samchain/econo-pairs-v1 huggingface dataset:
Under the Initiative, a Credit Guarantee and Investment Facility has been set up as a Trust Fund of ADB to provide credit guarantee to allow investment-rated issuers to issue local currency bonds in ASEAN+3 markets. Another good example is the Asian Bond Fund project of the Executives’ Meeting of East Asia-Pacific Central Banks (EMEAP). The launch of the ABF funds introduced to the region’s bond markets a new low-cost and efficient product in the form of passively-managed index bond funds and helped catalyse infrastructure, tax and regulatory reforms at both the regional and domestic levels. The Hong Kong Monetary Authority took an active part in the design and implementation of the project. These efforts, along with the rapid economic growth and improved investment climate, have contributed to considerable growth in the local currency bond markets. According to ADB, the  BIS central bankers’ speeches  1  amount of local currency bonds outstanding in emerging East Asia increased by more than ten folds from $ billion prior to the Asian financial crisis in 1996 to $ billion in 2011. We have also seen the interesting development of offshore bond markets. In Hong Kong, the RMB bond market has grown substantially since the first issuance in 2007, with total issuance increased to over RMB 100 billion in 2011 from RMB 10 billion in 2007. The range of issuers has also diversified, from predominantly the sovereign and banks in China to multinational companies and international financial institutions.

Eddie Yue: Developing local-currency bond markets in Asia Statement by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority and Head of the Delegation of Hong Kong, at the 45th Asian Development Bank Annual Meeting, Manila, 4 May 2012. *  *  *  I would like to thank the Government of the Philippines for hosting the 45th Annual Meeting of the Asian Development Bank (ADB). I would also like to congratulate ADB on the successful conclusion of the Tenth Replenishment of the Asian Development Fund (ADF XI), which would provide critical resources to ADB to further its work in poverty reduction in Asia. The global economy has shown signs of improvement in 2012 following a marked slowdown amid the intensification of the euro zone debt crisis in the latter part of last year. Nevertheless, significant downside risks remain, with the euro zone debt crisis yet to be fully resolved and rising oil prices adding further uncertainty to the recovery outlook. Asia has remained resilient so far, in large part attributable to the reforms taken by regional economies over the years to strengthen economic fundamentals, improve fiscal discipline and enhance the resilience of their financial systems since the Asia financial crisis. Nevertheless, the region is not immune from the lingering fragility in the global environment. To date, the deleveraging by European banks has not caused significant short-term credit tightening in Asia, with banks in the region and elsewhere having stepped in to fill the gap left by European banks.
No agency which is a creature of the Government can be entirely independent of the Government. While the Government may be prepared to give an independent regulatory agency rather wide discretion in a field such as that of money, there is no gain-saying that, in the last analysis, the Government must assume responsibility for monetary policy as for other policies. The Governor and the appointed member of the Monetary Board cannot help being acutely conscious of the fact that, since no Parliament can bind its successors, their independence and tenure in office  4  BIS central bankers’ speeches  under the proposed legislation is limited by the ultimate power of the Government to change the law.” Exter also makes a further useful observation: “The exact degree and independence of the Central Bank is likely to vary from time to time. For example, central banks can ordinarily act more independently in stable, peace-time economic conditions, than in time of war or other national emergency. They also tend to take stronger stands on issues which are primarily monetary in character, than on related issues which may simply have monetary repercussions”. Seventh: Exter describes the ideal situation as contemplated by the MLA. I quote once again: “The ideal which it is hoped that the proposed law will achieve is one in which there will be continuous and constructive co-operation between the Monetary Board and the Government.

