered here today, for your hard work and dedication to ensure the Project achieves its objectives. I am also delighted that we have representatives from Bangko Sentral ng Pilipinas and Bank Indonesia with us tonight. Migrant remittances and Project Greenback 2.0 Mr. Juan Somavia, the former Director General of the International Labour Organization based in Switzerland once said “migrants are an asset to every country, where they bring their labour. Let us give them the dignity they deserve as human beings and the respect they deserve as workers”. Malaysia is a land of opportunity for many. Close to 1.8 million foreign workers, men and women, have left their loved ones behind to earn better income here. For many, they are simply chasing the “Malaysian dream”.
Collectively, these forces lead to a more efficient allocation of a country’s scarce resources— one that is more closely aligned to its international comparative advantage. As a consequence, consumers can benefit from lower prices, higher real incomes, and greater variety and quality of goods and services. Increased openness may also reduce wasteful rentseeking behavior on the part of protected industries and the related costs of corruption. Openness to trade has certainly played a large role in the economic ascent of Asia. Following the rise of Japan, Korea, Taiwan, and others, fast growth in China and India has lifted hundreds of millions of people out of extreme poverty—an unprecedented feat in human history. Reflecting these gains, a number of emerging market countries have become strong supporters of open trade, a sign of how much the world has changed in recent years. Benefits from open trade are evident in Brazil.5 Following its dramatic trade reforms in the 1990s, productivity growth in Brazil increased. Brazil also has leveraged its ample and diverse natural resource endowments to become a leading exporter of iron ore and a number of 2/8  BIS central bankers' speeches  agricultural products. And, the country has benefitted from the rise of China—total export volumes more than doubled between 2000 and 2010, and have now nearly tripled. Brazilian multinational companies are also important global players in industries such as mining and metals, food, paper products, and transportation equipment. But, increased openness to trade is not a panacea in and of itself.

If the provisions for improving stability do not suffice and a crisis occurs anyway, the mechanisms that guarantee the continuation of systemically important functions will kick in.4 In their entirety, these measures help to ensure that the banks are again able to bear more of their risks themselves. What are the objections to the package of measures? So why are there still objections to the Swiss package of measures from various quarters, if the advantages are so obvious? Do these measures have any harmful consequences? 2  The proposal of the committee of experts and the message of the Federal Council can be downloaded at www.efd.admin.ch. 3  The new capital adequacy regulations for systemically important banks are to apply to risk-weighted capital and to the leverage ratio. Furthermore, they are designed to be progressive. In other words, the bigger the bank, the higher the requirement. Given the current size of Switzerland’s two big banks, the requirement would be 19% total capital of the risk-weighted assets, of which 9% can be held in convertible capital (cocos) and 10% must be held in common equity. 4  If common equity falls below the threshold of 5%, the cocos will be converted and the emergency planning for separating the systemically important functions from the rest of the bank will be initiated. 2  BIS central bankers’ speeches  Objections and doubts before the introduction of new regulations or laws are part and parcel of a thriving democracy.
This is perhaps most relevant in times of unease on the financial markets, and the Riksbank may have reason to act both to maintain financial stability and to counteract disturbances on certain markets as well as to attain the inflation target. The Act also contains explicit wording to the effect that the Riksbank's measures shall be fit for purpose and that the intended result shall be in reasonable proportion to the costs and risks to the Riksbank and to central government finances. It has in fact always been a general principle that authorities should act proportionately. But the fact that this is now explicitly stated in the Sveriges Riksbank Act may also require us to justify our decisions more clearly. Clear motives make it easier, for instance, to examine and evaluate the Riksbank. With regard to our independence, particularly concerning monetary policy, it is important that our principal, the Riksdag, as representative of the Swedish people, follows up and evaluates the Riksbank's activities in an efficient manner. With the new act, the Finance Committee will have more resources for this. Exceptional reasons for the Riksbank to buy private securities One change in the new act concerns the conditions for the Riksbank to trade in private securities. The Riksbank can buy and sell Swedish government securities and private, i. e. non-government, securities. Our monetary policy toolbox in this respect remains the same as before. But now there is a more restrictive view of when trade in private securities can be relevant.

