samchain/econo-pairs-v1 huggingface dataset:
Despite their cost magnitude, we persist  BIS central bankers’ speeches  1  with these investments because we believe that once properly leveraged they will enable the organisation to do more with less by: (i) increasing staff efficiency and productivity; (ii) strengthening relationships with the organisation’s customers; and (iii) fostering more effective collaboration with various business partners to quicken the speed at which data that is required for decision-making can be provided. In striving to achieve these goals, we are exposed to the likelihood of being affected by the major risks that are attendant with information technology use. Consequently, the institution continues to allocate resources to: (a) make its information systems and the supporting technical infrastructure more reliable and resilient; and (b) protect the integrity of the institution’s data assets. Achievement of the foregoing objectives is heavily dependent on all information technologyrelated activities and investments being channelled in a manner that is consistent with the organisation’s goals and needs – the so called IT/business alignment challenge that appears to be so elusive in many cases. Here, from a management oversight perspective, one cannot overemphasise the necessity of embracing governance mechanisms that are fit for purpose. To remain relevant, the information technology function must continually evaluate and if necessary enhance its existing capability to ensure that it can meet the requirements of core business processes while being in tune with the current and envisaged directions of the organisation.

In short, some sort of European investment agency, whether in the form of a new or an existing euro area body, with the capacity to issue bonds, might be able to target an optimal fiscal policy stance, while providing the economy with more safe assets, thus facilitating monetary policy transmission, increasing the international role of the euro and completing the Banking and Capital Markets Union. Twenty years ago, the euro was seen, in Christian Noyer’s words, as a catalyst for integration. This view is now as valid as it was then. In order to achieve price stability, the single currency generates the need to pursue sound economic policies. But it is clear now that monetary integration does not immediately lead to financial integration. This is an ongoing process, and the governance framework to guarantee the success of the European project is still developing. We must endeavour to achieve completion of the Capital Markets Union and the Banking Union. This will also require progress towards the Fiscal Union. A European safe asset lies at the heart of all of these initiatives. But, more often than not, the heart is the most difficult place to reach. I am sure that these two days will bring advanced research and a constructive exchange of views to bear on this and other important areas of the euro area architecture. Thank you for your attention. 8/8
As early as 1967, Brainard showed that central banks should respond more cautiously to economic disturbances when there is uncertainty as to how strongly the interest rate affects the economy, in other words when there is multiplicative uncertainty.15 On the other hand, according to theory, additive uncertainty, where uncertainty factors are assumed to be independent of the interest rate, shall not be taken into account when setting interest rates. Certainty equivalence implies that we make an unbiased projection for the uncertain factor and take the projection into account in the same way as if we knew with certainty that it would occur. Theory implies that the central bank should be more aggressive when setting interest rates when faced with certain types of multiplicative uncertainty, for example, uncertainty regarding the extent to which the deviation from the inflation target for a period has an effect on market participants’ expectations concerning future inflation.16 This is in line with previous statements from Norges Bank where we state that: The interest rate may be changed rapidly and markedly if there is a risk that inflation might deviate considerably from the target over an extended period so that inflation expectations might be influenced, or when heightened turbulence in financial markets or a rise in costs as a result of negotiated wage increases indicate that confidence in monetary policy is in jeopardy. The fact that academic research is devoting more attention to monetary policy under uncertainty is useful for us practitioners.

Encik Adnan Zaylani Mohamad Zahid: Islamic finance - future trend Keynote address by Mr Encik Adnan Zaylani Mohamad Zahid, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 13th Kuala Lumpur Islamic Finance Forum 2016 (KLIFF) "Islamic Finance - Future Trend", Kuala Lumpur, 21 November 2016. * * * It is my pleasure; and an honour to be given the opportunity to speak at this forum today. Since the first introduction of KLIFF, more than a decade ago the event has gained recognition as a prestigious annual gathering for industry experts and key players in Islamic finance. I therefore wish to congratulate the organisers for its success in organising this event and maintaining its momentum. This year, in line with the chosen theme deliberations in the forum will revolve around strategies to elevate Islamic finance to the next level. As we are now at an important crossroads in Islamic finance, its continued dynamism in the journey ahead, requires the industry to strategically respond to the changing requirements of the global economy. My remarks today centres on the future trend of Islamic finance. In charting our growth for the industry, I will reflect on our achievements; and offer some thoughts on key areas that can accelerate the industry forward. I would then deliberate on the key underpinnings for the industry to successfully meet the intended objectives, in my conclusion.
13 European Banking Authority (2018), EBA report on the impact of FinTech on incumbent credit institutions’  business models, EBA, London. 14 See Nikolov, P. (2016), “Cross-border risk sharing after asymmetric shocks: evidence from the euro area and  the United States”, Quarterly Report on the Euro Area, 15(2): 7-18, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission, Brussels. 15 Andersson et al. (2018), op. cit. 5/5  BIS central bankers' speeches

