samchain/econo-pairs-v1 huggingface dataset:
G  The desire for certainty and control which seems to underlie such proposals is understandable, as it appears to offer the promise of using less public money, and seemingly entails less risk that creditors will be bailed out for poor credit decisions. But the control and manageability that might result may be more seeming than real. G  For one, a perceived disposition to preemptively lock the door seems likely to send investors heading for the exits all that much sooner. As a result, many avoidable crises soon may become inevitable. And the problem of contagion, whereby difficulties in one case spread to many, would seem likely to worsen. G  Moreover, a perceived weakening of the international community’s commitment to voluntary, market-oriented approaches and its support for honoring contractual commitments would likely create deep distrust, making it harder to encourage cooperation between debtors and creditors in ultimately resolving the crisis. G  An overly quick recourse to payment suspensions also risks discouraging precisely the types of flows that we should wish to encourage, that is, longer maturities with better risk-sharing characteristics, such as long-term bonds and equities. In a crisis, the hottest money leaves first - - by definition. It seems counterproductive to seek to penalize those who stay. G  Finally, I would suggest that preemptive attempts to "freeze markets" also undermine market discipline of, and ownership by, the local authorities.

So despite these crises elsewhere, growth in Sweden remained stable at an average annual rate of 3 to 4%. When the unrest had subsided, the repo rate was raised to the current level of 3.75%. The Riksbank has heralded a repo rate increase for some time During the past year, Riksbank representatives have frequently said that sooner or later, a continuation of strong economic activity will make a further repo rate increase necessary. This is because an annual GDP growth rate of 3 to 4% is more than the economy can achieve without generating imbalances. Higher economic growth is, however, feasible for a time if there are unutilised resources in the economy. But when tensions arise between total demand and supply, various bottleneck problems are liable to result in price and wage increases that ultimately threaten price stability. 1  BIS Review 109/2000  Perhaps the best illustration of this is to be found in the labour market. The increase in employment in recent years has exceeded what demographic factors are contributing to labour force growth by around 40,000 to 70,000 persons a year. Employment growth is in fact the strongest for several decades. Considering how high unemployment has been, this is welcome. But sooner or later, such a development means that firms will have difficulties in recruiting labour. Then, if not before, wage costs are liable to accelerate and push prices up.
2  BIS Review 45/2003  Third, it is extremely difficult to anticipate the future path of interest rates. That is because the Monetary Policy Committee sets rates in response to news in the economy, and that news is inherently difficult to forecast. Each month the Committee makes a careful assessment of the outlook for inflation, and it is that which will guide our decisions on the appropriate level of interest rates. It is over 3 1/2 years since interest rates were last raised - the longest such period since Bank Rate was held constant at 2% through the 1940s. At some point reducing the present degree of monetary stimulus will be necessary in order to keep inflation on track to meet the target. The timing of any such decision will reflect our judgment of the outlook for inflation. Listening to our business contacts and learning from our visits around the UK is an important input into that judgment. To retain the unrivalled degree of stability that we achieved during the “nice” decade will be an even more difficult challenge for the future. The present monetary and fiscal frameworks provide a seaworthy policy vessel, but, as all sailors know, fog, especially statistical fog, can be dangerous. So we must hope that Lady Luck will continue to smile on us. BIS Review 45/2003  3

