samchain/econo-pairs-v1 huggingface dataset:
The strengthened Islamic financial institutions, the establishment of key financial infrastructure for Islamic finance including the regulatory and supervisory framework have positioned Malaysia at the frontier of Islamic finance. The recommendations in the Blueprint aim to build on this progress towards resulting in the development of a financial sector that will meet the economic and financial realities of this new decade. The financial system envisaged   will be firmly anchored in the real economy in providing financial services that contribute positively to growth;    that offers a diverse range of products, services and institutions that cater to the financial needs of a broader spectrum of Malaysian households and businesses;    will be reinforced by deep, liquid and efficient foreign exchange and money markets to complement the bond market;    that is more engaged with the region and other parts of the world;    that can contribute meaningfully to Malaysia’s economic transformation; and finally,    a financial system that is inclusive in reaching Malaysians across all social, geographic and economic stratas. It is envisaged that by 2020, the financial system is expected to expand from the current 4.3 times to six times of GDP. Correspondingly, the financial sector contribution to nominal GDP is projected to rise from 8.6% to between 10 to 12% in 2020.

This process is indispensable to clean bank balances from investments that are burdensome and release funds that would be used for new credits. In this context, monitoring of loan quality and behaviour or difficulties that banks face in this process lays at the very centre of the supervisory activity. Second area concerns the cost of banking services for clients. On this issue, the Bank of Albania has conducted necessary analysis, which led to the conclusion that costs for a number of bank products and services, including payments and transfers, debit and credit cards, as well as some other forms of crediting, could be lower. In relation to this issue, we are focused on two aspects: First, promoting transparency in the banking sector on its relations with the clients regarding these services. For this issue, we have implemented requirements for the establishment of methodologies to determine effective crediting costs and clearly define contractual obligations vis-à-vis the clients. Banks are asked to provide all the information and explanations to the interested clients. In addition, following the same logic, we would ask from banks to establish methodologies to define their costs for bank services, mainly related to payments and transfers. 2  BIS central bankers’ speeches  Therefore, it will be easier for clients to compare between a variety of offers by banking institutions and, hence, be able to make their choice according to the most favourable alternative.
12  The Global Documentation Steering Group (GDSC) is an industry group formed in 1999 to implement the documentation-related recommendations of the report of Counterparty Risk Management Policy Group (CRMPG). The primary objective of the Committee is to encourage the harmonisation of documentation in standard over-the-counter contracts in order to minimise disparities that can exacerbate market, credit and legal risk. It took the lead in updating the recommendations on documentation issues for the second CRMPG report released in 2005. GDSC is sponsored by, but independent of, the Federal Reserve Bank of New York. The hedge fund community is represented on the GDSG. The Stock Lending and Repo Committee, facilitated and chaired by the Bank of England, provides a forum for practitioners and the authorities to discuss structural (including legal) developments in London-based securities lending and repo markets. 6  BIS Review 44/2007  At the macro end of the spectrum, that above all means credible monetary regimes. The MPC is now ten years old. During that period, inflation expectations have been well anchored to our target. And no one should be in any doubt that the Committee is determined to keep it that way. But a credible monetary regime does not insulate the economy, or financial markets, against all shocks. Over the coming decade, some currently observable imbalances will plausibly work their way through the system, as the pattern of global saving shifts, asset prices adjust, and we encounter, eventually, a period of corporate defaults.

