samchain/econo-pairs-v1 huggingface dataset:
In view of the expected increase in demand for bank financing for a number of economic projects in the economic sectors, and the different financing methods, as well as the great development in the field of modern technology, banks will be required to develop methods for risk management and should be aware of the new risks included in these methods. So, qualifications capable of managing such risk to minimum level should be developed. It is also important to continue to comply with international standards in the area of supervision and accounting. The ability to measure and manage risks will require continued awareness of the dynamic nature of banking business in the context of changing markets with renewed risks which require development of outstanding skills, application of secure technology and following an advanced approach in risk assessment. 4. It is expected that banks will face increased demand for the provision of advanced banking services and products to meet the requirements of the era. Therefore, work should focus on creativeness and innovation so that banks can cater to future needs of the different types of their customers. High levels of baking services should be maintained. There should also be expansion in the number of branches, ATMs, telephone banking and other channels. I wish to conclude with the observation that the Saudi economy is currently undergoing a phase of accelerated growth in the various sectors and activities unprecedented in the preceding decades.

Saudi banks have benefited greatly from the Universal Banking Model permitted by SAMA and offer a range of financial services including investment management, mutual funds, brokerage, and other services. During the past decade, the volume of business of Saudi banks has grown at a phenomenal rate. In the ten years period 1996-2005, the banks’ assets grew by 213 per cent, deposits by 224 per cent and capital and reserves by 248 per cent. During this period the profits for the banking system showed strong growth and the return on equity averaged well over 20% and return on assets was over 2%. The strength of Saudi banks is further underlined by their average risk-based capital adequacy, which has been high according to Basel capital adequacy standard, and averaged 18% during the past decade. If we review our long history of foreign investment in the financial sector since early 1950, a number of foreign banks were granted licenses to open branches in the Kingdom. In 1976, there were 12 banks in the Kingdom including 10 foreign banks. To Saudize the banking system and benefit from foreign expertise of the banks operating in the Kingdom, the government invited foreign banks to convert their branches into Saudi-foreign joint stock companies with an equity share of 40% for the foreign partner. Technical Management Agreements were also entered into to manage the new banks by the foreign partners.
But set those tools to one side for a moment. Monetary policy could be used to reach a point more like P in Chart 5, with less variation in the output gap and more variation in inflation than we have actually experienced over the past 20 years. Put another way, higher interest rates in the run up to the financial crisis might have reduced the impact of the subsequent bust, at the cost of below-target inflation and below-trend output before the crisis hit.2 In practice new macroprudential tools and better micro-prudential supervision will improve the possibilities available to monetary policymakers. Having additional instruments in effect brings about a favourable shift in the Minsky-Taylor frontier (or surface) which defines the possibilities open to policymakers.3 Nevertheless, consistent with the new remit4 given to the Monetary Policy Committee by the UK Government last month, the experience of recent years suggests that there may be  2  A more detailed appraisal of this argument is contained in “Twenty years of inflation targeting”, a speech by Mervyn King (2012), available at http://www.bankofengland.co.uk/publications/Pages/speeches/2012/606.aspx. 3  A social planner would use both instruments together to pick the welfare maximising point on the frontier / surface, and in the UK the Monetary Policy Committee is expected to work closely with the Financial Policy Committee which has the statutory power to deploy macro-prudential instruments.

