samchain/econo-pairs-v1 huggingface dataset:
However, it is important that there are also good forms for discussion, cooperation and consultation between the authorities and the Financial Stability Council is one useful forum for this. The Riksbank's voice on liquidity issues should carry particular weight For the Riksbank, with its central role in providing liquidity to society, the management of liquidity among participants in the financial system is particularly important. The first sign of a financial crisis – regardless of whether it concerns an individual institution or the financial system as a whole – is namely often a shortage of liquidity. By acting as lender of last resort and using its balance sheet, the Riksbank is therefore usually the public authority that first takes action in a financial crisis. In the same way as the fire brigade tries to work on prevention by reducing the risk of fires, it is reasonable that the Riksbank should in various ways contribute to reducing the risks of a financial crisis. It is therefore natural that the Riksbank should analyse and comment on regulations that affect the probability of Sweden suffering a financial crisis, and also the cost of the crisis if it should  10 [12]  come to that. My view is that the Riksbank's voice should carry particular weight with regard to liquidity issues, given our central role in supplying liquidity. There are many different ways of formalising this.

This principle relates to the dichotomy between the ECB’s monetary policy and its liquidity policy or, in other words, between the formulation and implementation of monetary policy. During the turmoil, the separation principle proved to be very effective. Supported by the flexibility of its operational framework, the ECB was able to react in a flexible and quick manner to a changing market environment, and it allowed the steering of interest rates close to the policy rate by means of temporary quantity adjustments, albeit without increasing the aggregate supply of euro liquidity to the banking sector. The main objective of the ECB’s immediate and lasting responses to tensions in the money market was to keep under to control the very short-term interest rates as the first step in the transmission of monetary policy. Broadly speaking, the ECB’s liquidity policy response consisted of three elements: First, it changed the timing of the liquidity provision within the maintenance period (the so-called “front-loading policy”), and thereby allowed banks to build up temporary liquidity buffers. Second, it lengthened the average maturity of its tender operations: before the turmoil, the bulk of liquidity was supplied through one-week operations, and only about 30% was auctioned for three months. As the turmoil unfolded, the ECB gradually increased the share of the three-month operations and moreover introduced a six-month maturity operation. Finally, it participated in the joint coordination effort of an increasing number of central banks around the world within the context of the Term Auction Facility.
To all the prize winners for 2006, I extend my sincere and heartfelt congratulations for well deserved awards. Please remember that it is not enough to only enjoy the glory of the moment, but also to take the responsibility to act as mentors to emergent writers. I believe that what the journalist fraternity needs is not individuals who excel alone, but a cadre of responsible reporters that leave an outstanding legacy. Let me also take this opportunity to thank ACCA, the sponsors of this event and prizes for their continuing support to economic, business and financial journalism. In conclusion, allow me to encourage our journalists to compete for international media awards as well. This will be the true barometer of where you stand as Zambian journalists because you will be judged against international best practice which is, in turn, the true barometer in global economy. As your patron, I wish you all the best in this and future endeavors that seek to raise the standards of journalism in the country. I thank you. 2  BIS Review 10/2007

The Commission’s recovery fund proposal is clearly a key building block in delivering on this goal. But the European level cannot be expected to do it alone. Crucially, the recovery fund will only reach its full potential if it is firmly rooted in structural reforms conceived and implemented at the national level. We will get a “bigger bang” for each euro spent if countries conduct the structural reforms they need at the same time. As an illustration, ECB research shows that in the event of a common shock hitting all euro area countries – of the type we have just seen – those with less efficient economic structures can on average suffer up to twice the output loss of a country that is at the frontier of institutional parameters.7 The Country Specific Recommendations identify further helpful reforms. In Italy’s case, I understand that these recommendations call for, among other things, investing in digital infrastructure for education and training, promoting renewable energy production, developing ebusiness models and modernising public administration. Such reforms – designed and owned by you – are indispensable to capitalise on this moment. 3/4  BIS central bankers' speeches  Conclusion I therefore encourage you, as policymakers, not to let this crisis go to waste. My institution, the ECB, will play its part within its mandate. But it is for you to prove to citizens that our societies will emerge from this transformation stronger and greener.
Therefore it seems reasonable to  3  BIS Review 43/2000  argue that transition economies should pay special attention to formal education, and other forms of training and research. As the empirical evidence suggests (Flanagan, 1998), return to schooling began to rise rapidly during the transition. Relatively soon, they approximated those in many market economies. Under central planning, the main distortions in human capital formation were the overvaluation of vocational training and the undervaluing of university education. However, the transition process has quickly started to correct this shortcoming of socialism. Formal schooling need not be the main factor in developing human capital. Let me just mention that according to Lucas (1993), the most central feature of human capital accumulation for growth is learning on the job (learning by doing). For this to happen, we need both managers and workers to be constantly exposed to new challenges, to move up on the “quality ladder”. In the globalized world of today it seems that one of the best ways to be exposed to new challenges is by exporting. An old Latin saying could be paraphrased into: “Exportare necesse est, vivere non necesse est”.2 By opening up the economy, we are promoting human capital, which in turn is essential to growth. A similar approach can be used to argue for more foreign direct investments (FDI) in transition economies. FDIs bring not only physical capital, but: new organization, know-how, etc which then increase “domestic” human capital.

