samchain/econo-pairs-v1 huggingface dataset:
Specifically, in our case, they do not always draw a distinction between regional and central governments, or between the government and the opposition. What they see is, simply, Spain. Taking these lessons on market behaviour to heart is very important for all countries, but all the more so in a country such as Spain which, owing to the systematic and growing build-up of current account deficits since 1996, has had to resort to external financing. Accordingly, it is vital to transmit confidence to those who finance us. We’re now moving in the right direction. In the space of three years we’ve moved from a current account deficit of around 10% of GDP to one below 5% this year. And in the case of the budget deficit, we’ll see a decline from over 11% last year to 6% next year. Once the adjustment is over, the Spanish economy will once again outgrow the biggest economies in the euro area, as foreseen by most international institutions. Yet we should not be complacent, but carry on pushing structural reforms through. You’ll have noted that the markets behave like people: sometimes they give reasonable advice, sometimes they do so late, sometimes they make mistakes, and sometimes they have a short memory. And they waver between greed and fear, depending on whether they’re preoccupied with returns or with risk. We’re now witnessing a “flight from risk”. But you’ll no doubt recall the frenzied “search for yield” on financial markets worldwide in the decade prior to the crisis.

True, during the expansionary phase, private-sector debt grew at very high rates, although it should be clarified that the growth in asset prices – unwarranted by fundamentals – was less than in other countries. Yet during these three years the Spanish banking system has proven reasonably resilient; only two small entities had to be taken under central bank control, and the volume of public aid made available was very small compared with the public resources earmarked to this end in other countries. The explanation for this different outcome in apparently similar situations must be sought in the quality of banking regulation and supervision, and in the retail banking-based business model of banks in Spain. What happened was that the countries which saw their banking systems collapse were largely those which, in the preceding years, had most vigorously defended the benefits of a “hands-off” government approach to the functioning of the financial sector. This was quite the opposite of the approach of the Banco de España, a central bank that took to heart the lessons of the serious banking crises of the 1980s and early 1990s in Spain. BIS Review 171/2010  1  Until the crisis erupted, the prevailing doctrine had advocated light-handed regulation, considering both our supervisory approach and our banking system’s business model, centred on traditional banking activities, as outmoded. But in the wake of the crisis, the pendulum has swung. Now the predominant approach in financial regulation has gone to the other extreme.
Zeti Akhtar Aziz: The global Islamic financial market today – challenges and way forward Luncheon address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the annual “The Asset Triple A Awards for Islamic Finance”, Kuala Lumpur, 6 July 2010. *  *  *  It is my great pleasure to be here this afternoon on this occasion of the Annual “The Asset Triple A Awards for Islamic Finance” by the Asset Publishing and Research, to deliver some remarks on the key challenges and way forward for Islamic finance in the international financial system. Islamic finance has experienced its most rapid pace of development in this decade demonstrating its competitiveness and resilience as a form of financial intermediation. While the Islamic assets are now more than $ trillion, it is estimated that the global Islamic finance industry will reach the $ trillion mark in the next three to five years. The sukuk market has become the most significant and vibrant segment in the international Islamic financial system. Issuers are seeing the sukuk instrument as an attractive alternative means for raising capital, whilst investors are increasingly seeing it as a new asset class in their investment universe. This has generated significant cross-border flows as funds are raised from beyond domestic financial markets and as investors diversify their portfolios into assets from other jurisdictions. The sukuk market currently stands at almost $ billion, with a growth rate of about 40 percent annually.