In common with many other countries, our problems also reflect the underlying need to rebalance our economy, requiring a reallocation of resources both within and between nations. It is not simply a question of boosting aggregate demand, but of helping to bring about a shift to a new equilibrium. That in turn implies the need for both large changes in relative prices, especially between tradable and non-tradable goods and services, and a shift in the relative levels of domestic demand at home and overseas. There are, therefore, limits on what any one country’s domestic monetary policies can achieve without the support of others. Despite these limits, circumstances have demanded that central banks take extraordinary measures. Such measures can risk moving into territory more normally associated with fiscal policy and, in doing so, put at risk their hard-won independence. There are, it seems to me, three threats to central bank independence. First, there is the risk of appearing to promise too much or allowing too much to be expected of us. With constraints on other policy instruments, central banks are seen as “the only game  5  Facilities introduced by the Bank of England have included the Discount Window Facility, the Special Liquidity Scheme, Extended Collateral Term Repos, Extended Collateral Long Term Repos, and the Funding for Lending Scheme. The ECB initiated its Long Term Repo Operations.
William C Dudley: Update on economic and fiscal conditions in Puerto Rico Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, to the Association of Certified Public Accountants of Puerto Rico, San Juan, Puerto Rico, 24 June 2014. *  *  *  Good afternoon. I thank you for the opportunity to address your association. It is always a pleasure to speak with the different communities that make up the Second Federal Reserve District and it is especially gratifying to be here in Puerto Rico. As with other parts of our District, the New York Fed is dedicated to the people of Puerto Rico and to their future growth and prosperity. Our commitment is reflected in our ongoing work with our many partners in Puerto Rico. Over the past several years we have held three forums (cosponsored with the local Small Business Administration office, the Puerto Rico Small Business Development and Technology Center and the Federal Deposit Insurance Corporation), which provided technical assistance to help small businesses access capital, procure government contracts, and export their products and services. We also continue to promote financial literacy through our ongoing partnership with the Puerto Rico Bankers Association, and we have cosponsored the Financial Awareness Video Festival working with students at local colleges to produce short videos highlighting aspects of financial literacy. Let me just pause for a moment to say congratulations to this year’s winner: Pontificia de Ponce.

More recently, though, serious fiscal challenges have surfaced that are closely interrelated with the Island’s ongoing weak economic performance. Persistent deficits in the Commonwealth’s fiscal accounts as well as mounting deficits in the operation of the several major public corporations have substantially raised the Island’s overall level of public debt and led to serious concerns about whether the Island’s fiscal position is sustainable. In light of the fiscal pressures Puerto Rico now faces, the New York Fed is undertaking an update to our earlier report. In this new report, we plan to focus on Puerto Rico’s fiscal health. We will examine the factors leading to the sizeable buildup of public debt on the Island and the key variables that will determine its future trend. In some ways, the data on Puerto Rico’s public debt clearly define the fiscal problems the Island faces. But meeting with a variety of stakeholders, as I have on this visit, will help to inform our analysis and will provide us with concrete evidence of how these issues are playing out across the Puerto Rico economy. The clear challenge going forward will be for the Commonwealth government to continue to make progress on its efforts to raise its economic growth rate while at the same time to take credible steps to constrain the buildup of debt. The demanding choices Puerto Rico makes today will affect its long-run economic prospects and the future livelihood of its residents.
But people get used to this – or, in models, anticipate it – and so the extra inflation is simply built into their wage and price setting, without any benefit to output or jobs, but at the cost of a higher steady-state inflation rate. 11  This is discussed in Mervyn King’s 2007 letter to the Treasury Select Committee. 12  Page 205 of the 1999 paperback reprint of Bagehot (1873), “Lombard Street” in the Wiley Investment Classics series. 4  BIS Review 67/2009  assets and collateral. In doing so, the Bank recognises that its decisions will have a bearing on the development of markets. For example, for securitised assets, the Bank plans in due course to establish criteria for both the structure of the securitisations and the composition of the underlying portfolios that it will lend against. The Bank’s Discount Window Facility and wider-collateral OMOs: adverse incentives and the terms of liquidity insurance These expansions of the Bank of England’s facilities have required us to be much clearer than, perhaps, ever before about the terms on which we insure against liquidity risk. As with other types of insurance, without care central banks’ provision of insurance could inadvertently have the perverse effect of reducing banks’ incentives to contain their exposures to liquidity risk in the first place – no doubt bringing the banks temporarily higher profits, but increasing the potential costs to the wider economy of those liquidity risks crystallising.

