samchain/econo-pairs-v1 huggingface dataset:
Nor Shamsiah Mohd Yunus: Value based intermediation - beyond profit Keynote address by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Islamic Finance Forum 2018 (GIFF) "Value Based Intermediation - Beyond Profit", Kuala Lumpur, 3 October 2018. * * * Henry Ford, credited with revolutionising the American transportation industry in the 20th century, once remarked that “Business must be run at a profit, else it will die. But when anyone attempts to run a business solely for profit and thinks not at all of the service to the community, then also the business must die, for it no longer has a reason for existence”. Nearly a hundred years since, these words of wisdom remain true. Perhaps, even more so now than ever. Indeed, we have witnessed time and again, episodes of excessiveness, and the sole and unchecked pursuit of profits, that have led to global financial crises. The theme of this conference, “Value Based Intermediation – Beyond Profit”, is therefore a fitting reminder of the role of finance, and Islamic finance in particular, in helping build a more resilient and sustainable future. In the past half century, the world economy expanded sixfold, despite experiencing the worst and most expensive financial crisis. Average per capita income more than doubled to about USD11,000, compared to only about USD5,000 in 1967. People are living longer, with better quality of life, greater access to basic necessities, improved health and medical care, and better education.

The financial stability analyses focus on macroeconomic stability factors and on the strength and soundness of the financial system as a whole. The Bank addresses both these principal areas with a strong professional ambition. Its two main fields of analysis reinforce each other and benefit from close cooperation among the staff. Both areas have forced us to put our analyses, projections and policies on a longer-term perspective which provides an opportunity for better overall economic and monetary policy management. Although much remains to be explained about the nature of the interaction of monetary and financial stability, I mentioned earlier that a sound financial system is a precondition for economic and monetary stability and the implementation of an effective monetary policy. In this respect, these areas support each other. Since financial liberalisation was introduced, we have not faced circumstances where financial stability concerns have directly affected or conflicted with monetary policy decisions. Our aim is to prevent such a situation from arising. The potential risks to financial stability at the end of the last upswing were defused by the swift achievement of monetary stability and the restoration of internal and external balance. In conclusion, I would like to repeat my warm welcome to all the participants in the seminar. I trust that both the seminar and your stay in Iceland will be interesting and rewarding, professionally and socially. BIS Review 34/2004  3
But Giles suggested, “I’m sure we can all do better than that.” He took a stab at translating the sentence himself, suggesting that it meant “the MPC will let the recovery run for as long as it can,” but he invited others who might have “better, more elegant and more accurate translations” to submit them via social media. Later that day, he announced the best summation received. Forward guidance expressed in a two-word sentence: “We’ll see.” 6 That about sums it up. The FOMC is seeking to make sure that we have a sustained recovery without giving rise to inflation or market instability. We will conduct monetary policy accordingly. Regardless of the way we may finally agree at the FOMC to write it out or have Chair Yellen explain it at a press conference, we really cannot say more than that. 5  From Churchill by Himself: The Definitive Collection of Quotations, edited by Richard Langworth, Philadelphia: Perseus Books Group, 2008, p. 17. Langworth cites Churchill from March 15, 1926. 6  “Forward guidance in a sentence,” by Chris Giles, Financial Times, Money Supply (blog), Oct. 2, 2013. Giles announced the “forward guidance in a sentence … winner” on Twitter later that same day. BIS central bankers’ speeches  5  So that’s where we are: “We’ll see.” Or as Deng Xiaoping would have phrased it: “We will cross the river by feeling the stones” ( 摸 石 頭 過 河).