I would like to present a briefing on accomplishments achieved during the last year, the most important of which were: The Kingdom achieved tangible progress in its AML procedures, in the framework of the follow-up process that followed the Mutual Assessment Process. The Kingdom submitted the First Follow-up Report to the MENAFATF in February 2012. The report includes the new and updated legislations issued and the actions taken to cope with the implementation of all international standards and practices issued recently. BIS central bankers’ speeches  1  The Kingdom amended the Anti-Money Laundering Law issued by Royal Decree No. (M/31) dated 11/5/1433H to cover many domestic and international requirements and developments. Its Implementing Regulation was updated as well. Here, I would like to highlight that the national AML legislation was finalized in line with international developments and standards. The Kingdom hosted a number of conferences, symposiums and training courses on combating money laundering. The most important of which was the Fifteenth MENA-FATF General Meeting held in April 2012 in Jeddah. In September 2012, the Investigation and Public Prosecution Authority, in cooperation with MENA-FATF, also hosted a symposium on “the Role and Responsibility of Public Prosecution Agencies and Judicial Organs in Combating Money Laundering and Terrorism Financing”. In September 2012, SAMA, in collaboration with the Secretariat General of the Cooperation Council for the Arab States of the Gulf, organized a workshop on Updating FATF Recommendations to Combat Money Laundering, Terrorism Financing and Weapons Proliferation.
At our monetary policy meeting in May we were able to observe that the new information received since the publication of the Monetary Policy Report in February indicated higher inflationary pressures than we had predicted. One reason was that the result of the spring wage bargaining rounds indicated that wages could increase more quickly during the forecast period than we had estimated in the main alternative in the report published in February. The motive for high wage increases not being part of our main scenario was that we considered that the spare capacity in the labour market still appeared substantial, which would slow down the rate of wage increase. How high wage increases will be in total will depend not only on the collective wage agreements, but also on how much wages rise outside of the agreements. As I mentioned in May, it is reasonable in the currently strong labour market situation to count on wage increases outside of the agreements being higher than they have been in recent years. How high will depend on how well the labour market functions. I pointed to a number of important questions then. Will the labour supply increase to the extent expected? Will the matching of demand for and supply of labour function? How will the stronger labour market situation affect wage negotiations? At the May meeting we were also able to observe that the statistics received for the first quarter showed a slightly more strained labour market situation than we expected to see in February.

The fact that forecasters revise their assessments is not at all strange, as new information is received all the time. This indicates that as the conditions for the real economy change and new information is received the forecasts for the repo rate path need to be adjusted. There is nothing particularly dramatic about this. It applies to all market agents, to the major banks, to the Ministry of Finance and also to us at the Riksbank. The great uncertainty factor means that all forecasters should be humble, but this should not prevent them from making forecasts. I would therefore like to emphasise once again that the repo rate path we present in the Monetary Policy Report is a forecast and not a promise. The Riksbank cannot undertake, regardless of what  BIS Review 62/2007  3  happens in the economy, to follow the path published. The interest rate path is quite simply the best assessment we can make at a given point in time, given the information that is then available. New information may change the picture of the economy and then the Executive Board will have to rethink how we set the repo rate. The reason why we have chosen to publish our interest rate forecast despite the uncertainty over the future is largely because we believe this is the best way of explaining our thoughts on monetary policy. It also makes it easier for us to justify forecasts and interest rate decisions and to outline alternative scenarios for the repo rate.
It includes 42 new or amended directives which have a bearing on the financial sector. Disappearing exchange rate risks … It is easy to conclude that there has been a dramatic decline in interest rate spreads between the countries that have introduced the euro, in the region of from around 5 down to 0.3 percentage points for government bonds. Some of this decline is, of course, connected with the consolidation of government finances in the EU member states, but as long as the national currencies remained, investors often also demanded a premium for managing exchange rate risk. The remaining interest rate spread can be largely explained by different credit ratings of member states in the euro area, which are carrying different baggage weights from debt previously incurred, as well as by differences in liquidity between different bond issues. The introduction of the euro has also contributed to increasing the breadth and depth of European capital markets and in any case led to almost complete integration of the part of the money market trading that is closely connected with the Eurosystem’s monetary policy transactions. To be sure, it is the quintessence of a common monetary policy that there should be uniform interest rate conditions for the liquidity supply across the entire monetary union. This has also led to an integration of deposit markets, i.e. short-term financing without formal collateral.

