samchain/econo-pairs-v1 huggingface dataset:
Muhammad bin Ibrahim: Central bank collaboration in Asia – facilitating the use of local currencies for settlement of trade and investments Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Signing Ceremony of the Memoranda of Understanding between Bank Indonesia and Bank Negara Malaysia and Bank Indonesia and the Bank of Thailand, Bangkok, 23 December 2016. * * * My delegation and I are pleased to join Governor Veerathai and Governor Agus here in Bangkok today to mark the collaboration between our central banks to facilitate the use of local currencies for settlements of trade and investments. Our economies face common challenges in managing the risks from heightened volatility in the global financial markets. We can expect continued episodes of volatility to occur in the periods ahead, driven by a combination of policy uncertainties, negative sentiment and speculative activity. The arrangements signed today are part of our continuous efforts to provide the institutional and policy framework to promote orderly financial market conditions and support the efficient management of financial risks. In particular, these arrangements will enable exporters and importers in our countries to better manage foreign exchange risks by using local currencies to settle trade and investment activities. In addition to improving cost efficiencies for businesses, the increased demand for local currency financial products will also contribute towards deepening the region’s financial markets. This is important to further strengthen conditions for regional financial stability.

When Bank Negara Malaysia and the Bank of Thailand first operationalized this arrangement between our central banks in March 2016, we saw the potential and benefits for local currencies to play a more important role in enhancing regional trade linkages. The expansion of the arrangement today to include our close trade partner, Indonesia, underscores this potential. The signing of this MoU between Bank Indonesia and Bank Negara Malaysia represents another important milestone in the move to strengthen the relationship between Malaysia and Indonesia. Following the conclusion of the ASEAN Banking Integration Framework, we are confident financial institutions in both countries will be able to collaborate towards realizing the objective of facilitating greater cross-border trade and investments. Both Thailand and Indonesia share important links with Malaysia, forged through a long history of trade and investment activities, and close cooperation between our central banks. This occasion reflects how far we have come in this process. The cooperation arrangements between our central banks have now expanded to include clearly defined protocols and operational frameworks in a broad range of areas, including financial market development, supervision, surveillance, payment arrangements and crisis management. Bank Negara Malaysia has long been a strong supporter of financial and economic integration in both ASEAN and broader Asia – to unlock the region’s growth potential and support a stronger, more resilient economic community.
As a result, there is a lack of integration of GRC across business areas or functions. 2. New regulations and pressure for integrated risk management  2.1 During the past few years, regulatory and compliance requirements of the financial institutions have strengthened globally. Since the first updating of the Basel Capital Accord in the late 1990s, the Sarbanes-Oxley Act in 2002, the launch of new regulations seems to  2  BIS Review 15/2008  have become more frequent. With these new requirements, financial institutions are facing an amplified focus on risk management with risk based performance measures and capital allocation. Rating agencies too have expanded their analysis of Integrated Risk Management practices when determining credit ratings. 2.2 The Financial Services Authority (FSA) in the UK, which has come under much criticism in recent times due to the failure of Northern Rock, has published its risk outlook report in 2008, which has identified 5 priority risks. Although some of these may not be directly relevant or applicable to Sri Lanka’s financial institutions, they are common risks that need to be flagged by the Boards of Directors of financial institutions. The priority risks set out by the FSA are: •  Existing business model of some financial institutions are under strain as a result of adverse market conditions. Given the nature of financial business, i.e.