On asset purchases: “If incoming information broadly supports the committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the committee will likely reduce the pace of asset purchases in further measured steps ...” On the timing of liftoff: “The committee continues to anticipate ... that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends ...” On the post-liftoff path of the funds rate: “The committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the committee views as normal in the longer run.” As a former practitioner, I can tell you that market operators prefer Odyssean guidance to Delphic guidance, and within the Odyssean model, tend to prefer inflexible, calendar-based guidance to guidance that’s either conditional or qualitative. Life in my former incarnation would naturally be much more pleasant if I could dial in the specific dates and levels of interest rate movements. But as a central banker, I am haunted by a comment made by Winston Churchill in 1926, shortly before things began to unravel in the global financial  4  BIS central bankers’ speeches  markets.
Thus, GDP will grow in the 5.5%–6.5% range in 2011, with a smaller contribution of supplyside sectors – i.e., fishing, mining and hydroelectric generation – than foreseen in the latest IPoM, while the other sectors will converge to trend growth as the monetary and external impulses are normalized (table 2). Prospects for trend growth are similar to September’s, that is, around 5%. In this scenario, which also features improved terms of trade, the current account of the balance of payments will post a surplus of 0.3% of GDP in 2010, contrasting with the deficit forecast in September, owing mainly to better export prices. However, estimations yield that in 2011 the current account will reach a deficit of 1.4% of GDP. Y-o-y headline inflation has remained in the lower zone of the tolerance range, while the core measure CPIX1 is still in negative territory. This low core inflation has been partly offset by increases in the prices of foodstuffs, both perishable and non-perishable and, most recently, by increased fuel prices (figure 8). Since last July, there has been a renewed, markedly ascending trend in food prices in the global market. Given the experience of 2008, it has become again cause for concern for policy-makers in some countries. As shown in a box in our IPoM, in Chile a little more than one percentage point of inflation is due to food prices. Until now, the recovery of margins in the aftermath of the crisis has allowed cushioning the local inflationary effects of world price increases.

BIS central bankers’ speeches  5  Figure 1  World output (*) (index, second quarter 2007=100)  Unemployment rate (*) (percent)  120  120 10  10  110  110  8  8  6  6  4  4  2  2  100  100  90  90  07  08  09  10  08  Jul. 09  Jul. 10  Jul. Emerging economies  Developed economies  (1) Regions weighted at PPP. Developed economies include: Australia, Canada, the Eurozone, Japan, Sweden, Switzerland, the U.K. and the U.S. Emerging economies includes: Argentina, Brazil, Chile, China, Colombia, Hong Kong, India Indonesia, Israel, Malaysia, Mexico, the Philippines, Saudi Arabia, South Korea, Russia, Singapore, Taiwan, Thailand and Venezuela. (2) Regions weighted at PPP. Developed economies include: Canada, the Eurozone, Japan, the U.K. and the U.S. Emerging economies include: Brazil, Mexico, South Korea, Thailand and Taiwan. Sources: Central Bank of Chile based on Bloomberg, OECD and each country's statistics offices, and U.S. Federal Reserve.
Andrew Bailey: Challenges of prudential regulation Speech by Mr Andrew Bailey, Deputy Governor of Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority at the Bank of England, at the Society of Business Economists Annual Dinner, London, 3 June 2013. *  *  *  Thank you for inviting me this evening – it is a great pleasure to have this opportunity and particularly at a time when we are embarking on major reforms to policymaking in the area of financial regulation. The financial crisis has provided hard lessons on what happens when the stability of the financial system is found wanting. It has reminded us how much we depend upon the supply of critical services from banks, insurers, investment firms, asset managers and other parts of the financial sector. If you take the banks as Exhibit One, there is good reason to curse them, but at the same time recent experiences have only served to emphasise how much we depend upon them, like it or not. The new legislation on financial regulation in the UK emphasises the importance of the continuity of supply of critical financial services. This is a permanent public policy objective, and rightly so. I use the term “permanent” deliberately to distinguish this objective from the support provided by Too Big / Important to Fail, which should not be permanent.

The evidence in credit creation is so far mixed, which is not in my view a mark of the failure of policy since this operates with a lag. But it does indicate that all of us should go on looking for changes that will help. The distribution and information issues around SME lending identified by Kate and her colleagues are one such area, and in my view more focus needs to be put on the consequences of debt overhangs linked to commercial property in those parts of the market where there are problems. Thank you  4  BIS central bankers’ speeches
Excess domestic demand combined with low productivity growth should be reflected in rising prices, and domestic measures of price and wage inflation in the catchingup economies were indeed running considerably higher than the euro area average on a cumulative basis. Average annual inflation differentials in the 2002 to 2008 period were in the range of 0.5 to 1.5 percentage points. However, these developments were not considered especially alarming by some observers as they were interpreted as reinforcing the theory of Balassa-Samuelson equalisation. Some also saw inflation differentials as being more reflective of low inflation in Germany as it went through a phase of wage adjustment. Overall, this may have led to less concern about the lack of real convergence in productivity levels than was warranted. 8  European Commission, “EMU@10: Successes and challenges after ten years of Economic and Monetary Union”, European Economy 2, 2008. 9  See for example Minsky, H (1982), “Can ‘it’ happen again?”, Essays on Instability and Finance. 10  Drehmann et al (2012), “Characterising the financial cycle: don’t lose sight of the medium term!”, BIS Working Papers No 380, June 2012. 11  For a detailed explanation see Borio et al (2013), “Rethinking potential output: Embedding information about the financial cycle”, BIS Working Papers No 404, February 2013. 4  BIS central bankers’ speeches  Achieving sustainable convergence It was only when the financial cycle turned that the unsustainability of economic convergence became apparent.