Marzunisham Omar: Financial advisers, trusted advisers Keynote address by Mr Marzunisham Omar, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 6th Annual Conference of the Association of Financial Advisers 2017 "Financial Advisers, Trusted Advisers", Kuala Lumpur, 9 October 2017. * * * It is indeed a great pleasure to be here this morning. I would like to thank the Association of Financial Advisers for inviting me to speak, and allow me first to congratulate the team on the successful organisation of this year’s conference. The future is as promising as it is unpredictable. As I reflect on the theme of the Conference, I am reminded of a quote from Confucius, the ancient Chinese philosopher – “I used to take on trust a man’s deeds, after having listened to his words. Now, having listened to a man’s words, I go on to observe his deeds.” This morning I would like to talk about trust – financial advisers as trusted advisers. Indeed, trust is at the heart of the financial advisory industry. While customer service and technology are increasingly the key differentiators, the most essential element has been, and will always be, trust. In an industry where the very foundations are dependent on the strength of personal relationships, trust is not only a necessary feature – it is its strongest advantage, its defining value proposition.
I am not so pessimistic as to imagine that the best one can do, over the next twenty years, is the negative real return offered by indexed gilts. But one can’t make these predictions with any great confidence. And if that sounds rather non-committal, then it only underlines the point I’m trying to make. Whatever does cause a sustained rise in real interest rates – a lasting solution to the arrangements of the euro area, perhaps, or renewed optimism about global productivity growth – it is unlikely to be the arbitrary whim of central bankers. Those betting on long-term movements in interest rates will have to work a little harder than just listening to people like me. And that sounds like a good place to end. Chart 10 Despite low rates equities have performed poorly over the past 15 years  Source: Bank of England  References Baldwin, R., and Teulings, C., 2014, “Secular Stagnation: Facts, Causes and Cures”, VoxEU, http://www.voxeu.org/content/secular-stagnation-facts-causes-and-cures Bank of England, 2014, May 2014 Inflation Report, http://www.bankofengland.co.uk/ publications/Documents/inflationreport/2014/ir14feb.pdf Banks J., R. Crawford and G. Tetlow, 2010, “What does the distribution of wealth tell us about future retirement resources?”, A report of research carried out by the Institute for Fiscal Studies on behalf of the Department for Work and Pensions. Barro R., 2009, “Rare disasters, asset prices, and welfare costs”, American Economic Review 2009, 99:1, 243–264.

Because the majority are owned by institutions – banks, pension funds and insurance companies – it is hard to trace through the impact of any capital gain to its ultimate beneficiary. One thing worth saying is that, at least in terms of effective wealth, the gainers clearly include those entitled to future payouts from defined-benefit pensions. You can’t sell such an entitlement. But it does offer a guaranteed flow of future income, much like the coupons from an indexed gilt (that’s why DB pension funds are obliged to discount their liabilities using gilt yields and why, in response, they hold significant quantities of government debt). The present value of this income has therefore risen in similar fashion. To the extent they include equities, the value of defined-contribution (DC) pension funds will have performed less well. The third point is that none of this need have any bearing on the distribution of income, as opposed to that of wealth. This is an important distinction. To the extent that asset prices rise because the marginal investor is becoming more patient, lowering the discount rate (Chart 6(a)), this reflects a change in the present value of a given stream of income, not in the stream itself. Things are a little more complicated if interest rates have fallen in response to slower growth (6(b)). In that case, anyone who has locked in a future flow of income (coupons on government bonds, for example) will gain relative to others.
I have long been clear that the risk weights for mortgages that the banks calculate using their own models are often too low. However, the causes of both the Swedish and the international problems can be traced to the same source. Internationally too, it has been concluded that the banks’ own models are inadequate for ensuring that risk weights always reflect the risks in a good and reliable way. Discussions are therefore underway as to whether the regulatory frameworks, as well as the oversight and approval of the banks’ internal models, must be reviewed so that the models cannot become tools for an unwarranted lowering of the capital requirements. In my opinion, finding ways of ensuring that the risk-weight calculations are credible and that the risk weights of different banks can be compared is one of the most important tasks of the Basel Committee going forward. A number of measures are being considered and discussed; we will gradually begin to see the fruits of this work. This relates, for example, to reviewing the banks’ choice of models for calculating risk weights and the degree of freedom for the banks to make their own assumptions in the models, as well as setting stricter requirements to ensure that the data used as input in the models is of sufficiently high quality.

This will benefit everyone, even Sweden, partly by reducing the risk of global crises and partly by reducing the risk of crises spreading to Sweden and other countries through the links that exist on the financial markets. At the same time, the problems and risks that the international regulatory initiatives aim to deal with correspond to those that Swedish authorities have identified in Sweden. The Basel III framework will therefore also have a direct positive impact on financial stability in Sweden. Let me give you a few concrete examples: •  Stricter risk-based capital requirements will increase the ability of the Swedish banks to cover unexpected losses, in both their Swedish and foreign operations, thereby increasing the banks’ resilience. •  The leverage ratio will provide a complementary picture to the risk-based capital requirement and means that authorities and investors will be better able to assess a bank’s capital situation. Having a quantitative requirement for the leverage ratio sets a limit for a how low the Swedish banks’ capital can fall in relation to their total assets, irrespective of how risky their operations are considered to be. A leverage ratio requirement of, let us say, 3 per cent corresponds to a risk weight for mortgages of approximately 22 per cent for a major Swedish bank with a 12 per cent CET 1 capital requirement. 1  •  Another example is the NSFR.
Philipp M Hildebrand: Do financial markets promote responsible behaviour? Speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the 35th ICS-Symposium, University of St Gallen, 21 May 2005. *  *  *  I am honoured to join this distinguished panel. In his opening remarks to this year’s ISC Symposium, Federal Councillor Moritz Leuenberger compared the symposium’s theme – Liberty, Trust and Responsibility – to the Holy Trinity. Let me assure you. I will be less ambitious. In my formal comments, I will take the liberty to reflect not only on financial market but on markets more broadly. The great economist Adam Smith has famously written that “it is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” This often-cited reference from the Wealth of Nations can be interpreted as suggesting that markets function best when market participants are not concerned about any particular normative values of responsibility but simply pursue their self-interest. Led by the “invisible hand”, this collective pursuit of self-interest produces the optimal economic outcome. In other words, market participants need not be concerned about responsibility or, to use Adam Smith’s term, benevolence. The “invisible hand” of the market will take care of that. It seems to me such a reading of Adam Smith is too narrow.