A measure of success is not how much paper we buy, but whether providing a backstop assists the functioning of the market. The Bank’s second facility is in some ways more interesting in the context of the debate about MMLR. We are acting as a back-stop buyer of sterling corporate bonds, by regularly holding auctions in individual securities. To protect against risk, the Bank sets (and updates)  24  Many of them by Willem Buiter. 25  Cecchetti S G (2009), “Central Bank Tools and Liquidity Shortages”, Federal Reserve Bank of New York Conference, 19-20 February 2009. The quote is from the slides used at the conference. BIS Review 67/2009  11  reserve prices, which draw on CDS spreads, models of risk etc as well as qualitative information. The amounts we offer to buy in each auction are small. The objective is explicitly catalytic. It is to reduce the inventory risk run by bank market-makers in the securities, and to reduce liquidity risk for market participants more generally. Perhaps the best way to think about it in the abstract is that it is akin to our stepping into the market with a narrower bidoffer spread than private sector intermediaries would otherwise offer, with a view to those very same dealers bringing their bid-offer spreads inside ours and to investors reducing the liquidity premium they require.
Such demand shocks can be triggered by structural changes in the behaviour of economic agents or result from portfolio shifts or financial innovations in the context of financial globalisation. There are indeed some signs that a money demand shock occurred at the beginning of the 2000s in the euro area, as illustrated by an apparent structural shift in the trend velocity of money, which summarises the relationship between money, output and the price level. (see Figure Annex page 8). A tentative explanation is that our economies are becoming more and more "financial" in the sense that the ratio of financial wealth to GDP is constantly increasing. Since economic agents – especially financial intermediaries and corporates – need to keep part of their total financial assets in liquid holdings, there may be a structural increase in the demand for money (everything equal). The euro and the integration of European capital markets may have accelerated this evolution. As an illustration of the uncertainties facing euro area monetary policy makers, one possible consequence of current events in credit markets may be to trigger a re-intermediation process, i.e. an expansion of banks' balance sheets which may further complicate our reading and interpretation of monetary and credit dynamics in the months to come. As you can see there is a need to continuously reassess and diversify the tools used in our monetary analysis. 4. Predictability and frequency of policy actions  Contrary to some preconceptions, most monetary policy decisions have been perfectly anticipated by the markets.

In the case of Spain, yields decreased by 70 bps, while in Italy, they decreased by 30 bps. This is the first time in three years that a major crisis in one euro area country has not affected others. This sends an important message. The euro area is more robust today than it was a year ago. While challenges remain, the actions taken have increased our resilience to internal and external shocks. Before I move on to other areas of progress, I would like to say a few more words on Cyprus. First, the financial support provided by the euro area countries and the IMF was very substantial, up to EUR 10, 000 for every Cypriot citizen. This should put to rest the claims that the country was unfairly treated and discriminated against. Second, the commitment to protect insured depositors has been maintained in the euro area and, in fact, is strengthened as a result of recent events. Last but not least: Cyprus is a unique case. This was an extreme situation of moral hazard with big depositors looking for abnormal yields in the domestic banking system. And it justified an exceptional treatment. Cyprus is neither a precedent nor a template for future crisis management. It is also important to state that such a banking model has no place in the euro area. And such a situation would not have existed had the banking union been in place.
Depending on what had happened to sterling’s bilateral exchange rates, the UK would not be immune from spillovers, as the euro area is by far our largest trading partner. For some time, therefore, global imbalances have been a real source of risk to the UK as well as to the global economy. Should I have been voting to cut interest rates to head off those risks? I don’t think so. It would not have made sense to try to anticipate the effects of a shock that had not yet occurred and over which we had effectively no influence. A number of external ‘tail risks’ are rather like that. How does that fit with ‘precautionary’ or ‘insurance’ policy settings. Individual policymakers differ on the usefulness of this concept. I find it quite useful. But on my view of what it means, it has to be subject to some quite stringent conditions in practice. Remembering that we have a highly imperfect line of sight of what is going on in the economy, assume as a thought experiment that some indicators are flashing the possibility that there has been a material shock to demand. For example, imagine that there has been a bit of bad news but that there  15  Harrison et al, 2005, ‘The Bank of England Quarterly Model’, pages 128-132. BIS Review 46/2006  5  are signs that consumer confidence may be ebbing away by more than we would have guessed was proportionate. So maybe spending will fall materially.