5  See the Annex for brief explanations. BIS Review 44/2007  3  hold tranches of other CDOs, which hold LBO debt of all types as well as asset-backed securities bundling together household loans. (The diagram may, or may not, help!) What is going on here? One possible explanation is that capital might be being allocated to wherever its cost is cheapest for a particular desired risk profile. That optimisation involves comparing the capital charges applied by regulators to regulated institutions; and by rating agencies to various types of vehicle (SIVs, CPDCs, CDOs, monolines etc). The “smart money” seems to be assembling its own portfolio of vehicles, so that it can choose from a menu of where to book transactions. One of the drivers is commonly referred to by practitioners as “ratings arbitrage”. Another was of course Basel I, which triggered the securitisation of high-quality credits, and for quite a few years fuelled a ballooning of vehicles whose existence depended on commercial banks providing zero-capital-weighted “liquidity” lines. Basel II will change all of that. Indeed, if central banks are to understand how the global financial system fits together, we will need to fathom the reconfiguration that Basel II prompts, including the potential for risk transfers between banks adopting different steps on the ladder of Standard, Foundation, Advanced approaches that it makes available.
12 To this end, MAS established the industry-led Steering Committee on SOR transition to SORA or SC-STS, in August last year, chaired by Mr Samuel Tsien (Group CEO of OCBC and ABS Chairman). The SC-STS provides strategic direction on developing new SORA-based products and markets, and serves as the key coordinating platform to engage relevant 3/7  BIS central bankers' speeches  stakeholders in support of a smooth transition. Since its formation, the SC-STS and its various Sub-Groups have made significant progress in laying the foundation to support benchmark transition by – establishing market conventions and infrastructure, building liquidity in the SORA derivatives market, conducting pilot test trades in SORA loans and bonds, and engaging market participants and end-customers on the transition. 13 I would like to thank Samuel and the Sub-Group leads for their strong and able leadership, and the great work done thus far. Samuel will be sharing more on the SC-STS transition roadmap later, and will also chart out what needs to be done in the remaining 15 months to end-2021. D Executing a smooth transition to the new landscape 14 A key part of our work in the remaining months to end-2021, is the transitioning of legacy contracts from SOR to SORA. Close to $ trillion notional value of outstanding SGD derivatives contracts referencing SOR, and 8 amounting to $ billion, will around 12,000 SOR contracts in SGD cash markets, mature after end-2021, and will need to transition. 15 Transitioning legacy contracts from SOR to SORA is a complex exercise.

8  BIS Review 36/2005  Chart 1: The Maradona theory of interest rates in 2002 Feb IR  Per cent 8  May IR Aug IR Nov IR  7 6 5 4 3 2 1  2001  2003  2002  2004  0  Note: the black line represents the Bank of England official interest rate. The coloured lines represent the market’s expectations of future interest rates, as calculated in each of the four Inflation Reports published in 2002. Chart 2: Inflation and Unemployment 1993-2005 RPIX inflation (%) 30 25 20 15 10 5 0 -5 0  2 4 6 Une mployme nt (%)  8  10  12  Source: ONS. Note: The unemployment rate used here is the Claimant Count measure.
At the outset of the Conference, it has been clearly articulated by our EU speakers that the enlargement of the EU and the economic and monetary integration of acceding countries will not only strengthen the role of the EU as a global player in the long term, but also make a sustainable contribution to global stability and prosperity. On the developments and prospects for ASEAN, our ASEAN speakers have more than stressed that the overall economic and financial transformation that has occurred in ASEAN since the Asian financial crisis has resulted in an ASEAN that is a mutually reinforcing region of growth; an ASEAN that has an increasing role in the creation of wealth; and an ASEAN that will remain as an important region in promoting and supporting global stability and growth. This Conference has revealed to us that both our regions are currently at the confluence of favourable factors; factors that have led to a marked expansion in the base of opportunities that we can offer each other. It is imperative that our discussions on taking advantage of the emerging opportunities be translated into concrete actions. We are of course aware that implementing these actions will demand decision and leadership from both ASEAN and the EU. From the proceedings of the Conference, it seems to me that there may be a need to develop a more entrenched mechanism to leverage further on our respective core capabilities and which seeks to find simpler, faster and more effective ways that would enhance our joint endeavours.

As the Eurosystem, we stand ready to take part in initiatives on issues falling within our fields of competence. I should like to end my remarks here. However, before I do, let me once again express my gratitude for being invited to give this lecture today. It has indeed been a great honour, in particular in view of Governor Zolotas’ long and distinguished career at the Bank of Greece. BIS Review 113/1999  6
Chart 5: Population ageing is expected to continue Age distribution in the adult (16+) UK population (a)  (a) Dashed line and hashed bars are calculated using the ONS 2020-based interim national population projections: year ending June 2022 estimated international migration variant. Sources: ONS and Bank calculations. Chart 5 shows the age distribution for the United Kingdom. The share of the adult population aged 20-59 has fallen below 65% in the past decade, and it is set to decline further in the coming years. This population ageing has been driven by a decline in birth rates relative to the high levels seen in the years that followed the Second World War – as well as by the happier news that people now live for longer. As people accumulate savings over their working life to fund their retirement, wealth in the economy increases as the age distribution shifts towards older cohorts (indicated in this chart by bars in different colours). So ageing households have sought to lend more at a time when less productive firms have sought to borrow less. The only way to establish an equilibrium between the supply and demand in the market for investable funds – that is, to incentivise firms to invest this  Bank of England  Page 9  additional wealth into productive capital – has been for the price of those funds, the real interest rate, to fall. The trend equilibrium rate, R*, is like a long-term anchor for monetary policy.