Indeed, apart from assuring the rule of law, Smith saw two other functions for government: “the duty of protecting the society from the violence and invasion of other independent societies” and the “the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain”. Against the backdrop of these brief reflections on the great Adam Smith, let me turn back to the specific question put to us. I have no doubt that together with a functioning rule of law and limited government intervention, free markets in general and financial markets in particular are the optimal path to the promotion of wealth. I am equally convinced that responsible behaviour has the best chances of flourishing in an environment of economic opportunities and rising standards of living. Trust clearly enhances the rule of law as there will never be enough courts to permanently monitor all market transactions. Modern means of communication and transparency, in turn, are trust-enhancing. Think of seller and purchaser ratings on many internet auction sites. Now, let me conclude my remarks with a final and in my view crucial note of caution. As Charles Kindleberger demonstrated convincingly in his 1978 book Manias, Panics and Crashes, financial markets are prone to phases of irrationality and exaggeration. Such market disequilibria lend support to the need for the rule of law and the utility of limited government intervention in a number of areas.
So far, 21 APG Typologies Workshops have been held since the APG’s formation in 1997, where the last Workshop was held in 2018, jointly with the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) in Russia. These Workshops have contributed to a better comprehension of prevalent money laundering and terrorism financing (ML/TF) threats in the region, by allowing members to understand latest trends, identify key red flags as well as sharing of information on possible counter-measures to respond to the threats. This has assisted members to take the hard decisions to prioritise, apply resources and put in place systems to effectively tackle financial crimes. With so much benefits, the APG is committed to continue holding the Annual Typologies Workshop so that members could keep abreast with the latest ML/TF trends and typologies. As you can see in the agenda, this year’s Workshop aims to discuss two key areas that were approved by the membership earlier. These two topics namely, Digital ID/e-KYC and Financing and Facilitation of Foreign Terrorist Fighters, are timely given the current development in our region. Allow me to touch briefly on these two topics. Digital ID/e-KYC The rapid technology advancement in the last decade has led to significant innovations in the financial sector. Then came the COVID-19 pandemic, which has accelerated the need for financial institutions around the world to shift their operations onto the digitalised platforms. Digital ID/e-KYC is one such innovation and the authorities have responded accordingly.

