samchain/econo-pairs-v1 huggingface dataset:
At one end of the spectrum are those who say that the crisis has meant that the dividing line between monetary policy and financial stability policy has in many ways been erased, or at least become less evident. If the central bank does not already have the clear and express task of maintaining financial stability, it should be given this – in addition to the natural task of acting as “lender of last resort” in a crisis. Monetary policy should be regarded as a legitimate tool in the financial stability toolbox.3 At the other end of the spectrum we find those who say that monetary policy and financial stability policy are distinct policies that should not be confused with one another. They claim that monetary policy and financial stability policy differ in the same way that monetary policy and fiscal policy differ, and they have different targets and methods. The policy rate should therefore not be regarded as an instrument for financial stability policy. Both types of policy should react to one another, but they should not be coordinated and conducted together as  1  The concept “balance sheet recession” was introduced a few years ago as an explanation for developments in Japan and its “lost decade”; see Koo, R.C., Balance Sheet Recession: Japan’s Struggle with Unchartered Economics and its Global Implications, Wiley, 2003.

These possibilities are why the Bank has already taken a number of steps to encourage FinTech’s development. 4  For a summary of the new regulatory arrangements see “Changes to the Bank of England”, Murphy, E. and Senior, S, Quarterly Bulletin Article (Q1 2013). 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  The PRA and the FCA have changed their authorisation processes to support new business models. The New Bank Start-Up Unit, created in 2016, works closely with firms seeking to become banks. Already, four new ‘mobile’ banks have been authorised. 5  The Bank also established a FinTech Accelerator last year. Since then, we have worked with a number of firms on proofs of concept ranging from strengthening our cyber security to using AI for regulatory data, and improving our understanding of distributed ledgers. Today we are opening our 4th round of applications to the Accelerator. We are looking to work on new proofs of concept on maintaining privacy in a distributed ledger and applying a range of big data tools to support the Bank’s analysis. 6  More broadly, the Bank is working to ensure that this time the right hard and soft infrastructure are in place to allow innovation to thrive while keeping the system safe. Let me expand briefly with three examples. The Right Soft Infrastructure First, with respect to soft infrastructure, the Bank is assessing how FinTech could change risks and opportunities along the financial services value chain.
When I think of the euro area today, I am reminded of Winston Churchill’s line about “always doing the right thing… after exhausting all the alternatives”. We have spent two decades exhausting all the alternatives in Europe – and so now I trust that the only path left to us is the right one. 6  BIS central bankers’ speeches

Durmuş Yilmaz: Managing liquidity in the Islamic financial services industry Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the conference on “Managing liquidity in the Islamic financial services industry”, organised by the Islamic Financial Services Board (IFSB), Istanbul, 6 April 2011. *  *  *  Distinguished Participants, Esteemed Guests and Valued Members of the Press, Welcome to the Conference on Managing Liquidity in the Islamic Financial Services Industry organized by Islamic Financial Services Board (IFSB). As the Central Bank of Turkey, we are very pleased to host this special event. I would like to extend my appreciation to the IFSB for organizing this timely conference in this beautiful city. I believe that this conference will be a productive platform for fruitful discussions on Islamic liquidity management practices. In this opening speech, I will share my thoughts regarding managing liquidity in Islamic finance and the challenges ahead. Distinguished Participants, As you all know, unconventional polices and extraordinary measures have been put in place by central banks and fiscal authorities during and after the financial crisis. As liquidity concerns played a major role in the deepening of the crisis, intense discussions on a new structure in global liquidity management have dominated the global arena. In this context, liquidity management issues in the Islamic Financial Services deserve a special attention. Successful implementation of a solid liquidity management system can be the key for sustaining the rapid growth of the industry.
It is understood that the previous mitigants and supporting measures taken by central banks, including the Central Bank of Kuwait, are were to survive coronavirus induced health/economic crisis, and had been unwound once they were no longer needed. The challenges and risks seen today differ from those we experienced during the past two years, and require attention, monitoring of their impacts on our economy and banking and financial sectors, and applying the appropriate measures and policies to face them. Among such risks is deceleration of the global economic growth. IMF forecasts in July indicated a decline in growth to 3.2% in 2022 and 2.9% in 2023, driven by several shocks, most notably is deceleration of the American and Chinese economies, Russian-Ukrainian conflict, the geopolitical risks in Southeast Asia, the elevating tensions between China and Taiwan, continued supply and demand imbalance as a result of disruption of supply Page 3 of 4  chains of many basic commodities (mainly food and energy), risks of the continuous rise in global commodity prices and decade-old high inflation rates, especially in USA and major European economies. To contain the prolonged and far-reaching rise in inflation rates, many central banks tightened their monetary policies, by withdrawing the stimulus packages they had taken to withstand the negative impacts of the pandemic, reduced asset purchase programs, and increased interest rates. Such actions are expected to result in inevitable economic costs and we, however, hope that these would not adversely affect our economic sectors, banking and finance in particular.

