samchain/econo-pairs-v1 huggingface dataset:
Co-operation between regulators across jurisdictions is vital in containing potential systemic risks that have extended beyond the national and regional boundaries. In the case of Islamic finance, a rigorous and well developed legal, regulatory and Shariah framework is being put in place. Such a regulatory framework also needs to govern market practices by the Islamic financial institutions. This will involve the implementation of the prudential standards that have been issued by the Islamic Financial Services Board, the IFSB. The IFSB also has an important role in the harmonisation of prudential standards, in addition to contributing towards the consistent development of Islamic finance across different jurisdictions. Several parts of the world, including Malaysia , have implemented the prudential standards issued by the IFSB. These prudential standards which have been designed to take into account the unique features specific to Islamic finance will contribute towards ensuring its soundness and stability. British financial regulators are therefore encouraged to be members of the IFSB. Early this year, the IFSB in collaboration with the Islamic Development Bank (IDB) established a task force on Islamic Finance and Global Financial Stability. The task force is responsible to examine the resilience of Islamic finance in the current challenging global financial environment and to examine further the building blocks that need to be put in place to develop the international financial architecture to strengthen further the resilience of Islamic finance.

Caleb M Fundanga: Local bond market developments in Zambia Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, on the occasion of the Listing of the Development Bank of Zambia Bond, Lusaka Stock Exchange, Lusaka, 4 April 2007. *  *  *  • The General Manager – Lusaka Stock Exchange • The Chairman, DBZ Board of Directors • The Chairman, Standard Chartered • The Secretary – Securities and Exchange Commission • Mr Ade Adebajo, Director, Standard Chartered Africa Debt Capital Markets • Member of the DBZ Board • All Senior Government Officials Present • Acting Managing Director, DBZ • Managing Director – Zambia State Insurance Corporation • Chief Executive Officer – Stock Brokers (Z) Limited • Representative of DBSA • Distinguished invited guests; and • Ladies and Gentleman Today marks another important milestone in financial sector development indicative of the coming of age of the Zambian financial system in general and local bond market in particular. The issue of the K68.620 billion senior unsecured floating rate note under the Development Bank of Zambia (DBZ) K150 billion Medium Term Note Programme and listing of the note on the Lusaka Stock Exchange (LuSE) is a landmark transaction for two key reasons. The first is that this is the first time in the history of the local bond market that a local currency medium term note programme has been established. The second is that this transaction marks the largest single issue ever offered to Zambian fixedincome institutional investors.
This approach is codified in the UK institutional set-up, with independent monetary and financial policy committees that are required by remit to have regard of the actions of each other. By addressing macro financial risks at source and building systemic resilience, the PRC and FPC allow monetary policy to concentrate on its job of delivering price stability. Third, “unconventional policies”, including asset purchases and forward guidance, are powerful policy tools in a low r* environment with more frequent encounters with the effective lower bound. A growing body of research shows that asset purchases led to substantial, long-lasting, reductions in long-term yields,26 providing support to activity when policy rates are constrained. Bank staff estimate that the MPC’s £ billion of asset purchases in August 2016 were equivalent to a Bank Rate cut of around 50 basis points. As the MPC noted at the time, there was considerable scope to increase purchases and to use the Term Funding Scheme to reinforce the pass through of further cuts to Bank rate had additional stimulus been required. 24  Such behaviour would be particularly concerning if people do not recognise the riskiness of the assets they are investing in to achieve their desired returns, for example because they are complex instruments which disguise the underlying risk of the assets and / or because the assets lie outside the regulatory perimeter. There are parallels in both cases to the pre-crisis situation. 25 It is also important not to muddle cause and effect of low interest rates.

