samchain/econo-pairs-v1 huggingface dataset:
On 25 September 1999 the ECB and the EU national central banks will conduct a demonstration of the TARGET Year 2000 compliance in which – according to current information – several hundred EU credit institutions will participate. Prior to this, the ECB and the national central banks have already successfully tested their TARGET components first at the national level and thereafter in cross-border tests. To a large extent, credit institutions have already taken part in these tests. In parallel, as announced a few weeks ago, on 29 June 1999 the ECB together with the national central banks successfully completed the bilateral testing of the ESCB applications that are necessary for the conduct of monetary policy operations. The testing exercise, together with the parallel remedial actions, has proved that these systems are Year 2000 compliant. BIS Review 96/1999  2  You may recall that on 15 July 1999 we decided to close TARGET on 31 December 1999 in order to smooth the transition not only for the ESCB institutions, but also for the other financial institutions. This day can thus be kept free for end-of-year operations and for making full back-ups of the relevant systems. In the area of TARGET, as well as in the area of monetary policy implementation and liquidity management, we are also reviewing our contingency procedures to minimise any potential Year 2000-related impact. It is worth noting that general contingency procedures had already been put in place shortly before the launch of the euro.

As a central bank governor, I would certainly welcome such a development. After all, the credibility of our monetary policy ultimately depends on whether the public believes that we match our words with our actions. BIS Review 55/2006  3
But even if the Governing Council does object, it cannot change the decision, but has to send it back to the Supervisory Board, which can either change the decision or call upon a mediation panel to resolve the difference of opinion. I can see that countries which join the banking union from outside the euro area might have some concerns. While they would have their seat on the Supervisory Board, they would not have a seat in the Governing Council. So, would they lose control over decisions that might directly affect their banks? Well, that would certainly not be in the spirit of the banking union. There are thus safeguards to avoid just that. Let me give you an example. If the Supervisory Board drafts a decision which affects a member from outside the euro area, and if that member disagrees with the decision, it can formally state its objection. Thus, the Governing Council is made aware that there are diverging views and has to take them fully into account. Now, what if the Governing Council objects to a draft decision, and the affected country does not agree with the objection? In such a case it could, for instance, call upon the mediation panel to resolve the issue. What I want to say is this: if a country from outside the euro area were to join the banking union, its voice would be heard at all stages of the decision-making process.

But is that really true? I don’t think so. If we work together, we are still in control and we can still do things well. The history of the EU is a case in point. When European countries signed the Treaty of Rome 61 years ago, they chose to work together instead of working alone. Today more than ever, this choice is also a reaction to a changing world. Some of the current changes are beyond any single government’s control, and are better managed with the help of strong allies and good friends. The world of banking is no exception. Our financial systems have grown closer together and have become much more complex than they used to be. Large banking groups now cover many Member States. We have all benefited from this. But if we want this trend towards integration to continue, we must make sure it does not come at the cost of greater instability and more crises. We need rules that apply across borders just as banks operate across borders. And we need supervisors who have the power to see and act across borders. In short: we need to cooperate. And when I say cooperate, that’s what I mean. I know that some may think we have created a system in which the ECB and the Single Resolution Board hold all the power. I think otherwise. The banking union is very much a joint project. Just look at banking supervision. We at the ECB cannot act alone.
Estimates of the drag from Brexit vary, but to give some perspective, the level of UK GDP is currently some 3% lower than might have been expected given how demand in the rest of the world has evolved since June 2016.22 Supported by the package of monetary policy measures, the broad-based global expansion and fiscal easing in late 2016, UK growth did rise above the subdued rate of potential supply growth. Over the course of 2017 and 2018, unemployment continued to decline and spare capacity was steadily used up. As the labour market tightened and companies found it harder to recruit and retain staff, wage growth began to pick up as expected (Chart 11). Across the economy as a whole, pay growth rose from around 1½% a year during 2010-15 to around 2¼% in 2016 and 2017 and 3% in 2018.23 Although these rates of pay growth were still lower than pre-crisis averages that largely reflected weak productivity growth. As a result, indicators of domestic inflationary pressures, such as unit labour cost growth, rose towards rates consistent with the inflation target. The steady absorption of slack and the prospect of moving into excess demand by the end of the MPC’s three-year forecast period – evident in the dots showing the successive Inflation Report projections in Chart 10b – reduced the degree to which it was appropriate to accommodate an extended period of inflation above the target.

