samchain/econo-pairs-v1 huggingface dataset:
Eddie Yue: The development and future of the offshore Renminbi market Welcome remarks by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Third Meeting of the Hong Kong – London RMB Forum, Hong Kong, 26 September 2013. *  *  *  The Right Honourable Greg Clark MP, Distinguished Guests, Ladies and Gentlemen: 1. I would like to extend a very warm welcome to all of you to this seminar, which is organised as part of the Third Meeting of the Hong Kong – London RMB Forum. The Forum was launched in January 2012, and it aims to foster cooperation between Hong Kong and London on the development of offshore RMB business. By improving linkages between our two financial centres, it is hoped that the Forum could help to further deepen and broaden the offshore RMB market, and to better enable businesses and financial institutions to capture the opportunities arising from the increased channels for transacting with China. 2. Significant progress has been made in the development of the offshore RMB market since our first meeting in May 2012. It is encouraging to see that market practitioners are making use of the policy headroom to develop RMB products and services to meet their customers’ needs. Opportunities in RMB are also being factored into the decision-making of many businesses and financial institutions. 3. Here, instead of focusing on recent developments in RMB, I would like to take a broader and more forward-looking view.

Central banks were born with the inception of fiat money – banknotes – and they have been pivotal for the take-up of non-cash payment instruments. Among the latter, a growing trend in the last few years has been the preponderance of electronic payments versus traditional paperbased ones – such as cheques – even if this trend varies across regions. This physical dematerialisation is actually ongoing, with the slow move away from dedicated form factors – such as plastic cards – towards entirely digitalised ones, for example solutions embedded in smartphones or other consumer devices. So, regarding money issuance, we have to monitor closely the latest technological innovations. Several central banks, including the oldest one – the Riksbank in Sweden –, have started to study the possibility of a digitallyissued central bank currency which could allow not only commercial banks but also the general public to access central bank money. Second, financial stability: payments are a key vector for trust and confidence in the adequate functioning of the financial system. This requires both secure and efficient payments and financial infrastructures. Therefore regulators attach importance to supporting technological innovations, including via the potential development of more efficient regulation or “Regtechs”, as long as they go hand in hand with low operational risks and high transaction safety. Third, economic services: payments are the nexus where a new ecosystem based on technological innovation and entrepreneurship is blooming.
In order to achieve this, the board shall have clear, well-defined and understood responsibilities. There shall be a balance of skills, knowledge, experience and perspectives among directors so that the board works effectively to ensure the long-term safety and soundness of the institution.” The guidelines in this respect expect the board of directors to exercise professionalism by having a formal charter that sets out its responsibilities, having a rigorous formal processes for evaluating its performance along with that of board committees and individual directors and, ensuring that the institution complies with all relevant laws, and codes of business practice, and that it communicates with its shareholders and relevant stakeholders openly and promptly Principle 6 – roles of senior management “It is the responsibility of management, under the direction of the chief executive officer, to conduct the institution’s business and affairs in an effective, responsible and ethical manner,  2  BIS Review 129/2007  consistent with the principles and direction established by the board through the strategic plan.” Apart from reflecting integrity in their management of the institution, the guidelines for this principle require that senior management be appropriately qualified to run the affairs of the institution. The expectation is that people of appropriate qualifications will reflect the professionalism that is required of their respective professions.

Measured in these terms, the deficit was three times larger than that of Italy and Spain last year. Policy had to be reversed and tightened. Many Norwegians saw a decline in real incomes. 1  David Landes (1998): The Wealth and Poverty of Nations, W.W. Norton & Company, Inc., N.Y  BIS central bankers’ speeches  1  Slide 4: Output gap: A boom-bust economy In the early 1980s, the Norwegian economy experienced a new boom, this time fuelled by debt. When oil prices fell in 1986, the Norwegian economy was hit again. We experienced a collapse in house prices, a severe banking crisis, a currency crisis, a fiscal crisis and high inflation. Unemployment soared. Large parts of the banking system were eventually nationalised. In the two years period after summer 1987, GDP fell by almost 5 percent. During the 1980s, Norwegian GDP per capita grew by a mere 1.2 percent annually, less than half of the growth recorded in both the preceding and following decades. By the early 1990s, the Norwegian authorities realised that the old policy framework was unsuitable for a modernised economy, with deregulated credit and capital markets. The low growth performance and volatility of the recent past was to be replaced by stability, predictability and renewed growth.
In addition, member countries participate in a variety of consultative fora on economic policy and financial stability, which should also promote improved policy in these areas. Another benefit of euro area membership is access to rescue funds and a common safety net intended to address shocks in individual countries and reduce contagion among them. But euro area membership also entails risks for Iceland. It would no longer be possible to apply independent monetary policy and a flexible exchange rate in response to shocks and to expedite adjustments to changes in national income. Under certain circumstances, this has been quite useful for the Icelandic economy. On the whole, however, domestic monetary policy has not proven particularly effective in achieving set goals, and more often than not a flexible exchange rate has proven a source of shocks rather than a shock absorber. Consequently, relinquishing domestic monetary policy may not prove to be a great sacrifice unless monetary policy can be improved and excess exchange rate volatility can be mitigated. This possibility is explored later in this chapter. Another risk is the crisis currently facing the euro area and the design failures that are a partial cause of it. Because of this, it would be risky for Iceland to join the euro area before it can be determined, based on further developments, whether the euro area would be a better or worse choice in the long run.

