samchain/econo-pairs-v1 huggingface dataset:
Rather, it is a crucial step in the economic and monetary integration of the European Union (“EU”) countries and the creation of the single market. This change will involve 300 million consumers, 16% of world GDP and 29% of world trade. This demonstrates why the euro is an important event for Hong Kong. As the UK Chancellor of the Exchequer recently made clear, we are now living in a global economy, in which each economy can directly affect the prospects of every other. Where the economy concerned is the size of the EU, its potential to affect other economies - for good or bad - is without question. This is reinforced by the existing trade and financial links between Hong Kong and the EU countries: • the EU ranks 3rd among Hong Kong’s trading partners in the world; • in the first eight months of this year, the EU accounted for $ billion or 13.2% of Hong Kong’s total trade - much of this represents entrepot trade between the EU and mainland China; • the EU is the largest external investor in Hong Kong, accounting for over $ billion or 34% of the total; • more than 700 EU companies use Hong Kong as regional headquarters or regional offices; • the EU is the 2nd largest source of visitors and 4th largest source of tourist earnings for Hong Kong; • there are over 50 licensed banks and other authorized institutions in Hong Kong from the EU countries, the largest concentration in Asia.

Hong Kong may also be able to take advantage of the increased flow of funds for global investment which may be forthcoming from a greatly enlarged European capital market. Furthermore, to the extent that an offshore euro market develops, Hong Kong would be an obvious location for this in Asia. This reflects the existing large presence of European banks in Hong Kong and our role as a bridge between Europe and mainland China. Finally, Hong Kong is one of the world’s largest holders of foreign exchange reserves and the euro will provide interesting opportunities for diversification of our portfolio. Of course, the advent of the single currency also brings with it certain risks. The discipline imposed by the single currency will not always be comfortable, particularly when the business cycles diverge in different member countries. This could set up tensions which could at worst lead to a break-up of monetary union or at least undermine confidence in the euro. The current dispute between politicians and the European Central Bank over interest rate policy might be a foretaste of what is to come. A break-up of monetary union seems highly unlikely, but the potential for internal wrangling is clearly there and that could be disruptive to world financial markets. There must also be at least a possibility that closer integration of the EU could make it more self-contained and inward-looking. Intra-EU trade could increase, while that with the rest of the world and Hong Kong could diminish.
Since Singapore’s economy was small and open, “financing budget deficits through Central Bank credit creation appeared to us as an invitation to disaster” (Prudence at the Helm, p 33). About 25 years before Singapore used this wisdom, Exter argued that, given the underlying domestic production capacity, deficit financing would be an efficacious policy in developed countries that were largely dependent on foreign trade. But, it would not be the case with a developing economy. Hence, the Exter Report highlighted that, “this should serve as a warning to those who might hope that some of the policies growing out of Keynesian economics can be uncritically adapted to Ceylon”. As a safeguard, a provision was included in the Monetary Law Act prohibiting the Central Bank to engage in trade or otherwise have a direct investment in any commercial, industrial or other undertaking. In Exter’s opinion, such interests would lead to money creation, generate conflicts of interest and prevent making investment decisions based on hard-core economic principles. As such, the Central Bank’s involvement in economic activities was considered sub-optimal. It would be useful to examine whether Exter indeed proposed the necessary legal provisions in the draft bill to facilitate the new central bank to carry on business as per the advice given  4  BIS Review 92/2007  above.

