samchain/econo-pairs-v1 huggingface dataset:
Those who perceive EU membership as a unique opportunity are equally aware that catching up with some of the most economically and socially advanced countries on earth is a major task for countries whose average income is still only some 40 per cent of the EU average. This challenge can only be overcome if the candidate countries seriously question the way they have organized and managed their economies in the past, and resolve to raise their performance. The magnitude of the task is not to be underestimated because the necessary changes are pervasive – affecting both institutions and mindsets, policies and work practices – and they also entail costs, financial and otherwise. There is clearly, however, also a widespread conviction in the other candidate countries that this would be change with a purpose. Apart from the highly desirable prospect of convergence with EU income levels and living standards, a process itself facilitated by EU financial and technical assistance, the pay-off would include anchoring the future prospects of each new member country to those of an economic superpower, unfettered access to a large and rich market with a single currency, the adoption across the board of international best practices and standards and, not least, a place at the table where decisions are taken which would affect these countries even as non-members. The dynamics of regional economic integration are such that the choices available to our policymakers will be inevitably conditioned in future by the policies of an enlarged and stronger EU.

The second conclusion to emerge from this analysis, therefore, is that if Malta seeks to negotiate a more advantageous form of association agreement, our exporters will only be able to secure improved access to the EU and its partners if the Maltese Government makes commitments in areas other than those covered by the present agreement, including a commitment to achieve legal equivalence with the EU Acquis. Pressures to liberalise, the costs of restructuring and the obligation of legal equivalence will arise irrespective of EU membership It could be argued that as a non-member the pace with which this legal equivalence would have to be achieved would be slower than that implied by the current enlargement calendar. In practice, however, the difference in timing is subtle. It must not be forgotten that nine other countries are also about to  10  In addition, a recent study by the World Trade Organisation shows that this is one of the regions with the lowest concentration of regional trade arrangements, a situation which is not expected to change much in the medium-term. See footnote 7 for source. 11  NSO, News Release 103/2002.
The conduct of CCPs depends on clarity and certainty. A regime that does not provide the same certainty as that set out in CCP rules runs the risk of undermining the very reasons why international leaders have placed CCPs at the heart of the response to the financial crisis. Conclusion To conclude. Anniversaries are not always milestones to celebrate – and the anniversary of the failure of Northern Rock is a case in point. But even where the lessons of the past were painful, their anniversary provide a chance to step back and consider whether they have been learned. The lessons of the crisis, of course, go much wider than resolution. The first defence against bank failure is to ensure that banks are properly capitalised to withstand losses and continue to serve the real economy. A vast amount of work has been done over the past 10 years to put in place capital and liquidity standards and stress testing regimes to ensure a much safer and stronger banking system. Resolution should be seen as an integral part of making the financial system safer and stronger. Credible resolution regimes that impose losses on shareholders and investors, rather than taxpayers, when things go wrong will incentivise banks to manage their risks properly.

Situations may take unexpected turns. In the face of such uncertainties, being prepared and ready is always a good proposition. 2  BIS Review 74/2007  Reputation risk and fair dealing with consumers Moving on from macroeconomic and financial risks to something closer to home, there is another risk which banks should remain mindful of. Unlike the other risks I had raised earlier, this is a risk which is fully within your bank’s domain. This is reputation risk. You all appreciate the value of a good reputation in doing business. A good reputation takes years to build. It can also be damaged within a short period of time through incidents that undermine consumer confidence and that are not managed properly. You have read the newspaper articles in recent months concerning public unhappiness and questions about the transparency and fairness of practices concerning multiple home loan board rates and promotional fixed deposit rates. You might have asked yourself why these issues should concern you as they may not pose any significant impact on the financial standings of your banks. While of limited short term bottom-line impact, these issues can affect the longer term reputation of and consumer confidence in your banks. The internet has empowered consumers with unprecedented reach. A disgruntled customer can post his or her unhappiness on a forum or blog and quickly reach a wide audience. It has become more important for banks to incorporate good and fair consumer outcomes as integral parts of the way they do business.
Mr. Yam speaks on defending Hong Kong’s monetary stability Speech by the Chief Executive of the Hong Kong Monetary Authority, Mr. Joseph Yam, JP, at the TDC Networking Luncheon in Singapore on 14/10/98. … As I am sure you have noticed, Hong Kong, and specifically the involvement of the Hong Kong Monetary Authority (HKMA) in the stock and futures markets in August, has been the subject of some controversy recently. This is understandable, for Hong Kong has always been in favour of leaving markets alone, as much as possible. Indeed, Hong Kong has for many years been named as one of the freest, if not the freest, markets in the world. For the authorities in Hong Kong to go into the stock and futures markets to buy shares and stock futures contracts in such a big way naturally came as a surprise to every one, apart from the few of us who had the unenviable task of taking the very difficult decisions. Clearly the responsibility of public office includes taking difficult decisions in the overall public interest, and one must take them with courage and execute them with commitment. Furthermore, one must also try one’s best to explain the rationale behind them, and be transparent in, and accountable for, the actions taken. Difficult and controversial decisions can be easily misunderstood, even by the most learned man on earth. So we need to present the arguments patiently and clearly. This has not been easy.