Page 1  Inflation is a ‘wicked problem’ − speech by Huw Pill Introductory remarks given at the Warwick Think Tank, Warwick University  Page 2  Published on 16 February 2023  Speech Good evening everyone. It is a great pleasure to be here at the Warwick Think Tank today. Thanks to the organisers for the invitation to participate. I am sure that you have many questions about the outlook for the UK economy. We all do. I am looking forward to discussing those in a moment. But before we turn to that discussion, I thought I would kick-off with a few remarks about the framework within which monetary policy works. The first thing to say is that the objective of monetary policy in the UK is very clear. The Bank of England’s Monetary Policy Committee (MPC) has the objective of price stability. Through achieving price stability, monetary policy creates an environment in which firms and households can make the longer-term plans and investment decisions that generate the innovation, dynamism and productivity that ultimately drive growth and prosperity. Price stability has been operationalised in the form of an inflation target of 2% for the consumer price index (CPI). This target holds at all times. The MPC therefore needs to achieve this target on a sustainable basis: it is not a target for one moment or horizon, but must be achieved on an ongoing basis over the medium term.
We thus will need to see more data to determine the extent to which the March data represent a transitory weather-related setback. Regardless of the importance of the mild winter in distorting the economic data, real economic activity has yet to be strong enough on a sustained basis to make a big dent in the overall amount of slack in the U.S. economy. While growth was stronger in the fourth quarter, most of it was due to inventory accumulation. Growth of final sales remained quite weak. Historically, quarters in which inventory investment makes significant growth contributions are typically followed by quarters in which that growth contribution is modest or even negative. That appears to be what is shaping up for the first quarter of this year. Based on available data, our current expectations are that real GDP will expand at around a 2 ¼ percent annual rate during the first quarter of 2012. Even with the robust increase of light vehicle sales, overall consumer spending in the first quarter appears to be rising at a similar moderate rate. At the same time, real disposable income has been flat over the past three months, and the large increase of gasoline prices is likely further sapping consumers’ real purchasing power. And growth of business investment spending, which softened in the fourth quarter of 2011, may have been even a little softer in the first quarter of this year.

In its place, the health and education sectors have emerged as important sources of job opportunity and economic development potential. These sectors have provided stability to the region through the recession and recovery. The recent announcement of Governor Cuomo’s $ billion economic development pledge to the region is another positive development. This commitment represents a tremendous opportunity for the region to accelerate the economic transformation already underway. Therefore, it is important for the community to think strategically about how best to use these funds to leverage the region’s existing strengths. Buffalo’s colleges and universities deserve special attention within this strategy. Not only do these institutions produce highly skilled labor, they also promote innovation by creating new knowledge and inventions through academic research and development. It can be especially beneficial for local businesses to take advantage of both the knowledge created and the availability of research facilities at local colleges and universities. Partnerships between private industry and higher-education institutions are an important ingredient in this regard. Going forward, I believe these partnerships will become more important than ever – particularly for places like Buffalo that continue to undergo economic restructuring. Fortunately, the region has a strong higher education sector in place. Conclusion To sum up, the incoming data on the U.S. economy has been a bit more upbeat of late, suggesting that the recovery may be getting better established.
And those who were tied to the German mark long before the euro was created (Austria and the Netherlands and Denmark for that matter) simply remained bound to Frankfurt after the Eurozone was established, only the Bundesbank building was replaced all of a sudden by the ECB building. There’s no basic euro story like this in the Czech Republic. Why should we try to create one artificially? Our story is one of maintaining monetary stability across regimes and governments and of keeping the koruna as the name of our currency continuously since the time of Emperor Franz Joseph (his monetary reform established a new currency – the crown, or koruna – throughout the Austro-Hungarian Monarchy in 1892) regardless of totalitarianism and the horrors of the 20th century. Neither the Nazis, nor the Communists had any tendency to rename the currency and kept this old monarchist name despite otherwise changing basically everything, and for the worse. Our country – unlike the rest of Central Europe – has never experienced hyperinflation in its modern history, and this monetary stability has always served the entrenched mentality of small Czech savers well. Domestic scepticism about the euro: that’s our authentic Czech story. The Prague-Copenhagen connection I have to add with some bitterness that many in the Czech Republic like having their own currency but not necessarily their own monetary policy or their autonomous central bank. This magical contradiction can be seen in the pleiad of ostensibly conservative political opponents of the euro in the revitalised euro debate.

