samchain/econo-pairs-v1 huggingface dataset:
In November of 2013, the Bank outlined proposed regulatory reforms for the financial advisory industry which formed part of the “Life Insurance and Family Takaful Framework” or in short the LIFE Framework, which we published for consultation. An important aim of the reforms is to support the Bank’s desire to further diversify insurance delivery channels as one – although not the only – way to improve the quality of advice, and enhance choice and value for consumers based on their specific needs and circumstances. This in turn would contribute towards increasing the insurance and takaful penetration rate to 75 percent by 2020 as targeted under the Government’s Economic Transformation Programme (ETP). We received positive feedback from the financial advisory industry on the proposed reforms and while specific elements of the LIFE Framework remain under review to take into account the comments that were received, we have moved ahead to implement several changes proposed which concern the financial advisory industry. The Bank has lowered the minimum capital requirement for financial advisers to RM50,000 which will take effect from 1 January 2015 to encourage more advisers to enter the industry. This follows an increased focus on professionalism, innovation and quality of advice as the hallmark of those who are admitted to the industry.

This is the way we have tried to work so far, and we will continue to do so as long as necessary. When I come here to the Committee on Finance hearing to answer questions on monetary policy, that subject is usually what my introductory speech concerns. Today it will be slightly different. Recent developments clearly show how closely our main tasks, financial stability and monetary policy, are linked. I would therefore like to begin by talking about those points of contact and various measures we have taken to ensure that certain financial markets will function more normally. With this as a base, I will then move on to the interest rate decisions and the financial turbulence from a monetary policy point of view. Finally, I would also like to make a brief comment on our own experiences of earlier crises and the future of the global financial system. Monetary policy and financial stability – why is the system so important? One can say that the payment system and to some extent the financial markets are the circulatory system of our economy. What is usually referred to as financial stability concerns, to put it simply, working in various ways to ensure the financial system is stable and functions efficiently. For example, individuals, companies and organisations must be able to make and receive payments in an efficient manner.
I believe lawyers call this a purposive approach to interpreting legislation and regulations – in other words interpreting meaning in the context of regulations rather than a literal interpretation. This is necessary because history shows us that the financial services industry can be addicted to arbitraging regulations – exploiting the rules to suit short term purposes rather than longerterm stability. I want to finish by saying something about a further important feature of financial stability. For me, the most unacceptable aspect of the financial crisis is that large banks have required the support of so much public money. This is often called the Too-Big-To-Fail problem, or better the “Too-Important-To-Fail-therefore-public-money-has-to-be-used” problem. Why are large banks in this position? The root of this issue is common to the key features of banks, namely their dependence on the confidence of depositors, the role of banks providing each of us with the facility to manage our money – our savings, and in our everyday lives in terms of payments – and the externality caused by the failure of one bank spreading a loss of confidence to other banks. The failure of any company should be dealt with, wherever possible, using the standard insolvency or bankruptcy laws of the country. These provide a well-established and predictable framework for dealing with company insolvency. But, the insolvency laws do not operate quickly – resolving a company can take time.

So, establishing and maintaining financial stability should be high up everyone’s agenda, and we should embed financial stability as the objective of public policy towards regulating the financial system. You can reasonably ask, why is this difficult to achieve? Financial stability is difficult to define quantitatively and precisely. Some people say that you know it when you have it, but it might be better to say that you know when you don’t have it. What is being done to tackle the issue? A month ago, the Government issued a consultation paper which seeks to define the financial stability objective that will be given to the new Financial Policy Committee of the Bank of England under its plans. The objective is defined at the high level as protecting and enhancing the stability of the financial system of the UK. More precisely, the Bank’s objective “relates primary to the identification of, monitoring of, and taking of action to remove or reduce” risk to the stability of the UK financial system as a whole or to a significant part of the system, “with a view to protecting and enhancing the resilience of the UK financial system”. But the paper goes on to include in the objective the statement that: this does not require or authorise the Bank “to exercise its function in a way that would in its opinion be likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term”.
Either way, our actions will be guided by our remit of achieving low inflation with financial stability. Conclusion  The Covid crisis to date has demonstrated that QE and forward guidance around it have been effective in a particular situation. It emphasises that we remain in a world where the choice of tool to use is more important than it has been at times in the past. And there is more nuance and flexibility within tools – thus, while QE relies more on stock effects when used in normal times, in a case of extreme market dysfunction the flow effect of the liquidity channel may come to prominence. The MPC has moved on from that approach as market conditions have eased. In June we increased the stock of QE purchases, but at a slower pace. And in August we introduced forward guidance, stating that the Committee does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably. This important step is intended to ensure monetary conditions do not tighten prematurely when there are some initial signs of an economic recovery. We also made clear that our box does include other tools, including the possibility of negative rates. We have used private sector asset purchases through the corporate bond programme, longer-term liquidity provision to banks with targeted lending incentives, and direct purchasing of newly issued commercial paper to supplement market-based lending channels.

