samchain/econo-pairs-v1 huggingface dataset:
In 95% of cases, the massive fluctuations in our income can be attributed to the fluctuating values in gold and foreign exchange positions. Experience has shown that valuation gains and losses on financial investments tend to level out again in the long term. Based on these conditions, we thus estimate the earnings potential of our assets to be between 2% and 3%, which translates into an income of between CHF 1.7 and CHF 2.5 billion per annum on the total assets of CHF 85 billion. Given the fluctuations in the exchange rate and gold price, however, the earnings generated can deviate greatly from this amount. For instance, the marked increase in the gold price this year has resulted in valuation gains of roughly CHF 8 billion to date. Should the gold price drop back next year to its end-2003 level, however, this would lead to a valuation loss of over CHF 7 billion. Long-term income estimates should not be based on such unusual gains and losses. Some of the income is allocated to provisions, thereby ensuring the growth of the currency reserves necessary for monetary policy. This allocation (currently approximately CHF 1 billion per annum) should be made in proportion to nominal GDP growth. After deduction of the SNB’s operating expenses of currently CHF 250 million, roughly CHF 1 billion remains for distribution to the Confederation and cantons. Based on the assumptions regarding the earnings potential of our assets, we can expect a distributable annual profit to be somewhere in this region in the foreseeable future.

Last year the Governing Council adopted a comprehensive action plan[9] to further incorporate climate change considerations into its monetary policy framework. There are a number of actions to which the ECB is committed under this plan. Let me now give a very concrete example of how the ECB has taken into account climate change considerations in the context of its corporate sector purchase programme (CSPP). Under the CSPP, the Eurosystem purchases corporate bonds for monetary policy purposes. Right now we are in the reinvestment phase which means that we are no longer increasing our portfolio but only reinvesting bonds that mature. Up until October 2022, the Eurosystem purchased these bonds in accordance with the “market benchmark”. However, owing to the way the corporate bond market functions, this “market benchmark” has been criticised as leading to the purchase of a larger proportion of bonds from carbon-intensive firms. Therefore, from October 2022, the ECB started to implement its decision to “tilt” CSPP reinvestments to increase the share of assets from issuers with better climate performance, rather than those with poorer climate performance. There are two main reasons for this decision. First, the ECB considered this essential in order to effectively pursue its primary objective of maintaining price stability. Given that carbon-intensive issuers are more vulnerable to physical and transition risks arising from climate change, large holdings of bonds from such companies pose higher financial risks to the Eurosystem’s balance sheet, which has an impact on the implementation of its monetary policy.
Perhaps the ability to pay high wages has been more dependent on the oil industry than thought earlier. Going forward, the key to success for Norway will be the same as for other countries: We must make the most of our number one resource - labour. The value of Norway’s human capital is around three times the sum of its natural resources, production capital and financial capital.7 Our future welfare level therefore depends on how many are in work and how productive they are. Employment in Norway is no longer as high as it once was. Today, a smaller share of the population aged between 25 and 54 is employed than 20 years ago (Chart 17), and the share is now higher in a number of countries, not least because female employment abroad has also risen. At the same time, the share of adult men in work in Norway has fallen. 7 See Meld. St. 29 (2016-2017), Long-term perspectives for the Norwegian economy 2017. 16  NORGES BANK  Chart 17a No longer at the top of the employment chart. Employment. Share of population aged 25-54.