Regarding the various sources of risk regularly monitored by national bodies with responsibility for safeguarding financial stability, the surprise factor was perhaps the form via which systemic risk could be triggered by the collective behaviour of financial institutions and the ways in which they interact in national and international financial markets. The crisis has highlighted the importance of improving our understanding of interconnectedness in the financial system, both via the direct links between financial institutions and the indirect ones created in financial markets. Macro-prudential analysis has two main focuses: (i) risk surveillance with the view to detect sources of risk or vulnerability within and outside the financial system, and (ii) risk assessment aiming at evaluating the potential severity of the identified risks. Risk surveillance should aim at leaving “no stone unturned” in reviewing potential vulnerabilities and risks to the stability of the financial system. It relies on the continuous and rigorous monitoring of financial markets, financial institutions and the economy at large, with the goal of detecting potential vulnerabilities. It is important at this initial stage to cast the net as wide as possible to ensure that no risk is missed or overlooked. Early warning indicators and a broad range of financial stability indicators can also be useful in this analysis. A solid statistical information-base and market intelligence efforts are also of the essence in the risk identification process with the view to support.
•  A second related explanation is focused on structural and technological changes which are permanent in nature, but were not directly caused or controlled by macroeconomic policies. For example, a special type of technological progress frequently mentioned in the discussion of output volatility refers to the improved management of inventories. If a significant part of the business cycle dynamics occurs through inventory fluctuations, “just in time” technologies and better management of inventories in general would reduce volatility along the business cycle (McConnell and Perez-Quiroz, 2000; Cecchetti et al., 2005). Another important structural change is related to worldwide economic integration and globalization, as reviewed in the Geneva Report prepared for this conference (Gerlach et al., 2008). Cavallo (2007), for example, emphasizes that trade openness has reduced output volatility, and hence, more open economies are also more stable. This evidence refutes the old view that more open economies are more exposed to volatility. On the contrary, Cavallo (2007) argues that more open economies have more opportunities to adjust to international shocks. Following this argument, the notable increase in openness all around the world would make all countries more stable. 1  •  A third and final factor which I would like to emphasize is related to improved monetary policy. These reforms have resulted in the reduction of not only inflation levels, but also its volatility. Figure 1 shows average growth and inflation over an ample set of developing countries, 2 while figure 2 shows the volatility of output and inflation.