In other words, depositors believe that they need very high nominal interest rates in Denars, in order to have a real return on savings, which leads to high interest rates on loans. This phenomenon was not and is not a result of the mistrust in the banking system. Mistrust of depositors comes from the fear that due to possible devaluation followed by inflationary transmission effects, saving in Denars would be insufficiently compensated if interest rates on savings deposits in Denars come too close to the interest rates on deposits in Euros. The stability of the exchange rate which established the idea that price stability is a public good one cannot live without, is the reason why depositors are no longer so much under the  2  BIS central bankers’ speeches  influence of this phenomenon. The latest data on the increased saving in Denars, compared to saving in Euros, point to this conclusion. The expectation that the stable exchange rate level will be maintained simultaneously indicates that the difference between real interest rates in Denars and real interest rates in Euros continues to decrease gradually, certainly without any of them remaining on negative territory for a longer time. The National Bank will continue not to hesitate to intervene in the foreign exchange market and increase the interest rate on the main instrument which represents an operational signal. Through these policies the National Bank confirms its capacity and institutional determination.
Marzunisham Omar: Capital flows management for monetary and financial stability Remarks by Mr Marzunisham Omar, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Seminar and Meeting of the SEACEN Expert Group on Capital Flows, Kuala Lumpur, 11 June 2019. * * * I am delighted to be here today. Let me take this opportunity to express Bank Negara Malaysia’s appreciation for the collaborative efforts of the SEACEN Centre and the Bank of Japan that have gathered us here for this biennial SEG event. It has been six years since I last attended the SEG Seminar in Manila, back in 2013 as the newly appointed co-chair. I am truly honoured to have had the opportunity to work alongside Deputy Governor Diwa. Under his capable stewardship and intellectual guidance, the SEG has developed into a beneficial platform for its members since it was established 19 years ago.

Given the multifaceted risks posed by capital flows, policymakers must be able to avail ourselves of a broad range of policy instruments. These policy instruments include interest rate, exchange rate, macroprudential and capital flow measures. In deciding which instruments to use, we should avoid ruling out the use of any policy tools upfront. Rather, the choice of instruments needs to be tailored to the specific risks being managed and the circumstances the economy is facing. In addition, the choice of policy instruments also needs to be considered in an integrated manner to increase the efficacy of policies, minimise potential trade-offs, and avoid overburdening of any single policy tool. Finally, I would like to briefly touch on the role of SEG and SEACEN in dealing with this issue. Earlier, I mentioned the importance of surfers learning how to deal with all types of weather and wave conditions. What I did not mention is the fact that it is impossible for them to learn these skills individually. In Pro Surf Bali, one of the most popular surfing schools in Bali, surfers come together to share their experiences surfing in the toughest conditions, and in doing so, prepare each other for possible eventualities. The SEG forum on capital flows is in a unique position to achieve this objective. The forum can facilitate deeper awareness and understanding of member countries’ challenges in dealing with capital flows. The frank exchanges of experiences and policies will place member countries on a stronger footing when facing the next wave of capital flows.
7  With a 10% deposit, that means they’d be buying a home worth 4.5 times their income. In short, the high levels of both mortgage debt and house prices in this country are a reflection of the high cost of housing in general. They are not the result of an addiction to debt or of reckless mortgage lending. 8  So Britain doesn’t have a high level of consumer debt. It doesn’t have a debt-driven housing market. And as we’ve seen, it doesn’t have rapid growth of credit overall. Debt Strikes Back isn’t yet screening again. But there are pockets of the galaxy where it may be. In the past year, outstanding car loans, credit card balances and personal loans have increased by 10%. Household incomes have risen by only 1.5% (Chart 8). On credit cards and personal loans, terms and conditions have become easier. The average advertised length of 0% credit card balance transfers has doubled to close to 30 months (Chart 9). Advertised interest rates on £ personal loans have fallen from 8% to around 3.8% today, even though official interest rates have hardly changed (Chart 10). These are all classic signs of lenders thinking the risks are lower. 6  Department for Communities and Local Government (2017) ‘English Housing Survey, Headline Report 2015-16’ 2 March. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/595785/2015-16_EHS_Headline_Report.pdf 7 The effective mortgage interest rate was last at 7% in 2001.