Norges Bank’s inflation projection is our judgement of the most probable outcome for the rise in the CPI two years ahead. The macroeconomic model RIMINI is a tool that is used in making these 3 projections. Judgement and assessments of current statistics and results from other models are also 3  A further discussion of the use of RIMINI in the work on the inflation projections is provided in: Kjetil Olsen and Fredrik Wulfsberg: “The role of assessments and judgement in the macroeconomic model RIMINI”, Economic Bulletin 2/2001, Norges Bank. BIS Review 7/2002  3  important. In setting the interest rate, however, we also place emphasis on the probability distribution – or the balance of risk – surrounding the projection. Therefore, we also publish our assessment of the risk associated with our own projections. The chart shows our assessment of risk as it was presented in the last Inflation Report, published on 31 October 2001. The black line represents what we consider the most probable development in the CPI. The bulk of the distribution was below the line. This is reflected in the formulation “the probability that inflation two years ahead will be lower than 2½ per cent is greater than the probability that it will be higher.” In order to reduce the possibility of substantial deviations from the inflation target, Norges Bank takes the balance of risks into account when assessing the interest rate. The assessment of the balance of risks largely expresses the Bank’s own judgement.
To try to explain why Spanish institutions have passed the tough test posed by this unprecedented crisis, I shall use the phrase recently used by Jacob Frenkel to summarise, humorously and clearly, the problems currently affecting many American and European banks. What has happened, according to Jacob, is that in the balance sheets of these institutions “on the right side there’s nothing left, and on the left side there’s nothing right”. In other words, on the assets side everything is damaged, while on the liabilities side, because some banks have financed themselves at such short maturities, the financing has vanished into thin air. This simplification of reality is highly illustrative of the situation that many international banks have got themselves into, but it also explains why the Spanish banking system has escaped the crisis. On the liabilities side, things are different in the Spanish banking sector. Admittedly, Spanish banks have been very active in seeking financing on the international wholesale markets. But they have focused on the longer maturities. This has given them greater peace of mind with regard to the structure of their liabilities, despite the fact that the cost has been higher than it would have been if they had made more use of financing at the shortest maturities. Spanish banks’ recourse to wholesale markets has taken the form of various instruments, including asset-backed securities. However, Spanish securitisation bears little resemblance to that which is currently proving highly problematic. First, because of the high quality of the securitised portfolios.

A credit slowdown stemming from the weakening of the cycle, due to its obvious effects both on the solvent demand for credit and on the riskadjusted supply by institutions, would be another matter entirely. For their part, institutions need to assume fully the new reality in which they will have to operate in the coming years and address it intelligently and decisively. This will require an adjustment of their balance sheets, so that credit flows to the real economy while attention is paid to the greater risk of default which will have to be correctly managed. At the same time, on the liabilities side, it will be necessary to continue strengthening the deposit base as far as possible, since the capacity to finance banking activity through the wholesale markets will be more limited. This adjustment of bank balance sheets must be accompanied by strict cost controls, which are the main mechanism for limiting the impact of the new environment on bank income statements. The economies of scale offered by bank consolidation (widely aired in the media) is one way to tackle this rationalisation of cost structures. In any event, irrespective of the strategy that each institution may decide to adopt, the result should be one of greater efficiency. Finally, if we have to face a period of slower growth in banking activity, with greater uncertainty and lower profits, banks should also endeavour to strengthen their capital base.
We have an ‘author in the room’ policy so that expert staff can always explain their papers in person and challenge conventional wisdom. Our core values (which include being Inclusive and Collaborative) are embedded in everything that we do, including feeding directly into the performance management and remuneration of all colleagues. We are proud to have a number of thriving and influential employee network groups including Women in the Bank, LGBT+ and Allies, Bank of England Ethnic Minority (BEEM), Mental Health, Disability, Carers, Parents, and three Faith Networks. The Employee Network Groups help Bank colleagues bring their whole selves to work. I will talk more in a moment about the important work our BEEM network does to support BAME colleagues. Third, inclusive communications Inclusion also means engaging with all our stakeholders, internal and external, and being aware of the many ways in which the economic situation affects different people. Active engagement with a range of expert and non-expert stakeholders across the UK has always been important, but it is taking on new prominence in the information age. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  Our agents and Bank officials meet thousands of business contacts across the UK each year to take the temperature of the UK economy.

Investing in Ethnicity & Race Speech given by Mark Carney, Governor Bank of England  Investing in Ethnicity & Race Conference 2019, Bank of England 28 March 2019  1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction It’s a pleasure for the Bank of England to host this workshop on Investing in Ethnicity & Race. To pursue its mission, Bank of England must reflect the diversity of the people it serves. That hasn’t always been the case. Historically, central banks were run by the City for the City. The Bank’s first female Court member, Frances Heaton, was appointed only in 1993, while our first Black, Asian and Minority Ethnic (BAME) member, Lord Morris, followed five years later. I’m the 120th in a very long line of male, white Governors of the Bank. Over the last five years the Bank has implemented a concerted strategy to increase diversity and foster inclusion. These initiatives have had a material impact on all aspects of diversity at the Bank. We are now reinforcing them to further improve the retention and progression of BAME colleagues in particular, and to deepen progress on inclusion more generally. The Bank values diversity for at least three reasons. First, it is the right thing to do: a public institution should reflect the public it serves. Second, diversity helps to build the trust we need to fulfil our remits. The decisions that the Bank takes impact every UK citizen, but not everyone wants to be steeped in fan charts and stress testing.
Addressing the stigma issue is extremely complex and has potentially affected a number of central bank operations internationally. One way of addressing perceptions of stigma is through appropriate policies on disclosure. While headline results of the Bank’s auctions, such as total bids and total amount allotted, are published immediately at their conclusion, we publish only the average daily amount outstanding in the DWF over the quarter, aggregated across firms, and even that with a one-quarter lag. The intention is that DWF drawings will not be disclosed until after they have terminated. Moreover, where structured as a liquidity upgrade, DWF borrowings would not be visible on the Bank’s balance sheet, reducing the risk that any drawing is unintentionally revealed. Another possibility is that counterparties are concerned about being “spotted” using DWFsourced gilts in the repo markets. For the majority of cases, however, I think there are simple ways to alleviate these concerns – for example by encouraging banks to set up multiple repo counterparty relationships and rotate their regular gilt repo business amongst them. That would deliver wider business and financial stability benefits, even in the absence of the DWF. Indeed, the FSA requires banks to test their repo capacity by lending out gilts from their liquid asset buffers. Ultimately we expect a counterparty would draw on the DWF if it had to, despite any stigma concerns. The risk is that the perception of stigma might delay an application to borrow, making a firm’s liquidity position more perilous.