Culture is at the heart of many of these issues, and addressing the root causes of misconduct must remain a high priority for the industry and regulators. The Supervisory Approach Given this imperative for change, the question is, what can we do to improve culture in financial services? Culture is like many of the risk management issues challenging businesses. Cyber threats, digital transformation, and climate change are all facts of life that companies face today, and will be facing 10 years from now. But I don’t hear any CEOs saying that securing their servers is a project that can wait until 2029. Nor does anyone think that there are “once and done” fixes for these problems. Indeed, one important lesson from cybersecurity is that this is not purely a technology problem, but one that requires a fundamental shift in mindset and culture over the long term. So the first thing is the industry, the regulatory agencies, and the banks need to take culture seriously, now. A major and essential part of this is that there must be meaningful consequences for firms and people when things go wrong. We have learned that simply levying large fines on companies is not enough to create lasting change. More is needed. Regulators must hold management and boards of directors to account. The legal element of supervision will always remain paramount. And a scandal often spurs change. But if leaders wait until things have gone wrong to think about culture, they’re leaving it too late.
In this regard, the recent, widely different experiences of Ireland and Portugal are highly instructive. 1 Thus, whereas real per capita income in these two countries was not very different in the early 1990s, it had roughly doubled in Ireland by 2006 to 131% of the euro area average, but had only improved slightly in Portugal to 68%. How can such divergent performances be explained? Before joining the euro area Portugal pursued a pro-cyclical fiscal policy, which reinforced domestic demand, while in Ireland the fiscal stance was more disciplined. Whereas unit labour costs and inflation rose fast in Portugal, cost and price pressures were more contained in Ireland. As a result, competitiveness declined in Portugal, reflected in a growing current account deficit, whereas Ireland remained competitive and enjoyed a roughly balanced current account. These different policy approaches left their mark in the post-euro period. In Ireland, real output growth in the years 1999-2006 continued at a strong pace, 6.5% per year on average, and the fiscal balance was in slight surplus. In contrast, Portugal experienced an average growth rate of 1.7%, continued weak competitiveness and a substantial current account deficit. A major factor behind Ireland’s success was a 3% average annual increase in labour productivity growth, compared to less than 1% in Portugal. Another lesson that has emerged from the experience of these two countries, and is also widely documented in the literature, is that cost levels are not the only determinant of competitiveness.

In the absence of a consensus, however, strong leadership would be required in order to explain the need for hard measures to the population and to isolate vested interests standing in the way of the needed reforms. Whatever the approach adopted, maximizing the benefits of Malta’s participation in monetary union will require the removal of the remaining impediments to growth. In the public sector, fiscal consolidation must henceforth involve a greater emphasis on expenditure reduction, particularly in view of rising pressures caused by aging-related factors such as pension and health care costs, and on securing more “value for money” and greater accountability in the use of public funds. The provision of free public goods and services regardless of the beneficiary’s ability to pay needs to be reassessed as it leads to waste and to a higher tax burden, besides being inequitable. The same applies to subsidies, whether implicit or explicit. The resulting distortion of incentives and inefficiencies is both unsustainable and incompatible with the fiscal discipline required in a monetary union. An important contribution to enhancing the economy’s competitiveness can also be made by new forms of employment security and by further improvements in labour market flexibility. With regard to the former, there remains scope for more innovation in terms of employmentfriendly labour laws, labour market practices and social protection systems.
5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  What is true across time is also true, by and large, across regions. Chart 5 looks at a regional map of firm-level productivity, where productivity is measured as output per hour worked. This map is built up from several sources of data on output and employment collected by the ONS using surveys covering tens of thousands of firms across all regions in the UK and all sectors of the economy. 10  It paints a pretty  comprehensive picture of the regional workings of the UK corporate sector. This productivity map suggests, perhaps unsurprisingly, a wide degree of regional dispersion. The most productive region (London) has firms with levels of productivity almost 60% higher than those in the lowest productivity part of the UK (Northern Ireland). This map matches closely the regional pattern of GDP per head and wages, consistent with Krugman’s conjecture. Much of the regional variation in economic activity and household income derives, it seems, from variations in productivity among firms. These regional maps suggest a simple but coherent story about regional variations in living standards. The more productive a firm, the higher the wage it pays. If levels of regional productivity differ greatly, so too will regional levels of economic activity and household income. So Red and Blue Car regions comprise low and high productivity firms, and thus low and high income households, respectively. This is not an imaginary world; it is the real world.

I believe that the odds of widespread financial disruption on this count are fairly slim, although, clearly, some borrowers are vulnerable. First, the shift to these new instruments appears relatively modest overall. Second, the equity cushions available to both borrowers and lenders still seem, on average, to be pretty substantial. This is evident in looking at loan-to-value ratios, which have fallen, on average, as home valuations have risen faster than mortgage debt. In addition, most financial institutions enjoy comfortable capital positions, so they’re better able to weather any problems with their mortgage portfolios. Finally, some of the risk associated with mortgages has been transferred from banks to investors, as banks have sold off securitized bundles of mortgage debt. These investors may be in a better position to handle the associated risk. So, while there undoubtedly would be some fallout from a substantial drop in house prices, the financial system and consumers appear to be in reasonably good shape to handle the situation. Monetary policy I’d like to close my remarks by taking a step back from the home price story and putting it in the broader context of the economy’s overall performance—which, after all, is the chief concern of monetary policymakers. As I’ve emphasized, economic activity has been burdened by some major drags over the past several years. As a result, the Fed has had to keep interest rates exceptionally low for a long time just to get respectable economic growth.