samchain/econo-pairs-v1 huggingface dataset:
Second, on market infrastructure and practices, establishing central counterparty especially for OTC transactions could have helped improve market infrastructure and lessen the risk of liquidity hoarding. And third, preapproved liquidity facilities by central bank, subject to certain prudential arrangements, for example, a satisfactory stress-test result, could also have helped central bank to inject liquidity more effectively and faster without creating a stigma issue to the requesting institution. And lastly, given all that has been said, how do we put all these together into a framework for policy. My tentative view is that, to be effective, a financial stability orientation policy has many crucial elements, with macroprudential being one of the components. To this end, an effective framework should include at least four policy pillars. The first is monetary policy, with a willingness for monetary policy to lean against the wind when the price stability objective of monetary policy is not compromised but there is a concern on financial stability. Second is a strong supervisory framework with vigilant implementation. By “strong”, I mean adopting a strengthened risk-based framework for microprudential supervision with a vigilant implementation. This crisis, to me, is more a crisis of supervision than crisis of regulation.

So it is no surprise that a risk factor which adversely affects one institution would simultaneously hurt another. With fair value accounting, everyone has to mark their positions to the same volatile market. A number of institutional investors also abide not to hold any assets below a certain credit rating, hence a hard cut-off. So when borderline assets get downgrade, all these institutional players have to liquidate their positions, all at the same time. Meanwhile, as VaR methodologies and risk management tools employed by different banks become increasingly converge, the results of the analysis also tend to converge. The main point is that when a risk factor moves adversely, these similarly exposed institutions incur the same direction of losses, whence their largely identical response actions further distress the market, thereby completing the feedback circuit. The second propagation channel in the form of network linkages between institutions presupposes that there exists prior bilateral relationships between financial institutions. A good example is in the clearing, payment, and settlement activities where the bilateral link is simply the amount that must be cleared, paid, or settled. But with real-time gross settlement,  4  BIS Review 130/2009  the vulnerability in this area featured very little in this crisis. Instead, in this crisis, the direct interbank liquidity/funding lines proved to be the most critical network of bilateral relationships. When one bank becomes illiquid, this triggers cascading illiquidity to all other banks that are direct counterparties, or counterparties to the counterparties.
Today, we are paving the way for closer collaboration between INCEIF and the institutions of higher learning in Malaysia to realise our common objective of developing the pool of expertise in Islamic finance. This collaborative move, would establish a network of mutual co-operation and collaboration that would strengthen the efforts between the institutions of higher learning in the areas of curriculum development, research, training, exchange of ideas and information, and resources in Islamic finance. This partnership in connecting the knowledge communities in Malaysia needs to be developed and maintained on a long-term basis. Entering into strategic alliances with institutions of higher learning, Islamic financial institutions and other organisations would create greater synergy, which may bring about new approaches, new technologies and new areas of specialization. Collaborative efforts between INCEIF and institutions of higher learning in particular, would strengthen the ability to leverage on the respective institutions' expertise in research. The introduction of new research findings in Islamic financial engineering could pave the way for increased innovation of new products. This would contribute towards broadening and deepening Islamic financial markets and thus strengthen the overall development of the Islamic financial industry. In addition, active collaboration between academic researchers and the practitioners will enable the practical application of research findings. BIS Review 125/2006  1  One of the strategic steps that INCEIF has initiated is the forging into strategic alliances with the five takaful operators to collaborate in promoting and undertaking research, development, training and education in Islamic finance.

In closing, once again, I would like to express our deepest appreciation to the Yang Berhormat Dato' Mustapa Mohamed, Minister of Higher Education for gracing this occasion and for accepting to witness INCEIF partnership with nine institutions of higher learning. Thank you. 2  BIS Review 125/2006
However, you would be mistaken in assuming that managing financial risks has no role in the Eurosystem’s monetary policy implementation – especially in the light of the significant balance sheet expansion over the past few years. On the contrary, we have applied the guiding principles of our financial risk management framework in a stable manner. We established these principles long before we embarked on non-conventional policies, not least because we have a statutory obligation to lend only against adequate collateral. We continue to apply them to standard as well as non-standard policy measures. Broadly speaking, these principles are protection, consistency, simplicity and transparency. This means that – if multiple monetary policy options exist to fulfil our mandate – we should select the measures that minimise our own exposure to financial risks. This idea is sometimes referred to as risk efficiency. These principles also imply that we aim to avoid undue distortions in the markets in which we operate. We trade at market prices and we adopt a risk-equivalent approach in setting our risk control measures. In addition, the principles require risk management to be an integral part of decision-making in the institution. So we are compelled to measure risk in an objective and consistent way across different types of operation. Lastly, our frameworks promote transparency and simplicity, and we champion adherence to these principles by being rules-based ourselves and as predictable as possible in our operations. We have come together here to discuss risk management for central banks and the lessons from the crisis.