But it is increasingly accepted as the best means we have raising the sustainable rate of growth - and employment - and living standards - at the macro-economic, and international, level. BIS Review 11/2002  1  These trends together have resulted in substantial economic progress in most of the developed economies. But - and this is the third theme I would draw attention to this morning - there was growing recognition of the fact that not all countries were equally well-placed to share in the potential benefits of free markets within a stable macro-economic framework, and of the need - as a matter of self-interest and not just social responsibility - to help draw other countries in to the global economy. Emerging markets and transition economies have increasingly gained access to international capital markets. And there is an increasing emphasis on the need to help the poorest countries that are seeking to help themselves to participate. This last concern will be on the agenda of the Monterrey conference next month. Now, all of these developments have had - and will continue to have - enormous influence on the evolution of the financial environment, including bond markets internationally. Monetary stability has brought a sustained decline in nominal government bond yields in industrial countries, and a narrowing of yield differentials, which was inconceivable during much of the earlier part of my working life.
As a background to my comments on the topic of this panel, “Where do central banks go from here?”, let me note that, as the world economy recovers from the recent financial crisis and the Great Recession that followed, a debate is underway regarding the causes of the crisis and how to reduce the risk of future crises. The role of monetary policy and its relation to financial stability are also under debate. Some blame the Federal Reserve, saying that its monetary policy was too expansionary after 2001 and that this laid the foundations for the crisis. The lesson to be drawn, they argue is that there is a need to modify the framework of flexible inflation targeting and give a greater role to financial-stability considerations. In my view, the crisis was largely caused by factors that had very little to do with monetary policy. Instead, it was mainly caused by regulatory and supervisory failures in combination with some special circumstances, such as low real interest rates around the world and housing policy in the United States. Neither do I share the view that there is a need to fundamentally modify the framework of flexible inflation targeting. Ultimately, my main conclusion for monetary policy is that flexible inflation targeting – applied in the right way and in particular using all the information about financial conditions that is relevant for the forecast of inflation and resource utilisation at any horizon – remains the best-practice monetary policy before, during, and after the financial crisis.

However, the fact that monetary policy is not just directed towards stabilising inflation, but also towards stabilising resource utilisation has, in the absence of quantitative measures of stability in these variables, made it difficult to measure and evaluate target fulfilment in this stability dimension. This makes it difficult to decide which policy-rate path best stabilizes both inflation and resource utilization. My suggestion is to use mean squared gaps for the inflation forecast and for the resourceutilization forecast as measures of the stability of inflation and resource utilization. 3 Figure 1 provides an example, using graphs from Norges Bank’s Inflation Report of June 2005. Figure 1 Monetary policy with mean squared gaps (Norges Bank, June 2005)  In figure 1, the top left panel shows three alternative policy-rate paths, the main path chosen by Norges Bank at the time and two alternative paths, a lower and a higher path. The top right panel shows the corresponding forecast of inflation according to the index CPI-ATE, the consumer price index adjusted for tax changes and excluding energy products. The bottom right panel shows the corresponding forecasts of the output gap, the gap between output and potential output. These three panels are shown in the June 2005 Inflation Report. We see that there is a tradeoff between stabilizing inflation and resource utilization, measured as the output gap. The lower (higher) policy-rate path stabilizes inflation better (worse) around the  3  See Svensson (2010a, c) for details.
The effect of the interest rate differential on the krone has been amplified by developments in international capital markets. Part of the appreciation in 2002 may also be due to higher oil prices. In a highly uncertain situation and with fears of war in Iraq, the Norwegian krone, buoyed by a relatively high interest rate and oil wealth, may have been regarded as an attractive alternative. Investment in NOK may have been considered a good hedge against a downturn in the world economy as a result of fears of war and high oil prices. Since December last year, the interest rate differential between Norway and other countries has narrowed by  2  BIS Review 38/2003  about 3 percentage points. Since the beginning of 2003, the krone measured in terms of the trade-weighted exchange rate index (TWI) has depreciated by 11 per cent. At the beginning of the 1990s, the Norwegian economy was in a deep recession. Production was far below capacity. When growth in the economy picked up, capacity utilisation increased. The output gap shows the difference between actual GDP and the level indicated by trend growth - estimated at close to 2½ per cent in Norway. Around 1996, there was full capacity utilisation, and the output gap, as we normally measure it, closed. Subsequently, costs increased and prices for goods and services produced for the Norwegian market accelerated. The upturn peaked in 1997, with GDP growth approaching 5 per cent.

