samchain/econo-pairs-v1 huggingface dataset:
During spring 2005 and 2006 the credit assessments appear to have deteriorated, at the same time as loans were granted on terms that far from corresponded to the risks. The price of risk was quite simply too low. However, during this period risk premiums on all assets fell. So it was not merely on subprime loans where the price was set too low. The same also applied, for example, to the market for leveraged buyouts. Hedge funds were the first to experience problems The first signs that the spark had reached the powder keg came during the summer, when it was evident that there would be more defaults on subprime loans than had been feared earlier. Two hedge funds tied to the US investment bank Bear Stearns were among the first to be affected. The funds had borrowed money which was then invested in structured credit instruments linked to securitised subprime loans. When the financiers wanted to pull out, the funds were forced to sell their assets. However, they were not successful as suspicions against subprime loans had increased and the funds collapsed with substantial losses. At around the same time the credit rating agencies began downgrading credit instruments containing subprime loans. As the ratings have set the tone for how the instruments are assessed, the downgradings have meant that the financial markets more or less lost confidence in anything that might contain subprime loans. Finally the banks were also affected But it was not only hedge funds that had invested in subprime loans.

The court’s adjudication role in Islamic finance is reinforced by the support from the SAC in its capacity as a consultative body to the Malaysian judiciary system. Under the law, the Central Bank of Malaysia Act 2009 prevails, if a question concerning a Shariah matter arises in any proceedings relating to Islamic financial business, where the court or the arbitrator shall take into consideration any published rulings of the SAC or refer the matter to the SAC for its ruling. The SAC’s rulings are binding on the courts and arbitrators. This referral system preserves and enhances the sanctity of Shariah rulings and the consistency in the interpretation and application of Shariah principles in Islamic financial transactions. To complement the court system, specific arbitration rules for Islamic banking and financial services have also been developed, enabling disputes for both domestic and international cases to be dealt with by the Kuala Lumpur Regional Centre for Arbitration (KLRCA). Such comprehensive legal infrastructure for Islamic finance is unique to Malaysia and essentially reflects the support and dedication by the legal fraternity in keeping abreast with the development of Islamic finance. Adding to the strength of the institutional and legal framework in Malaysia is our continuing emphasis on human capital development. Various measures have been implemented to ensure that our market players, including the judges and lawyers, are well-trained in Islamic finance.
But one thing I’m certain of is that a lot has changed in those five years – and much of it for the positive in terms of addressing some of the key weaknesses that led to the crisis. Where progress has been made I thought I’d start first by reflecting on several areas where we’ve seen progress. Importantly, the balance sheet repair that was necessary is underway. •  Banks are building capital – both the quantity and the quality of capital have improved markedly in the past several years. For example, by some measures, the largest banks in the U.S. have more than doubled capital levels over the past four years. •  Banks are also building liquidity, and liquidity levels far exceed those that most firms had going into the crisis in 2008. •  While progress on both fronts is somewhat uneven across jurisdictions, there are efforts underway, including through such mechanisms as the Basel rulemaking process and EU initiatives, to continue to make bank balance sheets more resilient to stress in the future. In the area of recovery and resolution, with the second round of plans in for the largest firms (and the first round in or due shortly for the remaining firms), a lot of learning has happened through this process.

