samchain/econo-pairs-v1 huggingface dataset:
It also contains a behavioural model of funding markets and banks’ liquidity positions which can generate liquidity crisis externalities (Aikman et al (2009)). There are also explicit behavioural links between macro-economic variables and bank balance sheets (through arrears, defaults, losses given default etc). These complex, non-linear  BIS central bankers’ speeches  11  channels of risk propagation mean the probability distributions generated from RAMSI are fat-tailed (Chart 17). These ingredients, with rich interactions both within and across banks and between banks and the economy, mean RAMSI is a useful framework when undertaking top-down stresstesting. Alongside bottom-up granular models, the Bank used RAMSI in its concurrent stresstesting of UK banks at the end of last year. Because it can be used to draw probability distributions of bank balance sheet measures, such as liquidity and solvency, in time this may enable probabilistic “fan charts” of bank strength to be constructed. These would be akin to the fan charts for inflation and output produced in the Bank’s Inflation Report for monetary policy purposes. In a broadly similar spirit, but at a greater level of granularity, Agent-Based Models (ABM) are a natural vehicle for modelling behavioural interactions within and across macro-financial systems (Farmer and Foley (2009)). There has been some progress towards developing ABMs, in particular since the financial crisis.

In the US, estimates suggest it was broadly equivalent in scale to banking in the run-up to the crisis. At a global level, non-bank intermediation is currently estimated at around $ trillion, around half of the assets of the global banking system. Because many of these entities sit outside of the regulatory perimeter, data on their exposures and interactions is thin on the ground. But work in the US to map these interactions suggests they too are dense and complex (Pozsar et al (2010)). Chart 8 presents a stylised map of the shadow banking sector and its interaction with the banking sector. These interactions are highly complex and multi-layered. (c)  Complexity of macro-financial interactions  The links and interactions between the financial sector and the wider economy are, in some respects, even less well mapped than the shadow banking sector. They, too, have evolved significantly over recent decades in scale and complexity. As an example of that evolution, Chart 9 looks at a representation of the flow of funds between various sectors in the UK – companies, households, the rest of the world and government. It also shows the role of the financial sector in intermediating these flows of funds between ultimate asset-owners (shown at the top) and liability-holders (shown at the bottom). The intermediation sector is further decomposed into banking and “other” financial intermediaries such as pension, hedge and other funds and insurance companies. The Bank of England’s is also shown.
Issues like misconduct risk and culture likely fall in these gaps because they involve the attitudes, norms, and behaviors and suggest a critical role for supervisors in addressing these risks. Conclusion To conclude, misconduct risk poses clear threats to both prudential and financial stability objectives. The work supervisors do to address misconduct challenges is critical because there are limits to the regulatory or deterrence and enforcement approach. To understand how a firm manages misconduct risk and to improve resiliency and reduce the potential for unwanted disruptions to financial intermediation, we must increase our focus on firms’ decision-making practices and behaviors as a core aspect of good governance. We can draw from the growing literature about the root causes of misconduct and the underlying factors that drive unhealthy cultures to support this goal. However, as I am sure you already appreciate, addressing culture reform across an entire industry is a complex challenge and there is no one action or approach that will fully address it. We all must be willing to work at this from our various vantage points, as supervisors, as academics, and as industry participants. As you reflect on the conversations you have had today, the points that were raised, and the potential paths forward, I encourage you to consider the important role you each play and the potential impact we, collectively, can have by working together toward the ultimate goal of ensuring a safe and sound financial system that supports economic growth and stability.