Some banks have even moved their core banking systems into the cloud to reap the benefits of its scalability and resilience. Cloud computing has considerably enhanced risk management. Risk assessments are now more comprehensive, more granular, and more real-time. But the cloud has also introduced new risks. The risks are not so much in the technology of cloud computing per se but in the business and operating models of cloud services. Cloud services are essentially a utility provided by specialist third-party providers. And as with any third-party service provider, there are outsourcing risks associated with these cloud service providers or CSPs. But with cloud computing, these outsourcing risks are much larger, given how much of a financial institution’s data and processing functions rely on CSPs. Financial institutions have less knowledge, let alone control, of where their data are stored in a cloud computing infrastructure spanning several different jurisdictions. Data breach or loss might occur due to a natural disaster, targeted attack, or poor security processes at the CSPs. The outsourcing risk is compounded by concentration risk. The top 4 CSPs in the world had a market share of 80% last year. About 25% of the core banking systems of global systemically important banks or G-SIBs is 5/9  BIS central bankers' speeches  now residing on the cloud. A large supplier of cloud services can potentially become a single point of failure when many financial institutions rely on them. The regulatory response to cloud computing has taken two forms.
Recently, however, the introduction of CREST and RTGS, and the European work on TARGET, has expanded on our work considerably. These maps cannot easily convey a sense of the dynamics of change in central banking. Central banks are evolving creatures, which respond to political and economic forces around them. One unusually powerful force, which will change their environment fundamentally, is EMU. But before considering its impact, I would like to consider the state of play in the rest of (non-EU) Europe, where exciting transformations of a different kind have occurred in the last decade. Turning socialist state banks into central banks The central banks of the formerly planned economies of central and eastern Europe have generally developed important responsibilities in each of my five areas (Figure 3). The old state banks have been transformed to fill the vacuum left by the dissolution of the mechanisms and institutions of a planned economy. Most had extensive branch networks and already operated rudimentary payment systems - though transfers often relied on correspondent banking relationships and slow and unreliable postal systems. But under the old regime there was little if any requirement for the other functions - setting interest rates, managing government debt, and supervising banks. Instead the main roles of the state banks had been the provision of banknotes; and making the financial transfers between state enterprises inherent in the central economic plans. The perceived importance of cash, and the bookkeeping culture, still influence to varying degrees their successor institutions.

In financial crises, savers and investors lose money for two reasons: first and foremost, because their pension funds and direct investments such as stocks, bonds and real estate lose value, and also second, because taxpayer money has to be used to rescue banks. Financial crises occur when risks are underestimated and price expectations of investments are exaggerated. This can lead to credit and asset price bubbles which sooner or later burst. When banks do not hold enough equity capital to absorb the losses they incur, they fail. Sovereign money would do nothing to change this situation. Risks can be underestimated and future returns overestimated in a sovereign money system too. Even without recourse to sight deposits, banks can grant loans which are too risky, hold too few provisions for times of crisis and become insolvent if a bubble bursts. Moreover, a key problem in the financial crisis was banks’ heavy reliance on short-term financing from the money market. These interbank loans proved to be a less stable source of financing than private customers’ sight deposits; in fact they dried up at the very start of the financial crisis in 2008. Sovereign money would not help to eliminate this risk of instability either. There are other, far more effective approaches to stave off credit and asset price bubbles than sovereign money. The significant increase in the capital and liquidity requirements for banks in the aftermath of the financial crisis is one such approach.
Prasarn Trairatvorakul: Connecting Thailand to the new investment frontiers – contribution of monetary and financial policies Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at “Thailand Focus 2013 – connecting to new investment frontiers”, Bangkok, 28 August 2013. *  *  *  Good morning, Distinguished Guests; Ladies and Gentlemen, I would like to thank the Stock Exchange of Thailand and Phatra Security and Bank of America Merrill Lynch as co-organizers for the invitation to address our distinguished audience on the topical issue of “Connecting Thailand to the New Investment Frontiers”. I also would like to extend a very warm welcome to our foreign guests and to thank you for your continued interests in Thailand and the region. Today I would like to discuss the roles of monetary and financial policies in supporting the Thai economy as we prepare ourselves for the new investment frontiers. Economic outlook and headwinds from volatility in global financial markets As you know, much has happened recently with events taking a complete 180 degree turn from the beginning of the year. It did not seem long ago when the EMEs were the fascination and destination of choice for international investors. But since May, global market sentiments have turned with the expectation of a scale back of the Fed’s asset purchases. This coincided with the concern over regional slowdown, initially starting with China, but lately moving to other South and South East Asian economies.