The forum provides the opportunities for policy dialogues, exchange of views and concerns, and information updates, among other things. This is the major operational arrangement that we have put in place to make the separate authorities model work for us. No doubt other operational arrangements can be put in place to make the integrated model work as well. Having said that, let me add another dimension to the issue of supervisory arrangement – one that is related to central bank’s other key function, namely, monetary policy. I believe that supervisory policy and monetary policy can be arranged in such a way that they are complementary and supportive to each other. I also believe that the often-cited conflicts of interest between the two roles, if performed by the same institution, may have been overstated somewhat. If there are policy conflicts, these conflicts will have to be resolved regardless of who is in charge of supervision. Then, would it not be more efficient if the conflicts could be internalized and resolved within an institution? In fact, many possible mechanisms exist to help ensure full accountability for each role, thereby minimizing potential conflicts while getting synergies from having the two roles under one roof. The arrangement we use In Thailand, as I alluded to earlier, is the establishment of two separate policy boards that include outside experts.
And that would have meant eventually having to tighten policy more abruptly, which would much more certainly have plunged the economy into serious recession, a bit further down the road. The harsh reality is that monetary policy can only target the economy as a whole - it cannot realistically seek to shelter particular businesses or particular sectors or particular regions, however much we might all wish it were otherwise. And, in relation to the economy as a whole, the effective choice in the situation we faced was not whether or not to tighten, but whether to tighten sooner, and by less, or later, by more. So we raised interest rates through the second half of last year - and again in June - trying, as best we could through our tactics, to minimise any further unwanted upward pressure on sterling. But things have now clearly moved on. The outlook for the world economy deteriorated further through the summer under the impact of a series of new shocks. Japan, the world’s second largest economy, slipped further into recession. Russia - which had only weeks earlier embarked on an IMF program - saw the collapse of the rouble and default on its debt. And acute nervousness spread through many of the world’s financial markets. Although there has been some improvement in sentiment over the past month or two, and although the US and European economies continue to expand, the likelihood remains that world economic growth will be significantly slower than had been expected earlier in the summer.

The facts are that for the past 6½ years the British economy as a whole has grown at an average annual rate of over 3% - which is well above its long term trend rate of some 2% - or, if you are optimistic, some 2½%. And we were still growing, at an annual rate of some 2% in each of the last two quarters, on the latest published data. At the time these headlines were written a month or so ago not one of the 28 independent professional forecasting organisations surveyed by Consensus Forecasts was expecting output to fall in 1999; and their average expectation was for 1% growth next year. That is broadly in line with our own latest best guess in the MPC. Your own most recent IOD forecast in September suggested slightly stronger growth next year. It is true that Consensus Forecasts have since revised down their mean expectation - to just over ¾% growth; but even now only one of the 28 contributors expects output to fall. On unemployment in the UK the headlines read: * Jobs gloom deepens as layoffs soar. * More jobs go as recession looms. * Jobless up as world pain hits Britain. BIS Review 98/1998  -2-  And the facts? At the time these headlines were written, the unemployment rate, both nationally and in virtually every region of the UK, apart from the South East and East Anglia, was the lowest it has been since at least the early 1980s. I could go on.
Actually, if this phenomenon occurs within a context of sudden drops in the copper price or costlier external financing, difficult adjustments could be necessary. The current macroeconomic scenario poses significant risks, demanding policy responses in different directions. On one hand, although so far its effects have been mild, the external situation is severe. Chile is a small economy, commercially and financially open,  6  BIS central bankers’ speeches  so it will not be immune to global developments. The probability of extreme events has not diminished, and their materialization could have very severe consequences on output around the world, including Chile. On the other hand, the strength of domestic demand and output, together with recent increases in some commodity prices, means that medium-term inflationary risks remain present. The MPR is within a range of values that are considered neutral, providing flexibility to wait for the concrete effects of such scenarios on the Chilean economy to become visible. The Board monitors closely the evolution of the external and internal macroeconomic scenario and its implications on inflation, and reiterates its commitment to conduct monetary policy so that projected inflation stands at 3% over the policy horizon. Allow me some final remarks. Final remarks Our latest presentations to the Senate have been marked by periods of high volatility or relative calm in international financial markets.