Personal Contract Purchase (PCP) plans accounted for one in five new car purchases in 2006. Now they finance almost four in five (Chart 13). At the aggregate level, PCP is the new cash purchase. The Financial Conduct Authority, which regulates car finance, has expressed its concerns about a lack of transparency, potential conflicts of interest and irresponsible lending in parts of the car finance industry. It will explore and address those practices. 9  The Bank of England’s role is to manage any risks to the wider economy from this growth. And those should be kept in perspective. On average, those taking out PCP plans tend to have higher incomes and more savings than the population as a whole. 70% of PCP borrowers have above average income (Chart 14). Arrears rates on banks’ car finance deals are lower than on other forms of consumer credit. Moreover, the true burden of car finance to households overall is much lower than it seems at first glance. 9  Financial Conduct Authority (2017) ‘Business Plan 2017/18’. https://www.fca.org.uk/publication/business-plans/business-plan-201718.pdf 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  PCP plans commit the car buyer to around three years of fixed monthly payments with an option - not an obligation - to make a final balloon payment at the end of that period, to own the car outright (Chart 15). If those optional balloon payments are excluded, this car finance debt accounts for only 1.2% of aggregate household income.
The 21st century financial marketplace is too dynamic, too complex, and supervisors must work within the political realities of our respective nations. Instead, what I envision is a flexible, multi-faceted strategy that emphasizes prudence and prevention, compatibility with the market, and that fosters a close and cooperative partnership between the private and public sector. With these priorities in mind, I believe there are three essential elements of a modern supervision framework: •  effective bank-level management;  •  market discipline; and  •  official supervision. Let me discuss each of these in turn, noting that each should reinforce the others to effectively promote a safe and sound financial system. Effective bank-level management Primary responsibility for the safe and sound operation of a banking institution lies with its board of directors and senior management. The purpose of the board of directors is to oversee the development  3  BIS Review 27/2000  of the overall strategy of the organization and the decisions made by senior management in pursuit of those strategic objectives. The role of senior management, in turn, is to oversee day-to-day decisions made within the organization and to ensure their consistency with long-term objectives and policies as determined by the board. There are several aspects to effective bank-level management.

At this critical juncture in the Asian recovery process, I think it is worth reviewing just how important a stable banking and financial system is to the health and vitality of any market economy - and particularly emerging market economies - and the crucial role that supervision plays in achieving and preserving financial stability. Indeed, effective supervision represents a crucial cornerstone of financial stability, both locally and globally. It is also clear that, given the accelerating pace of change and innovation in the financial services industry, our notion of supervision must encompass discipline applied by the marketplace, as well as official supervision. With these thoughts in mind, and noting the critical role banks play in a market economy, in my remarks today I will discuss the nature and form of an effective supervisory framework for the 21st century, addressing the role to be played by banks themselves, the broader marketplace and official supervisors. On the subject of official supervision, I will address the Basel Committee’s Core Principles for Effective Supervision, and then conclude with a discussion of the Committee’s major initiative to revise and refine the 1988 Capital Accord. Banks’ role in a market economy Let me first discuss the crucial role banks play in a market economy. While specific arrangements may vary from country to country reflecting differences in history, custom and culture, the basic principles are common to nearly all market economies.
By contrast, in the case of a public sector deficit, the investor's confidence is based not so much on any knowledge about the rate of return, if any, from the expenditure to which the funds are destined, as on faith in the government's ultimate ability to raise money through taxation, if necessary, at some future date in order to service its borrowings. Such a prospect of higher taxation might, among other things, serve as a dampener on financial confidence. •  Third, there may be a fear that public sector borrowing will crowd out worthy corporate sector borrowing from the financial markets, to the detriment of the economy as a whole, although to the extent that a public sector deficit has its counterpart in a corporate sector surplus (or reduced deficit), the corporate sector’s borrowing requirement will anyway have been reduced. •  Fourth, in some cases a public sector deficit may be financed by a reduction in net foreign currency assets. For instance, the government may resort to foreign borrowing because the local financial market is not mature enough to supply the funding. Or, exceptionally, as in the case of Hong Kong, the government may raise the funds by running down accumulated foreign currency investments. The respective build-up of foreign currency liabilities or reduction in foreign reserves may raise concerns in the context of net national wealth, national economic security, credit ratings, and so on. Moreover, foreign currency borrowing exposes the government to financial loss in local currency terms should the currency depreciate.