It is important for central banks to strike the right balance in this regard, and for financial risks to be correctly measured, properly understood and sufficiently contained. Moreover, the European Court of Justice, in its judgment on outright monetary transactions, has confirmed the need to provide sufficient risk management measures that are “likely to reduce the risk of losses to which the ECB is exposed”. Speaking in a country with a proud history of maritime exploration let me recall the words of Seneca, the Younger: When a man does not know what harbour he is making for, no wind is the right wind. The “harbour” of a central bank is its mandate. The principles it seeks to adhere to are the “compass” that helps it fulfil this mandate. When a central bank is facing a crisis, it needs to consider whether its monetary policy operations are still proportionate. This need stems from the obligation under primary law (proportionality principle) to properly weigh up all the components of a given measure against one another. The aim is to determine whether the expected benefits of the measure outweigh its costs. As a general rule, a stable risk management approach and a through-the-cycle approach are advisable. However, extraordinary circumstances may require extensions of the framework, such as the acceptance of additional collateral. If this still proves insufficient, unprecedented types of monetary policy measures may call for entirely new operations, accompanied by new risk management measures.
Looking ahead, given that it is hard to explain the relative weakness of the euro, it is reasonable to expect that it may in due course recover to more realistic levels; and there has indeed been some welcome movement in that direction since the spring. Whether that will continue is hard to judge, but it would be enormously helpful both to the balance of the UK economy as a whole and to the individual businesses most directly affected. The other major area of uncertainty we face is the encouraging and exciting, if somewhat tantalising, prospect that the UK may come to enjoy, or indeed may already be beginning to enjoy, some of the benefits evident in the US arising from the “new economy”. The advances we are seeing in information and computer technology, when combined with the greater flexibility and adaptability our economy has shown in recent years and the wider trading opportunities and greater competitiveness flowing from the globalisation of the world economy, are potentially very exciting because they represent scope for improvements in the supply side of the economy: they hold out the possibility that the economy might be able to grow faster than recent historical experience without jeopardising price stability. The dilemma is that, while the benefits these developments can bring are undoubted, if and when they manifest themselves in enhanced economic performance, the evidence of their doing so in the UK is, so far, piecemeal rather than conclusive.

Eddie Yue: Opening remarks at the commencement event of e-HKD Pilot Programme Opening remarks by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at the commencement event of e-HKD Pilot Programme, Hong Kong, 18 May 2023. *** Good afternoon, everyone. A very warm welcome to all of you for joining today's commencement of the e-HKD Pilot Programme, especially to those of you flying from other parts of the world. Central bank digital currency, or CBDC, is one of the hottest topics in the central banking community today. Over a hundred central banks are studying it and a few dozens of them are working on various types of pilot trials. The HKMA has been researching and piloting on CBDC since 2017. Apart from the exciting work that we are doing with our three partner central banks on the application of wholesale CBDC under Project mBridge, the HKMA has also been exploring the prospect of issuing retail CBDC, or e-HKD, in Hong Kong. e-HKD is Beyond Technology We conducted two rounds of market consultation in the past two years. Overall, the respondents are supportive of the e-HKD initiative and believe that e-HKD has the potential to make payments faster and more efficient while supporting the digital economy. However, we are cognizant of the fact that e-HKD is not and should not be merely a technology project.
5 This proposal has yet to be realised. Parts of the inquiry's proposal were nevertheless implemented voluntarily but we consider that this coordination responsibility should be made statutory and provide the possibility to place binding requirements on the payment system’s participants. No authority currently has such a responsibility and neither is there an authority responsible for producing an overall risk and vulnerability analysis. Ability to create unlimited liquidity in SEK Among the Riksbank’s many tasks is the important role of providing liquidity in the event of a crisis. There are certainly good reasons to believe that the function of banks in society – facilitate payments, mediate credit, enable risk diversification – is more efficient as a result of competition among private players rather than being run by the state. But banking operations also have an inherent vulnerability. The banks’ funding is based to a considerable degree on short-term loans, for example deposits from the general public and short-term borrowing on the capital market. Their assets, on the other hand, often comprises lending of a more longterm nature. This mismatch in maturity and liquidity between debts and assets is typical for traditional banking operations and does not constitute a major problem as long as confidence is maintained in the banks’ debt-servicing ability. But if doubts arise, depositors may quickly try to withdraw their money – money that the bank cannot obtain in the short run. This causes a liquidity problem.