Sometimes, inflation has been a bit higher than expected, other times a bit lower. On balance, inflation has been very close to our 2 percent longer-run objective. BIS central bankers’ speeches  1  Although I have focused on the private forecasting record here, the FOMC participants’ forecasts show a similar pattern. It is on the growth side where there have been chronic, systematic misses. In my view, the primary reason for the poor performance of the U.S. economy over this period has been inadequate aggregate demand. There are several explanations for this. Although some were well-known earlier, others have only become more obvious as the recovery has unfolded. One reason is the nature of economic recoveries following financial crises. On that basis, the poor performance of the U.S. economy is not unusual – historical experience shows clearly that recoveries following financial crises typically are very slow and difficult.1 During the credit boom, finance is available on easy terms and the economy builds up excesses in terms of leverage and risk-taking. When the bust arrives, credit availability drops sharply and financial deleveraging occurs. Wealth falls sharply, precautionary liquidity demands increase, desired leverage drops further. In the U.S. case, there were some idiosyncratic elements, such as subprime lending and collateralized debt obligations. But, in the end, the U.S. experience included the major elements of most booms: Too much leverage, too little understanding of risk, too easy credit terms, and then a very sharp reversal.
Perhaps we should not be too surprised that this utterance was greeted by the financial commentariat with less than delirious excitement. There was, however, an outbreak of delirium within the PRA – which I can assure you is an exceedingly rare event, in part due to the dour leadership style I try to affect. The reason for this was the government’s view that “the most effective way to [implement these regulations] is to delegate responsibility for the implementation of firm requirements to the Regulators, subject to an enhanced accountability framework. This means that the vast majority of the updated banking regime will be implemented in PRA rules.”  In short, for implementing this set of Basel rules the government proposes to move back to a more British style of regulation, with the rules made by regulators rather than set out in law. This is quite different from the EU approach, where a huge volume of detail is locked down in law because that is the only practicable way to ensure that 27 countries do the same thing. Absent that imperative, it makes much more sense to have these details in regulators’ rules, as most other countries do, so that we can keep pace with developments in financial markets and adapt the rules as needed – subject, of course, to us being fully accountable to parliament for our actions. Now this may sound rather boring. Indeed, to everyone apart from me and the PRA policy team it is rather boring!

9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  Figure 1B: Improvement in performance after adding Governance scores  Figure 1A naturally led us to ask whether there are other measures which can better anticipate problems at smaller banks and building societies. We know that the quality of governance is vitally important, so we repeated our experiment, adding PRA supervisors’ judgements about the quality of a firm’s governance. We found that adding judgements about governance reduced our false alarm rates more often – and by more – for small firms than for large. This of course doesn’t mean governance isn’t important at larger firms – the opposite is true in our view. But it does suggest that supervising governance can be even more important for small firms. Source: Bank of England and Bank calculations. Notes: Balance sheet data as of July 2007, taken from historical regulatory returns (see Sebastian J A de-Ramon, William B Francis and Kristoffer Milonas, ‘An overview of the UK banking sector since the Basel Accord: insights from a new regulatory database’, BoE Staff Working Paper No. 652 (2017)). Supervisors’ scores for Governance from historic FSA records (see Joel Suss and Henry Treitel, ‘Predicting bank distress in the UK with machine learning’, BoE Staff Working Paper No. 831 (2019)). To test the robustness of our findings to definitional choices, results are shown for two different definitions of “Large” and six different definitions of distress.
I would encourage you and your staff to make the most of this offer. 14. Over the past few years, in view of the challenges from COVID, we have also taken steps to facilitate the flow of credit to borrowers. For example, we have enhanced banks' lending capacity in times of liquidity stress. Since 2019, the HKMA has taken a series of steps, including lowering the Countercyclical Capital Buffer by 1.5 percentage points and cutting the Regulatory Reserves by half, releasing about $ trillion of banks' lending capacity. 15. Furthermore, we have been pushing the use of FinTech to help financial institutions to speed up loan approval. The Commercial Data Interchange, or CDI, which the HKMA launched in October last year, is designed to enable consent-  2/3  BIS - Central bankers' speeches  15.  based data sharing across banks. At the end of December 2022, CDI had already facilitated the approval of over 1,000 SME loans from participating banks, amounting to over $ billion. And this is just the very beginning of an exciting journey. 16. On top of all these, the Government has just announced in the 2023-24 Budget speech a wide range of new measures to further promote the development of the credit market in Hong Kong. For example, the Government will work with regulators to refine the regulatory measures and tax arrangements for the asset and wealth management sector, including introducing tax exemption for family offices and reviewing the existing tax concession measures applicable to funds.