Average MPC vote includes both decisions on Bank Rate and QE, with every extra £ of asset purchases (gilts and corporate bonds) treated as equivalent to a 25bp cut in Bank Rate (see Joyce, Tong and Woods, 2011). With uncertainty about supply now overwhelming uncertainty about demand, and with the strong desire to secure a recovery in an economy that had – reportedly at least – only narrowly missed a triple dip recession, the MPC provided forward guidance in August 2013 that explicitly linked any potential change in interest rates to the unemployment rate. By using a clear and widely understood indicator of the degree of spare capacity,6 the Committee sought to secure the nascent recovery while learning more about the supply capacity of the economy. Recall that at the time fiscal consolidation continued to weigh on domestic demand, making monetary policy the “only game in town.”  6  For the full text of the guidance, see the minutes of the August 2013 MPC meeting, available at https://www.bankofengland.co.uk/minutes/2013/monetary-policy-committee-august-2013. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  The message the Committee gave UK households and businesses was simple: the MPC would not even think about tightening policy at least until the unemployment rate had fallen below 7%, consistent with the creation of around three quarter of a million jobs. We reassured households and businesses that, after five difficult years, the recovery would not be choked off prematurely.
This, in turn, has raised the level of employment compatible with price stability, or, put differently, lowered the inflation rate for any given level of employment. The effects of globalisation may also be felt more indirectly through increased competition, both on the products and labour markets. On the products market, globalisation has eliminated the least productive domestic firms (those that set the highest prices) and reduced the pricing power of remaining domestic firms. It may also have created the conditions for wage moderation by increasing the degree of competition on the labour market. Overall, these developments have made it easier for Central Banks to bring down inflation without real costs to the economy. But it is doubtful that we can count indefinitely on such "tailwinds". Inflation only partly depends upon imported prices. Many goods and most services are still produced domestically with little competition from abroad. Domestic factors thus remain crucial determinants of inflation rates. Globalisation lowers the relative price of tradables to non-tradables in an open economy. But the overall level and dynamics of prices ultimately remain determined by the monetary authorities provided they ensure that steady growth in overall nominal demand is maintained through an appropriate monetary policy. 1 In addition, it is possible that the effects of globalisation on inflation will be reversed in the future. Strong growth in big emerging economies is increasingly putting pressures on the price of oil, food and other commodities.

This pace of growth would likely be sufficient to continue to absorb any remaining slack in the labor market and to support inflation moving back to our 2 percent objective. However, any forecast is uncertain and growth could end up higher or lower. Let me turn to an assessment of the balance of risks around my growth outlook. I believe that a sizable pickup  1  Tobias Adrian, Matthew Higgins, Jonathan McCarthy, Paolo Pesenti, Robert Rich, Giorgio Topa, Joseph Tracy and Peter Van Tassel assisted in preparing these remarks. BIS central bankers’ speeches  1  in the rate of growth of economic activity relative to that in my forecast seems unlikely for a number of reasons. Although consumer spending strengthened substantially in the second quarter, that stronger pace is unlikely to be sustained going forward. That is because the fundamentals supporting consumption have softened somewhat. Real income growth moderated in the second quarter as the pace of job gains slowed and the inflation rate rose, boosted by somewhat higher energy prices. Even with the surprisingly large addition of 287,000 payroll jobs in June, the pace of improvement in the U.S. labor market appears to have slowed somewhat. For example, over the past three months, payroll gains have averaged about 150,000 per month, as compared to an average of more than 200,000 per month over the course of 2015 and the first quarter of this year.
For the Bank of England, the answer to that question is clearly set out in the statutory objectives laid down for us by Parliament7: our mission is to promote the good of the people of the United Kingdom by maintaining monetary stability, defined by the Government as low and stable inflation with a target of 2% (and subject to that supporting the Government’s economic policy and growth and employment objectives); and financial Available on the Society of Professional Economists’ website. Peter was the managing editor of OxRep. 4 “The unemployment problem in the 1980s”, Derek Morris and Peter Sinclair, Oxford Review of Economic Policy, vol. 1 no. 2 (1985). 5 “Monetary policy normals, future and past”, William Allen and Peter Sinclair, National Institute Economic Review, vol. 241 no. 1 (2017) 6 “Quantitative easing is not as unconventional as it seems”, Peter Sinclair and Colin Ellis, Oxford Review of Economic Policy, vo. 28 no. 4 (2012) 7 Specifically, in the Bank of England Charter 1694, the Bank of England Act 1998 and the Banking Act 2009. 2  3  3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  stability, defined as the resilience of the UK financial system as a whole so that it can serve UK households and businesses in bad times as well as good. What makes the Bank of England the right institution to deliver those objectives?