Standing back from the Covid crisis, and looking at the UK case, there indeed is some evidence that the impact of QE over the past decade has been largest at times of market dysfunction and illiquidity. Of course the available event studies are very few in number. But, if this result proves robust, it suggests that “going big and fast” with QE is particularly effective in these conditions. I should stress that while the liquidity channel of QE appears to have been particularly relevant in terms of impact at a time of market dysfunction, such as that observed in March, the different channels of QE impact are by no means mutually exclusive. It seems likely that each channel operates to at least some extent most of the time, with all of them affecting long-term interest rates and thus economic activity and inflation. But this need not suggest that all the channels are equally powerful and persistent in all states of the world. Implications for the future  What does this mean for central bank balance sheets looking forwards? Again, two points stand out, though I should emphasise their tentative nature. First, a balance sheet intervention aimed solely at market functioning is likely to be more temporary, in terms of the duration of its need to be in place. To be clear, the asset purchases announced by the MPC in March were a response to much more than just market functioning, in terms of the effects of Covid on the outlook for the economy and inflation.
William C Dudley: Brief remarks about the centennial “The Fed at 100” Exhibit Introductory remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Museum of American Finance, New York City, 25 September 2013. *  *  *  Thank you all for being here to commemorate the opening of the centennial exhibit for the Federal Reserve System and the Federal Reserve Bank of New York at the Museum of American Finance, just a few blocks from the New York Fed’s landmark head office at 33 Liberty Street. I would like to say thank you to our friends at the Museum for their work and interest in the Fed and for supporting us in organizing this event. Before making some brief remarks about the centennial, I would also like to acknowledge some of the people in attendance tonight. We have two former New York Fed presidents here this evening: Jerry Corrigan and Bill McDonough. I met Jerry, the seventh president of the Bank, when I was still wet behind the ears. I was just out of graduate school at the Board of Governors in Washington, but Jerry was already a force to be reckoned with and a part of Paul Volcker’s inner circle. Jerry’s tenure as president had many memorable moments, including the October 1987 stock market “break”.

And it is that attitude, ability and esprit de corps that will no doubt allow us and the System to meet the important challenges on the road ahead. I will focus briefly on a few such challenges: The first will be on the monetary policy front. The Federal Reserve has engaged in a set of unconventional monetary policies in recent years. These policies have been necessary because the FOMC could not ease monetary policy further by conventional means – the federal funds rate was constrained by the so-called “zero lower bound”. Exit from these unconventional set of policies is certainly feasible – the ability to pay interest on excess reserves gives us a viable tool to manage monetary policy even with an enlarged balance sheet, and the New York Fed is prepared to execute on this mission, as we always are. But we do have to be a bit humble about what we don’t know. There will undoubtedly be communications and operational challenges and unexpected consequences. We will need to be sufficiently agile so that we can best achieve our dual mandate of maximum sustainable employment in the context of price stability. The second challenge for us at the New York Fed, and within the regulatory community more generally, will be in staying the course and implementing a regulatory regime in which no institutions are “too big to fail” (TBTF). TBTF is wrong for several reasons. It creates an unfair disparity between large and small institutions.
GDP growth in the fourth quarter of last year has been revised upwards, consumer confidence has rebounded somewhat and the main forward looking surveys of activity in the manufacturing and services sector have been looking substantially more positive since the turn of the year. Consistent with this tentative recovery in optimism, the Consensus survey of professional economists' forecasts for near-term growth in the US has been revised upwards for the first time in quite a period. So far, the UK has escaped the worst of the squalls raging across the Atlantic. Though GDP growth slowed over the course of last year, output in 2001 was still 2.4% higher than a year earlier, close to trend growth. Underlying this relatively benign aggregate picture, there are of course some quite marked differences: on the expenditure side, between growth in consumption, which has surged ahead, and growth in investment, which has been strikingly depressed; and, on the output side, between the fortunes of firms in manufacturing, which have borne the brunt of the global slowdown, and those of firms in the more sheltered services sector. These differences are sometimes referred to as 'imbalances', and it is certainly true that we can neither expect (nor wish) for them to persist over the long run. The shake-out in manufacturing has been particularly severe, as you know here only too well. Manufacturing output in Northern Ireland fell by some 4.6% in the year to last autumn, compared with a fall of 3.5% in the UK as a whole.