In the scenario we consider to be the most likely given present-day and expected conditions, the larger part of the adjustment to the MPR we began in June 2010, and which has amounted to an increase of 475 basis points, has already been completed. In this scenario, we use as a working assumption that the MPR will be within the range of values that have historically been considered neutral. However, we must keep in mind that the behavior of both the domestic and the external economy in the past several years may have changed those ranges, introducing a high degree of uncertainty about the true short-term level of the neutral MPR. All in all, exactly how far and when we will take the MPR in the current cycle is something the Board will be analyzing with incoming information on the evolution of the Chilean economy and the international scenario. It is worth pausing for a few moments to take a look at the evolution of the world economy. In our most likely scenario, we estimate that the world will continue to add momentum to Chile’s GDP growth, although gradually declining in the coming quarters. However, as I already mentioned, there are important risks. Developed economies may enter a stage where output fails to pick up and new economic policy efforts are needed to boost growth. The big problem they are facing is the exhaustion of their traditional policy tools.
It has a direct impact on financing conditions; and in doing so it indirectly keeps demand in line with the economy’s supply capacity, at a time when this capacity has been squeezed by external shocks. We need to banish one false suspicion that tends to arise in this context: the idea that monetary policy aims to create a recession, and that a choice has to be made between growth and controlling inflation. This is wrong, first because persistent inflation would mean higher risk premiums and price distortions which, in the longer term, would curtail growth. Second, from a more cyclical viewpoint, euro area activity and employment have proved resilient over recent quarters. There is therefore room to act and I want to make this clear: our achieving of disinflation will not lead to a recession. The goal now is to avoid a faster re-acceleration of demand than supply in the expected 2024-25 recovery. To achieve this, financing conditions obviously cannot remain the same today as they were when there was a demand shortfall, as in the past decade when inflation was too low for too long. Technically, we are talking about monetary tightening or “restrictive” financing conditions: these words obviously sound less appealing, but what do they mean in reality? We are first aiming, through monetary tightening, for an increase in real interest rates at different maturities.

Speech by François Villeroy de Galhau, Governor of the Banque de France, Centre des professions financières Paris, 17 February 2023 How monetary policy will defeat inflation: channels and locks  Page 2 of 19  Introduction Inflation is currently the number one concern for our fellow citizens and for us. Admittedly it has started to fall back slightly, to around 8.5% in the euro area, and it could have halved by the end of this year. But that will still be too high. Inflation that becomes entrenched at above 2% would be the worst enemy of confidence and therefore growth. The initial causes of this return of inflation are well known, and are primarily external to the euro area: disruptions to global supply chains with the exit from the pandemic, energy prices, Russia’s war against Ukraine... Their indirect repercussions have been felt gradually, first in manufactured goods prices, then in services prices. To sum up, inflation has not only become higher but also more widespread; not just imported but also domestic; not just linked to a transitory supply shock but also potentially persistent. In light of this, no one can seriously deny that monetary policy must respond. Today, therefore, I shall not talk about why the central bank must combat inflation but about how, in the current context, it needs to act to be effective.
The answer, as a 2 recent study by UBS Warburg has indicated, seems to be that sometimes mergers work and sometimes they do not. It depends to a large extent on management capability. It also seems to be the case that the benefits of mergers, in terms at least of securing economies of scale, may be relatively more easy to exploit in the case of smaller retail banks. This may be relevant to the situation in Hong Kong, to which I now turn. The situation in Hong Kong As I mentioned at the beginning of this speech, the local banking system in Hong Kong has stood somewhat aloof from the general trend towards consolidation. The emergence of HSBC as a truly global player over the last decade is of course an outstanding example of what can be achieved with the help of M&A. But this has happened outside Hong Kong. Until recently, at least, the situation within Hong Kong has been more static. The family ownership of a number of local banks is often cited as one of the reasons for this. It is true that family owners may be influenced by factors other than value maximisation, such as the desire to preserve the family heritage and to pass it on intact to the next generation. But an additional factor is that hitherto banks in Hong Kong have not been under economic pressure to merge because profitability has been satisfactory in absolute terms.