Birgir Ísleifur Gunnarsson: Review of economic and financial development in Iceland in 2004 Address by Mr Birgir Ísleifur Gunnarsson, Governor and Chairman of the Board of Governors of the Central Bank of Iceland, at the Bank’s Annual Meeting, Reykjavík, 30 March 2005. *  *  *  On behalf of the Board of Governors of the Central Bank of Iceland I welcome you all to the Bank’s 44th annual meeting. The Bank’s financial accounts for the year 2004 have been ratified today by the Prime Minister. The Bank’s annual report has also been published. It includes a survey of the Bank’s activities and operation, along with a report on the Bank’s monetary policy and actions, the financial system, financial stability and the financial markets, and the main features of economic developments in the course of last year. Under the Act on the Central Bank of Iceland that was passed by Parliament four years ago, the main objective of monetary policy is price stability. The joint declaration by the Government and the Central Bank from March 27, 2001 set a formal inflation target for the Central Bank, i.e. it is obliged to aim at a rate of inflation, measured as the annual twelve-month increase in the CPI, of as close to 2½% as possible.
However, the actual trade-off that is struck will be importantly influenced by MPC members’ views of both the nature of the shocks hitting the economy and the transmission mechanism of monetary policy.17  As the remit states: “In exceptional circumstances, shocks to the economy may be particularly large or the effects of shocks may persist over an extended period, or both. In such circumstances, the Monetary Policy Committee is likely to be faced with more significant trade-offs between the speed with which it aims to bring inflation back to the target and the consideration that should be placed on the variability of output.” 17 For more detail, see ‘Lambda’, speech by Mark Carney at the London School of Economics, 16 January 2017. 16  15  All speeches are available online at www.bankofengland.co.uk/news/speeches  15  Charts 10a and 10b demonstrate how the expected trade-off evolved in successive MPC forecasts since the referendum.

As a consequence, the MPC began to remove some of the policy stimulus, raising Bank Rate from ¼% to ½% in November 2017 and then to ¾% in August 2018 where it has remained since. 20  This comprised: a 25 basis point reduction in Bank Rate to 0.25%; a Term Funding Scheme to reinforce the pass-through of that cut to the borrowing rates faced by households and companies; £ billion of gilt purchases; and £ billion of corporate bond purchases. 21 The FPC cut the counter-cyclical capital buffer rate to zero, increasing credit availability by up to £ billion; emphasised that banks’ liquidity reserves are usable; and amended the leverage ratio framework for UK banks by excluding central bank reserves. The PRA Board used regulatory flexibilities to smooth insurers’ transition to new regulatory standards in a very low interest rate environment. 22 This estimate is based on the approach to construct a “synthetic” measure of UK GDP described in ‘The Economic Outlook: Fading global tailwinds, intensifying Brexit headwinds’, speech given by Gertjan Vlieghe at the Resolution Foundation, 14 February 2019. 23 Figures are for whole economy average wages excluding bonuses (“regular pay”).
If changes in the balance sheet are now acting as a substitute for changes in the federal funds rate, then one might expect balance sheet decisions to also be governed to a large extent by the evolution of the FOMC’s economic forecasts. The earlier purchase program, in contrast, did not demonstrate much responsiveness to changes in economic or financial conditions. Indeed, the execution of the program largely involved confirming the expectations that were put in place by the two early announcements. Third, how persistent should movements in the balance sheet be? An important feature of traditional monetary policy is that movements in the federal funds rate are not quickly reversed, which makes them more influential on broader financial conditions. A change that was expected to be transitory would instead move conditions very little. For similar reasons, one could argue that movements in the balance sheet should have some persistence in order to be more effective. Fourth, to what extent should the FOMC communicate about the likely path of the balance sheet? The FOMC often communicates about the path of the federal funds rate or provides other forward-looking information that allows market participants to anticipate that path. This anticipation of policy actions is beneficial, as it brings forward their effects and thus helps to stabilize the economy. For the same reason, providing information about the likely course of the balance sheet could be desirable.