Our monetary policy measures continue to underpin domestic demand. Private consumption is fostered by ongoing employment growth and rising wages. At the same time, business investment is supported by solid domestic demand, favourable financing conditions and corporate profitability. Housing investment remains robust. In addition, the expansion in global activity is expected to continue supporting euro area exports, though at a slower pace. The risks surrounding the euro area growth outlook can still be assessed as broadly balanced. At the same time, risks relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent. 1/2  BIS central bankers' speeches  Euro area annual HICP inflation increased to 2.1% in September 2018, from 2.0% in August, reflecting mainly higher energy and food price inflation. On the basis of current futures prices for oil, annual rates of headline inflation are likely to hover around the current level over the coming months. While measures of underlying inflation remain generally muted, they have been increasing from earlier lows. Domestic cost pressures are strengthening and broadening amid high levels of capacity utilisation and tightening labour markets. Looking ahead, underlying inflation is expected to pick up towards the end of the year and to increase further over the medium term, supported by our monetary policy measures, the ongoing economic expansion and rising wage growth. Turning to the monetary analysis, broad money (M3) growth stood at 3.5% in September 2018, after 3.4% in August. Apart from some volatility in monthly flows, M3 growth is increasingly supported by bank credit creation.
If adequate measures have not been taken within ten months, the country will be required to deposit a no-interest fee with the EU Commission. If the deficit is still excessive after two years, the fee is transformed into a fine. At most the fine can amount to the equivalent of 0.5 per cent of GDP. If the deficit is due to exceptional circumstances, sanctions are not to be imposed. If GDP falls by 2 per cent, no sanctions are to be levied for an excessively large budget deficit. The Council can also decide not to impose sanctions if GDP falls by between 0.75 and 2 per cent and other “special circumstances” apply. While the point of a system for preventing the abuse of fiscal policy in EMU has always been clear, one cannot turn a blind eye to the risks inherent in rules such as those in the stability pact. It is thus a matter of striking a reasonable balance between different interests, which is why the discussion has been so protracted. The risks are mainly of two kinds: - One has to do with the need of adjustment mechanisms. With no possibility of using monetary and exchange rate policy at the national level, it may be important for the system to provide other “buffers”. Therefore the pact ought not to be so strict that it might in practice have a destabilising effect in a particular country with problems. - The other concerns credibility.

For Sweden the Riksbank hopes that the changeover can be arranged in an appreciably shorter time than the allotted six months. It should be underscored, finally, that EMU is likely to bring about notable changes in the financial landscape. Some products will simply disappear: currencies, as well as forward and option instruments derived from them. With a single monetary policy and no exchange risk, interest rate differentials between national treasury papers will arise only from credit risk. The market for Swedish treasury paper will be more or less integrated in a market for treasury paper in euro. Provided the debt situation in the countries concerned is under control and reasonably similar, national T-bonds will become close substitutes. That will also do away with a number of national forward and option products. Certainly there will be new financial products; there has been no lack of creativity in this field in the past decade. There will clearly be increased competition between financial institutions as well as between financial markets in different locations. There is nothing new about the globalisation and integration of the world’s financial markets but it is reasonable to suppose that EMU will accelerate the process. BIS Review 14/1997  -7-  Summary and conclusions Today it looks for the most part as though economic and monetary union will start as planned on 1st January 1999. For Sweden the question is whether we are to participate from the start, wait a while or try to remain outside for ever.
The interest rate shall in the short and medium term contribute to stable inflation and stable developments in production. At the same time, it shall in the long term also contribute to equilibrium in the market for real capital. Capital accumulation shall over time correspond to saving. To achieve this, the real interest rate must not over time deviate substantially from the return on real capital. Substantial deviations can give rise to undesirable fluctuations in the markets for real capital that have no basis in economic fundamentals. The economic situation varies over time. Monetary policy will set an interest rate that is alternately above and below the neutral rate. Consequently, the interest rate level will probably not deviate substantially from the long-term equilibrium rate over time. By taking a gradualist approach to interest rate setting, it is also possible to assess whether imbalances are developing in capital markets. Interest rate developments from a historical perspective In the long term, the equilibrium real interest rate will be determined by underlying structural relationships in the economy. These relationships will probably only be changed gradually so that changes in nominal rates will primarily reflect changes in expected inflation. In the short term, however, the real interest rate will vary, not least because monetary policy seeks to influence the real interest rate in the short and medium term. Changes in nominal interest rates might therefore reflect changes in both real interest rates and inflation expectations.