First, we just do not know enough about the underlying structure and properties of the economy. Quite apart from the change in monetary regime, the extent and variety of the structural change underway in the real economy is profound: for example, labour market reform domestically, and the opening up of labour markets across the European continent, which has materially increased inward migration to the UK; the new technology and the price transparency it brings; China and India. In consequence, in the UK for the moment we do not really know whether the short-run trade off between excess (or deficient) demand and inflation has changed; whether the short-run Phillips curve has become flatter. Second, the data we use give us an unavoidably imperfect read on what is going on. Not infrequently in my experience we debate the various possible explanations for some puzzle in the data, only to find that a year or so later the data have been revised and, as it turned out, there was no puzzle. For that reason, the Bank of England is putting considerable resources into researching data uncertainty 14 . Where does that leave us? I should like to say that we can ‘rough tune’ but not fine tune. Rough tuning is important, as we do need to keep aggregate demand and supply broadly in line as a condition for  13  Balls, E. and G. O’Donnell (eds.
Moreover, a detailed analysis should be made as to what extent banks with a combination of high interest rate risk exposure and high mortgage lending growth are able to bear those risks. This is mainly a microprudential task, which is performed by FINMA. Furthermore, a revision of the self-regulation guidelines for mortgage-backed loans by the Swiss Bankers Association might make a substantial contribution to preventing the development of significant imbalances in the real estate and mortgage markets. It might be worth considering the inclusion of quantitative “best practice” standards as a complement to the qualitative guidelines. Ideally, microprudential supervision and self-regulation will prevent the build-up of systemic risk. Should the growth momentum currently being observed in mortgage lending and real estate prices continue, or even accelerate, further measures would have to be considered. Such measures should be countercyclical, thereby making a preventive contribution to financial stability. At best, the SNB’s monetary policy can only make a minor contribution to financial stability in this respect. First, monetary policy’s primary objective is to ensure price stability. Second, monetary policy always affects the economy as a whole. Thus, its effect cannot be directed only at specific areas of the economy. However, additional macroprudential tools, which would be much better suited to targeted intervention are currently not at the disposal of the Swiss authorities. In the recent past, both the SNB1 and the International Monetary Fund (IMF)2 have emphasised that there is a need for action in this area.

Work on the supply sides revolves around issues of tax, legal and regulatory as well as accounting and should receive endorsement from the highest levels of government following the adoption of the Chiang Mai Declaration on the Asian Bond Market Development. Demand side development: establishment of the Asian Bond Fund On the demand side, central banks in the region have been working closely under the Executives Meeting of East Asia-Pacific Central Banks – or EMEAP – to establish an Asian Bond Fund. Under this initiative, central banks will set aside a fraction of their reserves into a pool that will be invested in bonds issued by Asian governments and government enterprises, with an ultimate aim to provide a catalyst for private investors to consider investment in Asian issues EMEAP has worked out the details and modalities of the operation of such a Fund and will announce details to the public shortly. Approaches to regional cooperation: work on developing the supply side ASEAN+3 and APEC are both working on the development side of bond markets, including the removal of barriers impeding the issuance of bonds both in the regional and domestic contexts respectively. In addition, there has been cooperation in setting up the necessary infrastructure for such a regional bond market, including a regional credit rating agency, as well as credit enhancement facilities.
The recent rise in inflation and in measures of inflation expectations have increased my confidence around this outlook compared to earlier in the year, but it is still possible that the return of inflation to our objective could take longer than I anticipate. The forecast that I have just described is my best assessment of how the U.S. economy will evolve this year. As always, there is uncertainty and risk relative to this forecast, which also needs to be taken into consideration in assessing the implications of the outlook for monetary policy. I see the uncertainties around my forecast to be somewhat greater than usual. This assessment reflects the divergent economic signals I highlighted earlier. In addition, the factors behind the financial turbulence we saw earlier this year do not yet appear to be resolved fully. Although the downside risks have diminished since earlier in the year, I still judge the balance of risks to my inflation and growth outlooks to be tilted slightly to the downside. The low levels of energy and commodity prices may signal more persistent disinflationary pressures than I currently anticipate, while renewed tightening of financial market conditions could have a greater negative impact on the U.S. economy. Also, there is significant uncertainty about economic growth prospects abroad and how this will affect the U.S. economic outlook. I continue to monitor global economic and financial market developments closely to assess their implications for the outlook.

So, as long as New York City keeps adding jobs at such a brisk pace, Fairfield County will benefit. In addition, research indicates that a strong central city is critical for the well-being of its suburbs, meaning that a healthy and growing New York City economy is critically important to Fairfield County. What else can the region do to foster economic growth going forward? It certainly helps for cities like Bridgeport and Stamford to be attractive locations for businesses to locate and grow. It is also important to focus on quality of life issues that make people want to live here – like good schools and low crime, and also amenities ranging from nice parks to good restaurants. Bridgeport has clearly been making progress in this regard, both along the waterfront at Steelpointe Harbor and along Main Street. With New York City’s large and booming economy nearby, and Metro North providing a convenient mass transit link, anything that makes people more inclined to live here – and perhaps even set up shop here – is bound to boost the local economy. And finally, one of the most important ingredients for a healthy urban economy is a well-trained and motivated work force. It cannot be overstated how important it is to help provide residents with the skills and tools they need to be productive and successful, so that they can realize their full potential.