The banking sector should carry out a reassessment of the stability of the borrowers’ business model, under the post -Covid reality. Clients facing temporary financial difficulties but with stable business models, should be supported with liquidity and temporary operational easing. Clients facing serious difficulties may be supported through the restructuring of credit, always so far and at the level that the long-term perspective of the business remains solid. On its side, the Bank of Albania will encourage a pro-active approach of the banking sector towards this process, without prejudice to the stability of the sector and transparency of its balance sheets. Lastly, the fifth challenge is the safeguarding of the monetary and financial stability of Albania. In this regard, I would like to underscore that: The Albanian business should show transparent and loyal to the banking sector. This sector should provide its help to face the crisis, but it may not counter alone its financial costs. Also, banking sector should find a fair equilibrium between the support to borrowers in need – in a bilateral long-term interest and benefit – and the safeguarding of its balance sheet soundness. As I already mentioned, the monetary and financial stability is not negotiable to the Bank of 3/4  BIS central bankers' speeches  Albania. In compliance with our legal mandate it has been and will continue to be the milestone of our polices.
14  Figure 9 Employment (annual change, percent)  6  6 AFP (1)  4  4  AFC (2)  2  2 Total employment  0 Salaried employment  -2  0  -2  -4  -4 15  16  17  18  (1) Number of employed pension fund (AFP) contributors, (2) Number of unemployment insurance (AFC) contributors. Sources: Central Bank of Chile, National Statistics Institute (INE) and Superintendence of Pensions. Table 1 Domestic scenario (annual change, percent) 2017  2018 (f)  2019 (f)  2020 (f)  Sep.18 MP Dec.18 MP Sep.18 MP Dec.18 MP Jun.18 MP Dec.18 MP Report Report Report Report Report Report GDP Mining GDP Non-mining GDP Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports Current account (% of GDP) Gross national savings (% of GDP) Nominal gross fixed capital formation (% of GDP)  1.5 -2.0 1.8 3.1 1.8 -1.1 2.7 -0.9 4.7 -1.5 20.6 21.6  4.0-4.5  4.0  3.25-4.25  3.25-4.25  2.75-3.75  2.75-3.75  4.6 4.1 5.0 3.8 4.9 6.2 -2.2 20.3 21.7  4.7 4.0 5.5 3.6 4.8 7.3 -2.8 20.2 22.0  3.7 3.7 4.5 3.4 4.2 4.4 -2.6 20.5 22.1  3.8 3.9 6.0 3.3 4.1 5.0 -2.7 20.9 22.6  3.3 3.7 3.9 3.6 2.8 2.8 -2.7 20.5 22.4  3.3 3.6 3.9 3.5 2.8 3.0 -2.8 20.8 22.8  (f) Forecast. Source: Central Bank of Chile.

