samchain/econo-pairs-v1 huggingface dataset:
In line with this, today I would like to share how we at the Bank of England are looking to the future to ensure our systemically important payment systems are robust and resilient, their underlying infrastructure is best in class, and our regulatory toolkit remains fit for purpose and future-proof. NPSO: A mandate to be greater than the sum of its parts Payment systems, by their very nature, bring together participants that would otherwise transact bilaterally. Crucially, by doing so, they promote increased efficiency and resiliency that is enjoyed by all. They manage  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  risks, eliminate intermediate arrangements and related costs at the back-end of the payments value chain, and provide functionality that enables innovation to proliferate at the front-end. As described in our Annual 1  Report this year , financial market infrastructure, including payment systems, exist to reduce the risks and costs involved when participants make payments. And this leads me to the NPSO and its creation. The PSF, established by the Payment Systems Regulator (PSR) in March 2015, proposed the consolidation of the UK retail interbank payment system operators: Bacs 2  and Faster Payments, as well as the Cheque and Credit Clearing Company . The Bank was engaged closely with the work of the Forum and was supportive of this change as we could see the potential for the consolidated scheme to be greater than the sum of its constituent parts.

Our priority throughout this transition has been to ensure that it has been and continues to be managed in a way that promotes the robustness and resilience of the payment systems, and of wider financial stability. And a considerable amount of work was undertaken to achieve this - by the retail scheme operators, their participants and the NPSO. What we now expect to see: Tangible progress has been made, and this should rightly be recognised. But, as with any journey, we cannot lose sight of the work that lies ahead to deliver these benefits from consolidation. The NPSO’s primary focus should be on completing integration of the payment systems and embedding robustness and resilience within all of its activities, including the New Payments Architecture (NPA) programme. There is still much to do to complete the integration of these systems, from an organisational perspective, but also at the system level; completion of which will allow the NPSO to begin realising the ultimate goal of strategic leadership and higher standards of management and control. For this to succeed, the NPSO’s strategy will need to be realistic and consistent with its objectives and capabilities. It will also need to include an appropriate focus on reviewing and enhancing the activities the NPSO has inherited, to manage its own risk profile, its outsourced infrastructure partner, and risks to the wider system emanating from participants.
Another important risk is that deposit and credit rates are adjusting to the changes in the key rate more slowly than we expect, that is, the transmission of our decisions to monetary conditions takes more time. As to supply-side risks, logistics problems and bottlenecks in production chains remain a significant risk as these issues may persist longer than we estimate today. The abovementioned problem of a limited availability of labour resources is another risk, which is becoming increasingly important. Moreover, this problem may become even more serious. This is equally relevant for both the Russian labour market and the constraints experienced by other economies. A decline in global demand due to a slowdown in the world economy may become a disinflationary risk. This may happen, for instance, in the case of a large-scale new wave of the pandemic, accompanied by extensive lockdowns in the majority of countries. Another scenario where inflationary pressure might also weaken faster in the Russian economy is a quick easing of the restrictions on foreign travel for both outbound tourism and the inflow of labour migrants. There is a number of factors, the potential impact of which is uncertain today. In the first place, these are the volumes and quality of the grain and vegetable harvest this year both in Russia and worldwide. Moreover, it is still uncertain how steady global inflation is and how fast and extensively other central banks will respond to it. Winding up, I would like to comment on our future actions.

Let me now turn to seven more awkward questions for us. First, how do we square the principle of proportionality with the steeper slope of regulatory requirements this inevitably causes for growing firms? This arises in many ways, where we take a softer approach for smaller firms but this has to be withdrawn as they grow. One example is the steps in our Systemic Risk Buffer regime, which we’ve debated with Sir John in the past – it’s true these could be smoothed to some extent by greater granularity and/or an ‘income tax’ approach, but the basic problem of gradient remains. This issue also arises on the resolution side, which is of course outside the scope of the competition objective – it must be right that we exempt small firms from bail-in debt, but this inevitably leads to a moment when successful firms stop being small and need to start issuing. Second, and related to the first, although we have in my view been pretty successful in encouraging new entrants, it is so far notable that no small bank has successfully become a large bank. Perhaps this will change through time, and it may have much more to do with behavioural stickiness of current accounts than regulation, but it would be complacent to be relaxed about it. As an aside, there may be lessons to be learned here from the general insurance market: it is notable that some of today’s largest GI firms started as small challengers within the last 20-30 years.
If so, I think there are high returns to economics and finance making a further intellectual investment in Big Data and accompanying analytical techniques in the period ahead, the path less followed. The Definition of Big Data If Big Data holds promise, it is probably useful to start by defining just what it is. This is not entirely straightforward. Like beauty, what counts as Big Data lies in the eye of the beholder. It is also a fluid concept. For example, it is clear that data no longer means just numbers; it means words too. Indeed, growth in research on semantics has taken off over recent years, including in economics and finance. What is less contentious is that there has been the most extraordinary revolution in the creation, extraction and capture of data, broadly defined, over the course of the past decade or so. This has been, in part, the 12  Bacon (1620) summarises this well: “Those who have handled sciences have been either men of experiment or men of dogmas. The men of experiment are like the ant, they only collect and use; the reasoners resemble spiders, who make cobwebs out of their own substance. But the bee takes a middle course: it gathers its material from the flowers of the garden and of the field, but transforms and digests it by a power of its own.” 13 Carney (2015). 14 Obstfeld and Rogoff (2001) discuss six major puzzles in international macroeconomics, such as the excess volatility of exchange rates relative to fundamentals.

