samchain/econo-pairs-v1 huggingface dataset:
This development marks an important milestone in the ongoing evolution of the overall consumer protection framework for the industry. A number of initiatives have also been taken by the banking industry to maintain the integrity of the payments systems and instruments, focused at promoting user confidence and ensuring that consumers’ interests are safeguarded. In combating card fraud, significant investments have been made by the industry players to migrate all magnetic stripe ATM and credit card infrastructure to a chip-enabled environment. New payment channels and infrastructures that leveraged on the Internet have also been developed, aimed at increasing safety and efficiency in the financial system. Measures have also been introduced to enhance customer service levels at financial institutions. For this purpose, Bank Negara Malaysia has undertaken a nationwide survey to assess how well consumers are being serviced by the financial service providers. The findings of the survey were shared with the industry and individual institutions to serve as a basis for financial institutions to assess their own performance and to use the results to benchmark themselves against global best practices. The objective is to achieve world-class quality in financial services. Ladies and gentlemen, The provision of adequate avenues for redress is also important to enable consumers to resolve conflicts through an equitable process. Efforts have been made to strengthen redress mechanisms both at the institutional level as well as on an industry level.

Regional and international journals have portrayed ASEAN as drifting apart. Analysts doubt whether ASEAN countries can get together to pursue economic cooperation, lower trade barriers and restore prosperity and confidence. As one analyst said on BBC TV: “A lot of these issues are more or less on hold. … there’s very little impetus for really substantial change in the past few years and ASEAN hasn’t coped well with the various political and economic crises that the region has seen. If you look at investment, it’s really shifted to Korea, to China and it’s going to probably get much more competitive when China joins the WTO. In many ways, a lot of Southeast Asia has lost its competitive edge. The political problems, economic problems have really hurt the region. So, what you are seeing now is a lot of investors really reassessing their view of this region and moving much more towards the north east of Asia.”1 Falling behind The figures confirm this. Since 1996, Foreign Direct Investments (FDIs) to the North have continued to rise, whereas FDIs to the South have fallen to about half pre-crisis levels. As a result, Southeast Asia’s share of total FDIs to East Asia (excluding Japan) halved, from 33% in 1996 to just 15% in 1999. In equity markets, Southeast Asia’s weight has declined, while Northeast Asia’s has increased.
However, in the case of improving the supply of jobs in Spain, there must be an urgent recognition of our  BIS central bankers’ speeches  3  problems by all, and reform measures should be adopted as soon as possible. From December to March the markets acknowledged the last two measures adopted in the fiscal and financial field, namely pension reform and the Royal Decree-Law on recapitalisation. Yet the figures of more than 20% for total unemployment and of around 40% for youth unemployment continue to appear on all market screens, figures that investors consider to be a sign of inability to promptly attain close to potential growth. We have to change the institutional and legal framework of employment not because the markets demand it, but because it is in our interest. All citizens want lower unemployment rates and higher wages in those industries or companies where productivity is growing more. But we must also be aware that if the obstacles to job creation are not lifted, the markets will ultimately perceive that the only way Spain can recover competitiveness within the Monetary Union will be by maintaining very low GDP growth rates over many years, as has occurred in other countries. The solution to fiscal problems, no matter how appropriate the policies adopted are, will be much more complicated if public revenue is poor or if we carry on spending 3% of GDP on transfers to the unemployed for any length of time.