Finally, it is important that the world’s major private financial institutions run themselves with a sufficiently strong financial cushion, a cushion calibrated not just against the risks they confront in this uncertain world, but to the much more central role they play in many markets. Particularly for those institutions whose size and scope make them systemically important, capital, liquidity, and the overall risk management and control architecture need to be exceptionally strong, stronger than would be necessary and appropriate for smaller institutions. The consequence of size is not just that failure or the perceived risk of failure at one of these institutions has larger negative implications for the financial system today than would be the case in a less consolidated world. It is also the case that their greater relative size limits their ability to take actions that would reduce their exposure in the event of a shock without creating the risk of magnifying the shock. Let me conclude by noting the overwhelming significance of the economic policy decisions we make here in the United States to the world’s capacity to deal with these broader challenges. Our impact on global economic activity and on international financial stability is greater than simple measures of our share of GDP. When we are strong economically, the world can more easily tolerate economic weakness outside the United States. When we are less strong, the impact on the world economy is powerful. This has been true for some time.
This means focusing on what is heard rather than what is said: we cannot merely “publish and go”. As Tiff Macklem, my Canadian colleague, says “Public communications should be in plain language and free of jargon. We should speak as public servants and peers, not as oracles delivering messages from an ivory tower.”x And effective speaking also requires active listening. At the start of next year, consistent with the ECB endeavours, we will host a number of “Banque de France listens” events in all regions to hear what French citizens and SMEs think about inflation and monetary policy. We will then adjust our communication depending on what we hear. Let me elaborate on the economic stakes of this communication. Our inflation targeting policy will be significantly more efficient if economic agents, be they households or businesses, do actually understand it, accept it and believe it. Hence it should be seen as clear, legitimate and credible. I insisted earlier on clarification (question 2), let me now conclude with legitimacy and credibility. One of the most difficult challenges for a central bank with a price stability mandate is how to explain a positive inflation objective. The general public often does not understand why a central bank would deliberately try to increase inflation. We need to explain better that although our price stability objective is  Page 9 sur 10  defined in terms of HICP inflation, we are actually seeking a general average increase in all nominal variables, including wages and nominal GDP.

In our discussion to come, I believe we could study two types of aggregates:  Page 7 sur 10   Financial aggregates, from the perspective of financial stability, and potentially looking more closely at the assets of financial institutions including non-banks (such as their provision of credit in the broadest sense) rather than at their liabilities only (including money, as in the past).  Other economic aggregates, starting with nominal GDP, which has the virtue of combining real growth and prices – two variables that statisticians sometimes have difficulties separating in our measures. But also employment and income distribution, which respond to the demands of the Treaties as well as to the expectations of the public. Allow me some remarks on the substance of these “secondary” objectives. To achieve financial stability, in an ideal world, we would have a box of macroprudential tools that could maintain financial stability whatever the monetary policy stance. However, in practice our set of macroprudential tools is comparatively limited. We need a monetary policy strategy that reflects this reality. We should go beyond the old debate of “separation principle” versus “ leaning against the wind”. I advocate a median way, which we could call “coordinated” or “integrated”.viii We have now a range of unconventional monetary instruments and our objective should be to pick the right combination that delivers the necessary accommodative monetary stance while minimizing of adverse side-effects on financial stability.
The few of us involved received a lot of criticisms as a result, and some of these were not pleasant, particularly the accusations that we betrayed the free market. But I hope the way the matter has played out, and the handsome book profits that we are making, will serve as a vindication of our decisions. And, in case it has crossed your mind, luck has had very little, if any, to do with it, although I do not mind luck being on my side. The whole explosion of international finance has simply gone too far. If it were not the default by Russia, some other event would have caused yield spreads to widen sharply. If it were not LTCM, then some other hedge fund would have needed the massive de-leveraging that, had it been allowed to take place, threatened dislocation even in the largest market in the world. Some event, large or small, would have triggered all that. As some of you may remember, the sharp correction in the stock market in Hong Kong in 1973 was triggered by the Fire Brigade being sent in to inspect overcrowding on the then rather small trading floor of one of the stock exchanges before unification. Incidentally, the widening of the yield spreads that caused problems for LTCM last year actually started when we entered the market in August, according to a chart prepared by Stanley Fischer of the International Monetary Fund (IMF). It gathered momentum as Russia defaulted.

