samchain/econo-pairs-v1 huggingface dataset:
Whatever the motivation, a series of transactions have recently taken place that show that the pace of consolidation is picking up in Hong Kong. Last year, for example, we saw the acquisition by Standard Chartered of the credit card and retail banking business of Chase Manhattan and the purchase by Bank of East Asia of First Pacific Bank. This year, Development Bank of Singapore is in the process of acquiring Dao Heng Bank with the intention of eventually combining it with its existing locally incorporated subsidiary. Two of the Mainland banks, Bank of China and ICBC, are also consolidating their Hong Kong operations. The Bank of China move is particularly significant since it will create the second largest banking group incorporated in Hong Kong. What we have not so far seen in Hong Kong is merger among indigenous banks that are more or less of equal footing. This is perhaps not surprising. Such mergers are generally more difficult to arrange than straightforward acquisitions of a smaller bank by a larger bank. In the latter case, the acquirer is in a position to decide what it wants to do as regards management and staff changes, harmonisation of systems and the introduction of new products. With a true merger, these matters have to be settled by consensus, which may not be easy. Who for example is going to be the chairman or chief executive? It is probably better to avoid the Japanese solution of sharing each of these responsibilities among more than one individual.

Lots of companies are doing it, but the success of M&A in achieving its stated objectives of cost and revenue synergies is not clear-cut. Does M&A work? The G10 Report to which I referred concluded, for example, that there was only weak evidence of cost reduction arising from increased size, except perhaps in the case of smaller banks. While there was stronger evidence for improvement on the revenue side, the gains were probably not as large as those anticipated by the practitioners. Not surprisingly therefore, there was not much to show that, on average, M&A generated significant shareholder value. Rather, what tended to happen was that there was a transfer of wealth from the shareholders of the acquirer to those of the target. Other studies, and some well-publicised mergers that have failed to deliver the promised benefits, support this somewhat sceptical view. It is however equally possible to point to cases where mergers have been successful. Indeed, most, if not all, of the market leaders in the industry have got to where they are today through a series of mergers that have taken place over the years. The risk, however, is that banks may sometimes embark on a "merger too far". In other words, at some point the complexity of a merger may outstrip the ability of management to handle it, and diseconomies of scale set in. This means that we cannot really generalise about the success of bank mergers.
Economists have long found it difficult to explain why, given the risks of equity investments, governments should need to offer high real rates of return on their bonds in a world of low and stable inflation. So perhaps the world capital market is returning to an era of low real rates more akin to the nineteenth and early twentieth centuries. If annual market rates on index-linked securities in the UK were to remain around 1%, then, with a 2% inflation target, the level of official  2  BIS Review 9/2006  interest rates required to balance overall demand and supply would, in the long run, be lower than was thought necessary in the past few decades. Even if we knew that long-term interest rates were low because of a change in the balance of saving and investment in the world, judging the appropriate level of interest rates would be a challenge. But monetary policy is made more difficult by the fact that there is another, very different, explanation of recent low long-term interest rates. Rapid growth of money - as central banks have kept official interest rates very low - has helped to push up asset prices as investors “search for yield”. Data from the IMF suggest that world broad money in 2003 and 2004 was growing at its fastest rate since the late 1980s.

There will be deviations from these forecasts, even if they are well founded, partly because the economy is hit by  BIS Review 14/2002  1  unforeseen shocks from time to time. If fruit-growers' crops are attacked by insects, the price of apples will rise, if the dams are not filled with water, electricity prices may rise, and if cows in Europe suffer various diseases, the price of meat and certain other foodstuffs rises. If the Riksbank tried to make corrections for this type of temporary price disturbance, it would probably lead to large swings in monetary policy and unnecessary fluctuations in demand. It would therefore be wrong to give the impression that inflation will always lie at 2 per cent. On the other hand, it is important that the Riksbank constantly adapts the instrumental rate to ensure that the inflation forecast 1-2 years ahead is in line with the inflation target. This means that households and firms can rely on temporary deviations above or below this level being just temporary. One factor that could seriously undermine the credibility of the inflation target is if a higher rate of price increase led to large-scale demands for wage compensation. If wages and prices begin to chase one another upwards, as happened in the 1980s, everyone will lose out in the end. The importance of monetary policy for growth and vice versa The importance of monetary policy for growth is primarily connected to the need for stability in trade and industry and the labour market.
As noted on previous occasions, this partly reflects intensive growth in employment generation, which has  6  BIS Review 45/2005  been most beneficial for entrenching the expansionary cycle of the economy and making more efficient use of the labour supply available. But weak total factor productivity growth - the relative position of which vis-à-vis the EU has continued to worsen - denotes the presence of other more worrying factors which appear to be checking the incorporation of innovations and technical progress into productive processes. The lack of innovation in the productive system tends to stifle the economy’s overall efficiency and its long-term growth capacity. The indicators available for the stock of technological capital suggest a considerable lag remains in place. Undoubtedly, specific features of the Spanish economy’s pattern of productive specialisation - which is very biased in manufacturing towards the production of intermediate- and low-technology goods, and in services towards tourism activities - may partly explain this phenomenon. But there are also shortcomings that are restricting the business sector’s capacity to incorporate advances in knowledge and to adapt productive processes, human resources management and corporate strategies to an environment of heightened competition. Of particular importance are the persistent mismatches between the skills and training levels of labour and companies’ requirements, and, above all, the rigidities in the workings of factor and product markets, which discourage the adoption of more innovative strategies.

