samchain/econo-pairs-v1 huggingface dataset:
This is evidenced by the increasing number of takaful players world wide and the ability of these players in providing a comprehensive range of product and services, matching those offered by the conventional counterpart. In Malaysia, the takaful industry has experienced rapid growth and transformation since its inception more than 20 years ago. The industry continued to show positive growth, registering an average growth rate of 58% per annum in terms of asset. The growth is expected to be further strengthened with the increase in the number of takaful players. The Malaysian takaful operators are also actively venturing abroad to widen their global presence through the acquisition of equity interest in foreign takaful operators as well as exporting technical expertise to their foreign counterparts. Currently our domestic takaful operators have equity participation in Saudi Arabia, Sri Lanka, Indonesia and Pakistan. 6. On the regulatory front, Islamic finance continues to pose unprecedented challenges to regulators in their quest to be at par with conventional regulatory framework while, at the same time, upholding the true concept of Shariah. Of importance is the development of capital adequacy and solvency, risk assessment and management and corporate governance, which are very much relevant to Islamic banking and takaful. There is also a challenge to develop internationally acceptable standards for the regulation of Islamic banking and takaful sectors, specifically in areas which involve different Shariah interpretations.

Jean-Pierre Roth: Rising oil prices – a challenge for monetary policy? Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, Déjeuners de la Finance, Geneva, 2 November 2005. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  Despite oil prices being at a historically high level, inflation has increased only slightly in recent quarters and growth appears to be robust. Are we to assume, therefore, that oil no longer plays an important role in today’s economic environment? What challenges does the current situation pose for monetary policy? For the first time, the steady rise in energy prices is not the result of a political boycott by oil-producing countries, but of an increase in energy demand, coming in particular from the newly industrialised countries in Asia. In other words, the rise in crude oil prices this time can be attributed to the strong growth in global economic activity. This does not mean, however, that the role of monetary policy has changed. Although core inflation currently appears to be under control in most countries, a persistent and continuous rise in energy costs could have an effect on all prices and wages in the long run, thereby jeopardising monetary stability. Notwithstanding the low level of inflation (excluding energy prices), it is vital that the monetary authorities maintain a forward-looking stance so as not to put their credibility on the line and to ensure long-term price stability. 1/1
But they are particularly important in the case of innovative projects in Spain, where external finance comes mainly in the form of bank loans, due to the absence of sufficiently developed alternative capital markets, as evidenced by the fact that bond issues still represent barely 10% of the total finance received by Spanish non-financial corporations, compared with 40% in the USA. 9  See S. Fazzari, R. Hubbard and B. Petersen (1988), “Financing Constraints and Corporate Investment”, Brookings Papers on Economic Activity, vol. 1, pp. 141-206. 10 See A. Goodare and I. Tonks (1995), “Finance and Technological Change”, in P. Stoneman (ed. ), Handbook of the Economics of Innovation and Technological Change, Wiley-Blackwell, pp. 298-341. 14/18  Financing innovation  The most recent period has seen some growth of non-bank financing in Spain and a certain improvement in the allocation of bank financing compared with the period immediately before the crisis, during which the firms receiving credit were characterised by their low productivity and a high proportion of real estate assets on their balance sheets. This largely explains the low dynamism of aggregate productivity in that period.11 By contrast, in the recovery phase funds tended to go to firms with a comparatively more favourable economic and financial position and which were more productive.12 In any event, this relative improvement in the allocation of bank credit cannot be allowed to hinder the development of specific financial products to facilitate the financing and growth of small and/or newly created innovative firms.