Understanding the joint behaviour of employment and wages remains one of the central issues in modern macro-economics. These dynamics have been complicated recently by changes in the world of work, with automation changing both the nature and structure of work. Recent Bank research has used granular data on advertised job vacancies to shed light on these 42  dynamics. The research analyses around 15 million job vacancies over a ten year period. Instead of  classifying jobs by sector, occupation or region, it uses machine learning techniques on the text describing jobs to classify and cluster vacancies. What results is a more “job description-based” classification scheme for labour demand. This approach provides a different way of classifying and describing how the world of work is evolving – for example, the types of skills required in the face of automation. The classification scheme has also been useful when identifying the relationship between labour demand and wages. Using the job description-based classification helps identify a clearer link between labour demand and offered and agreed wages. 40 41 42  Cielinska et al (2017). Other recent research papers using trade repository data include Abad et al (2016) and Bonollo et al (2016). See, for example, Duffie, Gârleanu and Pedersen (2005) and Lagos, Rocheteau and Weill (2011). Turrell et al (forthcoming). 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Variety One of the potentially most productive avenues for Big Data research, in the macro and finance sphere, involves using not numbers but words as data.
There needs to be extremely high levels of resilience at CCPs and effective recovery and, in extremis, resolution options were a CCP to fail. So we need to have confidence in the sequential lines of defence that are in place to manage risks and absorb shocks within CCPs and in how resolution might provide a backstop. Clearing members themselves are the first line of defence  CCPs are not risk-taking entities. Rather, they are mechanisms for the management and for the mutualisation of their members’ credit counterparty risk. Their greatest, though not only, vector of risk is the default of one or more of their members. Ensuring that those members are able to continue to meet their obligations to CCPs is clearly the first line of defence. There has been a very substantial increase, since the crisis, in the resilience of the systemically important banks that are the main members of the largest CCPs. 55  A recent FSB survey found that exposures to CCPs are concentrated among a small number of institutions. And clearing member affiliates are also important providers of other critical services required by CCPs such as liquidity and credit providers or custodian and settlement banks. A small number of entities tend to dominate each resulting network. These concentrations suggest that shocks to one central element of each CCP network would likely have significant consequences for the rest of the network. FSB report ‘Analysis of central clearing independencies’, July 2017.

For resolution to have maximum effectiveness, banks not only need to be able to meet the policy standards and have sufficient loss absorbing capacity. They need also to have the capabilities to be ready to implement a resolution, the legal and operational arrangements in place to avoid disruption to customers. It needs to be possible to restructure a firm so that it can be made viable post-resolution. So the next phase of work will focus on ensuring that major banks have and are able to demonstrate that they have the systems, documentation, assurance and controls necessary to support their resolvability. We intend to consult at the end of this year on the detail of this reporting and assurance framework. We envisage that it will require major UK banks to conduct a self-assessment of their resolvability – measured against the policies and standards that have been established nationally and internationally. In line with our commitment to Parliament, we would then publish our assessment of resolvability for the major UK banks, providing greater transparency over the key judgments of the Bank as Resolution Authority. In a similar vein the Bank envisages we may require that elements of firms’ self-assessments are made public – this would enable firm-specific progress on resolvability to be made more transparent. It is important to emphasise that this is the next step in the natural evolution of the resolution regime in the UK. The Bank has been formally assessing the resolvability of UK firms since 2014.
Muhammad bin Ibrahim: New and emerging Islamic finance jurisdictions – opportunities and challenges ahead Remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the 11th Islamic Financial Services Board (IFSB) Summit, Session 5: Panel Discussion on “New and Emerging Islamic Finance Jurisdictions: Opportunities and Challenges Ahead”, Port Louis, Mauritius, 22 May 2014. *  *  *  I have taken great liberty in making my remarks today. I must admit these remarks are very much Malaysian-centric. I shall try to synthesise some of the lessons learnt by Malaysia that might be useful to new and emerging Islamic finance jurisdictions. These lessons are by no means exhaustive. Let me start with some points to set the context of my remarks. For new and emerging Islamic finance jurisdictions, they can learn from the experiences of other more established Islamic finance centres. These jurisdictions have the opportunity to jump start into 30 years of modern Islamic finance practices. They could move fast, avoid expensive pitfalls and adopt best practices. I will raise nine points that I hope will provide some perspectives on the issues raised. Islamic finance is for all (Gain acceptance). Islamic finance is for all. Its appeal extends to a larger global community, regardless of their faith and origins. Islamic finance is not only for the Muslims. Islamic finance cannot be successful if it is only supported by Muslims. Many now recognise that the inherent characteristics of Islamic finance are consistent with universal values.