I understand that the EU Code on remuneration would already be consistent with this. What I am describing is not a scary prospect. It should, in fact, be liberating to establish a financial system based more firmly on the principles of the market. But it is a prospective world in which our capital markets will be at least as important as they were over recent decades. That underlines the necessity of the work on, for example, standards for central counterparties, on shadow banking, and on transparent and resiliently liquid markets. This is a world in which securities regulators will play a vital role in underpinning stability. In the UK, the new Financial Conduct Authority under Martin Wheatley will be a member of the new macroprudential body, the Financial Policy Committee, for just that reason. Thank you again to AFME for providing a forum through its book for this public policy debate to continue. 2  BIS central bankers’ speeches
In this connection, it should be emphasized that, because of the inherently partisan nature of politics, and for other reasons as well, the government or state is not well-equipped to make credit decisions. Recent experience here in Asia, and before that in the former command economies of Eastern Europe, makes clear just how dangerous “policy lending” can be. Decisions as to who gets credit and who does not must be left to private initiative within a context where those making the decisions have a major stake - their own capital and economic livelihood. If the system is working properly, those receiving credit will be the most efficient, competitive, and profitable - those most capable of producing the stream of goods and services that will enable the economy to grow and, as a result, for living standards to rise. The purpose of supervision - preserving financial stability This, then, is the fundamental tension of commercial banking - how to meet the credit needs of a healthy and expanding market economy, which necessarily entails the taking of calculated risks, and yet preserve the confidence of depositors whose savings are the raw material that enable banks to perform their essential functions. Negotiating that tension, helping banks meet that challenge, is the critical task of supervision. And so what is the purpose of supervision in the 21st century? What are the objectives? How can those objectives be best pursued? Let me say first of all that there is no quick-fix or single answer.

First, I would underscore the importance of good corporate governance, the basic elements of which include: •  independent and competent outside directors;  •  capable and experienced management;  •  a coherent corporate strategy and business plan; and  •  clear lines of responsibility and accountability. Together, these elements contribute to an overall operating process conducive to long-term health and prosperity. A tightly run ship with a disciplined crew led by an experienced and competent cadre of officers is far better able to survive a long journey that will inevitably confront sudden storms. Closely related to good corporate governance and critical to any banking institution’s well-being is a rigorous internal control apparatus. Of course, effective internal control systems have always been centrally important to sound banking. This point becomes clear if we consider for a moment their basic purposes: •  to provide reasonable assurance that the bank’s and its customers’ assets are safeguarded, that its information is timely and reliable, and that errors and irregularities are discovered and corrected promptly;  •  to promote the bank’s operational efficiency; and  •  to ensure compliance with managerial policies, laws, regulations and sound fiduciary principles. With these purposes in mind, it is clear that the success of any banking organization depends on the effectiveness of its internal control apparatus. And never has this been more true than today.
2  BIS central bankers’ speeches  allocation of resources and capital is improved. Fiscal policy can benefit from this, because a steady economic cycle means more stable receipts and expenditure. Fiscal policy also facilitates the planning of economic decisions, when it is focused on stability. A balanced budget allows relatively constant taxation. But if a government is heavily in debt, there is a danger that households will save rather than consume, despite a low level of taxation, because they are expecting future tax increases (Ricardian equivalence). Economic policy stability reduces uncertainty and thereby creates favourable conditions for economic growth. In such an environment, the central bank is able to focus entirely on its mandate of maintaining price stability. So successful monetary policy is predicated on healthy fiscal policy, and vice versa. To achieve stability and prosperity in the long term, fiscal and monetary policy must both focus on sustainability. When that happens, tension can be avoided. Good rules limit discretionary freedom To achieve as tension-free an economic policy as possible, fiscal and monetary policy implementation thus has to focus on stability. But how can this be guaranteed? The freedom of action of a central bank, in particular, is considerable, given that it has the note-issuing privilege and implements monetary policy independently of political considerations. But in fiscal policy, too, the government and parliament enjoy a relatively large amount of discretion in the performance of their mandate.