I am pleased to inform the public that based on the outcome of the review and stress test, the Governing Council have concluded the following: 1. The Bulgarian banking system is stable. The main indicator of a bank’s financial resilience, the ratio of bank common equity tier one capital to its risk-weighted assets, or the CET 1 ratio, remains significantly above the required minimum regulatory requirements on a system level and is above the EU average as announced in the latest European stress test. The CET1 ratio adjusted for the results of the asset quality review is 18.9% on system-wide level compared to the minimum regulatory requirement of 4.5%. The stress test indicated that if the latest 2018 macroeconomic forecasts materialize, the CET1 ratio would increase to 22.2%. In the case of a severe economic crisis, which is very unlikely, the CET1 ratio would decline to 14.4%. For the European banks, the results are significantly lower – 13.9% and 9.4% respectively. Therefore, banks’ capital adequacy is strong and banks have the capacity to absorb shocks in unfavorable market conditions. 2. The capital adequacy of each bank after potential adjustments from the asset quality review remains above the minimum regulatory requirements. Indeed, the individual results vary across banks. Follow-up plans have been developed in line with individual results and include measures aimed at maintaining existing capital buffers for some banks or increasing capital buffers and decreasing risk-weighted assets for others.
This is no surprise given the rich cultural heritage in both our countries. It seemed to us, however, that as central banks we should devote today’s symposium to economic history and analysis. Japanese philosophy teaches us that “visiting the past teaches us new things" (“fuluki wo tazume atalashiki wo shilu”). I’m pretty confident that the historical approach of our morning session will shed light on the more recent economic developments that will be our focus this afternoon. Modern central banks emerged with the advent of industrial economies in order to facilitate trade and centralise the regalian function of issuing currency. While being strictly national, the issuing banks of 150 years ago quickly became used to keeping pace with globalisation. From the nineteenth century onwards, the appearance of central banks and the emergence of their role allowed them to meet the needs of economies that were already global, with an integrated production function in the wake of the industrial revolution. Lenders of last resort in critical moments and ultimate guarantors of their currencies, central banks extended their role in the twentieth century to include the construction and monitoring of business cycle indicators by drawing on highly-specialised knowledge of the credit sector, built up both in France and Japan through their branch networks. As well as producing statistical data and remaining vigilant with regard to internal stability in a more open and flexible environment, our central banks also became responsible for the external value of money in this period, and played an active role in international bodies.

This Office has also acted as the go-between with the head office of the Bank of Japan in Tokyo, for which I thank it sincerely. While the Banque de France has been seconding a representative to the French Embassy in Tokyo since 1976, the Representative Office of the Bank of Japan was set up in Paris over 50 years ago. This Office is an extremely strong and precious link between our two institutions, which enjoy exceptionally good long-standing relations. The Banque de France is very attached to the presence of this Office in Paris and strives to provide it with assistance and information. This Office is also, I believe, for the Bank of Japan, a prime vantage point for observing the French economy and the Paris Financial Centre, naturally, as well as a particular vantage point for the euro area, which is highly complementary with that provided by its Office in Frankfurt. For these reasons the Bank of Japan has retained this representation in Paris, and we are extremely pleased that it has. In addition to this very strong institutional foundation of the relationship between the Banque de France and the Bank of Japan, you, Governor Fukui, bring an important personal dimension in the form of your personal attachment to our country. It should be pointed out that, in the early 1970s, you yourself worked in the Bank of Japan’s office in Paris.
Third, we adjusted what has come to be known as our “chained forward guidance”. Indeed, in recent months the Governing Council had been explicitly stating its expectation that net purchases would end shortly before it starts raising policy interest rates. However, in our meeting last week, we agreed that any adjustments to the key ECB interest rates will be take place some time after the end of our net purchases under the APP and will be gradual. The change from “shortly before” to “some time after” maintains the sequential process we intend to follow in adjusting our instruments, but widens the possible time interval between these two events (the end of net purchases and the point at which we start raising our interest rates). This increases the flexibility with which we can implement our decisions in such an uncertain economic and geopolitical context. The gradual adjustment of interest rates is indicative of the Governing Council’s commitment to avoiding abrupt changes to monetary policy instruments. 6  Domestic policies Domestic economic policies must also have a vital role to play at the current juncture. First, it is important for domestic fiscal policy to exploit its ability to act in a very granular and targeted manner and to focus on supporting the households, businesses and sectors most affected by this combination of shocks. This includes particularly lowerincome households, which bear the brunt of the impact of inflation, and more energyintensive firms.