It is in this part that he argued the case for a central bank for the country in preference to a currency board. Part II is a draft bill for the establishment of the Central Bank of Ceylon with explanatory comments. These comments have helped to guide generations of central bankers, in the past, what was exactly meant by each section or clause of the bill. It will continue to do so in the future as well. The commentaries presented were succinct, precise and to the point. They testify to the vast knowledge which Exter had about the functioning of an economy, his reading of the status and the direction of the country’s economy, the functioning of a monetary system both in domestic and global economies and how a central bank should be organized and operated. Hence, to understand Exter Philosophy of Central Banking, there is no better document than the Exter Report. Nearly six decades after John Exter completed the Exter Report, it would be useful to re-visit the report and assess his philosophy of central banking in the context of the body of knowledge of central banking today and identify its relevance to central bankers as guidance. This paper is an attempt at this exercise. The choice between a central bank and a currency board Prior to the establishment of a central bank, Sri Lanka was operating under a currency board system in which the country’s currency had been backed by 100 percent in foreign reserves maintained with the Reserve Bank of India.
How banking practices and products reflect clearly and fairly the requirements of current and proposed prudential standards in their dealings with clients is a challenge, both for bankers and lawyers. The availability of a sufficient pool of legal experts in the Malaysian legal fraternity who are well versed with the detailed content and strategic intent of the prudential requirements will contribute immensely to the future development of the Malaysian derivatives industry, and as a consequence provide more opportunities for greater innovation in risk management within the Malaysian financial system. Let me now turn to the final point I wish to make, which is about the opportunities within the rapidly growing Islamic banking and finance sector to develop derivatives that facilitate hedging of risks. The Islamic financial system, comprising the Islamic banking industry, the Islamic money and capital markets, and the Takaful market, is becoming an increasingly important component in the Malaysian financial system and in the global arena. Indeed, the Islamic capital market has registered very strong growth. In the debt market, the outstanding Islamic private debt securities as at the end of June 2003 was RM 68.2 billion, or 37% of total outstanding private debt securities. Malaysia has also made progress in developing offshore Islamic banking and financial products. The latest listing of the inaugural Sukuk by the Government of Qatar on the Labuan International Financial Exchange (LFX) on the 28th of January 2004 increased the market capitalisation of the exchange to USD 2.95 billion (RM 11.2 billion).

I remember  BIS central bankers’ speeches  3  the speech our distinguished guest delivered at the end of his ECB tenure and the fact that the closing remarks showed not only a good sense of humour, but also a subtle comprehension of the manner in which physical distances and especially distances in time alter the assessment of individuals and, if I may add, of events. Please allow me to read the final part of the aforementioned speech, which presents the timeline of the news published by Le Moniteur concerning the return of Napoleon from his exile on Elba Island: 10 March – “The Corsican ogre has landed at Cape Juan”; 11 March – “The tiger is in Gap. Troops are on their way and will stop him. He will end his miserable adventure as a homeless refugee in the mountains”; 12 March – “The monster succeeded in proceeding to Grenoble”; 13 March – “The tyrant is now in Lyon. Horror has caught the people”; 18 March – “The usurper is some days’ march distant from Paris”; 19 March – “Bonaparte approaches in a hurry, but he will not succeed in advancing to Paris”; 20 March – “Napoleon will be in Paris tomorrow”; 21 March – “Emperor Napoleon is in Fontainebleau”; 22 March – “Yesterday evening His Majesty celebrated his arrival in Paris. The jubilation cannot be described”.
I shall here deal briefly with the government authorities’ control of the Riksbank and the bank management’s response to increased independence. The control of the Riksbank by the government authorities The government authorities exercise control of the Riksbank in at least four different ways: 1. The Riksbank is an authority subject to the Riksdag. The Bank was previously controlled by the Riksdag’s standing committee, the Governing Board. In the new organisation which started on 1 January 1999, the Governing Council appoints the six members of the Executive Board, the Governor and the five Deputy Governors. However, these appointments take place for different periods of time. This means that the Governing Council renews a mandate or appoints a new Deputy Governor each year. In this way, the Riksdag’s committee, the Governing Council, can indicate discontent with the policy carried out by the Riksbank’s Executive Board each year. 2. The Chairman and Vice Chairman of the Governing Council take part as a rule in Executive Board meetings. They have a right to speak but not the right to vote or make proposals. In this way, these persons have a complete insight into the Riksbank’s work and can assess the quality of the Executive Board’s work. 3. Twice a year, the Governor of the Riksbank and sometimes another Executive Board member appear before the Riksdag’s Standing Committee on Finance to give a report on the policy of the Riksbank.