This could at one level be influenced by the fact that significant increases in housing wealth in recent years may have postponed people’s consideration of these issues, though they may now feel more pressing looking ahead. It is pretty clear that the changes are likely to be spread over a period of years, and from that perspective policy implications are likely to be gradual and manageable. Over time though the degree of change in savings habits – and therefore the impact on consumption and demand – may be quite significant. And the question is whether these changes will be smooth trends, or whether there will be more sudden, and perhaps unpredictable shifts or discontinuities in behaviour. And if the latter, will they be of sufficient magnitude to be relevant to shorter-term monetary policy? The challenges here are considerable, both of measurement, timing, and of our ability to anticipate any relevant changes. But to my mind we certainly need to remain alert. Policy makers in Germany have for some time now wondered if the sluggish performance of domestic demand in recent years is in part the result of such precautionary saving, and here in the UK we have wondered if this could have been one factor in the recent consumption slowdown. While the data will not confirm this for a while at least, the greater public awareness of the issues, brought about by initiatives such as Lord Turner’s report, suggests it is plausible that this has been a contributory factor.
Those bondholders become the new owners. The group stays together. Under multiple-point-of-entry or MPE resolutions, by contrast, a group would be split up into some of its parts. Healthy parts might be sold or be maintained as a residual group shorn of  1  The accident of history arose from the McFadden Act ban on interstate banking. Banks set up holding companies so that they could own banks in different states. A variant of that story applies to broker dealer groups. BIS central bankers’ speeches  1  their distressed sister companies. The resolution of the distressed parts might be effected via bailin of bonds that had been issued to the market by a regional intermediate holding company. This is, of course, no more than a brief sketch, but I hope it will suffice for me to draw out some of the implications for the industry and regulators.2 For many financial groups, it is fairly obvious which broad resolution strategy (SPE or MPE) they are currently most suited to. But few major groups will escape having to make significant changes to their legal, organisational and financial structure to remove obstacles to effective resolution under that preferred strategy. For example, outside of the US, many “SPE groups” will need to establish holding companies from which to issue bonds that can absorb losses and be converted into equity through a resolution.

My final point, therefore, is that the authorities will have no excuse if they don’t solve the TBTF problem through resolution regimes and reforms. The necessary technology is clear. The necessary restructuring of firms is clear. The necessary degrees and forms of cross-border co-operation are clear. It is a matter of: just do it. 8  Committee on Payment and Settlement Systems (CPSS) and International Organization of Securities Commissions (IOSCO). 4  BIS central bankers’ speeches
Over the longer term, the instability, whether inherent or not, would decline if we have more developed financial and capital markets and also, by default, a multi-currency system as they reduce the risk concentration on one individual financial market and currency. Conclusion In closing, I believe that policymakers over the world need to focus our effort on all aspects of policy challenges in parallel including surveillance, financial market developments, regulations, and risk management. I strongly believe that market players respond to policy incentives and therefore policymakers have the responsibility to put the right policy and incentives in place. There is no quick fix and it will take a long time and painful adjustment before countries that were at the epicenter of the global crisis can resume normalcy. In Asia, we have taken a decade to strengthen our economic resilience. Because of our past efforts, we have been able to weather this crisis relatively well. That said, our work in Asia is still ongoing to strengthen the policy framework and tools to deal with future crisis that will surely not be the same as the last. Importantly, we are mindful that the world will have much less fiscal space to cushion potential global contraction, should the next crisis hit. While it may be easier to advance these efforts at the national level, achieving policy coordination on the global level will be much more difficult.