I do think the reforms already made to the capital adequacy and liquidity frameworks have improved markedly the robustness of the system. A leverage ratio, if and when it is introduced in the UK alongside the risk-weighted approach, would in my view make the capital adequacy regime for the banking sector appreciably stronger by guarding against model risk. And, as regards the non-bank financial sector, what some would classify as “shadow banking” – I also think we are starting to see some positive momentum towards the development of diversified credit channels in the UK and the EU – though there is a great way still to go. At the same time, the financial regulatory community is keeping a pretty close watch as to whether risks are migrating from the bank to non-bank sector and building up elsewhere. The FPC recently made its first analysis and assessment of risks in the UK outside the regulated banking system. That assessment was made difficult by generally incomplete data in this area, which we are starting to correct. But it concluded that, based on its current risk assessment and policy initiatives underway internationally – including through the FSB work on shadow banking that is coming to completion this year – it did not currently see a case for recommending changes to the UK regulatory framework. I am afraid, for financial stability, that is as good as it gets. The financial sector evolves at a phenomenal speed. Risks can change and build very quickly.
Moreover, this choice should preserve and strengthen the stability of the Algerian banking system, which has been achieved in particular by strong economic and financial performance since 2001 and the enhanced supervision capacities. The strengthening of these capacities over the past years constitutes a major asset for the Bank of Algeria and should make it possible not only to successfully ensure that Algerian banking regulation and supervision complies with international standards (such as the Basel Committee’s Core Principles for Effective Banking Supervision), but also to efficiently prepare the implementation of Basel II with a good take up of the Accord by Algerian banks. As Governor of the Banque de France and Chairman of the Commission bancaire, I am aware of the extent to which the preparation of the implementation of Basel II requires efforts and resources on the part of both institutions and supervisors. Allow me to illustrate this by briefly presenting initiatives carried out by the Commission bancaire and its General Secretariat for effectively implementing Basel II in France. By 31 December 2007, over 30 on-site inspections will have been conducted in 20 institutions, involving at times up to 100 inspectors at a time. These on-site inspections examined IRB systems for credit risk and advanced operational risk measurement approaches.

The rapid progress of information technology in recent years has brought new risk measurement models to aid in the measurement of market risk. The most widely accepted of these is the ”Value-at-Risk” model, called ”VaR” for short. VaR is the maximum loss that can occur in the value of a portfolio having a certain investment horizon under a certain probability. Since it is a simple and clear-cut concept, the VaR model is widely used for measuring market risk. It permits comparison of the market risk of different investment instruments, so that portfolio performance can be evaluated in terms of the risk undertaken. Especially for measuring  market risk to determine capital adequacy, this model has become a necessity in many countries and financial institutions. Another method widely used for measuring market risk is ”Scenario Analysis”. Scenario Analysis is a technique used to see how the value of a portfolio would be affected by various probable changes in market conditions. A last widely used method for measuring risk is the ”Stress Test” method. The Stress Test is used to estimate how the value of a portfolio would be affected by large, unexpected fluctuations in the markets, such as have been observed during the global crisis which is still with us. Though similar to Scenario Analysis, the Stress Test mainly aims to predict the maximum value that would be lost by a portfolio under certain extraordinary market conditions. The success of this method depends on successfully predicting market conditions.
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.

Uncertainty and capital adequacy Ease of exit is a consequence of the good risk management that pillar 2 requires of firms: risk management that is forward looking and prepares for unpalatable scenarios by structuring the balance sheet and business model appropriately. Good risk management is also about organising the firm in a way that allows the adequacy of the  Goldilocks and the three pillars: how much capital is just right? ‐ speech by Anna Sweeney | Bank of England  Page 4  capital base to be sensibly assessed, and the judgement about any need for intervention to be made in a timely way. In any balance sheet there will be risks that can be quantified, and there will be uncertainties that cannot. Uncertainties emerge for example, from reliance on unobservable assumptions or indeed concentration of exposure to any single risk factor on either side of the balance sheet. Another pertinent example is reliance on matching adjustment for illiquid assets: market prices of such assets are not directly observable and the calibration of the matching adjustment benefit relies on further splitting that unobservable spread into unobservable credit and liquidity components: so heavy reliance on the resulting matching adjustment is a source of material, inherent uncertainty. The greater the exposure to uncertainty, from any source, the less confidence we can have in the adequacy of the capital determined by a quantitative model.
How can the Joint Member Staffs and private stakeholders best collaborate to ensure stability in the Treasury market as the market structure evolves and new technologies are applied? How should practices and culture evolve accordingly? Will new technology and automation in the marketplace introduce unexpected challenges or risks to Treasury market participants? Are there opportunities to improve market transparency in a way that sheds light on risk issues that emerge as the market continues to evolve? Are the regulatory requirements imposed upon the Treasury market appropriate in the current environment? Has a competitive level playing field 2/3  BIS central bankers' speeches  been maintained given the evolving structure? And, are there any changes that could improve the functioning, efficiency and/or integrity of the Treasury market? As I highlighted before, answering such questions well could require greater transparency. It is important for officials and market participants to fully understand the range of market elements. These include the relative size of transaction volumes by various players, the breadth and resiliency of platforms used to facilitate risk transfer, and the robustness of market infrastructure under contingent circumstances. More broadly, interagency efforts and collaboration with the public to shed light on the evolving structure and its risks are critical to protecting Treasury market function and supporting investor confidence. Because we benefit from the Treasury market being the deepest and most liquid market for government securities, complacency should not be an option.