The arguments for establishing a committee for monetary policy and financial stability are weaker, in Norges Bank’s view, if the GPFG is separated from Norges Bank. Without responsibility for the GPFG, the Board’s range of responsibilities will be substantially reduced. In addition, dividing responsibility for central banking matters between the two bodies will pose challenges, particularly with regard to the division of work and reporting. The central bank’s core functions are closely intertwined and must be viewed as a whole, as experienced during the financial crisis. A solution where responsibility must be transferred from the board to the committee in critical situations, as proposed by the Commission, could give rise to a lack of clarity and conflicts of competence. An important point in this context is that in the implementation of the committee’s tasks, the Governor will not be responsible to the board, but will report directly to the Ministry of Finance on central banking matters. If the management of the GPFG is removed from the aegis of Norges Bank, the Bank’s function will be to exercise authority with regard to monetary policy, financial stability and the payment system. A board with broadly the same composition as at present would then function well. Combining responsibility for central banking matters and administrative matters in this board will place responsibility with the same body in both normal and crisis times. The consideration of central bank independence also points towards this solution.
What I have mentioned here is only some examples of the earlier and ongoing efforts that the Bank of Thailand was involved in developing the capital market. Going forward, there is still much work to do. The Bank of Thailand will continue to coordinate with other authorities and the private sector in order to move us closer to having a deeper and well structured capital market. Ladies and Gentlemen, In closing, I would like to stress that the underlying fundamentals of the Thai economy remain sound, as evidenced by its continued ability to weather various adverse shocks. While it is uncertain how the current political confrontation will unwind, I am confident that the economy will prevail, as it has done a number of times in the past. Over the longer term however, Thailand will need, among other things, a deeper and stronger capital market in order to grow sustainably. It is therefore in our best interest to promote the development of the Thai capital market and make Thailand an attractive destination for quality investors. For this, we will need your active participation and continued faith in the Thai economy. Thank you very much for your attention. 6  BIS Review 118/2008

In my view, three other major prerequisites are needed in order to foster robust, sustainable growth and durable job creation, namely : the continuation and strengthening of a policy designed to keep in check unit production costs, the improvement of the competitiveness of the economy, through ambitious structural reforms and lastly, the completion of a fully integrated European capital market. Raising the potential output growth and enhancing the competitiveness of the economy: If Europe wants to secure sustainable growth at levels that are as high as possible, the key variable is potential output growth. The level of potential output growth can firstly be raised thanks to investment: business leaders are completely free to invest wherever they want in Europe or elsewhere in the world. It is thus important that we create economic, legal and fiscal conditions that are as favourable as possible to investment in Europe. The investment appeal of Europe is crucial in this respect : the more we invest, the fewer inflationary pressures we will have, and the stronger potential output growth will be. BIS Review 60/2002  1  Another way of raising potential output growth is to increase the quantity of available labour and to boost gains in labour productivity: the fast transformation of information systems is likely to accentuate the structural transformation of the economies.
Fifteen to twenty years ago, central banks moved wholesale payment systems on to a Real-Time Gross Settlement basis. Cutting through the details, this meant that settlement banks are no longer exposed to each other during the day for the payments they send each other; and, in the UK and most other countries, the central bank delivers this without taking unsecured intra-day credit exposures itself. Without those unheralded reforms, I have little doubt that last autumn’s crisis would have been calamitous on a scale massively exceeding the dreadful near-seizure we did experience in the money markets. That example was a public sector initiative; the banks were more or less herded into it. But there is an equally important private sector initiative. Without the collateralisation of OTC-derivative counterparty credit exposures, the credit spillovers from firm and fund failures around the world would surely have been much greater. What those two examples demonstrate is that the authorities and practitioners can get things right – when we focus on what will matter in bad states of the world. Summary The Turner Report makes a big contribution to developing the agenda for reforming the global financial system, including on macroprudential oversight. If anything, I may have added to that agenda this morning. We need to undertake serious research and analysis on whether we can develop a macro instrument for taming the credit cycle. But, in making the system more resilient, we cannot rely solely on bank capital or loan market requirements.