The process of ascertaining the audit scope must be robust, such that audits focus on higher risk areas as the company grows and evolves in its products and processes. Internal auditors should be constantly challenged to think beyond the scope of the audit framework and focus on the broader picture. The so-called ability to ‘connect the dots’ about the implications of the audit findings across the organisation is an important starting point to identify new and emerging risks. Secondly, internal audit should move beyond compliance to strategic auditing and to provide value-added recommendations for the betterment of the organisation. My view is that before an organisation seeks to venture into new or higher risk areas of growth, it is imperative for the board and senior management to seek assurance from the internal audit function so that the risk and control frameworks are rigorous in identifying gaps in the system. The Audit Committee should identify opportunities where the internal audit function is able to add value, through consultation and advice on business process improvements. The input from the internal audit function would also be helpful to craft initiatives to embed good behavioural norms, ethical and responsible culture within the organisation. Thirdly, the internal audit function must be supported by a strong quality assurance process. This requires internal auditors to be equipped with the requisite skills such that they are able to leverage on their expertise and experience to make sound judgement and challenge the norm.
  Total merchandise export earnings rose by 71.2 percent to $ million in 2010 from $ million recorded in 2009, following increases in both metal and non-traditional export earnings.   Metal export earnings rose by 81.6 percent to $ million in 2010 from $ million in 2009, of which copper export earnings were US $ million and cobalt export earnings were US $ million. This was explained by the rise in copper and cobalt production following increased capacity utilisation at various mines and higher global market prices.   Exports of non-traditional products registered a growth of 34.3 percent to $ million in 2010 from $ million the previous year. This was driven by higher exports of copper wire, cane sugar, burley tobacco, cotton lint, electrical cables, gemstones, maize and maize seed, and wheat and meslin.   Total merchandise imports grew by 40.3 to $ million in 2010 from US $ million in 2009. Exchange rate   Following strong macroeconomic fundamentals and increased supply in foreign exchange, the Kwacha performed favourably against all the major traded currencies in 2010, except for the South African Rand. The Kwacha appreciated by 4.7 percent against US dollar to trade at $ from $ in 2009.   Similarly, the Kwacha appreciated by 6.0 percent against the British Pound and by 8.0 percent against the Euro to trade at £ and € respectively. 2  BIS central bankers’ speeches  However, the Kwacha registered a depreciation of 8.8 percent against the South African Rand.

In this age of increased connectivity and correlation of markets, respondents felt that a shock event such as a terrorist attack, pandemic or geopolitical instability could cause market disruptions. Respondents also highlighted the current liquidity in the financial markets. They observed that speculative liquidity was circulating in the financial system. This has led to historically unprecedented pricing and terms. When referring to the new players in the financial markets, respondents spoke of hedge funds and private equity in the same breath as “highly leveraged”, “covenant-lite structures” and “large speculative positions”. In the current low interest rate environment, many yield-hungry investors have become hedge providers for institutions. Respondents expressed concern about the systemic risks such providers posed and their default risk in a severe market correction. In summary, the responses to the survey indicated that there seems to be a heightened level of risk in the macroeconomic and financial environment. Nevertheless, these responses are encouraging from another perspective. They indicate that financial institutions are aware of this heightened level of risk. With acceptance comes preparedness for the risks that may materialize in future. It is important for banks not to become complacent. As banks pursue the many opportunities that lie ahead, we must not let our guard down. Banks must not be lulled into a false sense of security by the external environment’s bullishness and resilience to shocks so far. We must not allow ourselves to get over-confident with our knowledge and analyses of the risks out there. Risks may deviate from expectations.