This is because the banking system must serve the need of the real economy, which will become more complex with  4  BIS Review 20/2010  economic globalizations, aging population, and increasing demand from corporate and households. Thus, our banking system is interdependent with the real sector, and must evolve with this awareness, recognition, and impending responsibility. Thank you for your attention. BIS Review 20/2010  5
Gross non-performing loans to the business sector increased considerably through 2002. During the banking crisis, loans to commercial property companies accounted for a substantial share of banks’ loan losses. Losses on such loans are relatively small today. Lower rental and property prices and higher vacancy rates may suggest that losses in this sector will increase in the period ahead. Most banks, including the largest, have satisfactory financial strength and are fairly well equipped to cope with substantial losses. We therefore consider the outlook for financial stability to be satisfactory, even though loan losses are moving up. Debt growth and the level of household debt are high. However, we expect debt growth to slow in time, partly due to weaker economic developments and as an after-effect of the levelling-off of house prices. Consequently, developments in debt and house prices are no longer an obstacle to an easing of monetary policy. The exchange rate as an asset price An asset price of particular importance to economic developments is the exchange rate. It differs from other asset prices in a number of ways and it is to a lesser extent linked to financial stability. In the long term, changes in the exchange rate will essentially be based on underlying fundamentals. If inflation in Norway is persistently higher than that of our trading partners, the nominal krone exchange rate will tend to depreciate. In the very long term, the nominal exchange rate will therefore be determined by inflation differentials.

For Norwegian households, changes in house prices will therefore probably have a greater impact on consumption than changes in equity prices. In Norway, it became more common to own equities for all income and age groups in the 1990s. This was to a large extent reversed last year as a result of the fall in equity prices. We should nevertheless not rule out the possibility that fluctuations in equity prices in the future may have stronger effects on the real economy than we have witnessed so far. Developments in various asset prices may also influence investment. High equity prices may make it easier to gain access to capital to finance the acquisition of new machinery and buildings. A rise in property prices provides scope for raising larger loans against collateral in the asset. Possibilities for increased credit may contribute to higher demand for goods and services. The process may be self-reinforcing since part of the available credit can be used to purchase dwellings and other property. Similarly, bubbles in the stock market can result in overinvestment. When equity and property prices start to fall, companies are left with too much real capital and investment declines. This may lead to or amplify an economic downturn. There may be several factors that imply that particular emphasis should not be placed on financial imbalances in the conduct of monetary policy. First, it may take a long time before imbalances are triggered. The uncertainty surrounding developments so far ahead is considerable.
And indeed, the demand for M3 in the euro area has shown clear signs of instability since 2001 and a break in the income velocity of M3 occurred at the same time. Most remarkably, instead of delivering some erratic pattern, a new velocity trend seemed to emerge with liquidity expanding much more rapidly 6 . It is fair to say that the precise role of financial innovation in this regard is still unknown but we have all the reasons to believe that, taking it into account should help explain this change in money demand, and better gauge its consequences for future inflationary pressures. Let me elaborate further. First of all, the introduction of the euro in itself a major financial innovation, had many effects on the financial behaviour of economic agents. The introduction of the euro immediately resulted in: •  the removal of any exchange rate risk between participating countries;  •  the introduction of a new system of remunerated reserve requirements;  •  and the creation of an integrated money market – thanks in particular to the setting up of a new large-value payment system (TARGET). Furthermore, thanks to the introduction of the euro and to the successful monetary policy conducted by the ECB, all member countries now benefit from an environment of well-anchored inflation expectations and, as a result, low interest rates.