Here, it is also necessary to have an interplay between the central banks and supervisory authorities to implement existing regulations in a good manner. And the more integrated the financial sector becomes within the EU, the larger the number of people who will potentially be affected by such tensions or crises, which will make further demands for well-oiled channels for monitoring between different countries and concerning different types of financial activities. This involves not merely having good systems for mutually providing information on what is happening when things are going smoothly, but also maintaining a readiness to identify problems and intervene in acute crises that might arise and that could threaten the stability of the system. It is complicated to build up this kind of readiness when it comes to authorities in different countries with different traditions, different principals, responsibility for different parts of the financial system, etc., but it is nevertheless extremely important that the network co-operation in this field be developed further. New requirements for co-ordination in supervision and oversight The basic model for financial supervision within the EU is that it shall be carried out by national authorities and this is, in my opinion, the most natural and efficient means of keeping a watch over financial operators and markets. However, this requires that the supervision of other operations and markets that can affect financial conglomerates is also sufficiently co-ordinated.
Secondly, there is a need to improve the handling of cross-border crises. Financial crises tend to spread from one country to another. For example, many financial institutions have operations in more than one country. When such an institution experiences difficulties this therefore has an impact in several countries. An example of this is the Belgian bank Fortis and the events relating to the rescue of the bank by the authorities in Belgium, the Netherlands and Luxembourg. Crisis management becomes more effective if contacts and concrete arrangements between the countries are already in place. It also becomes simpler to decide how the costs of crisis management should be divided between the countries concerned. Joint crisis management exercises and a better flow of information between the relevant authorities in the countries concerned also facilitate cooperation in the event of a real crisis. Thirdly, the credibility of the credit rating agencies needs to be restored. They have played a central role in the events of the current financial crisis and their credibility has been seriously undermined. This is, however, an area where it is easy for regulation to go too far. I believe that to a large extent we can and should trust in the ability of the credit rating agencies to develop their evaluation methods and to restore confidence. Some form of registration and supervision may also be needed, but this should not involve intervention in the independent evaluations of the agencies. Fourthly, the deposit guarantee schemes need to be harmonised.

Two particularly important exceptions have been the gradual fixing of the exchange rates between members of the European Union, culminating in monetary union, and the more or less formal policies of the newly industrialised Asian countries and Japan to keep the value of their currencies stable against the dollar. Moreover, the Asian central banks have been accumulating large dollar reserves. For most of the post-war period, the quantity of central bank reserves held by Asian central banks was of the same order of magnitude as the reserves held by the G-7. Over the past 15 years, both Japan and non-Japan Asia have rapidly increased their reserves, which are now nearly ten times as large as the combined reserves of the rest of the G-7. Two thirds of these reserves are in dollars, a much larger proportion than the US share of world output. The counterpart to the Asian bloc’s current account surpluses and acquisition of dollar reserves has been large current account deficits in the US. There is nothing inherently wrong with such ‘imbalances’. In principle, they reflect the use of financial markets to allocate savings from around the world to the most profitable investment opportunities. But there is likely to be a limit to the amount of debt that one country can issue as a result of persistent deficits before investors start to worry about its ability or willingness to repay.
The size of global Islamic finance assets made a quantum leap from only $ billion in the mid-1990s to $ trillion at the end of 2011.1 Although the investment climate has been clouded by the US sub-prime crisis and the European sovereign debt problems in recent years, the global sukuk market is powering ahead. Indeed, last year was the best year for the global sukuk market on record, with sukuk issuances growing by more than 60% year-on-year, taking the outstanding sukuk amount to a new height of $ billion.2 According to some market estimates, the size of the global Islamic finance industry has the potential to increase five-fold from the current level to some $ trillion by 2020.3 4. The development of RMB-denominated investment products is equally impressive. In a short space of 6 years, the size of the RMB dim sum bond market in Hong Kong has grown from a modest amount of 10 billion yuan in 2007 to 237 billion yuan at the end of 2012. Offshore RMB financial products have also become more diversified, expanding from only RMB bonds to RMB equities, RMB investment funds, RMB A-share exchange-traded funds (ETFs) as well as RMB insurance products. The growth momentum of the offshore RMB financial markets is expected to pick up further, as more and more financing and investment activities can now be conducted in RMB, especially following the introduction by the Mainland authorities of the arrangements for inward and outward direct investments in RMB and the RMB Qualified Foreign Institutional Investors (i.e.