The principal sources of the deterioration lie overseas – from the squeeze on real incomes due to the rise in commodity prices and, more recently, weakening global demand due largely to the euro area crisis. Even if, as we all hope, a credible solution to the euro area’s problems can be put in place in the coming weeks, the traumas of the past few months will take a while to overcome. Confidence has been sucked out of financial markets. Pressured European banks are deleveraging by disposing of assets, or letting loans run off, elsewhere in the world. Trade finance is again becoming impaired. Capital raising by companies has declined. BIS central bankers’ speeches  1  And confidence has been drained out of the UK real economy too. Earlier in the year, we faced a tug of war between a resilient corporate sector looking to expand when demand picked up, and a fragile household sector worried about a rising cost of living, jobs and house prices, with some households therefore saving more in order to strengthen their balance sheets. In recent months, as confidence amongst businesses has flagged, they have been tugging on the same end of the rope, with the MPC at the other end, in effect tugging back. Part of that easing in monetary conditions has come through lower interest rates.
Although this led to an increase in the productivity growth measured during a transitional period, this was at substantial cost to those who lost their jobs and the economy as a whole, as a large part of the economy’s available resources were not utilised. During and directly after the crisis there were also a number of structural changes in the economy that are likely to have affected developments. Fiscal policy was tightened, with an expenditure ceiling and surplus target, while monetary policy was targeted at achieving a low, stable inflation rate. Such a stabilisation of the macroeconomy means that uncertainty about issues such as future tax rates and price developments decrease, which in turn makes it easier for households and firms to plan. Comparative studies of different countries have shown that this can have longer-term effects, partly through a rise in productivity. Furthermore, several markets were opened to both domestic and international competition through deregulation. Greater competition increases the pressure on profitability, which raises motivation for making production and organisations more efficient, for instance with the aid of more modern technology. There were also other types of structural changes in the Swedish economy during the 1990s. Up to the beginning of the 1990s, the number of people employed in the public sector increased, with a corresponding decline in the private sector. After the crisis there was a turnaround, and the private sector’s share began to increase again.

To address this, efforts are needed to develop a sufficient number of competent lawyers and judges that are equipped with sound knowledge and expertise in both Shariah and civil laws to deal with such matters. Seventh, development of vibrant Islamic financial markets In the more developed financial centers, the development of inter-related financial markets has contributed towards the stability in the financial system. This is an area of priority for the Islamic financial industry. In this regard, the development of a comprehensive Islamic financial system including the various components of the financial markets would meet the requirements of the various differentiated groups. The challenge in the Islamic banking industry is, therefore, to steer the development of an Islamic financial system towards one which is more dynamic and responsive. The development of an Islamic financial system should include the key components comprising the Islamic money market and the Islamic equity and debt capital market, given the strong linkages, inter-dependence and synergies among these components in the system. Of importance is the Islamic money market to act as a platform to provide a ready source of short-term funding and investment. Financial instruments and interbank investment will allow surplus banks to channel funds to the deficit banks, thereby maintaining the funding mechanism necessary to promote stability in the system. The Islamic money market will also facilitate the conduct of monetary policy.
The first is the pressure that strong growth in Asia and other rapidly growing emerging market economies is placing on the markets for energy and other natural resources. We have already seen this pressure reflected in a strong upward move in global energy and commodity prices since the early 2000s, as Chart 5 shows. After a brief respite during the financial crisis, this upward pressure on energy and commodity prices has resumed as the world economy has bounced back from recession. The oil price is back above $ and while there has been a modest correction in commodity prices over the past month, this seems likely to be a short-term pause in the upward trend rather than a fundamental readjustment. Chart 5 – Real oil and commodity prices since 1980 Deflated by US consumer price index; 2000=100 S&P GSCI Agriculture and Livestock index  350  S&P GSCI Industrial Metals index  300  Brent crude spot price 250 200 150 100 50 0 1980  1985  1990  1995  2000  2005  2010  . Source: IMF and Thompson Datastream It is no coincidence that this upward pressure began to emerge in the early 2000s and has continued for the best part of a decade now. The rapid growth we have seen in Asia and other emerging market and developing economies has been very resource-hungry. The effects of this can be seen in the pattern of global energy consumption, shown in Chart 6.

Both the financial crisis and the recession which followed it were global economic events. No major economy in the world was unaffected by the financial turbulence and the dramatic downturn in world economic activity in late 2008 and early 2009. And on the inflation front, we have seen major global forces operating too, with the inflation rate in the UK and other countries being significantly affected by large price swings in global energy and commodity markets. The global economy is now much more integrated and interdependent than at any time in the history of the world. Four main forces have come together in the past two decades to create the “New Global Economy” of the 21st Century. First, new technologies have had a major impact, notably the development of global information technology, media and communications networks. Second, barriers to trade have been reduced, with most of the world’s nations now participating in a liberal and open trading system. The World Trade Organisation now has 153 members, covering 97% of the world’s population. Third, political change has extended the global market economy to large parts of the world which were previously closed to international trade and investment – including China, India and the former Soviet Union economies. And fourth, there has been a tide of deregulation of markets – including financial markets – in many countries, and as markets have been deregulated, they have also been opened up to international competition.
Given past events, my feeling is, although I have no firm facts to base it on, that the low productivity outcome for 2007 will be revised upwards somewhat as the statistical base improves. But this will not alter the picture of 2007 as a year of very weak productivity growth. We will not know the definite outcome for a couple of years yet. In the Monetary Policy Update published in December last year we could observe that productivity growth had been weaker than we estimated in our October Report (see Figure  12  Sveriges Riksbank (2007). 13  Öller (2007). BIS Review 12/2008  5  3). We therefore revised down our forecast slightly in the short term. In 2008 we envisaged a gradual recover in productivity. After that, our assessment was that productivity growth would develop roughly in line with the trend rate of increase. Several factors indicate that the long-term rate of increase in productivity will remain relatively high, although it will not be as high as during the years at the beginning of the 2000s. Globalisation is one such factor, and will probably continue to be a driving force behind productivity for a long time to come. Integration within the EU is deepening. The countries in eastern and central Europe who have moved away from planned economies have many years of rapid development ahead of them before they catch up with western Europe.