That matters – because our responsibilities for the stability of the financial system mean that we must be satisfied that the new framework can deliver levels of resilience at least as high as those we have become accustomed to, whilst also enabling improved innovation and competition, before it can go live. Working together, I am confident that we can achieve that. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4
This is somewhat comforting, because it means that a huge part of the ethical challenge can be addressed without the need to reform people from within. The problem of “bad apples”, it seems, can be largely solved by focusing on cleaning up the “bad barrels”. However, the element of “people” remains relevant in determining behavioural outcomes – even if to a lesser extent. Again, this is a very wide and complex subject, but I wish to briefly mention two key points. First – we must remember that the financial sector, like human society, is made up of moral creatures. We cannot live, much less flourish, unless we recognise this and begin to employ the language of ethics in business. The language of business must align with what most people feel about how to live well: be honest; give trust; create lasting values; be reliable; and take pride in your work. The evidence reveals that employees are much more productive, and feel more fulfilled, when they believe that they share the same values as the organisation they work for. My point is simple – we must not shy away from the language of morality and objectivity in finance. Yes, there are many ambiguous areas. But some things are right, and some things are wrong; and as moral creatures, we should engage on these terms, even in business. Morality does not 4/5  BIS central bankers' speeches  cease to exist when we go to work.

Third, banks have many ways they can adjust their business models to meet the new standards as they are phased in. Many of these changes can occur without any risk of disruption to the flow of credit to households and business. For instance, banks can sell nonstrategic assets to investors and can modify their minority investments in non-consolidated interests. Low-quality legacy assets, such as subprime mortgage loans and second mortgages, will mature and run off. Risk-weighted assets will tend to fall as the economy recovers. Moreover, as banks book profits, deferred tax assets will shrink, reducing the magnitude of these future deductions from common equity. Finally, it is important to note the significant potential earnings power of large U.S. banks, which have historically tended to have higher rates of return on their average assets relative to many of their foreign counterparts. Banks that currently are short of the 2019 standard could retain these future earnings to build up their capital ratios. Equity analysts project that the 20 largest U.S. banks will earn more than $ billion in 2010, and consensus estimates expect that figure will increase to around $ billion in 2011. Of course, because these estimates are dependent on an economy that continues to recover, we need to be cautious about relying entirely on as-yet-unrealized earnings as the primary means to meet the higher capital standards. So what about the long-run consequences?
We will probably have to live with some of the repercussions of the crisis for some time to come, but we expect the financial markets to normalise. But it is necessary to achieve a balanced economic growth even beyond the monetary policy forecasting horizon. If we are to do so we must attend to any deficiencies regarding, for instance, regulation, supervision and the allocation of responsibility, deficiencies which have come to light rather clearly in recent years. It is important to establish a system that covers all aspects; a system that prevents unnecessary risks and imbalances from building up. Experiences of the financial crisis in the 1990s have in many ways contributed to changes that have given our economy better resilience during periods such as the past few years. Merely the fact that we entered this crisis with sound public finances, a surplus on our current account and a lower, more stable inflation rate has given us room to manoeuvre that we previously lacked and which many other countries lack now. Some changes have also been made with regard to financial supervision and analysis of the bank sector. The banks themselves have also learnt from the previous crisis and have acted, at least in Sweden, in a much more responsible manner with regard to credit granting, for instance. But to some extent I think our memories were too short in the 1990s, when the acute crisis was behind us and crisis management was no longer such a pressing issue.