As the MPC highlighted again in the Minutes of its February 2021 meeting, if needed the Bank could re-evaluate some of its self-imposed constraints on gilt purchases to create more headroom. As I noted earlier, the MPC has asked the PRA to engage with firms to ensure they could be ready to implement a negative Bank Rate at any point after six months, and has asked Bank staff to commence internal technical preparations to deliver the option of a tiered system of reserve remuneration that could be ready to be implemented, should it be judged appropriate, alongside a negative Bank Rate. At the same time the Committee also agreed to ask Bank staff to reconsider the previous guidance on the appropriate strategy for tightening monetary policy should that be required in the future. But none of these requests are intended as a signal about the future path of monetary policy – they represented transparent contingency planning for possible future uses of our monetary policy tools. 28  In my speech ‘The Monetary Policy Toolbox in the UK’ 14  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  14  As for the immediate future: in November 2020 the MPC voted unanimously for a further £ of government bond purchases, to be implemented throughout 2021 and to be completed at around the end of the year.
The programme offers wide ranging topics for Islamic finance and caters to the needs of a group of central bankers, regulators and Government officials. We wish to thank the Central Bank of the Republic of Turkey for their support for making this training initiative possible. Before I end my remarks, I would like to take this opportunity to re-emphasise our commitment to strengthen strategic collaboration with Turkey. With me is a delegation of the Malaysian financial institutions, investment institutions and professional firms ready to explore, engage and leverage on each other’s market opportunities. There is much that can be done by both sides to jointly explore and realise the potential for mutual benefits. I strongly believe that today’s event will end on a positive note, with both Turkish and Malaysian delegation able to identify on the next steps. It is our fervent hope that the business and financial community of both countries would establish regular contacts to further strengthen collaborative network and to follow through on some of the understandings reached today. I take this opportunity to offer for the next follow meeting or seminar to be held in Malaysia. It is always useful to see first-hand the opportunities and prospect that Malaysia has to offer. I wish to thank you all for your participation in making this event a success and to His Excellency Tun Dr. Mahathir Mohamad and the panel of speakers for the ideas, pointers and suggestions that you would share to make this event a successful one.

Muhammad bin Ibrahim: Malaysia and Turkey – the new silk route in Islamic finance – strategies for collaboration, cooperation and smart partnership Opening remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at a business seminar on Islamic finance Istanbul: “Malaysia-Turkey Islamic finance cooperation: new solution – preferred partner”, Istanbul, 29 September 2011. *  *  *  I have the honour today to welcome distinguished guests to the Business Seminar organised by Bank Negara Malaysia, held in this beautiful and historic city of Istanbul. The theme “Malaysia and Turkey: The New Silk Route in Islamic Finance – Strategies for Collaboration, Cooperation and Smart Partnership” was chosen as a reflection of our desire to strengthen economic and business ties for the mutual benefits of both countries. The emergence of the “Silk Route”, a term coined by Governor Dr Zeti in 2006 opens up exciting prospects for countries and businesses. The new “Silk Route” not only carries traditional trade of goods and services of old but also manufactured goods, technological innovation and know-how, portfolio flows, private equity investment and mobility of human capital and knowledge. Today, Islamic financial products and services are truly “new” additions to this trade. Let me first express our heartfelt appreciation to His Excellency Tun Dr. Mahathir Mohamad for accepting our invitation to speak at this event, sharing his thoughts on Islamic finance. Tun Dr. Mahathir needs no introduction.
This is an important wake-up call for the financial market, and market participants are spending a lot more efforts on the transition issues, with the support of ISDA and other industry bodies. 3. But, with this growing momentum, are we all geared up? I would reply with a simple ‘no’. Clearly, much more remains to be done. Transition: A challenging process even for the deep USD market 4. Among all the IBORs, USD LIBOR is the most widely used benchmark in the global market. And the US authorities have been proactively engaging with the industry in promoting the use of Secured Overnight Financing Rate (SOFR) as an alternative. 5. Since the launch of SOFR in April 2018, the trading volume of interest rate derivatives (IRD) referencing SOFR has been growing, but it remains relatively small. According to ISDA’s Interest Rate Benchmarks Review, the total traded notional volumes of IRD referencing SOFR was $ billion in Q1 2019. This was less than 0.1% of those referencing USD LIBOR, which totalled $ trillion. 6. So, even for the USD market, which is the deepest and most liquid market in the world, the build-up of transactions based on an alternative risk-free rate could take some time. For other IBORs, this could be an even longer and more challenging process. Transition: A multi-dimension challenge Wide-ranging impact arising from the transition 7. As many speakers have pointed out, transitioning to alternative reference rates is a complex multi-dimension task.