Instead it is technological and organisational advances, together with innovations, that have largely been the driving forces behind productivity. During the 1990s a number of markets in Sweden were opened up to competition. This included the markets for electricity, telecommunications, post and a large part of the transport sector. At the same time, there was a general reinforcement of the competition policy through the establishment of the Swedish Competition Authority and the introduction in Sweden of a new, stricter law on competition. When competition stiffens, companies are forced to become more efficient and cost-conscious, which leads to an increase in productivity. Studies by the OECD indicate a clear relationship between deregulation of product markets and productivity growth. 3 This factor has probably been significant for the relatively rapid increase in productivity during the past 10-15 years. One important aspect in today’s globalised knowledge-based society is that competition promotes innovation and thereby productivity. 4 To avoid being driven out of the market companies are forced to constantly improve existing products and processes and also to develop new ones. Sweden is at the forefront in Europe and pointed out as an innovation leader alongside Denmark and Finland, for instance. 5 Another explanation for the growth in productivity in Sweden, as in many other countries, has been that the percentage of highly educated persons in the labour force has shown an increase trend, partly as a result of technological developments.
Tough measures are already being adopted – measures that were certainly long overdue. But these are not just nice words. HB: What was agreed? Trichet: The Commission in liaison with the ECB and the IMF will monitor very closely the implementation of the measures. But what is also decisive that all Governments take fully their responsibilities of surveillance. It is true for all the other 15 and of course for Germany amongst them. Germany is the largest economy in the euro area and a country which has a tradition of sound fiscal management. I count on the very active role of all countries including Germany inserting the function of surveillance. HB: Should the ECB not also have been tougher and more vocal in its criticism of European governments in recent years? Trichet: The Governing Council has been public in asking Governments to embark on better and sounder fiscal policies on the occasion of all our monthly meetings. You have heard me being vocal in all my press conferences. I had to counter in the name of the Governing Council, the attempt to destroy the Stability and Growth Pact in 2004 and 2005. This attempt was engineered by the big countries of the euro area, including Germany and France and by the Chancellor of Germany and by the President of France of the time. And in all Euro group meetings since five years I call Ministers to regain control not only of their budget but of all nominal evolutions including unit labour costs.

The situation in a number of financial markets was hampering the transmission of our monetary policy, a monetary policy stance that we had judged to be appropriate precisely the previous Thursday. That had to be put right. The exceptional circumstances demanded that we act swiftly. HB: What volume will the purchase programme have? Trichet: I do not provide any figures at the moment. HB: The markets would like to know in somewhat more detail how you intend to absorb the liquidity again. Trichet: Allow me to repeat myself: We are not changing our monetary policy stance. We are not embarking on quantitative easing. We will withdraw the liquidity that we will inject mainly through tendering term deposits. HB: Will that be possible? Trichet: Of course. It does not present technical difficulties. That is what we intend to do. And let me say, that what counts, is our determination and the fact that we are true to our primary mandate of safeguarding price stability. The Governing Council will not tolerate inflation. HB: Is Greece an isolated case? Could the same happen to other countries as well? Trichet: Greece was clearly in a unique exceptionally grave situation before it embarked on its adjustment programme. But I call solemnly upon all countries to implement programmes commensurate to recover sound fiscal situation. HB: What has to be done?
Previously, I stated multiple times, including in the State Duma, that it is vital for us to have our own national financial infrastructure. We now have the Mir card that is continuing to develop and the national Financial Messaging System which is an analogue of SW IFT we created after 2014. This system currently services over 20% of financial messages inside the country and is capable of servicing the entire domestic traffic if needs be. The Faster Payments System is advancing. As I have said earlier, it played a critical role last 4/5  BIS central bankers' speeches  year ensuring P2P money transfers — to family members, friends and acquaintances: when people needed to make a money transfer, they had the opportunity to make it cheaply and instantaneously. Today, the Faster Payments System is advancing to the next level enabling not only P2P money transfers, but also payments for goods and services. As was announced by President Putin, all related costs for small businesses will be compensated from the budget until the end of the year. This will make it easier for small businesses to connect to this system. It is essential that all systemically important banks must connect to the system by 1 July. As of the current moment, 10 of the 12 systemically important banks have connected to the FPS. We hope that the remaining ones will be compliant with the deadline.