In particular, and in accordance with previous communications, the Governing Council acted – with a package of expansionary measures – in response to inflation rates, both observed and projected for the next few years, that have remained persistently below the ECB’s objective, in line with its commitment to symmetry in relation to this aim. In this context, symmetry means that the ECB undertakes to act with the same determination whether inflation is persistently above or below 2%.1 In particular, the Governing Council of the ECB took the decision to decrease the interest rate on the deposit facility by 10 basis points (bp) to -0.50% and reinforced its forward guidance on interest rates by indicating that they will remain at their present or lower levels until the inflation outlook is seen to be robustly converging on a level sufficiently close to, but below, 2%. Such convergence should also be consistently reflected in the observed behaviour of inflation. 1  See the Governor of the Banco de España’s closing address of the La Granda Courses on 31 August 2019, “The European economic policy response to a scenario of lower growth and inflation”. 4/18  The ECB also agreed to restart net purchases under its asset purchase programme (APP) at a monthly pace of € billion as from 1 November and without a defined time limit.
After spiking over the next few months, inflation is, we believe, likely to drop below our 2% target due to the downward pressures from a weak level of demand on wages and prices (Chart 6). But it is then likely to climb back towards the target as the economy recovers. Compared with our previous collective forecast last November, there are differences of nuance in the “most likely” and “mean” paths for growth and inflation, but frankly to my mind those nuances are small beer compared to the main risks. My take on those risks is that, on the downside, the headwinds to demand and activity could prove stronger than currently foreseen. And, on the  1  See Tucker P M W (2009e), “The Debate on Financial System Resilience: Macroprudential Instruments”, Barclays Annual Lecture, London, 22 October, 2009. BIS Review 21/2010  1  upside, that we (and our peers) could prove too slow to withdraw monetary stimulus if animal spirits revive across the economy or further spikes in inflation outturns raise medium-term expectations. Meanwhile, the data are bound to be mixed. Four aspects of the conjuncture Against that background, I shall briefly review a handful of the issues that, one way or another, the MPC will face over the coming months. A balance sheet recession? I have a good deal of sympathy for those who argue that the current downturn owes a lot to stretched balance sheets – in the private sector, public sector, and the national economy as a whole.

In Sweden too, authorities such as the Riksbank, the National Debt Office and Finansinspektionen (the Swedish Financial Supervisory Authority) have acted to alleviate the crisis. As in many other countries, the government has increased the national deposit guarantee scheme and has extended it to cover all forms of deposits in accounts. The government has also introduced a guarantee programme, set up a guarantee fund and decided on capital injections for banks. At the same time, the government is conducting a more expansionary fiscal policy than previously to mitigate the effects on the real economy. The Riksbank has implemented a large number of measures to safeguard financial stability and mitigate the negative effects of the financial crisis. We have changed the collateral requirements so that the banks can use more types of security as collateral when they borrow from the Riksbank. We have, for example, begun offering loans with commercial paper as collateral to facilitate the companies' financing. We have also begun to lend at longer maturities, with variable interest rates and with smaller supplements. We have provided special liquidity assistance to Kaupthing and Carnegie. In addition, we have entered into loan agreements with Iceland, Latvia and Estonia to ease the situation in these countries. All this has meant that during the second half of 2008 the Riksbank increased its total lending to the banks by more than SEK 450 billion. I will discuss what this entails in just a moment.
No doubt, however, that a point target can also be attractive, as it is clearer and constitutes a stronger anchor for expectations. Given the SNB's excellent track record with regard to price stability – twelve years of inflation below 2% – we can benefit from firmly anchored expectations without having to accept the unnecessary constraints that a point target would imply. The third subtlety is that, while the SNB defines price stability as inflation of less than 2%, the ECB, which has more or less the same definition, aims for a rate close to 2%, and the Bank of Israel has an inflation target of 1 to 3%. Why is it that the three central banks have different views as to what exactly constitutes price stability? There are several considerations here, but the most important is the historical perspective. For central banks that have faced relatively high and volatile inflation levels in the past, a comparatively high inflation target is already ambitious. Only once expectations have been anchored, can further steps towards price stability be envisaged. This is true for Israel, where keeping inflation between 2% and 3% is a huge step forward as compared with historical records. For the ECB, which still has to cope with adjustment difficulties (such as higher inflation in countries that are catching up, like Spain or Greece), an inflation rate "close to 2%" seems reasonable. Monetary independence thus allows a country to choose the level of inflation it finds appropriate.

For them, one of the major advantages of joining a monetary union is stronger economic growth thanks to lower transaction costs and reduced exchange rate risk. Moreover, for countries that have historically experienced high and volatile inflation and thus high interest rates, adopting the euro brings a fall in nominal and real interest rates, thereby reducing government and private debt burdens. Given these positive effects, why has Switzerland not embraced the euro or, at least, pegged the franc to the euro? To my mind, there are four main reasons for this. •  The first is that retaining our own currency, within the framework of flexible exchange rates, gives us the freedom to choose the level of domestic inflation. •  Secondly, monetary independence allows a better reaction to country-specific shocks. •  Thirdly, monetary integration would lead to higher interest rates in our capital market. •  And finally, any tentative move to peg the franc to the euro, as long as Switzerland is not at least in the process of becoming an EU member, would destabilise rather than stabilise our currency. Let me review these points in detail. 2  BIS Review 46/2006  Choice of monetary policy goal The European Central Bank's main task is to guarantee price stability in the euro area. The ECB achieves this by, in its own wording, "aim[ing] at maintaining [consumer price] inflation below, but close to, 2% over the medium term". The National Bank Act defines the SNB's main task, too, as the achievement of price stability.
From the customer’s point of view it means increased choice and control over financial assets, data and the service providers having access to this. The big aim of Open Banking is to increase competition in the market by driving innovation in the quality of products and services that customers receive. The current account market has complex pricing, low customer switching, difficulties in comparing products and high charges on overdrafts. The outcome is that people are paying more for lower quality services than they need to. In 2016, Accenture conducted a research with consumers which showed that 85% of 18–24 year olds would trust third parties to aggregate their financial data. In contrast, 48% of 55–64 year olds were neutral or positive.2 These figures already suggest that we will witness a battle for the customer relationship and data between banks and FinTech. The outcome of this battle will be crucial in determining the future of the bank models which will likely face several transition stages. At the current stage, the existing banks are under pressure by the FinTech to improve cost efficiency and the customer relationship. Given their market knowledge and good market positions, the existing banks may adapt relatively fast by adopting new technologies in close cooperation with the FinTech. In the future, banks and FinTech companies may strengthen their cooperation as joint ventures, partners or other type of structures where delivery of services to the clients is shared between them.