The growing importance of balance sheet considerations in monetary policy only reinforces the importance of transparency in central bank communication. 5 Finally, let me make an obvious but nonetheless crucial point, even if it goes beyond today’s topic. Transparency is a valuable good in its own right. For good reasons, central banks are powerful and for the most part politically independent institutions. Moreover, the officials who run central banks are typically appointed for lengthy terms and are difficult to remove from their positions. Transparency is a crucial element in creating democratic legitimacy for politically independent institutions whose actions can have wide-ranging consequences for a country’s citizens and its elected government. As former Fed Chairman Alan Greenspan (1996) said ten years ago, it “cannot be acceptable in a democratic society that a group of unelected individuals are vested with important responsibilities, without being open to full public scrutiny and accountability.” Transparency is of little use if markets and the public do not believe what a central bank says. Credibility is therefore a condition that is a sine qua non for a successful monetary policy. How can credibility be established? Alan Blinder (1998) summarises credibility as a "painstakingly built up history of matching deeds to words". A long history of actually matching deeds to words, of honest communication and a reputation for delivering price stability will therefore ensure central bank credibility.
Given how much debt banks will need to refinance or repay to the authorities around the world over the next few years, the Bank is keen – as reflected in the recently published minutes of the Chancellor’s Council for Financial Stability – that individual banks agree indicative refinancing plans with their supervisors; and that at least aggregate national conditions be shared amongst international peers. That would help to avoid each bank thinking that it can  2  BIS Review 21/2010  delay its effort, risking an almighty scramble in eighteen months or so when official-facilities will be running off. As household sector saving has risen and as banks have deleveraged, government borrowing has increased very sharply as it helped to absorb the macroeconomic shock. Without too much exaggeration, this can be thought of as a rescheduling of private sector debt facilitated by the only balance sheet currently strong enough to bear it – HMG’s. But, like financial services, the public sector had accounted for an increasing share of measured output in the run up to the crisis. And since a good deal of that was debt financed, this source of support is not unlimited. Indeed, those two sectors have to be part of the process of rebalancing demand and activity in the economy over the years ahead. Overall, the rebuilding of balance sheets and the rebalancing of demand pose a downside risk to the outlook for activity. Effective supply, and inflationary pressures Repair of balance sheets will affect the path of demand. What of supply?

The conditions for opening up that access are rapidly being created in the wake of the Second Review of the IMF programme, as is witnessed by the development of the credit default swap spread of the Icelandic sovereign and the fact that the rating outlook has improved. But what about the pension funds? They were hit very badly, of course, as their equity stakes in the fallen banks became worthless overnight, the value of bank bonds collapsed, and asset prices of all kinds tumbled. The result was that the real rate of return on the funds was negative to the tune of 22% in 2008, and their assets as a share of GDP fell from 134% in 2007 to 119% last year. But let us remember that part of this is a correction. The asset values of the boom and the associated rates of return on pension funds, as well as banks, had a significant element of froth. To some extent, they were never real. 4  BIS Review 63/2010  We always knew that this kind of shock was the major risk facing fully funded pension systems. But the system is still here. It took a hit, but it withstood the shock. So my basic belief in the strengths of the Icelandic pension system and similar systems around the world is still intact. But that is provided that we learn the lessons of the financial crisis and make it a once-in-a-lifetime event. We need to learn the lessons on incentives and risk management.
Financial education and the Bank of England Speech given by Ben Broadbent, Deputy Governor Monetary Policy  Helping children and young people learn about money conference, London 3 July 2019  I am grateful to Mette Nielsen and Ratidzo Starkey for their assistance in preparing these remarks. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Financial Policy Committee or the Monetary Policy Committee. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Welcome Hello and thank you for asking me along today. These are very important issues and I’m grateful to be able to talk to you. My purpose today is to set out a few things we’ve been doing at the Bank to help schools with economics education. Some of this, I should say, is self-interested. Over time, we benefit from having a large and diverse pool of well trained economists who might consider working for us. The same is true of many other institutions. More significantly, public understanding of what the Bank of England is for, and what it does, is very important. It matters because it is the general public that constitute our ultimate and most important stakeholders. Although the public already hold us to account via parliament, it’s important that we can explain ourselves, and in turn listen to people’s concerns, people, more directly.