Eddie Yue: Global Loan Market Summit Keynote speech by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at the Asia Pacific Loan Market Association (APLMA) Global Loan Market Summit, Hong Kong, 1 March 2023. *** Pedro, Andrew, distinguished guests, ladies, and gentlemen, Good afternoon. It is a great pleasure to be here. 1. First, I'd like to congratulate the Association on its 25thanniversary this year. A quarter century of valuable work in promoting growth, liquidity and best practice in syndicated loan markets in the Asia Pacific region is truly a significant milestone. We are all grateful for your invaluable contribution. 2. I am glad to see this event returning to Hong Kong in physical format after three years of virtual meetings. Alongside other recent large-scale events such as the Global Financial Leaders' Investment Summit and the many more that are planned, it is a strong vote of confidence in Hong Kong as an international finance centre. In recent months, as travel has largely returned normal, I have been meeting lots of overseas and mainland friends, and from my face-to-face interaction with them, I sensed great excitement and faith in Hong Kong's comeback. 3. 2022 was a difficult year for the global and local loan markets. Geopolitical conflicts, rising inflation and interest rates have put pressure on the performance of almost all asset classes. Bond and equity markets both fell sharply, and new bond issuance collapsed. Notwithstanding all these challenges, we saw continued strength in the loans market.
“Human capital”, to use the economists’ terminology, has been growing at a slower rate, particularly compared with the first half of the 1990s. Note the word “partly”. I don’t think this can really be seen as the main, or even a major, part of the productivity puzzle. Even if you’re prepared to view these compositional shifts as some independent phenomenon, unrelated to other things that have depressed productivity growth – and that is questionable – their scale isn’t really big enough to make that much of a dent. That 3% figure, which is probably a ceiling on the true contribution2, compares with a productivity shortfall of over 10% since the recession. The results offer clearer help with a second puzzle, namely the apparent ease with which real average earnings have adapted to lower productivity growth. The two must match each other in the end3. But, in the past, it’s been hard for the labour market to absorb negative  1  The Employment Cost Index (ECI) measures the change in the cost of labour by excluding the influence of employment shifts among occupations and industries. More information about the ECI can be found here In the UK, the ONS has an experimental series – the “Quality-Adjusted Labour Input” – which makes a similar adjustment: the latest release can be found here.

I would like to reiterate: •  that all European banks now have unlimited access to short-term liquidity, denominated in both euro and dollars, at a fixed rate;  •  that in all countries there are guarantee mechanisms enabling banks to ensure their financing and therefore to maintain their credit activities;  •  that banking systems are all being recapitalised at equivalent or higher levels than those prevailing before the crisis;  •  and lastly, that macroeconomic policy instruments are still available and could be used if economic activity were to decline durably. Moreover, for the past two months we have witnessed a reversal of the oil and food shock which strongly penalised economic growth during the first half of the year. Prices are now falling. If this trend continues, or even if it just stabilises, we can expect a gradual but marked  4  BIS Review 130/2008  slowdown in inflation. This should spontaneously give households extra purchasing power, contributing to a possible pick up in consumption. Together, these developments could stabilise the economy and allow a recovery in economic growth during 2009. We cannot, of course, predict a precise date or forecast the extent of this recovery. However, in my opinion, the prospect of a significant recovery in economic growth in 2009 is not being sufficiently taken into account, either by analysts or markets.
The monetary pillar provides for discipline not to ignore risks to price stability stemming from imbalances in money and credit developments. •  Initiatives are now being taken to close the gap in the area of cross-border supervision and between micro- and macro prudential supervision. The envisaged establishment of the European Systemic Risk Board (ESRB) which the ECB will support analytically and logistically marks an important step in this direction. The ESRB will monitor systemic risk and provide risk warnings and recommendations. Effective cooperation and leadership at the European level will be crucial to make the ESRB successful in the pursuit of its mandate. •  Is the current improvement in some financial market segments genuine or driven by governments and central banks? When the crisis took hold and risk aversion spread, leading to de-leveraging and a sharp decline in securitisation public attention focused on executive pay as an area for regulation. In fact improving corporate governance remains a key area for regulation. Bonus systems need to be changed so as to make managers liable for their decisions and provide them with the right incentives to focus on longer-term sustainability of their business models rather than short-term profit. •  But corporate governance is just one area where regulation needs to be improved.

•  At the same time, we need to develop the financial system further. To enhance transparency, we need to reduce the complexity of the financial system, institutions and products. •  The crisis has painfully shown that ensuring solvency of individual financial institutions does not ensure stability of the financial system as a whole. When funding markets shut down, both solvent and insolvent institutions are hit. Neglecting such wider systemic issues has been one of the glaring inefficiencies of prudential regulation. Too great an emphasis has been placed on micro-prudential rather than macro-prudential aspects. Initiatives are now being taken to close the gap that exists in this respect, especially in Europe, where cross-border supervision is still a challenge. Where do we precisely stand today in improving regulation and oversight? 2  •  At their meetings in November 2008 and April 2009, heads of states of the G20 countries have agreed on what are the most important challenges for improving regulation and oversight: (i) strengthening transparency and accountability, (ii) enhancing sound regulation, (iii) promoting integrity in financial markets, (iv) reinforcing international cooperation and (v) reforming the International Financial Institutions. •  Overall, improvements in accounting, capital regulation and macro-prudential supervision feature high on the agenda. The leaders of the G20 called on the IMF and FSB (Financial Stability Board) to produce guidelines on how national authorities can assess the systemic importance of financial institutions, markets, or instruments.