However, going forward a recovery is foreseen, considering that the expansionary measures adopted by its policy makers have begun to bear fruit. Colombia and Argentina have also shown signs of deceleration, But Colombia growing more than Argentina. Peru, meanwhile, is still growing strongly. In Mexico, growth during the first half of the year exceeded expectations, but in the near future the effects of the frail external sector will be seen more clearly. The developed economies continue to show weak growth. The developed economies continue to post weak growth. In the United States, the overall evaluation is still of a slow recovery. The United Kingdom is in recession, affected by anemic external and internal demand, the latter influenced by tight credit conditions and policies aimed at fiscal consolidation. In the Eurozone, the GDP shrank in the second quarter, after being flat in the early part of the year. The performance of the zone continued to be marked by big differences between peripheral economies (with sharp falls) and central European economies (with modest increases), reflecting financial and fiscal vulnerabilities. However, the weakness of some incoming indicators from Germany is cause for concern, particularly domestic consumption compounded by the weak performance of its exports and manufactures.
Consumers would benefit from a wider offering of products and services at competitive prices. Taking a more strategic and proactive approach to development Third, we adopted a more strategic and pro-active approach to developing the financial sector. We actively went out to attract new business here. For institutions already in Singapore, we tried to anchor them more firmly, and encouraged them to expand and introduce new activities here. BIS Review 62/2002  1  Enhancing monetary policy effectiveness Finally, we had to enhance the effectiveness of our monetary policy. Free capital flows and complex derivative products had made it impossible to completely insulate the Singapore dollar against attack. Our approach had been to operate an inscrutable monetary policy and impose comprehensive restrictions on non-resident borrowing of Singapore dollars. This was not only becoming untenable, but was also hampering the growth of our financial markets. We needed a more explicit and transparent monetary policy stance, and more precisely targeted safeguards against the risks of internationalising the Singapore dollar. III. The changes in the financial and economic landscape  We launched these major changes just as the Asian Crisis was breaking. But we did not foresee how difficult the next five years would be. Southeast Asian countries became mired in political difficulties triggered by the crisis. Malaysia dismissed its Minister of Finance and imposed exchange controls. Indonesia saw the fall of the Suharto government, only to be succeeded by a totally different dispensation.

At our monetary policy assessments in June and September, we indicated we would also consider selling foreign currency depending on the development of the exchange rate. Accordingly, we have sold foreign currency in recent months to ensure appropriate monetary conditions. We will also sell foreign currency in the future if this is appropriate from the monetary policy perspective. Conversely, we remain willing to buy foreign currency again if necessary, i.e. if there were to be excessive appreciation pressure. Ladies and gentlemen, thank you for your attention. I now hand over to Martin Schlegel, who will speak about the latest developments with regard to cash. Page 3/4  Berne, 15 December 2022 Thomas Jordan  News conference  Page 4/4
The world needs transition finance – to provide the funding support for businesses and sectors that are not so green, to adopt cleaner technologies, increase energy efficiency, and become greener over time. Inclusive transition is about decarbonising without compromising social and economic development. Hundreds of millions of people across Asia, Africa, and Latin America still do not have access to electricity, modern sanitation, and drinking water. Economic development will drive demand for fossil fuels, which is still the cheapest way to generate electricity and power mobility in many parts of the world. The switch to cleaner energy cannot be made in one leap. We need to shift the energy mix progressively, first to relatively less emissions-intensive fuels like natural gas, and then to renewables. Finance can be a powerful enabler for such a transition. Second, Asia – this is where the battle against climate change will be won or lost. Asia accounts for half of the world's greenhouse gas emissions and is home to about 60% of the global population. The issues of transition are most acute in Asia, with growing affluence and rapid urbanisation alongside the urgent needs of poverty alleviation. About 85% of the energy consumed in Asia comes from fossil fuels and Asia's demand for energy is projected to double in 2030. Asia is also most vulnerable to climate change, with large populations living close to locations prone to drought, floods, and rising sea levels.

However, the moderate growth in the M3 monetary aggregate indicates that this situation has not changed since the last monetary policy assessment. Thus, the monetary analysis shows that we can continue pursuing our expansionary monetary policy for the time being, without incurring additional risks. Since the first quarter of 2003, the year-on-year growth rate for mortgage loans has exceeded 5%. Mortgage loans to households slowed slightly at the end of 2004, but since then their rate of growth has accelerated to a level higher than that recorded in recent years. Mortgage loans to companies, which had declined over the past five years, have also risen again since the beginning of the year. Prices continue to increase in the real estate market, a development to which, in our view, the low mortgage rates have contributed. Well aware that our monetary policy is still expansionary, we are keeping a close eye on developments in the real estate sector. In view of the above-mentioned developments, we have decided to leave the target range for the three-month Libor rate unchanged at 0.25-1.25%. What were the most important factors that led to this decision? There were three of them. First of all, we needed to downgrade our expectations with respect to the development of the economy. However, there are no signs of any cyclical downturn and the economy continues to recover, even if this recovery is somewhat delayed and muted. Second, the lacklustre economic activity is being accompanied by an improvement in the medium-term outlook for inflation.
Given the limited scope for cutting deposit rates, low interest rates tend to depress net interest income. Thus, it will become increasingly difficult to maintain the cross-product subsidy whereby banks often exploit the loan-deposit spread to cover the cost of providing services to customers. Indeed it seems reasonable to expect that the zero fees policy will gradually fade into the background and that competition for deposits will shift in part to the business of providing transactional services. In any event, Spanish banks must adapt their business strategies to the new environment and must, in particular, take measures to continue to improve their operational efficiency. It is true to say that operational efficiency is, in general, already high in the Spanish industry in comparison with the rest of Europe, as Spanish banks on average have lower cost indicators than their euro area peers, but there are considerable differences from one institution to another and there is, therefore, room for improvement. It seems particularly appropriate to reflect on the need to adjust the commercial model of Spanish banks which is characterised, despite the industry consolidation, by a number of offices per capita which is much higher than the European average. In my view, both 6  BIS central bankers’ speeches  technological progress, which allows banks to increasingly interact with customers beyond physical points of sale, and the need to restore bank profitability on a sustainable basis, are sufficient arguments to support this reflection.

