samchain/econo-pairs-v1 huggingface dataset:
The nature of future monetary policy will largely depend on the success of the largest central banks to get out of this situation in a controlled and timely manner, without causing excess inflation and damaging central banks hard-earned credibility. These developments will affect monetary policy in the emerging markets through interest and exchange rates, but most importantly in the way central banks conduct their monetary policy. Influenced by current practices of leading central banks, some other central banks have reoriented their objectives and engaged in activities which are traditional for development banks and governments. We have been careful to stay away from adopting and targeting such objectives not only in monetary policy but also in our macro-prudential policy. The Bank of Albania has traditionally based its policy on two important pillars. Our first focus has been to achieve our inflation target and manage inflation expectations to preserve the purchasing power of our currency. This policy has simultaneously provided necessary stimulus to economic activity. Second, our focus on banking supervision and financial stability has enhanced the confidence on our financial system and therefore increased the efficiency and credibility of our monetary policy. As I have said in April of 2008, during the annual conference with the banking system in Albania, “every investment we make today in financial stability yields increased efficiency in our monetary policy”. 2  BIS central bankers’ speeches  Recently, the Bank of Albania has introduced financial literacy as a third pillar of our policy and independence.

You have implied that higher interest rates were necessary to defend the exchange rate. Has the recent declining trend in the Bank’s external reserves been mostly due to the premature conversion of Maltese lira to euro? With an open capital account and the growing integration of the Maltese financial system with that of the EU it is becoming increasingly difficult to clearly identify the impact of the different factors affecting movements in the external reserves. Some factors, moreover, are interest sensitive, others less so and yet others not at all. 2  BIS Review 59/2007  One major factor belonging to the latter category that has exerted downward pressure on the reserves since the latter part of 2006 has been the improved prospect of euro adoption in 2008. This has induced some firms and individuals who receive foreign income denominated in euro not to convert such income into domestic currency. Others are converting their Maltese lira deposits into euro deposits. In addition, holders of Maltese lira assets, particularly cash, have been buying up euro currency notes. It is significant that since the external reserves started to decrease in November, currency notes in circulation have declined by about Lm35 million, almost entirely in the form of Lm10 and Lm20 notes, the preferred medium for cash hoarding. At the same time, the importation of euro notes, mainly high denomination notes, has increased. Movements in the external reserves are also influenced by the performance of the current account of the balance of payments.
But what on earth are we doing not only tolerating but effectively encouraging a financial system in which asset managers and banks can’t always understand their portfolios? It is therefore vital that, together with the Basel Supervisors Committee, securities regulators around the world actively implement the FSB’s Principles for reducing mechanistic reliance on CRA ratings.14 In the US, the SEC is embarked on that. But I worry that others, including prudential supervisors, might not grapple with this admittedly difficult exercise in a determined way. The enhanced (meaning better not longer) disclosure by issuers I discussed earlier could make the standard-setters’ task somewhat less difficult. Infrastructure One of the wonderful things about capitalism is innovation. It helps to drive technical progress and higher-living standards. Open economies allow those innovations to spread across the world. Freely flowing capital is essential for this to work in my view. But innovations can take a nasty turn in financial markets when they outgrow their supporting infrastructure. This is an area where the authorities can do good, because there is often a collective action problem. For example, the recent crisis would have been much worse if the authorities, led by the New York Fed, had not “asked” the dealer and fund community to clean up the problem of assignments in credit-default-swap markets in the early years of the last decade. But we need to remember to be ready to step in. The OTC derivative markets are an example where the authorities have had to chase after events.

We cannot afford to ignore capital markets if we are to restore and preserve stability in the UK. The UK’s new macroprudential regime recognises this. The CEO of the planned new market regulator, the Financial Conduct Authority, will sit on the Financial Policy Committee once it is placed on a statutory footing. And the government proposes that the FPC be given power by Parliament to give Recommendations and Directions to FCA where it could develop its policies and rules in the interests of stability. Domestically, internationally, financial stability is a shared endeavour. I am therefore especially grateful for being invited to join you, the securities market community, today in what can only sensibly be the beginning of a collective process. 12  BIS central bankers’ speeches
The HKMA looks forward to being a long-term partner with you on this journey, and I hope you can offer us your unwavering support too. 2/5  BIS central bankers' speeches  Future-proofing Hong Kong for Central Bank Digital Currencies (CBDCs) 20. As we look beyond banks to the wider financial system, we turn our attention to initiatives that will have an impact on the financial system as a whole, one of which is CBDCs, the focus of our second strategy. 21. As the world becomes more interconnected than ever, cross-border and cross-boundary transactions have never been more frequent. Many of us have witnessed how payment instruments have evolved over time, from banknotes to credit cards to cross-border payment networks. While CBDCs may not see mainstream adoption any time soon, this is something that has the potential to profoundly alter the global payment landscape. We must work with the industry and international community to ensure that we address both the technical and non-technical issues involved. 22. For this reason, we have been researching wholesale CBDCs as they have great potential in addressing the long-standing pain points in cross-border payments. Lately, the HKMA’s joint research with the Bank of Thailand has been ranked by the market as one of the most mature of its kind in the world; a testimony that we stand at the forefront in the realm of wholesale CBDCs. We recently expanded the scale of the project to include more participating jurisdictions. 23.