If the risk that a client might fail became too high, a clearing bank could decide not to unwind that client’s trades in the morning, leaving its investors with the collateral. Most of these investors lacked the operational or financial capacity to take possession of collateral and liquidate it in a gradual manner to recoup their investment; they had a strong incentive to run at the first sign of trouble to avoid getting stuck with the dealer’s collateral. Alternatively, if a client were to fail suddenly after the mornings unwind, then the clearing bank would be stuck with huge loans to these counterparties that could have put their own viability at risk, backed by securities that were not necessarily high quality and liquid. The “breaking the buck” by the Reserve Fund following the Lehman bankruptcy also made it clear that the monies provided to the money market mutual funds by their own investors were also inherently unstable. This made such funds, in turn, an unreliable source of finance in repo, commercial paper and other markets. Investors in a fixed net asset value (NAV) money market fund could take their money out on a daily basis at par value, with no redemption penalty. This could occur even if the money market fund did not have sufficient cash or liquid assets that it could easily sell to meet all potential redemptions.
We are currently discussing introducing a new standard, which will differ from the current concentration standards (N6, N21) in that a banking group’s assets will be included in the calculation of N30 without risk weighting and will be correlated with the core capital rather than total capital. This, in our opinion, will make it possible to more accurately assess these risks and take into account risk transfer channels and the spread of risks across the group that forms banking groups. We have prepared a draft regulation and plan to discuss it with the banking community. In any case, the introduction of the standard will not take place earlier than 2022. There are, indeed, many topics that need to be discussed, and we are ready to discuss them. As you can see, I have already listed several of the consultation papers that we are publishing. And we will adhere to the practice that was and is in place and think is useful. All innovations that affect banks, will be discussed conceptually as advisory reports, then we will give everyone time to discuss the draft regulations themselves, and then give everyone time to implement these regulatory acts. At the request of the banking community, we have introduced the practice of a release approach. As you know, we are trying to package all changes to regulation in such a way that they come into force twice a year: on 1 April and 1 October.

Under normal circumstances, the real economic effects in the industrialised world from decreased trade with Brazil should be relatively limited. There is a risk, however, of the crisis also becoming more profound among Brazil’s neighbours, leading in time to somewhat larger repercussions in the industrialised countries as well. The effects via financial markets could be greater in the short run but developments to date in this respect have been better than many feared. The picture in other parts of the world economy at the end of 1998 is somewhat varied. Growth in the U.S. economy is still good, whereas the slowdown in the euro area has become  BIS Review 18/1999  2  slightly more marked than many observers counted on and we have yet to see an economic recovery in Japan. The sustained strength of the U.S. economy is mainly due to the unbroken growth of private consumption – the slowdown that was foreseen in our December Inflation Report has still to materialise. The stock exchange has recovered from last autumn’s fall and even reached new all-time highs. Together with a positive development of employment, this has helped improve the confidence of American consumers. In time, however, a slowdown in the U.S. economy still seems probable; but the course to date does suggest that it will not occur as soon as the Riksbank expected earlier, in which case the trend in 1999 may be stronger. A more dramatic downturn could occur if the U.S. stock markets were to fall markedly.