What is more, the Swiss franc has only seen a moderate rise against the euro. As Swiss households and companies are on a solid financial footing, they are shielded – so to speak – against a tightening in credit conditions. Lastly, the stronger Swiss franc vis-à-vis the US dollar has limited the impact of higher commodity prices. Several other factors, like a robust labour market and a competitive industrial sector, could cushion the negative repercussions of the financial crisis in Switzerland. Against this backdrop, the SNB is expecting real GDP to grow between 1.5% and 2% this year. Inflation should be below the 2% mark again in the course of 2008. These forecasts still involve substantial uncertainties. Given the present state of the economy, the current interest level seems to be appropriate. However, the SNB will keep a close eye on further economic developments and inflation so that it is able to identify when action needs to be taken and react in a quick and flexible manner. BIS Review 51/2008  1
For 2015, the Board estimates that GDP growth will be in the 2.5 to 3.5 percent range, so the economy is expected to continue growing below its mediumterm rate, which the Board estimates to lie between 4 and 4.5 percent. 2  BIS central bankers’ speeches  The economy is expected to outperform 2014 next year, thanks to the rapid and significant adjustments it made this year, as is visible in the current account, interest rates, and the real exchange rate. It also relies on the expected improvement in consumer and business confidence, as well as in the external conditions foreseen for 2015, which although not so good as expected in September, are an improvement from 2014, partly owing to the boost coming from the oil price decline. The significant monetary impulse that has been added already, the stronger fiscal impulse and the effect of the peso depreciation on the tradable sectors will provide important support. Finally, although the financial situation of households and enterprises has tightened, it is not expected to be a hindrance to economic recovery (table 1). On the external front, the baseline scenario considers a less dynamic outlook than forecast in September, but still pointing at greater growth rates in 2015 and 2016 than in 2014. This outlook reflects world activity that has recently receded, but that is compensated, at least in part, by the boost coming from the oil price drop.

10  BIS central bankers’ speeches  Table 2 International scenario assumptions 2013  2014 (f)  Jun.14 Report  Sep.14 Report  Dec.14 Report  Growth  2015 (f)  Jun.14 Report  Sep.14 Report  Dec.14 Report  2016 (f)  Sep.14 Report  Dec.14 Report  (annual change, percent)  Trading partners' GDP  3.5  3.6  3.4  3.2  3.9  3.8  3.5  3.9  3.9  World GDP at PPP  3.1  3.3  3.2  3.2  3.7  3.7  3.5  4.1  3.9  United States Eurozone Japan China India Rest of Asia (excl. Japan, China and Ind Latin America (excl. Chile)  2.2 -0.4 1.6 7.7 5.0 3.9 2.3  2.4 1.0 1.6 7.3 5.4 4.1 2.0  2.1 0.8 1.0 7.3 5.4 4.0 1.7  2.3 0.8 0.3 7.4 5.6 3.6 1.1  3.1 1.7 1.0 7.2 6.2 4.4 3.0  3.0 1.7 1.5 7.2 6.2 4.5 2.6  3.0 1.0 1.3 7.1 6.3 4.3 1.9  3.2 1.8 1.2 7.0 6.5 4.8 3.3  3.1 1.5 1.4 6.9 6.5 4.8 3.0  LME copper price $ Brent oil price $  332 109  310 108  315 106  311 99  (levels) 290 103  305 104  295 70  300 101  285 75  Terms of trade  -3.2  -0.5  0.0  -1.1  1.7  -0.5  -2.1  (annual change, percent) -1.5  -0.8  (f) Forecast.
Together they make up 80% of the world’s population, use half the world’s energy and produce over 40% of the world’s exports. And over the last five years they have accounted for well over half of total world growth. Implications for policy Taken together, these developments have profound implications for policy-makers. The linkages between one economy and another are now wider, deeper and more complex than ever before. One country’s policy is more likely to have ‘spill over’ effects on other countries. The interpretation of economic developments has become more challenging. And the rapid emergence of new economic superpowers is creating a new generation of policy issues. For example, the addition of large supplies of low cost labour to the world market is affecting global relative prices, especially of manufactured goods and natural resources, as well as intensifying competition in labour and product markets. This seems to be affecting wage and price setting behaviour in developed countries, as well as their terms of trade. Domestic policy-makers have been  2  BIS Review 103/2006  left struggling to comprehend how globalisation is changing the behaviour of their own economies, and thus the likely impact of their own policy actions. From a global perspective, the coexistence, in recent years, of low long-term real interest rates, massive, and rising, US current account deficits and the build up of huge foreign exchange reserves in Asia has been a source of particular puzzlement and some concern to policy-makers.