Islamic finance with a growth rate of between 10 to 12% annually in the past decade is gaining prominence at many fronts, including its ability to meet the unique demands of the modern economy. The sukuk market in particular, has produced a dynamic stream of cutting edge products with an appeal that transcends beyond borders and beliefs. It has a wide geographical spread, with global sukuk outstanding domiciled in over 20 countries, and an investor base that spans from Europe to the Middle East and Asia, thus allowing greater diversification of exposures and risks. Malaysia, with a consistent global sukuk market share of more than 50%, over the last 10 years, has sustained its position as the market leader. In the last few years, we have witnessed increasing sovereign sukuk issuances by non-Muslim jurisdictions to meet the varying motivations of its issuers. In 2015, at least 13 jurisdictions have tapped the global sovereign sukuk market. Issuances by the United Kingdom and Hong Kong, are testimonies that the sukuk has come of age. As for Malaysia, its market share of sovereign sukuk stands at 40% and the recent issuance of a Sukuk Wakalah by the Government, with 30-year tenure is currently the longest tenured sovereign sukuk globally. The horizons and usability of sukuk have also expanded into the sphere of Socially Responsible Investment (SRI); following the issuance of the first SRI Sukuk in 2015 by a Malaysian GLC. This is an example of innovative impact investing that generates positive social outcomes.
This is important because, even though we might think that our rules and regulations are now in much better shape, history tells us that the commercial incentives of firms will create pressures to find ways to minimise the impact of those rules. I am especially mindful that financial institutions will always be able to innovate faster than we are able to modify the prudential rulebook. In order to remain fit for purpose, the prudential regulatory framework must be responsive to changes in the behaviour and structure of the financial system and identify any gaps, faults or incoherence that can lead to perverse behaviour. This is why we need well-informed rule-makers and alert supervisors, who together can smell when something is off and decide what to do about it. And this is one reason, in my view, why supervision will be particularly important in the coming phase. The financial services industry that we regulate is highly developed, highly innovative and highly sophisticated. But, stripped bare of this complexity, it remains a business in which individuals need to exercise judgement, skill and care. The role of the supervisor is to observe this behaviour and form judgements about the extent to which the firm – and the individuals running it – meet the intention, as well as the letter of, the regulation. Some innovation by financial institutions in response to regulation will be intended by regulators, or, if not intended, at least benign.

With that strongly in mind, supervisors will maintain the normal supervisory approach and focus on the biggest risks at each firm. For some businesses, Brexit will be a key risk and will, justifiably, warrant supervisory attention – we must not lose sight of risks as structures and business models change, or as activities move around or adapt. Equally, firms’ management should remain focused on the full spectrum of risks that they face. As we would any other identified risk, we expect to have discussions with firms about their contingency plans as part of our regular interaction. But in terms of how supervisors go about their day-to-day business, we remain focused squarely on the task in hand – safety and soundness of all firms and policyholder protection for insurers. Returning to the punchbowl? As well as a determination to inform our approach to current risks by having regard to lessons learned in the past, PRA supervisors are forward-looking and pay close attention to emerging trends and potential future 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  risks. I would like to take this opportunity to highlight some issues of particular relevance for building societies. We observe that net interest margins at societies are coming under increasing pressure, and, although they are still well above levels seen in 2010, the trend seems to have turned downwards.
The Discussion Paper asks for your views about how these trade-offs should be managed. If a fully focused approach based on a very small number of conservatively calibrated requirements represents one extreme, 9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  and a modestly streamlined approach which trims a few elements from the current rulebook represents another, where on the spectrum between those poles would you prefer us to be? Key questions Let me conclude by summarising some of the key choices we seek comments on. First, is it right to start (as we suggest) with the smallest banks and then move in time towards bigger ones as we build a graduated strong and simple framework? Is this the right first step? Second, are the scope criteria we suggest the right ones and, if so, where should we draw the line in terms of size? Third, would you prefer a focused approach with few more conservative requirements, or a streamlined approach? The Discussion Paper contains questions addressing these choices along with questions about other, more detailed choices which we will face as we design a simpler regime. I strongly encourage you to submit comments on them all. As I began by saying, we approach all of these questions with an open mind and we will use your comments when we answer them. We will be accepting comments until 9 July.

It can only affect the long real mortgage rate after tax in the long run to the extent that the rate of inflation for a given tax system affects real tax deductions and real wealth and property taxes. An inflation target and low, stable inflation mean that this opportunity for influence disappears. Then monetary policy will no longer have any long-run effect on housing prices in relation to disposable income.8 Monetary policy could still affect the debt ratio if it could influence the loan-to-value ratio. A higher policy rate might limit the debt ratio if it led to a lower loan-to-value ratio, if there was a negative relation between the policy rate and the loan-to-value ratio. As can be seen in Figure 5, however, there is hardly any support for such a relation. Thus, there does not seem to be any support for the view that monetary policy could affect indebtedness in the long run. In the short run, that is a few years ahead, monetary policy has very little effect on housing prices and even less on the debt ratio, as the debt ratio’s numerator and denominator move in the same direction in the short run. At the latest monetary policy meeting (Sveriges Riksbank 2012d) I mentioned a typical result from empirical estimates, namely that a one percentage point higher policy rate for four quarters leads to just over 2 per cent lower housing prices and debt than would otherwise be the case.