One example of this enhanced impact is provided by the behaviour of hedge funds who customarily borrow short-term funds to finance their (longer-term) investments 9 . -  Turning to the exchange rate channel, financial innovation results in greater integration of domestic and international financial markets, which should also strengthen the exchange rate channel as exchange rates become more sensitive to interest rate differentials between currency areas. This has been illustrated by the recent debate about cross-border carry trades 10 . -  At the same time, financial innovation has probably weakened the credit channel 11 . Several phenomena may be at play : •  Financial innovation gives firms broader access to securities markets, which may reduce information asymmetries at the source of the credit channel. 7  BIS, 1994  8  Noyer, 2001  9  Weber, 2007  10  Weber, 2007  11  BIS, 1994; Thornton, 1994  BIS Review 42/2007  3  •  More specifically, securitisation by banks has reduced their liquidity constraints and thus further weakened the credit channel. A recently published research paper by the New York Fed, using a micro data set of individual loans granted by a sample of banks between 1997 and 2005, shows that the use of credit derivatives is associated with a greater supply of newly negotiated loans extended to large corporate borrowers. Previous research has generally found that banks have used earlier credit market innovations such as loan sales and securitisation to diversify credit risk exposures and increase lending.
So summing up, as with the Concordat, a country’s prudential regime could be judged as complying with the Core Principles even though it does not ensure that the distribution of capital across a banking group leaves its individual entities adequately capitalised. Finally, the Capital Accord7 – now in its third incarnation – applies to banking groups on a consolidated basis (or at a sub-consolidated basis for different tiers of a group). The Accord gives jurisdictions an option to apply capital requirements on a solo-basis to individual legal entities as an alternative to applying the requirements to consolidated groups of legal entities8, but there is no requirement to exercise that option. Again, then, there is no hard rule that ensures a sensible distribution of capital across individual entities within a group. If you cannot fit all that together, you can be excused! Here’s an attempt to make sense of it. There appears to be a disconnect between the Concordat (consolidated supervision); the Core Principles (both consolidated and solo perspective recognised as important, but no mandated solo capital requirements); and the Capital Accord (consolidated and sub-consolidated, with solo subject to deductions allowed but not required). Or, put another way, each of the three BCBS documents does an important job but none of them addresses the distribution of capital across a group. That is a gap. Do not assume that this is a theoretical point. It is one reason there have been attempts by regulators to shore up the financial soundness of local subsidiaries during the crisis.

I also emphasize that SAMA will follow up this matter and take legal actions against insurers that are proven to be negligent. I am sure that you all are aware of the significance of handling such claims promptly and efficiently since this will enhance insurance companies’ reputation and attractiveness to those averse to taking risks. Dear Audience, During the past few years, the insurance sector has not only achieved good results in terms of services provided, diversity of products, and establishing trust with beneficiaries, but also in terms of compliance with laws, regulations, and instructions issued. However, there is a lot more that remains to be done to modernize the insurance industry to enhance its soundness, capabilities and performance to make it comparable to regional and global insurance industries. Such a situation calls for considerable attention to professionalism in application of technical aspects of pricing policies, management of claims, provision of technological infrastructure consistent with the size and nature of the work, investment policy, compliance with the financial solvency standards, and allocations of necessary technical provisions to ensure health and soundness of the companies’ financial positions. It is imperative that the insurance industry remains competitive by developing and providing insurance products and services to the satisfaction of customers at all times. Dear Audience, We expect the insurance industry to continue to improve its performance and achieve balanced growth in accordance with corporate objectives and available resources.
Bank Negara has also actively pursued initiatives to develop a viable regional cross currency market to support trade and investment by expanding the availability of multiple choices of currencies that businesses can use for trade and settlement. Malaysia and Thailand recently established the first cross-currency settlement and clearing arrangement between two ASEAN countries, following similar arrangements with China and South Korea. Moving forward, Malaysia remains committed to regional efforts to advance financial integration. This will be guided by the ASEAN Economic Community Blueprint 2025, which focuses on the three key pillars of financial integration, financial inclusion and financial stability in the region. Facilitating fintech developments I am pleased today to announce that Bank Negara will introduce a framework for fintech firms to test innovations in the financial services operational environment. Earlier this month at the Global Islamic Finance Forum, I spoke briefly about the work that Bank Negara Malaysia has undertaken with respect to fintech. Indeed, Bank Negara has long recognised  BIS central bankers’ speeches  3  the power of technology in driving the financial sector forward. Over the years, banks have harnessed the power of technology to reap significant benefits. Bank Negara has supported this development on many fronts including in the areas of payments, internet banking, agent banking, Islamic finance and money exchange and remittances. Fintech will be a new addition to the list. Fintech developments such as blockchain, artificial intelligence and biometric applications are now expanding the frontiers of banking.