However, as the economy bounces back, such a large-scale programme is now mostly pushing up housing prices, and this rise is not covered by the subsidised interest rate. Nor does it improve the affordability of housing for people, while the main goal is to increase the affordability of housing for people. We needed a shift to more targeted programmes addressing social issues, rather than focused on boosting construction in general. This is exactly why the parameters of the subsidised programme were changed, as was announced by President Putin. The next measure is reducing people’s and companies’ costs for covering their daily financial needs. In other words, this is not only loan restructuring and new loans which largely offset plummeting incomes, but also lower costs in the financial sector. We introduced a free limit of 100,000 rubles for P2P money transfers in the Faster Payments 2/5  BIS central bankers' speeches  System and obliged all banks to provide convenient access to the FPS in their applications. In addition, we limited acquiring fees to reduce companies’ costs related to cashless payments. This was a temporary measure, but it helped companies save 1.5% of their non-cash flows. Accommodative monetary policy and, accordingly, lower deposit rates made people opt for more profitable instruments in the stock market. Russia recorded a surge in the number of retail investors. As of the current moment, almost 13 million people have entered the stock market. They are mostly newcomers in the stock market, and we need to protect their rights.
Zeti Akhtar Aziz: Electronic payments in Malaysia Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Promotion of Electronic Banking and Payments Launching Ceremony, Electronic Banking: The Way Forward, Kuala Lumpur, 8 May 2003. *  *  *  Bismillahirrahmanirahim Dr. Rozali bin Mohamed Ali Chairman of the Association of Banks in Malaysia (ABM) Ladies and gentlemen Good morning, It gives me great pleasure to launch the ABM programme to promote electronic payments in Malaysia. This programme is to raise the awareness on the changes in technology and how they are affecting banking and payments in Malaysia. There is enormous potential that technological developments can bring to transform the financial industry in a manner that will bring significant gains to businesses and consumers. The rapid pace of advancement in information technology and communication networking has offered a wide range of delivering channels in retail banking. Banking institutions need to exploit the opportunities that arise from these developments and changes to remain competitive. The successful financial institutions in the future will be those that are able to leverage most from the information and communications technology revolution. Increasingly, consumers are also demanding more efficient banking services and are becoming more discerning of the power that the technology brings. The winners will be those financial institutions that are able to harness on the capability of ICT in making strategic decisions in terms of enabling better alignment of business, enhancing organisational capacity and capability, risk management and building better customer relationship.

In this respect, I note that the banking industry has drawn up a communication strategy to raise consumers awareness of its convenience, speed and efficiency and to encourage its use. A smooth functioning payment system is critical to the effective functioning of the economy. As the payment systems continue to evolve, Bank Negara Malaysia, will continue to facilitate and foster the safety and efficiency of the payment systems to safeguard public interest. To enhance the efficiency of the payment systems, Bank Negara Malaysia has recently reviewed the legal and regulatory framework of the payments system. A comprehensive legislation on the payment systems is being put in place to provide the mandate for Bank Negara Malaysia to effectively oversee and facilitate greater development of the payment systems. The legislation would also promote a conducive and liberalised environment for the modernisation of the payment systems in Malaysia. Several policy decisions have also been made. Access to the payments system has been broadened with the relaxation of the policy on the offering of payment gateway services and issuance of credit cards. Banks are allowed to operate their own payment gateways and non-banks are permitted to issue credit cards if they have established line of credit mechanism from the banks, or have set up a joint venture company with the banking institutions.