This dialogue will now be held annually to serve as a platform for cooperation among the Shariah scholars to promote greater understanding on emerging developments across the world in the area of Islamic finance. This is to promote a greater understanding on the approaches taken by different jurisdictions in their Shariah interpretations. To support the Shariah scholars' activities especially in the areas of research and capacity building, Bank Negara Malaysia has also allocated a RM200 million endowment fund to meet the financing requirements of the Shariah Scholars' Dialogue research activities and the provision of scholarships. It is hoped that this will contribute towards greater understanding in the process of harmonizing the international implementation of Shariah in Islamic finance. These initiatives have contributed to the success in the creation of a robust Islamic financial environment. It is further supported by the requisite financial infrastructure that includes the financial markets and that is reinforced further by a comprehensive regulatory, prudential, legal and accounting  1/2  framework. These elements have provided an enabling environment that increases the potential for Malaysia to evolve as an Islamic financial centre. These measures, however, need to be reinforced by efforts by the Islamic financial institutions to take on a more active role in promoting Islamic finance. Indeed, the rapid progress of Islamic banking over the last two decades would not have been possible without the pioneering efforts of the Islamic financial institutions in building up a successful and vibrant industry.
Strengthening market discipline For a long period, the absence of a common uniting standard to account for the measurement of insurance contracts has resulted in a wide range of approaches being applied by insurers across the world. Take for example the measurement of present value of future cashflows from insurance contracts. While some insurers update the discount rates to reflect current economic conditions, others opt to retain the use of historical discount rates when these contracts were originally underwritten, ignoring recent and future developments that could affect the value of the contracts. This means that similar contracts are being measured very differently, resulting in contrasting representations of the true performance and strength of an insurer. Such variations in measurement approaches significantly complicate comparability between insurers. This in turn weakens market discipline. The harmonisation of insurance contract measurement approaches across the globe brought about by IFRS 17 is therefore timely, if not long overdue. The measurement of insurance liabilities using current market prices will bring about a closer alignment between the assets and liabilities on an insurer’s balance sheet. And with a clearer demarcation between underwriting and investment profits and the recognition of profits over the lifetime of a contract rather than at a single point in time, IFRS 17 will also paint a more accurate picture of an insurer’s performance. These improvements will increase the relevance and utility of financial information provided to investors, financial advisers, insurance risk managers, businesses and individuals to inform investment and purchasing decisions.

Encik Abdul Rasheed Ghaffour: Value-Based Intermediation (VBI) propelling Islamic finance Address by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Value-Based Intermediation (VBI) Dialogue, Kuala Lumpur, 24 August 2017. * * * Over the years, finance has lifted the lives of many, enabled businesses to grow and helped to fund the construction of public infrastructure that we now depend on. Yet, as the global economy transforms and society evolves, the question as to whether the financial sector is sufficiently serving the needs of the real economy continues to be debated. The evidence from the global financial crisis underlines the need for the financial sector to restore its balance with the real economy. There is a need to rethink, reassess and re-strategise the role and contribution of the financial industry. Undoubtedly, there is an increasing expectation for the financial sector to deliver greater impact to the economy and society. I am pleased to be here with you today and be part of this important milestone in our Islamic finance journey. The issuance of the Value-Based Intermediation (VBI) Strategy Paper by Bank Negara Malaysia marks the next step to realising the full potential of Islamic finance. On behalf of the Bank, I wish to thank all of you who have devoted time and effort to work with us in this important initiative.
Regarding the first one, the publication at the beginning of the month of the last contribution to the IPCC 6th assessment report on climate change mitigation reminds us of the need for an urgent transition toward carbon neutrality, which will entail major transition risks for banks. Supervisors have already started to assess the exposure and disclosure of financial institutions to those risks to incentivize them to identify, assess and manage those risks as mainstream ones– and the ACPR played a pioneering role in this respect, with the achievement of the first bottom-up climate risks stress-test last year. From now on climate risks will be progressively integrated into the prudential framework,  starting with pillar 3 and pillar 2 requirements. Banks must step up their efforts to prepare meeting these forthcoming regulatory requirements, including those related to climate stress-tests and banks’ transition plans, which are part of the CRD6 proposal currently in negotiation. As regards the pillar 1 framework, let me note that the integration of climate risks is still a hotly debated topic and I hope the upcoming publication of a discussion paper by the EBA on this issue will allow us to move forward. We shouldn’t jump to conclusions though. There are many methodological and data shortcomings to address before implementing new requirements. In any case, let me emphasise that from my supervisory perspective the pillar 1 should remain risk-based and that we should overcome the green / brown dichotomy by assessing transition risk on the basis of the transition plans instead.