For the rest of the year, assuming a gradual improvement in the COVID-19 situation, further progress in the recovery was expected, underpinned by a decline in uncertainty, the gradual disappearance of bottlenecks, the maintenance of favourable financing conditions and, in Europe, the gradual implementation of the Next Generation EU (NGEU) programme. As regards inflation, the data in the first two months of the year had continued to surprise on the upside compared, for example, with the projections made in late 2021. 1  The possible economic consequences of the conflict  The Russian invasion of Ukraine, on 24 February, and the western world’s response, which has led to the imposition of unprecedented economic sanctions on Moscow, represent a new and foreseeably hugely significant shock, with adverse consequences in terms of a weaker economic performance and greater inflationary pressures. To assess the scale of these effects, it is helpful to describe the different channels through which this new shock will affect the global economic outlook:  i. Energy and non-energy commodities. One first economic impact of the invasion of Ukraine stems from the fact that Russia and, to a lesser extent, Ukraine, are among the world’s main producers of certain energy and non-energy commodities, and that Europe is highly dependent on imports of some of these products, especially oil and gas from Russia, but also cereals from Ukraine.1  The price of many of these commodities has already risen significantly as a result of the conflict.
2  BIS Review 46/2003  Growth and welfare in the long run A monetary policy that leads to price stability creates favourable conditions for economic activities, consumption, trade and investment. But monetary policy in itself cannot generate growth. Other economic policy decisions can, however, especially those that affect people's willingness to work and invest in new businesses. Between 1975 and 1995 Sweden lost its previously so prominent position in the world. These years were also characterised by substantial wage increases and high inflation. Average inflation during this period was 8 per cent per year. We also lagged behind our Nordic neighbours. Had we experienced the same growth as Norway, Denmark and Finland during these years, the standard of living in Sweden today would be about 20 per cent higher. Partly as a result of the economic policies of the 1970s and 1980s, Sweden found itself in serious economic crisis at the beginning of the 1990s. This led to large deficits in both the central government budget and the current account, as well as to unemployment that quadrupled in the space of a few years. It was the largely the lessons drawn from this crisis that formed the basis for the changes in economy policy at the beginning of the 1990s. It was then that price stability was introduced as the objective of monetary policy. As regards fiscal policy, an expenditure ceiling and surplus target for central government expenditure were introduced, while cutbacks were also implemented.

You gave your time freely and shared your ideas selflessly. Thank you. We are also indebted to our partners and trainers who have contributed on a pro-bono basis to IBF’s learning resources – working on impossible timelines to deliver high-quality training standards and study guide materials. There is a final group that I want to acknowledge, the unsung heroes of the IBF story – the past and present staff of IBF. •  From administering the CMFAS examinations to developing new industry examinations;  •  from reviewing and accrediting training programmes to certifying individuals under FICS;  •  the management and staff of IBF have been unrelenting in their commitment to raising industry standards. As we look back at IBF’s 40 years, we can take pride in what it has achieved. •  Some 200,000 participants have benefitted to-date from training courses offered or accredited by IBF. •  Close to 2,000 practitioners have been certified under the FICS Standards. One of the reasons why IBF has done well is that it has renewed itself periodically, to stay relevant and effective amidst a changing environment but always focused on its core mandate of promoting competency in finance. Today, IBF embarks on the next phase of its journey to raise industry standards. Our new mission is to “empower practitioners with capabilities for a robust Asian financial industry”. To equip our finance professionals for the next phase in Singapore’s development as a financial centre, IBF will focus on two new dimensions.