One potential benefit of DLT-based structures is immediate clearing and settlement of securities, in contrast to the multiple-day lags that currently exist when exchanging cash for securities (and vice versa). Progress in this direction was recently achieved by a joint venture between the Deutsche Bundesbank and Deutsche Börse, which developed a functional prototype of a DLT based securities settlement platform that achieves delivery-versus-payment settlement of digital coins and securities (Deutsche Bundesbank (2016)). Whether or not a central bank should provide a digital alternative to cash is most pressing in 4/5  BIS central bankers' speeches  countries, such as Sweden, where cash usage is rapidly declining. But all central banks may eventually have to decide whether issuing CBCCs makes sense in their own context. In making this decision, central banks will have to consider not only consumer preferences for privacy and possible efficiency gains – in terms of payments, clearing and settlement – but also the risks it may entail for the financial system and the wider economy, as well as any implications for monetary policy. Some of the risks are currently hard to assess. For instance, at present very little can be said about the cyber-resilience of CBCCs, something not touched upon in this short feature. In this context, the current regulatory framework predate the emergence of FinTech companies. Therefore, it will certainly be changed and as a matter of fact it is already an evolving process in many countries, including Macedonia.
There has been steady expansion all along, but especially since EU membership. 31 new licences for financial services operators were issued during 2004, 93 in 2005 and a further 61 up to June of this year. Membership of the EU is contributing to this growth also as a result of the adoption of the single passport regulations and the right to provide cross-border services. There are 99 institutions with passporting rights in Malta today, and two Maltese credit institutions have passporting rights in the EU. The banking sector is composed of 18 banks, of which 6 are domestic and 12 foreign controlled. The combined balance sheet of the domestic banks has grown by an average annual rate of 7% in the past two-an-a-half years and their assets to GDP ratio, at 280%, is comparable to the average for the euro area. For the entire banking system, this ratio is closer to 750%. In the area of investment services, there are currently 21 professional investment funds targeting institutional investors and high net worth customers, and 66 sub-funds, with a total net asset value of Lm1.22 billion. The number of local collective investment schemes (CISs) stands at 14, with 52 sub-funds, and shareholders’ funds total over Lm0.5 billion. The insurance sector has also been growing rapidly of late, with four new licences being issued during the first half of 2006. To date, there are 33 insurance principals registered in Malta, 16 of them are foreign companies offering their services through insurance agents.