Banque de France / Deutsche Bundesbank conference Paris, 21 June 2018  Speech by François Villeroy de Galhau, Governor of the Banque de France  “Monetary policy making under uncertainty”  Press contact: Mark Deen (mark.deen@banque-france.fr). Page 1 sur 5 Ladies and Gentlemen, Good morning and welcome to Paris for the 6th joint conference organised by the Deutsche Bundesbank and the Banque de France. I would like to thank the organisers Emmanuel Fahri, Emanuel Moench and Benoit Mojon for assembling such an interesting set of papers. I will return to the topic of the conference later. I would like to use my opening remarks this morning to discuss a highly topical challenge for monetary policy: how to enhance confidence and how to respond to policy-induced uncertainty. We obviously live in an increasingly uncertain world. The lack of predictability of US trade policy – or worse, its protectionism - and the lack of clarity about Brexit risks reversing many of the gains of a globally integrated economy. The euro area itself is seeing a return of uncertainty. Winston Churchill once famously said: “true genius resides in the capacity for evaluation of uncertain, hazardous and conflicting information”. Obviously we, Central Bankers, do not claim to be geniuses, but our duty as policy makers, is to deal with this uncertainty, while sticking to our mandate. I. How to enhance confidence? I don’t need to repeat today the important decisions we announced at our recent Governing Council meeting in Riga.
If the issuance of private electronic money grows to a significant level in the real economy, and if much of that growth is provided by nonbank issuers of electronic money, there could be a similar request for nonbank issuers to provide information about the volume of their issuance and their outstanding electronic money liabilities, to the extent these liabilities are not recorded on the books of a bank every time they are circulated in the general economy. A Bank Supervisor’s View From this perspective, combining banking and the Internet offers both great opportunity and great potential risk. First, the good news -- it is primarily cost-related. It has been reported by several banking studies that the cost of a typical transaction at a bank branch is now over $ the cost of an ATM transaction is approximately $ The cost of an Internet transaction, however, has been estimated at about a penny. I do not vouch for this statistic, but the difference is substantial. Such figures make a compelling argument for banks to get on the Internet sooner rather than later, and to move as many of their customers on to electronic or Internet banking as soon as they possibly can. Indeed, some banks offer low-fee accounts where the customer is not expected to enter an office physically -- mail, phone, and ATM are sufficient. As stated by Board of Governors Chairman Alan Greenspan: “it is useful...to begin by reminding ourselves just why there is bank supervision and regulation.

Anita Angelovska-Bezoska: Workshop on fintech - opening remarks Opening remarks by Ms Anita Angelovska-Bezoska, Governor of the National Bank of the Republic of Macedonia, at the NBRM Workshop on Fintech, Skopje, 28 May 2018. * * * Dear Mr. Jay Tikam, Dear colleagues, It is my great pleasure to open the NBRM workshop on a topic that has been attracting a rising interest by regulators, supervisors and central bankers, i.e. a workshop on fIntech organizations that, by combining new business models and innovative technology, gradually change the shape of the financial services segment. The main idea of this workshop is to become better acquainted with this rather new but very important topic. It has been organized with the support of the European Fund for Southeast Europe, for which we are thankful. Although in continental Europe, fintech companies account for just a small share of the markets for banking, payment services and asset management, still they are on the rise as they are rapidly entering the markets and competing with banks. According to Ernst&Young’s Fintech Adoption Index, one-third of the consumers utilize at least two or more fintech services and they are increasingly aware of FinTech as part of their day-to-day activities.
Exposures to emerging market economies are low and limited as credit and financial institutions have taken measures to protect their balance sheet from any undue risk. Despite the strong historical ties with the UK, studies carried out by the Central Bank of Malta indicate that the potential direct adverse effects of a ‘hard Brexit’ on the Maltese economy are deemed to be manageable. The robust economic developments together with the regulatory measures  implemented by domestic authorities have contributed to the further decline in credit risk and improving asset quality, with the non-performing loans ratio for the whole banking system falling to just 3.1% and comfortably below the EU average. Following a contraction phase of four years, lending to non-financial corporates finally turned the corner, increasing by an annual rate of 4.6% in September 2018. This is a welcome sign since it does not only hint that bank disintermediation is normalising, but it also augurs well for monetary policy effectiveness, given that banks are the conduit for its proper functioning. Although such signs are encouraging, we have yet to stimulate more usage of the current liquidity lying idle at the Central Bank. Here, banks play a crucial role in finding new viable business niches. Page | 7  Key performance indicators (KPIs) for domestic financial institutions are healthy but we must not become complacent. Vulnerabilities remain. Aggregate KPIs only give one side of the story masking the variability in operational performance at an institutional and sectoral level.