of rooms  2.5  2.0  1.5  1.0  0.5  0.0 BE IE LU UK MT DK ES FR CY FI DE SE NL AT EE PT CZ LT SI IT BG EL LV HU SK HR PL RO  Source: Eurostat  6  Figure 6. Population living in poor conditions percent 30  25  Total population having neither a bath, nor a shower, nor indoor flushing toilet in their household - 2015  20  15  10  5  0 RO LV BG LT EE HU PL HR PT CY SK DK EL UK FR AT SI FI BE CZ ES IE IT LU MT NL  Source: Eurostat  Figure 7. People at risk of poverty or social exclusion, % total population percent  Bulgaria  70  Czech Republic Hungary  60 50 40 30 20 10 0 2007  2008  2009  2010  2011  2012  2013  2014  2015  2016  Source: Eurostat  7  Figure 8.
But despite that progress, when the Bank was reunited with the PRA we knew that we still had to do much, much more. So three years ago we made Diverse and Talented a central pillar of our first strategic plan. We value diversity for at least three reasons. First, it is the right thing to do; a public institution should seek to reflect i  the public it serves. Second, it helps to build the trust we need to deliver our remits. Third, it is well established that diversity leads to more creative thinking and reduces the risks of groupthink and bias. It isn’t enough for us to reflect diversity, however; we need also to choose inclusiveness. Inclusiveness unlocks the true value of an organisation’s diversity; through inclusion people can realise their full potential. That’s why as we increase the diversity of the Bank, we are focussing on building a culture that values diverse ideas, encourages open debate, and empowers people at all levels to take initiative. Since these two ideals go hand in hand, today I will reflect on both diversity and inclusion: what they mean, why they matter, and how they are best delivered in a modern central bank. The what There are two main types of diversity – identity and cognitive. Gender, ethnicity, age, disability, sexual orientation, education are all identity factors, which can be ii  measured, targeted and their impact assessed. As I will discuss in a moment, we have introduced diversity targets for the first time.

The TCFD report provides case studies – from Rio Tinto to Unilever to Citi – and finds common characteristics of good scenario analysis:   Using multiple climate-related scenarios to assess strategic resilience    Describing assumptions and parameters specific to the company    Identifying potential impacts of climate-related risks or opportunities    Disclosing potential strategic resilience under different climate-related scenarios  To develop leading practices, the TCFD has created a Knowledge Hub which provides guidance, research, tools, standards, frameworks and webinars.16  12  The Task Force encourages companies to describe the characteristics of their strategies that allow them to adapt to climate-related changes materially affecting their business while maintaining operations and profitability and safeguarding people, assets, and overall reputation. The TCFD report identifies that Investors are likely to need information on the range of scenarios considered by a company; implications of each scenario for the business; strategic options considered; and the reasoning around the strategy adopted. Another factor that may warrant disclosure is the company’s ability—and flexibility—to adjust its strategy in response to emerging climate conditions, including alternative ways to use resources and the robustness and redundancy of business processes. 13 TCFD Status Report (2019) pg. 64 14 TCFD Status Report (2019) pg. 63 15 TCFD Status Report (2019) pg. 62 16 This includes several industry associations and non-governmental organizations that have brought companies together to work through sector-specific approaches to climate change issues.
Over the short term, moreover, the actual equilibrium interest rate, r*, will fluctuate around the trend level, R*, driven by shorter-term influences from both demand and supply. This is what matters for monetary policy here and now. Why? Because r* is the rate at which demand is in line with supply so that there is no output gap – neither excess demand nor excess supply in the economy. Responding to shifts in r* is what helps keep inflation close to target. This does not mean that monetary policy should always align Bank Rate exactly to r*. Sometimes, monetary policy faces trade-offs between inflation and the balance of supply and demand. But it does mean that supply matters for monetary policy also in the short run. By determining the level of demand the economy can sustain without generating excess  Bank of England  Page 10  inflationary pressures, it affects the appropriate level of interest rates, effectively by setting the speed limit for the economy. And when shocks drive inflation away from target in the way we have seen, monetary policy responds by steering demand to a level – relative to supply – that ensures that inflation returns to target sustainably. Monetary policy cannot affect this level of supply. But the level of supply will affect the appropriate setting of monetary policy. It matters, therefore, that big shocks to the economy have weighed heavily on supply in recent times.