Gazi Erçel: Risk management - within reserve management policies  Opening remarks by Mr Gazi Erçel, Governor of the Central Bank of Turkey, in the Conference titled “Current issues in reserves management for central banks in Europe, Middle East and North Africa” which has been organized by the World Bank Treasury in Istanbul on 4-5 May 2000. *  *  *  I am delighted to be with you today to offer some general remarks about reserve management, and our approach to risk management, at the Central Bank of Turkey. Before starting my speech, I would like to thank the World Bank for organizing this conference which, I believe, will be most beneficial to all of us. I am sure most of the important subjects related to new developments in reserve management will be covered in detail at this meeting. However, let me briefly comment on recent developments in managing risk within reserve management and share our experience at the Central Bank of Turkey with you. A string of disaster stories dominated the financial news coverage during the last two decades. A variety of factors could be cited as possible causes of these events. They include shortcomings in economic policy, inadequate supervision and, in most cases, poor risk management by the market players themselves. Beyond that, the basic issue is the financial system’s vulnerability to unforeseen events. We all learned much from these bad experiences but we are living in a changing world.
This new puzzling reality has triggered more profound discussion on the monetary policy frameworks with the academia and policy making community. Are the main traditional monetary policy principles -price stability as a main objective, some form of flexible IT as a most adequate strategy, policy rate as a main instrument- still valid? As crisis clearly demonstrated that price stability is not a guarantee for financial stability and that financial instability can have long lasting effects on output and inflation, the discussions focus on the need to take into account financial stability in the monetary policy frameworks. Thus, the question: Is the so called “flexible IT” enough flexible to deal with the current and future challenges or maybe as some observers have suggested, a thought should be given to the other alternative strategies such as targeting price level or nominal GDP. The discussions even touch upon the question of adding explicit financial stability objective. For example, as Borio (2016) claims ”if mandates (of the central banks) are seen as overly constraining the room for maneuver, revisiting them should not be taboo. After all, mandates are a means to an end.” Concerning the instruments, the current debates focus on whether the unconventional tool kit is temporary, as initially considered, or will become conventional tool supplementing the traditional monetary instrument. This is, in particular, in the context of the ultra-low interest rate environment and still anemic recovery.