6  Admittedly, some new technological developments (such as digitalisation, robotics and artificial intelligence) could be a source of faster productivity growth. And plausibly, population ageing may actually promote automation. But eventually automation can only progress insofar as new ideas (so-called product innovation) emerge. Whatever the net effect on productivity, with the evidence we now have on the association between demography and growth in advanced economies in recent decades, we should not rule out the possibility that population ageing might significantly decrease potential output growth. Given population projections, extrapolating the observed association into the coming decades yields declines of output growth of about 1 percentage point (pp) until 2030, and close to 2 pp in countries where the demographic transition will accelerate in the years ahead. And recent observations on productivity growth are not very encouraging. Whatever the measurement used (either labour productivity or total factor productivity) there is a clear productivity slowdown in most advanced economies during the last two decades, even though total factor productivity growth has recovered somewhat in the last one. There is some discussion about to what extent this global productivity trend is due either to missmeasurement, to the delay in the diffusion of the new technologies and of their potential effects, or to more fundamental reasons, such as a slower innovation rate. Nevertheless, we cannot take for granted that productivity growth could compensate for the negative effects of population ageing on potential growth. 7  Population ageing may also affect trend inflation.
As the Riksbank and the banks must have personnel in place, the system is only open during normal office hours, and even if these can be extended by an hour or so, it is not likely that we will operate it 24 hours a day. At the same time, we want all payments in Swedish krona to be settled in Riksbank money. This reduces counterparty risk in the financial system. If, for instance, a private bank were to run such a system, all participants would have a claim on that bank before the payments are settled. If that bank were to go bankrupt, all of the money would be lost. That risk does not exist if the central bank runs the system. Additionally, it would be preferable if the system were run by a competition neutral actor in the form of the central bank. We therefore want to ensure that all payments in Sweden will continue to be settled with us. However, instant payments require systems that can manage payments around the clock. The European Central bank, ECB, is in the process of developing a new technical platform called “Target Instant Payment Settlement” (TIPS). This will enable instant payments around the clock and it will be operational at the end of 2018. It will also be prepared to handle other currencies than the euro, for instance the krona.

However, the analysis is less urgent in other countries, where they have not experienced the same rapid decline in the use of cash. While the value of outstanding cash as a percentage of GDP is just over 1 per cent in Sweden, it is 10 per cent in the Eurozone and a good 20 per cent in Japan. Our Nordic neighbours are also conducting similar analyses because of a decline in the use of cash. Norway and Denmark, for instance, have produced reports and analyses on digital central bank money. The Bank of England and the Bank of Canada have published research articles in this field that analyse, for instance, possible motives for central bank digital currencies and their consequences for monetary policy and financial stability. 6 Central banks in some emerging market economies have also shown an interest in central bank digital currencies. These countries’ motives for being interested in central bank digital currency differ somewhat from our own. One motive is that they see the opportunity to broaden access to fundamental financial services to all parts of the population, that is to say, financial inclusion. Other arguments concern reducing the use of cash, which may be regarded as costly and risky. They also point to the negative environmental aspects of cash and to the fact that it enables money laundering and makes it easier for the black economy. 7 The work that is done is not solely theoretical.
It may surprise some of you to know that there are fifteen Government Ministries and 38 Agencies involved in supporting the development of SMEs. The formation of the Council was therefore a mammoth undertaking that clearly signals the commitment of the Government to the SME agenda. The Council, chaired by the Prime Minister and supported by Bank Negara Malaysia as the Secretariat, provides the policy direction of the programmes to support the SMEs, and ensures the effective implementation and coordination of these programmes. The national SME strategy is focused on the development of high performance and resilient SMEs under three broad strategic thrusts, namely, strengthening the enabling infrastructure; enhancing the capacity and capability of SMEs; and enhancing access to financing. Bank Negara Malaysia has been at the forefront of initiatives to ensure that SMEs, at different stages of the business life cycle, have adequate access to financing. These included among others, initiatives to develop a vibrant and sustainable microfinance industry, the establishment of two venture capital funds of RM150 million each for the agriculture sector and the establishment of the Small Debt Resolution Scheme. The various measures have already yielded positive results. SMEs today have greater access to financing, with financial institutions being the main SME financing provider. In 2007, banking institutions approved RM55.1 billion in new financing to more than 109,000 SME accounts. SME financing continues to remain robust. For the first three months of 2008 alone, a total of RM12.4 billion in new financing was approved to more than 34,000 SME accounts.

On behalf of the MIFC Executive Committee, I would like to express my appreciation to the members of the panel of jury for the Royal Award for Islamic Finance which is led by Yang Amat Berbahagia Tun Musa Hitam, former Deputy Prime Minister of Malaysia and also to the members of the taskforce that was chaired by Tan Sri Zarinah Anwar, Chairman of the Securities Commission, who oversaw the establishment of this prestigious award. It is my sincere hope that this Royal Award will be an inspiration to the global development of Islamic finance. 2  BIS Review 141/2010