Passporting rights have been well availed of in this sector, too, and the total number of Notifications for European Insurance Undertakings to carry on business in Malta under the Freedom to Provide Services directive now stands at 204. The other reflection I would like to share with you is inspired by an interview given recently by the CEO of Mediterranean Bank to a local economic magazine, in which Malta was referred to as ‘a secure EU jurisdiction’. In this same context it was stated that ‘Malta’s stability is an important part of its appeal as a banking location’. While such accolades are indeed welcome, they do not come entirely as a surprise. For when Malta’s financial legislation was overhauled in 1994, and when EU legislation was later transposed in anticipation of EU membership, an intended by-product was indeed the incorporation of the highest international standards and best practices into Maltese financial laws and regulations. This was accompanied by a strengthening of the institutional framework for the regulation and oversight of the financial system. In 2002 the Malta Financial Services Authority (MFSA) became the single regulator for financial services when it took over the responsibility for the banking sector from  BIS Review 92/2006  1  the Central Bank of Malta (CBM). The Bank then assumed responsibility for ensuring the stability of the entire financial system. A year later Malta volunteered to undergo a Financial Sector Assessment Programme (FSAP) by the IMF and the World Bank.
The diversity and independence of its membership have always inspired ELEC to ask the appropriate questions and formulate coherent opinions, constantly having in mind the European interest. This year’s ELEC conference promises to be equally interesting as it concentrates on “Convergence towards euro enlargement” and I am honoured to be one of the keynote speakers. I salute the close cooperation between government officials in the region with high European officials, as well as with the private sector and prestigious organisations such as ELEC. We should never allow ourselves to lose sight of the fact that these discussions aim to help us on a journey made for the benefit of all. And it is a journey that can only be made through constant and diverse dialogue. Allow me to greet our renowned foreign guests: Baron Bernard Snoy, President of ELEC International, Wim Boonstra, President of ELEC Monetary Commission, Mr. Servaas Deroose, Deputy Director-General, ECFIN, as well as the distinguished speakers and panelists. Ladies and gentlemen, The same as the topics discussed in the previous reunions, “Convergence towards euro enlargement” is highly important and is worth debating at length. Let me start from the fact that euro adoption by the New Member States is a matter of when, not if, because they do not have an opt-out clause. The commitment to join the euro area is undeniable, yet how the complex process of ensuring the prerequisite economic convergence is conducted remains largely at the discretion of the authorities in candidate countries.

Take emerging Asia (excluding Japan), for example, which represents over 50% of the global population and 21% of GDP. The third exception to the conditions specified in the international trade theory relates to the high savings rate of some emerging economies, in particular those in Asia. Such savings, which are in part precautionary, stem from the lack of a system of social shock absorbers and a developed financial system. Income growth in these countries does not translate into comparable increases in consumption, and thus in imports. The fourth exception concerns protectionist practices, explicit or implicit, which are applied in many of these countries and discourage imports. The fifth exception involves the exchange rate policies implemented by various emerging economies, which favour an undervaluation of the currency, creating a competitive advantage in favour of their own products and net savings vis-à-vis the rest of the world. Finally, the strong growth of emerging economies puts pressure on the world’s scarce resources, increasing their prices and thus resulting in a loss of terms of trade for importing countries. The case of raw materials, the global demand for which increases at a higher rate than supply, is well-known. But there are other, less obvious examples, such as that of secondary and tertiary education. In this sector too, supply has grown less than global demand, leading to greater competition and higher costs for attending the best universities in the world.
While this argument for a wider pre-emptive role for monetary policy would bring self-evident benefits, we should bear in mind that it also entails some costs and can be difficult to communicate to the  4  BIS Review 34//2005  public. These costs can be understood as an insurance premium that must be paid for using monetary policy in a decidedly preventive fashion. These considerations help to highlight some dimensions of the current monetary policy context that may benefit from a sound banking capital regulatory framework. In this regard, I tend to think that certain important elements in Basel II will contribute, firstly, to restricting the build-up of financial imbalances, thus diminishing the probability of extreme adverse shocks; and secondly, to mitigating their negative consequences for the overall system. As the disorderly granting of credit is often a defining characteristic of an extreme and unstable phase of financial euphoria, a regulatory framework that provides banks with strong incentives for sound risk assessment must clearly be conducive to a more watchful and efficient allocation of credit. In this sense, one would naturally expect a more risk-sensitive capital framework to make banks more likely to account for the true risks of lending policies aimed at achieving short-run-focused targets, such as market share or portfolio size, at the expense of putting their medium-term financial health more at risk.

At the start of 2018, when the economy was growing well above trend and interest rates still were still quite low, gradually raising rates was the obvious and necessary choice. Twelve months later, the tailwinds have lost their gust, interest rates are closer to normal levels, and inflation is tame. The approach we need is one of prudence, patience, and good judgment. The motto of “data dependence” is more relevant than ever. If growth continues to come in well above sustainable levels, somewhat higher interest rates may well be called for at some point. However, if conditions turn out to be less robust, then I will adjust my policy views accordingly. I assure you that I have my eyes wide open and my ear to the ground when it comes to thinking about how the economic outlook will unfold in the year ahead, and as ever I’ll be guided by the data in all its forms. The Balance Sheet Aside from my views on interest rates, the other issue I get asked about is the normalization of the balance sheet. When we first announced our plans in June 2017, I was poised to expound on them in great detail.4 But when I raised the topic I was sorely disappointed to be met with glazed eyes and general indifference. Sadly, nobody seemed to care! Now that’s changed, and I’m getting more interest on this topic. It’s important to remember why the Fed took unconventional monetary policy actions in the first place.