Unable to adjust lending rates according to the creditworthiness of borrowers, banks resorted to significant collateral requirements and to credit rationing. The heavy reliance on real estate as collateral, the insufficient importance attached to the viability of project proposals, along with the absence of a capital market meant than savings were often not channelled efficiently into productive investment. The resulting misallocation of resources served to compound the distortions that would proliferate in the rest of the economy. A sea change in economic strategy occurred in the late eighties with the introduction of policies to reduce the overbearing state presence. These included a gradual reorientation towards a more market-oriented banking system and a monetary policy that operated more through incentives and less through command. A first reduction in the government’s shareholdings in banks took place during 1990/1991, and this was accompanied by a strengthening of the regulatory framework, including measures to enhance the capital base of banks through profit retention and the issue of new stock. A capital market, in the form of the Malta Stock Exchange, was also created. Supporting economic reforms included a relaxation of the extensive system of import controls, the partial lifting of wage-price controls and an overhaul of the income tax regime. While reforms were incremental, a number of landmarks stand out. In 1994, for example, a comprehensive package of legislation was enacted as part of a strategy to further develop Malta as an international financial centre.
The “prudential” suffix, for its part, refers to the fact that it has to act pre-emptively; it will seek firstly to mitigate the accumulation of systemic risk or its potential materialisation, and secondly to generate buffers (mainly capital buffers in the case of banks) enabling the impact of systemic risk, should it materialise, to be cushioned. The multi-dimensional nature of systemic risk One characteristic of macroprudential policy is the multi-dimensional nature of its objective: to prevent systemic risk. Theoretical and empirical research appear to concur that there are at least two dimensions to this risk which, moreover, can interact with each other. The first is the time dimension, which is related to how systemic risk evolves over the course of the financial cycle. A good example of this dimension can be found in the run-up to the global financial crisis. During those years, there was strong growth in credit to the nonfinancial private sector in Spain (in particular to real estate development and construction activities), attaining levels far above those considered sustainable. This situation was accompanied by price rises and increases in real estate market activity, also to unsustainable levels. Against this background, household and corporate debt associated with real estate transactions mounted to such an extent over time that, when its sustainability was questioned and financing ground to a halt, there was a sharp correction to these financial imbalances.

And because if our common initiative is not sufficient to reach a European decision – indeed there are other countries and the Commission around the table –, it is nonetheless a prerequisite: without the Franco-German engine, the European car will remain at a stand-still. The projects for a better Europe must be chosen with care and prioritised; and we mustn’t just talk about them. We must ensure that we have the actual means, through efficient governance, to achieve concrete results. To put it briefly: little, well, until the end. There are naturally some non-economic areas such as defence, border security, climate change and youth education and training – an Erasmus-pro programme should be a priority to put an end to the tragedy of the unqualified and unemployed youth. But, as regards economic matters, much also remains to be done. As Helmut Schmidt repeated frequently, we must build economic union as well as monetary union. To my mind, we need to make headway on two projects. 2/3  BIS central bankers' speeches  The first project, to be started immediately, is a “Financing Union for Investment and Innovation”. The European Commission launched the Juncker investment Plan and Capital Markets Union, and Banking Union is now underway. But it is now necessary to make these initiatives converge, in the interest of European savers and firms. Europe needs a better sharing of private sector risk, in order to channel its abundant savings more effectively towards productive investment.
At the same time, households and firms could remain confident that the expansionary monetary stance would not contribute to price and wage spirals in the longer term. In Norway, various measures of underlying inflation have been close to 2.5 per cent in recent months. Lower wage growth, reduced capacity utilisation and low global inflation have counterbalanced the effects of higher energy prices and the krone depreciation in autumn 2008. Consumer price inflation is expected to fall to somewhat below 2 per cent in 2010 following the krone appreciation over the past year. The interest rate is set with a view to stabilising inflation close to 2.5 per cent over time and bringing capacity utilisation gradually back to a normal level. Growth in the Norwegian economy is expected to gradually pick up through the remainder of this year and next. Capacity utilisation is expected to be close to a normal level in 2011 and to reach this level in the course of 2012. In our projections, inflation gradually moves up towards 2.5 per cent around the end of the projection period as capacity utilisation reaches a normal level and the effects of the krone appreciation unwind. Wage growth shows a gradual increase. The projections are based on a gradual rise in productivity. Improved productivity will ease cost pressures for firms. The projections are also based on increased scope for firms to strengthen profitability by raising prices. Activity in the Norwegian economy picked up towards the end of 2009.