Likewise, in the case of the financial system, restructuring will be slower if low growth diminishes the volume of banking business and increases bad debts. We should not accept having to pay a spread of around 200 basis points for much longer. This not only increases the portion of public spending set aside to pay interest but, above all, it might ultimately hamper business financing, reducing the supply of credit and raising its cost. To date, credit figures have behaved in Spain as the macroeconomic models might have predicted. After a long phase of excessive debt, households and firms must deleverage, and logically their demand for credit should be contained. And as was likewise to be expected, the reduction in credit is affecting those sectors such as construction and real estate more adversely than other sectors which are even recording positive growth in credit. Past experience also teaches us that we will only see an increase in the solvent demand for credit that is higher than nominal GDP growth when sufficient time has elapsed since the cyclical trough in the economy. All this is true but, if we do not sufficiently narrow the Kingdom of Spain’s spread, complying with our fiscal and financial commitments and changing our institutional framework for employment, credit developments in Spain may be affected not only by the lack of momentum of solvent demand, but also by supply-side limitations. I would like to conclude on an optimistic note.
From an economic perspective, coming on top of what was already a very steep rise in the cost of globally traded goods, in the wake of the pandemic, the invasion has led to substantial rises in the cost of energy and other commodities. As a big net importer of manufactures and commodities it’s doubtful that the UK has ever experienced an external hit to real national income on this scale. From the narrow perspective of monetary policy it will result in the near term in the difficult combination of even higher inflation but weaker domestic demand and output growth. However, the MPC has already said quite a bit about these things, individually and collectively, and – dramatic though its economic effects have been – my topic today is not this awful conflict or the immediate questions it poses monetary policy. I’ve no doubt we will  discuss these things in the Q&A. Instead, I wanted to talk about something more general, namely the communication of monetary policy, and specifically the role of “forward guidance”. I will take this to mean statements by monetary authorities about future policy. The question “what’s going to happen to interest rates?” is asked of us routinely. (Sometimes it’s phrased directly, sometimes more circuitously, but it always seems to come in one form or another.) And perhaps it’s understandable that people should want to know, particularly in an environment as uncertain as this.

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Given that all the Swedish banks benefit from the Riksbank’s foreign-exchange reserve, it would not be unreasonable for them to share the costs of maintaining it. If we can price this in an effective way it will also give the banks an incentive to reduce their own currency risks. This would reduce the risks to financial stability in the Swedish economy. BIS central bankers’ speeches  9  It is of course no secret that we are also looking at mortgage loans from the asset side in the banks’ balance sheets. As I have already pointed out, the banks’ risk weights are very low. Finansinspektionen intends to begin applying a risk-weight floor of 15 per cent for the banks’ portfolios of Swedish mortgage loans. The Riksbank supports the proposal for a risk-weight floor of 15 per cent. We also believe that there are good reasons for analysing whether this floor needs to be raised even further. One important reason is that the public sector and non-financial companies would have to bear a large part of the risk if the debt-servicing ability of the households were to weaken. I have also spoken about the risks arising from the fact that a large proportion of the mortgage loans are interest-only loans. In this context, the Swedish Bankers’ Association’s recommendation that all mortgages that exceed a loan-to-value ratio of 75 per cent should be amortised is of course welcome, although one may ask whether this is enough.

Similarly, crises that are preceded by a credit and housing boom tend to be longer and more severe than other economic crises.1 A fall in housing prices may lead households to save rather than consume in order to compensate for the fact that the value of their homes has fallen. If many households behave in this way, this may weaken economic activity, increase unemployment and create loan losses in the banks' lending to companies. This, for example, is what has happened in our neighbouring country Denmark in recent years. What we can note is that the credit conditions for mortgages changed in the early 2000s. Interest-only mortgages became increasingly common at the same time as the loan-to-value ratios increased. The banks also began to fund mortgages by issuing so-called covered  1  See Claessens, S., A, Kose, and M, Terrones (2011), “Financial Cycles: What? How? When?”, IMF Working Paper. CEPR Discussion Paper, NO.8379. BIS central bankers’ speeches  3  bonds on the financial markets to an increasing extent. Easy access to inexpensive funding in combination with a high demand for mortgages led to rapid credit growth. Now, the debts of the Swedish households are high in both historical and international terms. Although the rate of credit growth has slowed down and loan-to-value ratios have fallen – the mortgage cap introduced in 2010 has probably contributed to this – there are still structural weaknesses on the Swedish mortgage market.
What I want to illustrate is that it is important to protect the entirety, so that we can continue using the services that are so important to the Swedish economy, all the way down to the individual level. This is where the Riksbank, together with other authorities and organisations, comes into the picture. We work on preparations to create resilience and contingency solutions, which is called business continuity planning by those who work with these issues. The planning with regard to what to do when problems arise is called crisis recovery planning. This entails using contingency routines to maintain the capacity to make payments, which does not necessarily mean that the function needs to be maintained in all parts of the payment system. It may be a good idea to have contingency solutions that are entirely independent of the regular system. Given the important function of the payment system in society, priority must be given to investment in building up resilience and managing crises. However, at the same time, these investments must be constantly balanced against the aim that the system should have the functions that are in demand and it should be cost-efficient to society. For instance, the aim for the Riksbank's business continuity and crisis recovery planning is that it should be at a level that provides a sufficiently stable system, but still be cost efficient. Several authorities and private companies own and have responsibility for the payment system infrastructure.