While  1/5  BIS - Central bankers' speeches  policy rates remain our main instrument for steering monetary policy, we have made clear that we are ready to adjust all our instruments to maintain the consistency we need in our monetary policy to achieve our primary objective of price stability. Datadependent, going meeting-by-meeting. Heute wie auch morgen und übermorgen bleibt die Geldpolitik auf der Hut und handlungsbereit. Banking supervision when macroeconomic tides are shiftingAs both an ECB Executive Board member and the Vice-Chair of the ECB's Supervisory Board, I am particularly interested in how banks adjust to the shifting macroeconomic tides. Higher interest rates as such are generally good news for banks because – after a decade of exceptionally low interest rates – they improve profitability. Indeed, euro area banks performed well in the first half of the year as their net interest income increased steadily, a trend that most analysts expect to continue in the near term as further monetary policy normalisation takes hold. Yet, even if the expectation of improved profitability for the median bank comes true in the near term, not all banks are expected to benefit equally from the increase in interest rates. More importantly, banks and we as supervisors need to be mindful that the increase in interest rates does not occur in isolation.
Households are to a greater extent choosing electronic means of payment instead of cash, and there are increasing requirements that payments should be made easier and should reach the recipient faster. This development also means that the Riksbank's role in the payment market is changing. As the use of cash has declined, the Riksbank is wondering whether it is desirable and possible to issue electronic central bank money to the general public, so-called e-krona. But today I don't intend to discuss the e-krona. Instead I would like to focus on the role of the Riksbank in the payment infrastructure that  * I am grateful to Martin W Johansson who has helped me prepare this text. Thanks also to Anders Vredin and  Marianne Sterner for valuable comments. 1 A payment infrastructure can quite simply be said to consist of two parts; the technical platform (hardware, software and other technical components) required to execute a payment, and the regulatory framework and corporate form. 1 [8]  banks and other financial institutions use to pay one another. This infrastructure is used in the background when most of the payments in Sweden are executed, or settled, as it is also called. Central banks play an important role in enabling households and companies to make payments to one another by using financial institutions as an intermediary. The Riksbank functions as a hub and supplies a payment system with accounts where financial institutions can hold money (“central bank money”).

It would also mean that the Swedish payment infrastructure is to a greater extent harmonised with the rest of the EU, which can increase competition and the quality of the payment services offered to Swedish customers. RIX plays a central role in the Swedish payment system The payment system the Riksbank currently supplies to financial institutions is called RIX. Institutions wishing to become participants in RIX enter into an agreement with the Riksbank. The Riksbank is a public institution, which means that entry to the RIX system is given on competitively neutral terms to institutions meeting the conditions that are set. It is difficult to overestimate the importance of RIX for the Swedish economy. From the time that RIX opens at 0700 hours on a typical working day until it closes at 1700 hours, a good 20,000 payments are settled to a total value of more than  2 According to the international standards on financial infrastructure issued by the CPMI-IOSCO, systemically im-  portant infrastructures should settle in central bank money whenever it is practically possible. 3 The Eurosystem consists of the European Central Bank and the national central banks in the euro area. 2 [8]  SEK 600 billion.4 RIX is the hub of the Swedish payment system and it is therefore also logical that the functions and accessibility of RIX will be in focus when the Riksbank upgrades its capacity to meet the challenges of the future payment market. The Riksbank is not in any unique situation in this respect.