Credit registry established in 1998 that provides a loan–by-loan data appears to be very useful tool for financial stability and monetary policy purposes. The recent crisis has emphasized that despite the fact that there is a vast data on credit available, still more granular, frequent and flexible credit data is needed. Though this is mainly for the purpose of credit risk assessment and financial stability issues, to which I will refer later, the availability of loan-by-loan data and their characteristics allows for more profound monetary policy research. In particular, the individual loan-by-loan data can be utilized for instance, for exploring the risk-taking monetary policy channel, which has been on the margin of the research. Further, data from the credit registry allowed us to investigate where are the credit flows channeled – to what extent it supports the SME segment, which is a key segment in reviving the growth and boosting employment, to what extent it is channeled to non-tradable sector creating possible bubbles down the road. Of course, the banking system is only one sequence of the monetary policy transmission mechanism. The corporates and households are the other very important part, whose behavior affects the outcome of the undertaken monetary policy measures. As a first line of policymaking, we surely still rely on stylized macro models, where we strive to estimate or calibrate the average behavior of the economy, or the behavior of representative agents. Of course, the reality can be much more different and heterogeneity much more pronounced than envisaged.
Our presence in the global Islamic finance system has made its mark largely in the global sukuk market, where we have sustained our position as the market leader with market share of more than 50% over the last 10 years. Domestically, our achievements have placed the Malaysian Islamic finance industry at the forefront. Islamic finance continues to grow, but as it matures and enters the mainstream, the days of double digit annual growth are now behind us. Beyond headline numbers, the industry must now seize opportunities in new growth areas; reinforce the core strengths of Islamic finance; unlock its potential; and realise its intended promises. Aspiration for Islamic finance (IF) The question is – what lies in the road ahead for Islamic finance? I would like to highlight three trends that are sweeping the world, which in turn offer opportunities for the Islamic finance industry to capitalise on. First – is the rise of entrepreneurship. Second – is the growing interest in halal economy; and Third – the global large infrastructure financing needs. Rise of entrepreneurship Starting with the first trend on the rise of entrepreneurship – All around the world, we are seeing more small businesses and start-ups being set up accounting for about 90% of businesses and over 50% of employment worldwide3. These SMEs have become key engines of job creation and economic growth in developing countries, particularly following the global financial crisis. With the rise of the digital economy the SME ecosystem is also expanding with increasing number of new technology start-ups.

In 2016, Shariah-compliant trade finance accounted for 24.1% of total trade finance provided by the Malaysian banking sector. However, our Islamic finance industry only financed about 5% of total exports in Malaysia, again, signifying an untapped growth area with large potential. Increasing bank financing for SMEs would also encourage more market based solutions to meet the funding needs of the halal sector participants, which are now largely reliant on government initiatives. There are however a number of challenges that may impede trade finance facilitation by Islamic finance players. I would like to highlight two. First is – “process inefficiencies” – that can contribute to higher operational risks such as fraud. This can be mitigated through use of technology that reduces reliance on traditionally document-intensive and multi-tiered manual processes. In Malaysia, I am happy to note that six Islamic banks have embarked on digitalisation of trade finance processes – through an integrated web-based platform that offers trade finance and working capital management solutions. The second challenge is, – the need to improve connectivity between the Islamic finance industry and the international trade community – to facilitate effective intermediation of trade finance needs. Again, the use of technology can ease the application and submission of trade-related information and documents which can expedite the whole process. If these challenges are not addressed, industry players are at risk of becoming irrelevant in the trade finance space.
With more competitors around, the wider effects of the failure of an individual bank would in all likelihood be smaller. The stability authorities need to be more alert than in the past to this source of economic vulnerability. Consistent with that, as we prepare for the transfer of prudential supervision, the Bank of England wants to reduce barriers to entry somewhat, so that the banking system can, over time, become less concentrated. But for that to be sensible, we need to be confident in the authorities’ ability to resolve those banks that get into distress without dramatic spillovers – lowering barriers to entry by removing barriers to exit. For smaller banks, that should already be possible using the Special Resolution Regime introduced in 2009. Prudential supervisors will need, as a priority, to ensure that banks are set up to enable the Financial Services Compensation Scheme to pay out rapidly. To be clear, for banks funded by insured deposits, the costs of failure will fall on their peers. Over time, I suspect that that will increase pressure for a funded deposit-guarantee scheme with risk-based levies. The Bank would welcome that. Prudential regulation: higher risk-based capital requirements and a cap on leverage But the reform agenda is not just about handling failure. Banks will be better capitalised, more liquid, and less interconnected. To take just one of those changes in the global order, higher capital requirements will affect behaviour as well as resilience.

The first panel will be moderated by Mr. Liviu Voinea, Deputy Governor and will approach the theme of investments and investment finance in 2018. The second panel will be moderated by Ms. Lara Tassan Zanin, Head of The European Investment Bank Office in Romania and will focus on the support of sustainable growth in Romania, shifting from consumption to investments. Ladies and gentlemen, Romania and the European Investment Bank share a long and fruitful cooperation that started in 1990. It got closer in 2007 when Romania became a member of European Union and implicitly of European Investment Bank. This joint partnership has boosted investments in Romania in areas of significant importance for the national economy, such as the infrastructure, small and medium enterprises, environment and innovation. These coordinates are totaling more than 13 billion EUR allocated to around 130 projects financed by the European Investment Bank, besides other 70 projects financed by the European Fund for Strategic Investments. These figures alone speak about the priorities, however I would like to point out that the financial impact transcends beyond the sum of total loans. There is significant potential for development and improvement. Romania is a net beneficiary of EU funds, the latest data showing a positive aggregate balance with more than 32 billion EUR as net received funds.