First, in an open economy setting, higher interest rates will attract even more capital inflows to Singapore, especially given our strong macroeconomic fundamentals and persistently low foreign interest rates. This could fuel further asset price inflation. Second, the hike in interest rates would have to be very aggressive for it to dampen demand for credit, and tame asset prices. This would mean a sharp appreciation in the exchange rate, which would impose significant collateral damage on the broader economy. Indeed, some regional countries with interest rate regimes are facing the dilemma between raising rates to curb credit booms and preventing the spillovers on capital inflows and their exchange rates. On balance, a switch to a regime of managing interest rates will be highly destabilising. There are potentially unpredictable costs associated with a shift in the monetary policy regime, quite apart from its limited impact on the other broader and more predominant sources of underlying price pressures in the economy. MAS’ assessment has been corroborated by Professor Ilian Mihov, Professor of Economics at INSEAD. His pioneering academic work has demonstrated that for an open economy like Singapore, a monetary policy response based on the exchange rate delivers superior economic welfare outcomes compared to an interest rate regime. In particular, the exchange rate is better able than the interest rate to reduce volatility in output and inflation.
Bank liquidity remains at historically high levels, and this, coupled with the fierce competition for new lending business, has pushed down lending margins, particularly in the all-important mortgage portfolio. 1  BIS Review 93/2000  It is not only that the market is not growing as fast as it did. The traditional, local players are also beginning to encounter more pressure from global firms, non-bank entrants and competing sources of finance. The competitive environment is giving added impetus to the need for banks to consider how they can use the new technology, and particularly the internet, to drive down costs and broaden income sources. In Hong Kong around 20 banks have introduced transactional banking services for retail customers. Many have already introduced corporate banking services through the internet, or will shortly do so. So far the take-up of these services seems in general to be rather slow. However, a few banks have achieved reasonable levels of usage by customers either because they were early movers or because of their leading market position. Customer acceptance of the internet will undoubtedly grow. But it will not happen overnight, and the contribution to the bottom line will be slow to emerge. In the meantime, the banks will have to bear the extra costs of the investment in the new technology, while margins may come under pressure from the increased ability of consumers to shop around and compare prices.

As I mentioned earlier, the internet shifts the balance of power from banks to the consumers by giving them increased opportunity to shop around. This has coincided with efforts by banks to switch their marketing efforts to consumer finance, credit cards and wealth management products in order to broaden their sources of income and to make up for sluggish business opportunities elsewhere. The internet should help in the cross-selling of these products to consumers, but it is not by itself a guarantee of success. The banks must also ensure that they do not alienate their customers through unfair or opaque terms and conditions. For example, in the internet context, customers should not be held liable for direct losses caused by unauthorised transactions where they are not at fault. Banks therefore need to become more conscious of the fact that they cannot take their customers for granted. They must be prepared to offer them a fair deal, and be seen to do so. This is something that we will be addressing in Hong Kong through revisions to our Code of Banking Practice. In this connection, we have recently issued for consultation some proposals on credit card practices which will eventually be incorporated into the revised Code. These include, for example, a recommendation that banks should publish standardised APRs for the cost of obtaining finance via credit cards. I will close by returning to the theme of the New Economy. It used to be said that the days of the banks were numbered.