And sometimes shifts in supply can be as abrupt and as important for the inflation outlook as shifts in demand. We have seen this very clearly in the past three years since Covid hit. Throughout this time, the Monetary Policy Committee has had to play close attention to the supply side of the economy – and make a number of critical judgements about it – for instance, as care for the public’s health necessitated a pause in a range of economic activities. That is the reason I would like to focus on supply in my remarks here this evening. Supply, R* and monetary policy I will start by making a distinction between the short run and the long run. Monetary policy’s inability to influence supply has at times been taken to suggest that monetary policy has no effects on real economic activity at all. In classical economic theory, for example, monetary policy only affects nominal variables such as wages and prices, not real variables such as the level of production and employment. In this tradition, real business cycle theories have been developed in which supply side disturbances are the main drivers of real activity. But overwhelming empirical evidence, and many years of practical experience, show that monetary policy affects economic activity and inflation through aggregate demand. In the New Keynesian models that have dominated monetary macroeconomics over the past  Bank of England  Page 4  three decades, monetary policy has real effects because market prices are sticky.
Indeed, it  would require more than just adjustments in exchange rates. The nature and breadth of the adjustments will be important to achieve a long-term solution. With its young workforce, growing productivity, competitive and dynamic economies, there is great potential for the Asian economies to contribute towards the re-balancing of global growth. With rising income levels in regional economies, particularly among the growing middle income group in China, India and the ASEAN economies, there is potential for an expansion of demand within the region. The rebalancing of global growth across the world will eventually contribute towards reducing the prevailing imbalances. Malaysia's own agility to absorb and respond to the external and domestic challenges has allowed us to efficiently shift resources to new areas of growth, to new areas of comparative advantage and thus, sustain our long-term prospects. Going forward, Malaysia's economic policy will therefore continue to focus on ensuring that the economy's flexibility and resilience is sustained. With the strengthening of the economy, the financial system and our fundamentals, the opportunity has been taken to deregulate and liberalise the environment further. The most recent policy initiative in this direction has been the shift in the exchange rate regime to a managed float. Under this regime, exchange rate stability will continue to be a primary objective of exchange rate policy. Malaysia is a trading economy that is highly integrated with the world economy, and in this context, a stable exchange rate environment continues to be important.

In Zambia, with the growing emphasis on trade within the regional economic groupings like SADC and COMESA, plastic money in the form of credit cards, is a very practical way of facilitating settlement of cross border transactions. Another benefit which may be associated, with the more extensive use of e-money is the potential increase in tax compliance among the retail and wholesale sectors. The use of credit cards generates accurate records of purchases which currently may not be captured by the Zambia Revenue Authority because business houses may declare false figures. With the use of a credit card there is no provision to cheat the taxman by refraining from issuing a receipt as the record of the transaction will speak for itself. Whilst on the subject of greater tax compliance, I would want to see some form of requirement for most businesses to use points of sale terminals and other non-cash forms of payment in our shopping malls and central business district businesses where we see a resistance from businesses to embrace this technology in favour of cash. But let me end my remarks this evening by pointing out a number of problems and challenges that might be associated with the use of credit cards. The biggest disadvantage of credit cards is that they encourage the holders to spend money they don’t have. If the credit card does not require that you pay off your balance each month, this balance will accumulate.