This period would entail rather unpleasant outcomes such as outflow of capital, depreciation of EME currencies, contraction of domestic and foreign credit, rise in interest rates (some of which were engineered by the central banks to dampen inflation and outflows). As a result, the growth in EMEs is slowing down and there is now a clear shift of market sentiment on the prospects of the EMEs in favour of the US and, to a lesser extent, Europe and Japan. 4. The question I hope this Conference would discuss in the next two days is in what way and to what extent EMEs would be affected by the exit of QE and normalisation of US interest rates in the next 12 to 24 months. This is a difficult question because it is far from easy to ascertain the magnitude of the dollar carry trade that found its way to EMEs in the first place and what impact such carry trade would have on EMEs when it unwinds. Another related question is what kind of responses or measures that the EMEs need to take to mitigate the risk of shocks or turbulence during this period. These are very important questions not only for the EMEs but also for the US and other advanced economies. This is not because the advanced economies need to be kind to the EMEs but because there is a feedback loop that could possibly transmit negative shocks from the EMEs to the advanced economies.
In advanced economies, public investment has been on a gently downwards path for the past three decades (Chart 17). In the UK, public investment relative to GDP is a third of its level in 1970. There has been no deepening in the global capital stock for a generation, if anything the opposite. Given the role public investment has often played in the past in supporting private innovation, this is not an entirely comforting picture. 71 In sum, if history and empirical evidence is any guide, this cocktail of sociological factors, individually and in combination, could restrain growth. They could jeopardise the promise of the fourth industrial revolution. Pessimists’ concerns would be warranted. Conclusion Growth is a gift. Yet contrary to popular perceptions, it has not always kept on giving. Despite centuries of experience, the raw ingredients of growth remain something of a mystery. As best we can tell historically, they have been a complex mix of the sociological and the technological, typically acting in harmony. All three of the industrial revolutions since 1750 bear these hallmarks. Today, the growth picture is foggier. We have fear about secular stagnation at the same time as cheer about secular innovation. The technological tailwinds to growth are strong, but so too are the sociological headwinds. Buffeted by these cross-winds, future growth risks becoming suspended between the mundane and the miraculous. 67  Mischel (2014). 68  Urminsky and Zauberman (2014). 69  For example, Davies, Haldane, Nielson and Pezzini (2014).

Second, a wide array of recent indicators suggest that the U.S. economy entered 2011 with substantial forward momentum.   Real personal consumption expenditure (PCE) grew 4.4 percent (AR) in 2010Q4, led by spending on durable goods (Chart 9).   The one-year, 2 percentage point payroll tax cut, part of the December 2010 tax package extending the Bush-era tax cuts, is likely to give a significant boost to real PCE over the first half of 2011, perhaps as much as $ billion. BIS central bankers’ speeches  1    Real exports have grown rapidly of late; growth has been strong among much of the emerging market world, and growth prospects among our major trading partners is promising (Chart 10).   Growth of business investment in equipment and software has been well maintained and is likely to get an added boost in 2011 from the “full expensing” provision enacted late last year as part of the tax package. This and the export strength is reflected in high levels of orders and shipments of capital goods (Chart 11).   Business investment in nonresidential structures, such as office buildings and hotels, hard hit by the recession, is still declining but at a much reduced rate (Chart 12).   Business inventories are in good balance with sales, after a very pronounced inventory cycle (Chart 13). Reflecting these developments, measures of business activity in both manufacturing and nonmanufacturing have reached substantial highs and measures of consumer confidence have stabilized (Charts 14–15).