Peter Pang: Islamic capital and money markets Welcoming remarks by Mr Peter Pang, Deputy Chief Executive, Hong Kong Monetary Authority, at the workshop on “Islamic capital and money markets”, Hong Kong, 19 March 2013. *  *  *  Distinguished guests, ladies and gentlemen, 1. It is my great pleasure to welcome you to this Islamic finance workshop. We are particularly grateful to Mr. Mohd. Radzuan, Mr. Azidy and Mr. Azahari, the experts from Malaysia, who have flown all the way to Hong Kong to share with us their knowledge on Islamic capital and money markets and their valuable experience in developing these critical components of Islamic finance. I would also like to thank Mr. Najmuddin of Bank Negara Malaysia for bringing the Malaysian delegation here. Two fast developing asset classes in the global markets 2. This workshop comes at a very opportune time as Hong Kong is looking to develop Islamic finance as a way to diversify our financial platform and further enhance our capability as an international financial centre. In my view, to be a truly international financial centre, one needs to develop a conducive platform for the two fast developing asset classes in the global markets – Islamic financial products and RMB-denominated investment assets. 3. The development of Islamic financial markets has been phenomenal in the past two decades.
6  BIS central bankers’ speeches  However, even enhanced recovery tools may not be enough to prevent the CCP from being resolved, first of all because it is impossible to estimate ex ante the size of potential uncovered exposures, secondly because under certain circumstances it might be preferable to resolve a CCP – especially if the market has lost confidence in this CCP as a going concern. Effective CCP resolution as an ultimate tool. Lastly, we need to assess whether more assurances are needed so that a CCP can be effectively resolved and can re-launch its viable operations, and whether the measures discussed before are either ineffective or out of line with market preferences. Much like recovery frameworks, CCP resolution frameworks are currently being designed and implemented across jurisdictions. The FSB is reviewing CCP resolution regimes and resolution planning arrangements. Based on this review, it may develop minimum standards for CCP resolution planning, strategies and tools without resorting to a government bailout, and without resulting in contagion to other parts of the financial system. Meanwhile, the European Commission is preparing specific EU legislation. If, after an in-depth assessment, authorities come to the conclusion that an additional source of financial resources is needed, what form should these extra funds take? Let me first reiterate that any bailout of CCPs with public money should be categorically excluded. Resolution plans should fully allocate losses to CCPs and their participants.

Furthermore, taxpayers should obviously not be liable for any losses incurred by CCPs. Losses should be entirely borne by the CCPs themselves and their participants, in an appropriate and proportional manner, and in line with prudent incentives. In particular, the involvement of indirect participants should be carefully considered: their contribution to the loss allocation process should take into account the fact that they have no contractual agreements with the CCP, and, unlike direct members, have no part in the CCP’s risk governance process (and therefore have no say in the CCP’s risk management). Lastly, the issue of compensating clearing members for losses incurred during a recovery or resolution process remains comparatively unexplored and deserves careful attention.10 Let me now turn to the various tools that authorities could use to address potential shortcomings in CCP risk management and loss-absorption capacities. These options have very different implications, namely in terms of sharing the funding needs between CCPs and participants, and in terms of providing the right incentives to CCPs’ stakeholders. Increasing the level of pre-funded resources held by CCPs to cover default losses beyond the current standards. One possible conclusion from the current review of the international implementation of regulatory requirements, and the analysis and assessments being carried out in parallel, could be that standards regarding margins and stress testing are sufficiently stringent, but are not implemented consistently across CCPs and jurisdictions.