However, if we describe the entire chain, from the Swedish Social Insurance Administration beginning the payment process until Ingrid actually has the money in her hand, there is a fairly substantial amount of infrastructure, infrastructure communications and payment flows required. In addition to the basic infrastructure of electricity, telecommunications and post, the computer systems at the Swedish National Debt Office, the banks, the Riksbank and the Bankgirocentralen are used to implement ordinary, simple pension payments. In order for Ingrid the pensioner to receive her pension, the social insurance office sends a payment order to the Swedish National Debt Office and one to the banks the Swedish Social Insurance Administration uses to execute its payments. It is the Swedish National Debt Office’s job, in its role as bank to the central government, to pay pension money to a number of banks as instructed by the social insurance offices. These banks in turn distribute money to the pensioners’ accounts in their own banks, if the pensioners have bank accounts there. For those pensioners who have accounts in banks other than those with which the Swedish Social Insurance Administration has an agreement, the money is forwarded to these banks through Bankgirocentralen. The pensioners who do not have a bank account at all are instead given a payment slip that can be redeemed at any bank or at Svensk Kassaservice. The Swedish National Debt Office makes the payment of pension funds by temporarily, over the day, using its credit with the Riksbank.
Monetary policy transmission could not work properly without such a system. At the same time, it is equally important that the financial system itself is not a source of excessive risk for the rest of the economy. Our efforts are thus concentrated on increasing resilience by mitigating systemic risk. To ensure this, we work closely with the Financial Market Supervisory Authority, FINMA, the Federal Department of Finance and various international standard-setting bodies. A great deal has been achieved in our country so far. One of these achievements is the countercyclical capital buffer (CCB) 7, which has recently generated a number of headlines. As you know, the SNB has, for the time being, decided against proposing the activation of the CCB. There are two reasons for this. First, as I have already mentioned, we have observed some indications of a possible slowdown of price momentum in the market for residential real estate. Second, two other measures came into effect at the beginning of June – stricter capital requirements for mortgages and a revision of the self-regulation rules for mortgage lending. However, this is far from an all-clear for the real estate market – I want to underline again that the risk of a further build-up of imbalances followed by a significant price correction is  5  Cf. SNB press release, 27 August 2012. 6  Cf. SNB, Financial Stability Report, 2011 and 2012  7  Cf.

There are two reasons for this: the size and the international orientation of the financial industry. First, the financial industry makes up a large share of gross domestic product (GDP) in Switzerland – larger than in other rich nations. For example, at its peak in 2007, the financial industry contributed around 13.5% to GDP in Switzerland, compared to just 8% in the US, 7.5% in the UK, and less than 5% in Germany 1. In countries with large financial industries, households and non-financial companies generally rely more on external capital. Consequently, in these nations, shocks to the financial system have larger output effects. The financial industry’s considerable share of GDP thus implies that shocks to the financial system potentially have more substantial effects on the real economy of Switzerland than in other countries 2. Second, parts of Switzerland’s financial industry are very internationally oriented. In the aggregate, around half of the entire value added by banks in Switzerland stems from  1  Source: OECD, Structural Analysis Database. 2  This has been documented empirically by Levintal (2009), who shows that the effects of fluctuating bank profits on GDP growth are related to the size of the financial industry as a share of GDP; Kroszner, Laeven and Klingebiel (2007) find that bank crises have more pronounced real effects in countries with a higher ratio of loans to GDP. 2  BIS central bankers’ speeches  business conducted with foreign customers. Over half of all assets under management by Swiss banks come from foreign customers 3.
In my view, three main factors have been driving the recovery over the last year – a bounce back in business and consumer confidence, strong growth in Asia and other emerging markets, and the impact of policy stimulus. These three factors will also have a key bearing on future global economic prospects, and I will discuss them briefly in turn. Recovery in confidence A key factor which plunged the world economy into recession was the massive shock to business and consumer confidence across all the major economies of the world when the global financial system appeared to be rocking and reeling in late 2008 and early 2009. Since then, confidence has gradually recovered as the financial system has stabilised and the shock waves from the traumatic events of eighteen months ago have subsided. 3  See http://www.iata.org/whatwedo/economics/ for data compiled by the International Air Traffic Association (IATA). 4  The 8.5% increase relates to the seven-month period Q2 2009 to Nov–Jan 2010. 5  UK exports of goods and services grew in volume terms by 5.4% per annum from 1992 to 2007; exports of goods excluding oil and erratics increased by 4.5% over the same period. 6  This has been reflected in an upgrading of world growth forecasts for 2010. For example, the IMF forecast of GDP growth across the world economy this year has risen from 1.9% in April 2009 to 3.9% in its latest World Economic Outlook (January 2010).