That insurance needs to be provided on terms that do not incite imprudent liquidity risks, and that are time consistent, in the sense that we avoid needing to recast our regime when really difficult times hit. The Bank set out its approach in the paper we issued last autumn on the launch of our Discount Window Facility, through which we stand ready to lend against a wide range of  BIS Review 39/2009  3  collateral at pre-determined fees to banks that are not facing fundamental problems of solvency or viability. Capital, and capital-of-last-resort I have talked about liquidity partly because, as our community returns to thinking about bank supervision in terms of stability as well as consumer protection, it needs to be centre stage again; but also because we can think about capital regulation under the same broad headings. What should count as capital; what risks should it protect against; and what happens when the system turns out not to have enough capital? On the definition of capital, I agree with the Turner Report that what matters to stability is common equity (and possibly, subject to further analysis, also instruments that can unambiguously be converted into common equity at the option of the bank or regulator). That is because confidence in a bank as a going concern is crucial to the stability of its deposit and wholesale funding base.
We will have to devise a system to make ECB responsibility compatible with a rational division of work, so the ECB will have the direct oversight of significant banks with the cooperation of the national competent authorities. The direct supervision of the Less Significant Institutions is for the National Authorities, which will have to comply with regulations, guidelines and general instructions issued by the ECB. In fact, the ECB will indirectly supervise such banks, having access to their data and the power to assume, if so decided, the direct supervision of any of them. It is important to underline that this is not going to be a two-tier system, but a single one with a distribution of tasks; this is not going to be a “confederation” of supervisors, but an “Union” of supervisors under a single European authority. Preparatory work already done to launch the Single Supervisory Mechanism At this point, I will briefly describe the work we have done, how the SSM is going to be set up in organisational terms, and the work ahead of us. Steered by a High-Level Group on Supervision, chaired by the President of the ECB, a preparatory structure has laid down the work schedule regarding the following areas: (i)  The mapping of all the EU banking institutions, to determine the supervisory regime applicable under the Single Mechanism Regulation.

2  BIS central bankers’ speeches  From my perspective, Japan’s experience with forward guidance for the policy rate, asset purchases and a more formal inflation goal are particularly instructive, as this helped inform the later use of such tools in the United States. In early 1999, the Bank of Japan said it would maintain its zero interest rate policy until “deflationary concerns” were “dispelled.” This commitment was lifted in August 2000, and the BoJ raised the policy rate by a quarter-point. However, the BoJ was subsequently obliged to reverse course, and reintroduced forward guidance in March 2001. This guidance was tied to the realization of a new inflation objective. With deflation intensifying, the Bank of Japan embarked on a quantitative easing (QE) program in 2001 designed to increase the size of the monetary base. The Bank of Japan engaged in purchases of JGBs that were large in scale, but confined to short-dated maturities. This reflected a view that such purchases primarily acted through the liabilities side of the central bank's balance sheet – pushing up the amount of reserves in the banking system. Because the growth of the monetary base was deemed the goal of policy, it was logical to purchase short-dated assets, which could be allowed to run off once a sustainable recovery was in place. The downside of this approach was that the purchases did not change the composition of the private sector’s balance sheet very much because the policy essentially resulted in the exchange of one short-term risk-free asset for another.