We will see whether these expectations, which are very volatile, will be vindicated by the actual decisions of the governing Council as they will remain data driven and will reflect their assessment of the outlook. However, I believe it is fair and safe to say that the interest rates environment is likely to change after a long period of very low interest rates. As a supervisor, the current downside risks to growth and upside risks to inflation, and the associated perspective of a normalization of monetary policy of the euro area, make it all the more relevant to maintain credit and market risk management of banks, including exposures to vulnerable sectors, to leverage finance and to shocks in interest rates and credit spreads, a top SSM supervisory priority. 2.Financial stability situation: the risks associated with indirect exposures 1/4  BIS central bankers' speeches  Normalization of monetary policy will certainly come with a rise in interest rates. An orderly rise in interest rates as well as the direct exposures, which are small and concentrated, of euro-area financial intermediaries to Ukraine and Russia, are not likely to threaten financial stability. Through these direct exposures, the financial stability impact of the war has been well contained so far. However, the outlook is uncertain as vulnerabilities associated in particular with markets underpricing of risk, NFC high level of debt and exposure to cyber-attacks may unravel through indirect exposures and amplification mechanisms.
5 See ECB (2020), “ECB announces € billion Pandemic Emergency Purchase Programme (PEPP)”, 18  March. 6 See Schnabel, I. (2020), “How long is the medium term? Monetary policy in a low inflation environment”, speech  at the Barclays International Monetary Policy Forum. 7/7  BIS central bankers' speeches

We need to work together to ensure that the longstanding confidence in the Treasury market is sustained in the future. This conference provides an excellent opportunity to continue this discussion and work on these issues. Thank you for coming. I look forward to today’s dialogue and the ongoing engagement between the Joint Member Staffs and the public. 3/3  BIS central bankers' speeches
Mario Draghi: ECB press conference - introductory statement Introductory statement by Mr Mario Draghi, President of the European Central Bank, and Mr Luis de Guindos, Vice-President of the European Central Bank, Frankfurt am Main, 25 October 2018. * * * Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by the Commission Vice-President, Mr Dombrovskis. Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. We continue to expect them to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. Regarding non-standard monetary policy measures, we will continue to make net purchases under the asset purchase programme (APP) at the new monthly pace of € billion until the end of December 2018. We anticipate that, subject to incoming data confirming our medium-term inflation outlook, we will then end net purchases. We intend to reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of our net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

The narrow monetary aggregate M1 remained the main contributor to broad money growth. The growth of loans to the private sector strengthened further, continuing the upward trend observed since the beginning of 2014. The annual growth rate of loans to non-financial corporations rose to 4.3% in September 2018, from 4.1% in August, while the annual growth rate of loans to households stood at 3.1%, unchanged from the previous month. The euro area bank lending survey for the third quarter of 2018 indicates that loan growth continues to be supported by increasing demand across all loan categories and favorable bank lending conditions for loans to enterprises and loans for house purchase. The pass-through of the monetary policy measures put in place since June 2014 continues to significantly support borrowing conditions for firms and households, access to financing – in particular for small and medium-sized enterprises – and credit flows across the euro area. To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. In order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer-term growth potential and reducing vulnerabilities.
The latest data from the Bank for International Settlements showed that $ trillion of FX products were traded daily in 2016 – and the London market, the largest single centre, has grown by a third since then. That suggests that global FX turnover may now be more than 20 times the equivalent measure of global economic output, across an exceptionally wide range of products, participants and financial centres (Chart 1). For analysts, investors and policymakers, movements in floating FX rates provide a fast and comprehensive synthesis of market perceptions of economic news. And a huge empirical literature finds little evidence that excess returns are systematically predictable: a formal definition of ‘efficiency’. Even a harsh examiner would score FX markets ‘very good’ on this heading. Chart 1: The global FX market at a glance  Sources: London Foreign Exchange Joint Standing Committee April 2019 survey, Bank for International Settlements triennial surveys, Bloomberg LP, International Monetary Fund and Bank calculations. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  A resilient market is one in which markets continue to function in good times and bad, ensuring that prices give a consistently accurate signal about the balance of demand and supply. Again, the experience here is positive. FX markets have rarely ‘closed’.

9  A recent paper, by Charlie Bean, Matthias Paustian, Adrian Penalver and Tim Taylor, “Monetary policy after the fall”, Federal Reserve Bank of Kansas City Annual Conference, August 2010, shows that the monetary policy instrument and macroprudential instrument (a lump-sum levy/subsidy on the banking sector) are not perfect substitutes in a sticky-price New Keynesian macroeconomic model with a banking sector. 10  Charlie Bean et al, ibid. BIS central bankers’ speeches  9  The overlap between macroprudential and monetary policy is one rationale for giving the central bank a prominent role in the setting of macroprudential policy. In addition, many central banks already have some of the analytical skills that will be needed for conducting the policy. However, greater analytical capacity will need to be built up. Analytical tools must be developed to guide policy While we know that there is an overlap between macroprudential policy and monetary policy, we lack models that describe the relationship in much detail. It is a difficult task for a number of reasons: (a) in the models currently used by central banks, financial sectors are poorly modelled, so it is difficult to introduce financial instabilities; (b) developments in financial markets are sometimes driven by psychology, which is difficult to replicate in models with rational agents; (c) the risk of a crisis cannot be modelled in the usual way, as it is more like an extra channel in the transmission mechanism; and (d) policymakers want models that can give them guidance on when to act, which is extremely challenging.