In particular, by purchasing longer-term securities, the Federal Reserve removes duration risk from the market, which should help to reduce the term premium that investors demand for holding longer-term securities. That effect should in turn boost other asset prices, as those investors displaced by the Fed’s purchases would likely seek to hold alternative types of securities. Some research studies have estimated that the effects of the earlier expansion of our securities holdings by just over $ trillion lowered longer-term Treasury yields by about 50 basis points through this portfolio balance channel. 3 These effects on Treasury yields appear to have been transmitted into lower rates on private credit instruments and higher asset prices more broadly. 1  Reflecting the long-standing practice of the Desk, principal payments on our holdings of Treasury securities were already being fully reinvested at Treasury auctions. 2  The Fed’s asset purchases initially had an additional and important effect on mortgage rates by improving the functioning of the MBS market. As I have noted in earlier speeches, the use of the central bank’s balance sheet can be particularly effective when focused on markets in which liquidity and market functioning have become impaired. The focus here is whether, in addition to those effects, the size and composition of the Fed’s balance sheet have a lasting impact on financial conditions in well-functioning and relatively liquid markets.
In any event, the preamble to Law 11/2015 establishes that these arrangements for the allocation of functions should be assessed once – within two years – the implementation of the restructuring plans currently under way has been completed, in light of the experience acquired, with a view to achieving greater efficiency. 4  BIS central bankers’ speeches  All told, as regards the organisation of the traditional supervisory functions, namely solvency, conduct and investor protection, Spain retains a sectoral approach which, as indicated earlier, was abandoned some time back by our peers. Hence, the Banco de España retains supervisory competencies for the solvency of credit institutions and also for their conduct, as regards the marketing and selling of loan and deposit products. The CNMV, meanwhile, in addition to overseeing the functioning of markets, supervises the solvency and conduct of investment firms and other capital market intermediaries (such as investment fund management companies), and the commercialization of financial products classified as securities. Finally, the Directorate General for Insurance and Pension Funds oversees the solvency and conduct of companies in the insurance sector, along with the operations of pension funds and their management companies. These authorities also manage enquiries and claims services in their respective areas and are empowered to issue reports on disputes between the different institutions and their customers, although, as you know, such reports are not binding.

The outlook for monetary policy Substantial accommodation is still needed to secure the path of inflation convergence and this is reflected in our past monetary policy decisions. In parallel to winding down net purchases, we have strengthened our forward guidance on interest rates and bond reinvestments. This has allowed us to rotate the instruments used to set the policy stance, while leaving the stance itself broadly unchanged. Our forward guidance framework has been specifically designed to accompany the economy by facilitating needed adjustments in the policy stance as the outlook evolves. It works along three main dimensions. First, the state-based leg of our guidance ensures that interest rate expectations are anchored to our ultimate inflation objective, and thereby acts as an “automatic stabiliser” in the event of downside risks emerging. Second, the date-based leg provides extra information to focus rate expectations over the near term. Third, since our forward guidance on reinvestments is tied to our guidance on rates, adjustments to rate guidance automatically entail a change of the reinvestment horizon in the same direction. This reinforces the easing impact of a flatter expected rate path by compressing the term 4/6  BIS central bankers' speeches  premium component of longer-term interest rates. We will continue monitoring how banks can maintain healthy earning conditions while net interest margins are compressed. And, if necessary, we need to reflect on possible measures that can preserve the favourable implications of negative rates for the economy, while mitigating the side effects, if any.
As is always the case, there is substantial uncertainty surrounding this forecast. Moreover, there is always the possibility of some unforeseen shock. Thus, we will continue to monitor U.S. and global economic conditions very carefully and will adjust our views on the likely path for growth, inflation and the unemployment rate accordingly. Thank you for your kind attention and I will now be happy to take some questions. 1  4  Based on the CoreLogic home price index including distressed sales. BIS central bankers’ speeches

The intrinsic nature of Islamic finance encourages risk management and provides confidence through explicit disclosure and transparency of the roles and responsibilities defined in the contract. The transparent nature of the Islamic financial contracts and the need for underlying economic transaction reinforces the stability of the Islamic financial system. A vital challenge going forward is however to build a stronger, competitive and dynamic Islamic financial system that better reflects the internalization of Shariah principles in financial transactions, in its form, spirit and substance. This epitomizes the objectives of the Shariah in promoting economic and social justice. While developing Islamic financial system with products and services mirroring the conventional counterpart is acceptable as a pragmatic approach, it needs to develop further on its own paths and merits so as to maximize the potential benefits of Islamic financial system. Key to this is having an appropriate pricing benchmark to be an indicator for Islamic securities to be efficiently priced and credible. In addition, the role of Shariah scholars who have the full understanding of the mechanics of Islamic financial products and services, are key to ensuring its continued development. At the same time, Shariah decisions, when made, needs to be disclosed. This will allow others to appreciate the juristic reasoning, which in turn would lead to a wider acceptance of Shariah decisions, particularly if they have implications on cross-border transactions. As the Islamic financial system becomes increasingly more internationally-integrated, it is important to recognize the different regional and institutional strengths and complementarities and the need to maximize synergies.