The interest rate was raised by 0.50 percentage point towards the end of the year with a view to maintaining inflation at 2.5 per cent over time. New information suggests that the recovery in the Norwegian economy is continuing, but that capacity utilisation is probably somewhat lower than anticipated in autumn 2009. Combined with lower interest rates abroad, a stronger krone and lower wage growth suggest that the interest rate forecast should be revised down somewhat in relation to the October Report. Interest rates in Norway are low. The effect on private consumption of the substantial interest rate cuts in 2008 and 2009 has probably not been exhausted and high consumption growth is expected to continue in 2010. House prices have risen. The new guidelines for prudent residential mortgage lending issued by Finanstilsynet (the Financial Supervisory Authority of Norway) may curb household debt accumulation. Over time, household borrowing may nevertheless increase considerably and saving may fall. The aim of guarding against the risk  4  BIS Review 38/2010  of future imbalances, which may disturb activity and inflation somewhat further ahead, suggests that the interest rate should be gradually brought closer to a more normal level. On the other hand, a marked interest rate increase in Norway and a wider interest rate differential between Norway and other countries may entail a risk of a considerably strongerthan-projected krone, resulting in inflation that is too low. This will make it difficult to bring inflation up to target within a reasonable time horizon.
The Committee's statement that ratings should not be 'point in time' but 'must represent a conservative view of a long run average probability of default for the borrower grades' attempts to introduce such a balance. Such ratings ought to be reasonably robust to the normal ups and downs of economic activity. The Committee has backed this up with requirements for minimum lengths of data histories to underlie the internal ratings, so helping to ensure that they incorporate some experience of economic low points. Over-optimism by banks in allocating ratings could also induce procyclicality. The Committee proposes several checks on this. In particular, supervisors will look at the ratings allocated to some individual loans, and also compare the distribution of loans across rating bands with those of different banks. Ultimately, of course, we will have to rely on those charged with daily supervision of banks, backed up by the Pillar 3 disclosure requirements, to ensure that ratings are not set in a way which risks undue procyclicality. Impact of the Basel Accord on SMEs Leaving aside the issue of how the risk sensitive capital requirements will behave over an economic cycle, I would also like to touch on the question of how they may affect the supply and pricing of finance to certain types of borrower. If risk sensitivity means a greater distinction between different types of borrower, we need to consider carefully whether the right outcome has been achieved.

If we can succeed in implementing the reforms that are still outstanding, there is a chance that economic growth can be propelled to a level beyond the current economic upswing. BIS Review 100/2006  1
Of course strong and growing exports are a main target for most countries due to their balancing of payments. In our case, these FDIs in automotive and electronics have contributed primarily to our economic growth in regards to manufacturing. Other manufacturing sectors are struggling due to their continued dependence on the European Union’s growth; as such, their success is dependent upon overall growth and stabilization within the EU, which is showing signs of alleviation. Clearly a growing focus is a diversification of export markets. This can be remedied by establishing further value-added capacities in manufacturing which can allow for non-EU exports. Is it safe to assume that the growth factors mentioned previously are a result of the Economic Zones established within Macedonia? Yes, most of these FDIs in production of tradable goods and their resulting benefits to the overall Macedonian economy are located within the Economic Zones. We have been speaking about the EU and its effect on Macedonia’s economy. Compared to the US, if only marginally, the EU is experiencing a more stagnant rate of growth. You mentioned you see the EU beginning to recover slightly. What is your outlook on the future of the Euro Zone? This is true; the US is ahead in terms of growth. The EU economy in Q2 of this year went out of recession but remains in a fragile state and questions certainly remain regarding its long term stability. They are not out-of-the-woods yet but are heading in that direction.