François Villeroy de Galhau: How to develop a “financial Eurosystem” post-Brexit Closing remarks by Mr François Villeroy de Galhau, Governor of the Bank of France, at theEurofi High Level Seminar 2019, Bucharest, 5 April 2019. * * * Ladies and Gentlemen, It is a pleasure to be in Bucharest today to conclude this Eurofi High Level Seminar. I am grateful to D. Wright and D. Cahen for offering me the opportunity to give this keynote speech... but perhaps less grateful about the theme they asked me to address: “Opportunities for developing EU autonomy in the financial area post-Brexit”. We are still faced with great uncertainties, and Brexit is and remains bad news, not only for the United Kingdom, but also for Europe. This unchartered territory has nevertheless the merit of making one thing very clear: it costs dearly to leave the single market. So we are still hoping for the best, but we have to prepare for the worst: a no-deal Brexit and all the risks it implies. This will be my first point today. Then, your theme obliges us to look ahead, beyond Brexit: Europeans should use the demands created by the current context to build a more integrated “financial Eurosystem”, and add some pillars to Europe’s financial sovereignty. **  I. Preparing for the risks It has been – first and foremost – the responsibility of the financial industry itself to prepare for the consequences of Brexit, starting with the loss of EU passporting rights.
Their other features are: low administrative and marketing cost, and labor wages, simple routine procedures, highly efficient communications and readily available information needed for work therein, the usage of uncomplicated production and operation methods, the ability to cope with new changes with regard to meeting consumers’ preferences and tastes, the ability to change the composition of labor force, production, marketing or finance polices to face quick changes without any hesitation, helping them to overcome economic cycles and changes. In addition, SMEs are also characterized by the freedom to enter and exit the market because of the modest ratio of their liabilities to fixed or full assets, and the easiness to convert small enterprises into liquidity in a short time without incurring a significant loss. Furthermore, the exit of a SME will have no significant impact on the market. Finally, SMEs are flexible to move and spread geographically. In spite of these features, the growth of SMEs is facing a variety of challenges which may be similar to a great extent not only at the level of one country only, but also at the global level.

At the end of the day it's probably fair to say that, although we may experience some difficulty in describing exactly what a derivative is, we can usually recognise one when we encounter it. The interests of the central bank in derivatives will tend to be rather broader than those of any commercial bank, trader or broker, because of its multiple policy responsibilities. The issues can be conveniently grouped under four headings: infrastructure, supervision, information, and operations. Infrastructure HKMA is probably fairly typical of most central banks in developed financial centres in having a general concern for the stability and development of the financial infrastructure, but without necessarily being involved directly in the provision of that infrastructure, of which derivatives nowadays form an indispensable part. Derivatives have brought substantial benefits to the commercial community, in facilitating hedging and hence business planning more generally, and have enabled the financial institutions to offer a progressively wider range of services and greater efficiency in the intermediation process, as well as to exploit market imperfections and other trading opportunities for their own gain. The range of available derivative products in Hong Kong is extensive. Exchange tradable derivatives include futures and options on the Hang Seng Index as well as on individual Hong Kong stocks and, since the launch a few weeks ago, on a selection of leading stocks of certain overseas exchanges. Exchange traded interest rate products include one-month and three-month HIBOR futures; and futures contracts on three-year Exchange Fund Notes are expected to commence trading later this month.