The US is of course the biggest export market in the world but total US imports account for only 3% of global GDP. Many other countries – especially in Emerging Asia – are trading among themselves without a nexus to the US. These trading linkages will grow over time as demand in these economies grows with a rising middle class, urbanisation, and investment in infrastructure. All the same, a prolonged period of trade tensions is not good for the global economy. The more serious casualty is perhaps not trade but investment. Corporates may scale back investment amidst uncertainty. This will reduce the productive capacity for future growth, delay technological upgrading, and compromise productivity growth. This is why the best response to unilateral trade restrictions is to push ahead with further trade liberalisation among other willing parties instead of retaliation and escalation. If countries do not retaliate against tariffs imposed by the US, the cost to their own 1/3  BIS central bankers' speeches  economies is likely to be contained. And a mutually damaging trade war would be averted. And this is what Emerging Asia is doing – liberalising trade within the region and with others. TPP-11 or Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) This will reduce barriers across economies with a GDP of $ trillion, roughly 13.5% of the world economy. It is expected to be ratified early next year. And five to six more countries have expressed interest in joining the CPTPP.
Finally, while business investment in equipment and software rose strongly last year, by almost 14 percent, the level of investment is still not as high relative to GDP as we’d expect, given favorable economic conditions and firms’ healthy balance sheets. Economic growth has been solid for a few years now. And, with the very low level of interest rates, borrowing costs can’t be the problem. Moreover, profit margins have been high for some time, so firms are certainly not strapped for cash. The shortfall might be due to business caution, perhaps related to reverberations from 9/11 and subsequent terrorist threats and actions or perhaps to the corporate governance scandals and the adjustments required by the legislation that followed them. Alternatively, the investment shortfall might reflect the perception by businesses that productivity gains can be realized at this stage that do not require major new investments in equipment and software. Whatever the explanation, the consequence of these drags is that the Fed had to keep interest rates exceptionally low for a long time just to get respectable, but not stellar, economic growth. In fact, the federal funds rate was lowered all the way to 1 percent and held there until the middle of last year. Since then, the FOMC has raised the funds rate nine times to 3¼ percent, but it still remains in a range normally considered stimulative. Bond rate conundrum Increases in the federal funds rate typically lead to increases in longer-term interest rates.

Jessica Chew Cheng Lian: Financial advisers the future – rise of the new wave Keynote address by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia, at the 2nd Annual Conference of the Association of Financial Advisers “Financial advisers the future – rise of the new wave”, Kuala Lumpur, 31 October 2013. *  *  *  It is my great pleasure to be here this morning at the 2nd annual conference of the Association of Financial Advisers (AFA). This year would be the eighth year that financial advisers have been a part of the financial landscape in Malaysia. As the industry looks to the future, I think it is useful to also look back to the motivations for developing financial advisers in Malaysia. Fundamentally, the objective was to improve the quality of advice on insurance solutions that was being provided to consumers. Before financial advisers, such advice was mainly only available in this country from tied agents and this system had certain limitations in terms of incentive structures and the breadth of products that the agent could draw on to advise consumers. A second objective, and perhaps one that has not been emphasized enough, is the expectation that financial advisers would be able to help individuals and households with a broader financial outlook. This means helping individuals and households understand how insurance fits within their broader financial management strategies to grow their savings, manage risk and meet specific financial goals.