The share employed in the public sector is also somewhat higher than in Norway as a whole. Unemployment has also been markedly lower in the inland region than in most other regions in recent years. 2  BIS Review 79/2005  According to the most recent reports, the economic situation in the region is favourable. Participating companies report rising employment and solid growth in all industries. In retail trade and in the construction sector, activity is brisk and increasing, with a somewhat wait-and-see approach to future developments. Growth in manufacturing has slowed slightly, but is likely to stabilise. Investment is rising in all sectors. Enterprises in the region envisage a slight rise in prices in the period ahead. Inflation has edged up since the beginning of 2004. In October, the year-on-year rise in consumer prices adjusted for tax changes and excluding energy products (CPI-ATE) was 1.2 per cent. Adjusted for the estimated direct effect of the interest rate fall on house rents, the rise in prices is estimated at 1.3 per cent in October. Total consumer prices (CPI) rose by 1.8 per cent in the same period. Prices for domestically produced goods and services rose by 2.0 per cent in the twelve months to October this year. The rise in prices for domestically produced consumer goods exposed to international competition has been very low this year. In October, prices for these goods were 0.2 per cent higher than in the same month one year earlier.
Today, Mainland China is already the second largest economy in the world and the single biggest contributor to the world’s economic expansion, creating nearly one-fifth of the world’s newly-generated economic activities. 4. The China factor creates many different opportunities for Hong Kong’s financial services industry. Today I will highlight two aspects that I believe are key drivers for growth in the next few years. The first is the gradual financial liberalisation in Mainland China and the second is the wider external use of the renminbi (RMB). The gradual financial liberalisation in Mainland China 5. In the gradual financial liberalisation process in Mainland China, we can observe three key patterns: inflows being de-regulated before outflows, direct investment flows being liberalised before portfolio investment flows, and collective investment schemes being relaxed before individual investors. 6. Specifically, during the early stages of Mainland China’s reform process, in the late 1970s and early 1980s, only Foreign Direct Investment (FDI) was encouraged. Hong Kong has been the largest source of FDI for the Mainland, accounting for more than half of the total amount in 2009. In the opposite direction, Mainland China’s Overseas Direct Investment (ODI) has also been liberalised gradually over the years. Hong Kong has been the largest recipient of ODI flows from the Mainland. At present, about 60% of ODI from the Mainland has gone to Hong Kong or via Hong Kong to other places.

National policies should work to increase the capacity of each national economy to adjust to adverse shocks and to promote productivity and the use of the different production factors. The longer the adoption of the necessary national policies is delayed, the greater the potential costs will be in the face of adverse events. As central bankers, it is for us to concentrate our efforts on maintaining price stability, providing the appropriate framework for sustained growth and increases in employment and welfare. But it is also for us to keep the economic authorities and social agents fully aware of the rules of play of a monetary union. Clearly, this anniversary comes at a time of great complexity in the international economy, from which neither the euro area nor Spain are isolated. The challenges are great and the uncertainty very high. But it would be unfair not to acknowledge that the course of the  BIS Review 24/2009  3  common project over these past ten years offers sound grounds to maintain a reasonable degree of optimism about our ability to face them. Thank you. 4  BIS Review 24/2009
Once employees are on board, performance management should play a greater role, both in compensation decision-making, which needs to be simplified and diversified, and in the promotion process. The process should reflect a better balance between production and controls, by focusing not on “what” was accomplished but “how” it was accomplished. Repercussions are necessary for employees that do not behave in a manner that is desirable. I said that leadership must come from the top. But that doesn’t mean that you can’t drive the culture from throughout the organization in the form of “culture carriers” – employees who are well connected, respected and can be effective in making your culture “go viral.” Cultural change is not just a “flavor of the month.” It is a long-term commitment to changing a firm and an industry. It will take time. And, once you feel you’ve achieved what you originally set out to achieve, you will likely have raised the bar and will need to reset your goals. Building and maintaining a strong culture in a firm is an ongoing effort, not a “one and done” initiative. 8  BIS central bankers’ speeches  Conclusion Will our list of “to dos” ever end? Probably not. Will our list of “worries” get shorter? Unlikely in the current environment. We live in an ever-changing environment where speed and agility are of the essence. Demands from customers change, expectations from shareholders change, and the regulatory landscape you work within will continue to evolve to keep pace.

4  BIS central bankers’ speeches  We expect banking organizations of all types and sizes to have the capacity to analyze the potential impact of adverse outcomes on their financial condition. Stress testing can be a means to carry out such analysis. Certain portions of existing supervisory guidance – which cover capital planning and management of funding and liquidity risks – discuss using stress testing or addressing potential adverse outcomes in order to enhance risk management practices. This guidance is applied commensurate with an organization’s size, complexity and risk profile. For example: •  Community banks – those with below $ billion in assets – are not expected to conduct the type of stress testing required or expected of larger banking organizations, as indicated in recent rulemakings, proposals and guidance. A community bank may still employ certain other types of simpler stress testing to augment their risk management – as many community banks have been doing for some time. •  In contrast, regional banks – which are typically those with assets between $ and $ billion – are indeed required to conduct a company-run stress test on an annual basis. Still, regional banks are not subject to many other stress testing requirements imposed on larger firms, such as going through a supervisory stress test or conducting an additional stress test each year. Moreover, our reviews of those company-run stress tests are focused primarily on the quality of the processes those firms employ and not necessarily the results.