8  BIS Review 130/2010  Figure 1 GDP gaps in September 2010 and in real time Per cent  Source: The Riksbank. Figure 2 Historical GDP trends Index 2000 = 100  Source: Statistics Sweden and the Riksbank. BIS Review 130/2010  9  Figure 3 GDP, hours worked and productivity Index 2007 Q4 = 100  Note: Broken lines denote the Riksbank’s forecasts in MPU September 2008. Sources: Statistics Sweden and the Riksbank. Figure 4 The GDP gap according to the Riksbank, the National Institute of Economic Research and the Ministry of Finance Per cent  10  BIS Review 130/2010  Figure 5 The GDP gap according to the Riksbank, the OECD, the IMF and the European Commission Per cent  Figure 6 Labour market gaps Percentage deviation from the HP-trend and from the average 2000–2007, seasonally-adjusted data  Note. Broken lines denote the Riksbank’s forecast in MPU September 2010. Sources: Statistics Sweden and the Riksbank. BIS Review 130/2010  11  Figure 7 Indicators for the business sector Deviation from the average, percentage points  Note. Companies’ inflation expectations 12 months ahead are denoted in tenths of a percentage point. Source: National Institute of Economic Research. Figure 8 Shortage of labour in the business sector and capacity utilisation in the manufacturing industry Deviation from average 1996–2007  Source: National Institute of Economic Research.
At the same time, the monetary policy stance of the ECB, while fully oriented towards the price stability objective, does influence the exchange rate. From a theoretical viewpoint, one can argue that the member countries of the euro area have chosen to go beyond a fixed exchange rate by adopting a single currency. The adoption of the euro implies the irreversible abolition of national currencies and, hence, of national exchange rates themselves. This choice involves a trade-off. On one hand, a single currency, as we have seen, eliminates the volatility of exchange rates within the monetary union. The euro, as a freely-floating currency, helps protect the economies of its member countries from external shocks. The single currency also facilitates trade between them, deepening economic integration. However, the elimination of national currencies implies that market signals regarding domestic economic imbalances are lost, allowing such imbalances to build up. More importantly, the absence of national currencies also implies that a valuable tool for stabilising the economy in the short term in the face of asymmetric shocks is no longer available. The sovereign debt crisis in the euro area has brought home the implications, both positive and negative, of membership of a single currency area. It remains my firm opinion, however, that the gains outweigh the losses. It is also my firm opinion that greater efforts need to be made to reduce and eventually eliminate internal imbalances within the monetary union in order to protect its sustainability.

Much has been said about how the banking system has remained broadly resilient to date, and how banks have not been “part of the problem” in exacerbating the economic crisis. This is in no small part due to the fact that banks entered the pandemic on a much more resilient footing that during the Great Financial Crisis, thanks to the initial set of Basel III reforms, and the ongoing cooperation among Basel Committee members over the past year. In addition, the unprecedented range of fiscal and monetary measures taken by jurisdictions around the world to support the real economy have largely shielded banks to date from losses. 1/3  Yet in order to safeguard global financial stability, it is crucial to lock-in the benefits of the outstanding Basel III reforms by implementing them in a full, timely and consistent manner. Doing so would ensure that the regulatory fault lines of the global banking system – most notably with regards to excessive variability in risk-weighted asset, the gravity of which remains as important today as it was pre-pandemic – are adequately fixed. These reforms benefited from an extensive consultation process with a wide range of stakeholders. The finalised standards took on board many of the comments received from stakeholders and reflect the differences in views among our members. They are a compromise by their very nature. I should further note that the majority of the adjustments made in the finalised standards reflected the views of different European stakeholders.