If there is a suspicion – whether or not well founded – that a public sector deficit is inclined to the former category, it will be judged less helpful to the long-term health of the economy and thus tend to weaken  BIS Review 70/2002  1  financial confidence. A sizeable underlying public sector deficit may anyway be regarded as a sign of fundamental weakness in an economy, if it signifies too heavy an involvement of government in the running of the economy. It is these types of consideration which have led to the emergence of various recommendations and rules about fiscal deficits. There is, for example, the "golden rule" of the UK finance minister, Gordon Brown, which he first espoused in 1997, stating that, over the cycle, spending of a current (as opposed to capital) nature should be balanced by revenues, and borrowing should only be countenanced to cover capital expenditure. In Europe there is the supposedly sacrosanct cap on the fiscal deficit of each of the member countries of the euro-zone, at 3% of GDP. And in Hong Kong there is the Basic Law (Article 107), stating that Hong Kong should strive to achieve a fiscal balance and avoid deficits. •  Second, the financing of private sector deficits is subject to market discipline, in that those who provide finance do so on the calculated expectation that the investment will generate sufficient internal returns to repay them in due course.
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 world is changing quickly and it is only a couple of years since several of the big emerging markets, which now according to a GDP criterion should be given greater influence, were in need of support from the very countries that today by the same criterion would have to scale back their role. We do not know what the situation will be in five or ten years. Maybe, there are reasons to aim for more regional representation? A very difficult question – which I do not think can be ignored – is if the level of “democracy” or “governance” in individual countries’ should be a factor when determining countries influence in the IMF. Whatever the answer to this question is, it will have potential consequences for the legitimacy of the organisation. Finally, we should not be led to believe that a changed representation per se, resolves the problems of the IMF. There are a number of other things that could, and should, be done that may even play a more important role. Allow me to indicate a number of areas where more could be done, and where the prospect of progress is probably higher than in the QVR-field. I myself have positive experiences of a similar gradual process of reform within the framework of the Bank for International Settlements (BIS). 1. Much has been done to increase transparency in various ways at the IMF. Greater openness is probably the most important way to develop the organisation’s analysis and surveillance activities.
By the time Malta was about to join the EU, the economy was emerging from a period of stagnation, with a widening output gap, a slow pace of productivity growth and a large current account deficit. In addition, while the Government planned to reduce the budget deficit from almost 10% of GDP in 2003 to below 3% by 2006, an adjustment of that  1  Regional economic integration: the options for Malta, speech delivered at the Annual Dinner of the Malta Institute of Financial Services on 7 November 2002. BIS Review 60/2009  1  magnitude clearly presented considerable risks, not least because some fiscal tightening was already under way. The unemployment rate, for example, was edging upwards, partly in response to the ongoing restructuring process and the further liberalization of markets ahead of EU accession. In these circumstances it soon became evident that the advantages of the single market needed to be complemented by those of monetary union. The Central Bank of Malta was an early advocate of this objective, particularly because of the greater stability and policy credibility that it promised. From the Bank’s perspective a key advantage was the elimination of the risks inherent in managing a small, vulnerable currency. The irrevocable fixing of the exchange rate and the macroeconomic policy discipline of EMU, moreover, promised to offer a congenial environment for implementing the structural changes necessary for a lasting improvement in the country’s international competitiveness. This belief was shared by the Government and the rest is history.

In-principle support has been received from the Asian Infrastructure Investment Bank, the Asian Development Bank, and the International Finance Corporation under the World Bank Group. And others have also indicated an interest. IFFO will be launched in July and we look forward to sharing with you more information about its work. Corporate Treasury Management 10. I would now like to turn to issues of more immediate concern to you in your treasury management roles, and to share a few factors which I believe are shaping your business:  11. First, the continuing liberalisation of the Mainland’s capital account. As I mentioned earlier, the Mainland authorities have continued to implement measures to liberalise cross-border fund flows. I am sure many of you are familiar with the progress, but let me just quickly name a few key measures introduced in recent years:  2  BIS central bankers’ speeches  •  The Shanghai-Hong Kong Stock Connect has been in place and operating smoothly since November 2014, allowing international investors access to the A-shares listed in Shanghai through the stock exchange in Hong Kong, and vice versa. •  The Mainland-Hong Kong Mutual Recognition of Funds scheme was implemented in July 2015, allowing Mainland and Hong Kong funds to be distributed in each other’s markets through a streamlined approval process. •  The QFII arrangement was refined in February this year by relaxing individual quotas and shortening the investment lock-up period, among other improvements.