Marzunisham Omar: Digital ID/e-KYC and Financing and Facilitation of Foreign Terrorist Fighters Welcoming remarks by Mr Marzunisham Omar, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 22nd Asia/Pacific Group (APG) on Money Laundering Typologies Workshop, virtual, 2 February 2021. * * * It is my pleasure to welcome all of you to the first virtual APG Annual Typologies Workshop this week. It is rather unfortunate that I cannot personally host you in Kuala Lumpur for this event. I have recently assumed the role of APG Co-Chair, representing Malaysia. Malaysia is indeed very honoured to co-chair the APG and we are committed to working together with all members in delivering the APG’s mandates during this unprecedented and challenging times. It is my wish that during my tenure as Co-Chair, we would be able to further strengthen the strategic partnership amongst APG members and foster better collaboration in implementing the APG initiatives and agenda. Together with the APG Secretariat, we will continue to provide platforms for members to raise any issues affecting individual members as well as collectively as a group. For this purpose, together with Co-Chair Ian, we have identified several focus areas as the CoChairs’ Priorities, one of which is to host the Annual Typologies Workshop. Despite the pandemic and after a two-year hiatus, we are glad to be able to conduct the APG Typologies Workshop although in a virtual setting.
It takes a long view to recognise returns beyond profits where social and environmental gains are also equally valued. This will represent a major paradigm shift in many institutions. For this, strong and visionary leadership that sets the tone from the top, starting from the board and senior management, is certainly crucial. Far-sighted leadership to transform culture, systems and people will be central to this paradigm shift. To facilitate the process, the recently issued Strategy Paper on VBI will be complemented with an implementation guidance that is currently being developed by the Bank in collaboration with the industry. Second, VBI will require greater stakeholder activism through increased transparency on its adoption. This is a new initiative and it is imperative that our efforts go hand in hand with creating greater awareness and understanding of key stakeholders. The public sector and advocacy groups play an important role. But customers and business ventures should also play their roles wisely and use the power of their wallets to make informed choices. To catalyse this change, a value-based scorecard will be introduced to realign behaviours and expectations towards the desire to impact the community and the environment in a positive way. The scorecard will capture important dimensions of qualitative performance that are geared towards creating sustainable outcomes by Islamic financial institutions. The third critical area is adopting a collaborative approach to implementing VBI which will be key to mobilising change.

The success of this strategy has positioned TeamBank as the country’s third largest consumer finance provider. Equally commendable is Westpac Banking Corporation, the first Australian bank that has incorporated environmental filters in its day-to-day business decisions. In Malaysia, I believe Islamic financial institutions are now at the right stage of development to drive this important change. It is expected that Islamic banks would take the lead in the VBI initiative and to embrace the new principles in their business strategies and operations. Given the universal nature of VBI, the application and adoption of similar strategies by financial groups which comprise conventional financial institutions would be the next phase of this evolution as we move forward. In time, I believe that the underpinning thrusts of VBI will also be expanded to enhance its relevance to the takaful industry. 2/4  BIS central bankers' speeches  Realising the tangible impact of VBI is more of a journey than a fixed destination. However, it is encouraging to note that a number of our Islamic banks have already started applying principles of VBI in one way or another. What is needed now are strategies to realise the full potential and amplify the impact of VBI in creating positive outcomes for shareholders as well as broader stakeholders in Islamic finance. I would like to suggest three critical areas that require immediate attention, for this momentum of change to be sustained. First, VBI calls for a “transformation of the mind”, a change in how we think and how we act.
5 After four years of low or negative growth, the economy expanded by more than 3% in each year since 2005. At 6.5% the unemployment rate is at its lowest level in eight years, and the annual rate of change in productivity has returned to more acceptable levels after years of negative or marginal growth. Reflecting this general improvement, macroeconomic imbalances have also declined. The fiscal deficit contracted from almost 8% of GDP in 1999 to an estimated 1.6% in 2007 and the public debt/GDP ratio has gone down to 63% from a peak of 73% in 2004. The other Maastricht criteria, of course, were all met in good time and in a sustainable manner. Meanwhile, the current account deficit dropped from the 6 - 8% range in the first years after EU accession to around 3% in 2007, and is expected to drop further as the fiscal consolidation programme continues to unfold. At the same time, the private sector appears to have adjusted well to the changing composition of domestic and external demand. Not only has there been a shift away from public sector employment to private services - the share of the public sector in employment shed five percentage points to 30%since 2000 - but there has also been a move away from low value manufacturing activities to skills based services.

The way forward Becoming a member of the euro area does not represent the end of a process, but rather the beginning of a new era in which the burden of adjustment will have to be carried entirely by the real economy and in which the harmful effects of inefficient institutions and practices on costs and final prices will become more visible. The policy challenge, therefore, is to maximize the benefits of participation in monetary union and so bridge the remaining income gap with the euro area. Malta’s per capita income level is still around 70% of the euro area average. Among other things, this means that further fiscal consolidation is necessary in order to achieve a balanced budget by the set date of 2010. There must also be more emphasis on expenditure-based adjustment, particularly in view of rising pressures caused by ageing-  BIS Review 14/2008  5  related factors such as pension and health care costs. It will be equally important, in both the private and public sectors, for wage growth to be compatible with productivity growth, labour market conditions and cost developments in competitor countries. The further strengthening of competition in both product and resource markets and the creation of more incentives to work are also necessary in order to raise the participation rate. These ambitious objectives clearly allow no room for complacency. In this regard, it is a positive sign that the Budget for 2008 promises policy continuity.