2  BIS Review 33/2010  One indicator of this recovery in confidence is the performance of stock markets, reflecting an improving assessment of business prospects. As Chart 2 shows, equity markets in the UK and US have recovered by around 60% from their troughs about a year ago. Alongside this improvement in financial market confidence, business survey indicators have also been improving across the global economy. Chart 3 shows a composite measure of surveys of purchasing managers from the major world economies. The very negative readings of around a year ago have given way to responses which are consistent with rising activity and the expectation of future growth. BIS Review 33/2010  3  The natural momentum of a recovery is that, as growth continues and memories of the recession fade, both consumer and business confidence will continue to build. Over time, cutbacks in investment by firms and the deferral of major consumer purchases will begin to reverse. As a result, we should expect both consumer and investment demand to gradually strengthen as long as new shocks to confidence do not emerge. Growth in Asia and emerging markets Alongside this general recovery in confidence, a key engine of the world recovery has been a strong rebound in Asia and many other emerging market economies.
If their non-financial activities run into trouble, the banks may feel compelled to support them beyond normal commercial considerations, to protect their own reputation. In so doing the banks may undermine their own soundness; yet if they did not extend the rescue, the problems of the affiliates may trigger a loss of confidence in the bank itself because of the close association. Secondly, with banking and non-banking activities inter-meshed within a conglomerate, there will be a strong tendency to stretch any safety net intended for the banking system also to cover non-bank operations in the group. If failure of an associated non-bank threatens the bank and systemic stability, the regulator or government may be forced to rescue both. We have seen this happen in the recent Asian crisis. An implicit safety net for the banking system may be a necessary evil; but extending it to 1  BIS Review 53/2000  non-banks compounds the problem of moral hazard. It also tilts the playing field against non-bank competitors who are not associated with banks. Thirdly, separation minimises the risk of non arms-length transactions between banks and their nonbank affiliates. When a bank lends to a related entity at more favourable terms than market, or invests in an affiliate in order to control it even though the investment does not perform, minority shareholders of the bank are disadvantaged, and so are depositors.

The banks are less willing to lend to associates without independently assessing their risks and charging the appropriate risk premiums. And both banks and non-banks within the group are no longer willing to maintain shareholdings in each other which yield low returns. The changes will enhance transparency and corporate accountability. They are essential to Japan’s economic recovery, but will have far-reaching social and cultural implications. Existing structures of Singapore banks In Singapore, the local banks (other than DBS) started as family-owned banks and built up a successful financial business on that basis. Over time they have merged and consolidated. Today the founding families remain the principal shareholders, and are in several instances also involved in the management of the bank. Besides banking, the principal shareholders have also built up diverse non-banking businesses, especially in property. The local banks participate in these non-financial activities of the group, both by lending and through equity ownership. The banks and non-banks in the same group have developed significant cross-shareholdings. A mixed conglomerate structure has evolved. The commingling of financial and non-financial activities will potentially expose Singapore banks to the same problems that banks elsewhere have experienced. We have not run into serious problems, so far. This is because the principal shareholders have run the banks prudently and properly. The MAS has also been stringent in monitoring related party transactions.