samchain/econo-pairs-v1 huggingface dataset:
Post-financing expert advisory services which help borrowers mitigate the environmental impact of projects financed by the bank will feature more prominently in the product and service offerings of VBI banks. VBI-oriented Islamic financial institutions can, and indeed should, also play an important role in mobilising resources to finance climate change mitigation and adaptation initiatives. Funding for climate adaptation in particular, remains critically low, despite millions already at risk from the effects of climate change and in need of assistance to cope with the effects. For example, in the agriculture sector, resources can be channelled towards building flood defences, and developing local structures and facilities that are more resilient to harsh weather conditions. Takaful solutions also have an important role in strengthening resilience against climate events. These developments are likely to see important changes to the way financial institutions make decisions, and to the characteristics of banking and takaful portfolios. In supporting these changes, two new tools will be published by Bank Negara Malaysia today for public consultation – a VBI Impact Assessment Framework (VBIAF) and the VBI Scorecard. The Assessment Framework provides guidance on the assessment of financing and investment applications taking into consideration economic, social and environmental impacts, while the Scorecard supports the implementation of performance measurement frameworks for Islamic financial institutions that drive positive value and impact on society and the environment. I look forward to receiving constructive feedback from the industry and interested parties, and to further strengthen these frameworks to drive a renewed focus on sustainable financial solutions.

What role do you think currencies, including the yuan, should play in the global rebalancing? Noyer: It is up to [China] to assess exactly what part the exchange rate can play in the rebalancing. But appreciation of the yuan can help [China] enhance domestic consumption and dampen some of the effects of the rise in commodity prices. BIS central bankers’ speeches  1  WSJ: In order to address currency misalignments, shouldn’t the G-20 call more strongly for increased currency flexibility across the board? Noyer: The G-7 has been monitoring excessive currency fluctuations. But the world having changed and G-7 economies no longer being the dominant ones, should we adopt the same rules as we did during the ‘70s? We need to find out how to manage the system. How can we monitor capital flows, and how can we avoid the risk of capital controls hampering global trade? We need to give a clear mandate to the IMF to monitor the capital account. It would be useful to have a clear set of rules. The IMF can be an independent assessor of policies and give advice on the best course of action. WSJ: What lessons have you learned from the crisis?
To be successful in this objective requires a number of factors to be in place at both the individual bank and sector levels. In individual banks, there must be an effective system of credit monitoring and loan classification to detect problem loans at an early stage and to enable corrective action to be taken as soon as possible. As I have already indicated, the shift from relationship banking and the unwillingness of borrowers to supply sufficient information have been hindering factors in Hong Kong in enabling banks to pick up early warning signals. Once problems have been detected, it may be sufficient in the early stages to leave the handling of these with the account officers. But when the problems are too deeprooted, there will usually be advantage in transferring problem loans to a dedicated loan recovery unit where specialist expertise attention can be devoted either to restructure the loans or to take recovery action and liquidate any collateral. This is the theory, but it is easier said that done to find loan recovery specialists when many bankers in the region have not experienced a prolonged period of economic decline. Outside experts, for example from the accounting firms, can help to fill some of the gap. But it is also essential that the banks build up their own resources and provide more training to their own staff on how to deal with problem loans.

Adopting a more systematic and rigorous approach to assessing trust in the central bank may not only help address these shortcomings but also to acknowledge the full diversity of its responsibilities. I have already noted research stressing the relevance of credibility for the effectiveness of monetary policy, but credibility and public trust may be equally important for financial stability, the issuing of currency, or the generation of statistics. Moreover, one can conceive that trust across these functions could be somewhat connected. Loss of trust from a misconceived financial intervention or from distorted statistics may spillover to the way stakeholders assess the credibility of monetary policy. To foster trust, a central bank must go beyond the conduct of monetary policy to focus on how to develop reliability, adaptability, integrity, openness and fairness in its different areas of work. In the context of central banking, reliability is not equivalent to a dovish monetary policy giving priority to shortsighted demands to stimulate the economy, but to do the proper balancing of risks to align monetary policy with long-run social welfare. It means acting in a coherent way, showing thorough decision-making, carefully explaining reasons and arguments behind every action, conducing predictable decisions, and running efficiently the central bank as an organization. For this, I consider essential a clear framework for monetary and financial policy, data-driven decision making, unquestionable technical capacity and statistics, and skillful crisis management.
When the new framework for macroprudential policy is eventually in place and in use, the Riksbank will need to consider how it believes macroprudential policy measures will affect the development of the economy and financial stability in its forecasting work. The Riksbank should be able to take into account the effects of the macroprudential policy instruments in roughly the same way as it now takes into account how the government’s future budget plans will affect the economy. Gradual improvement in economic activity, but uncertainty remains I began this speech by looking back at the economic situation over the last few years. I would now like to spend the rest of my time looking forward. My second argument for leaving the repo rate unchanged at 1 per cent in July and September was namely that the economy seems to be taking a turn for the better. A gradual improvement in economic activity was indeed in line with the Riksbank’s earlier forecast, but ahead of the September meeting we had received additional statistics and other information that supported this assessment. For example, confidence indicators for Sweden and abroad had improved. Share indexes on the financial markets had risen thanks to positive signals about the recovery of the global economy. The outlook for a continued recovery in the United States was good and there were signs that an improvement had begun in the euro area.

The situation prior to the meetings in both July and September was marked by a low rate of inflation, for example CPIF inflation has been below two per cent since 2011, and a level of resource utilisation in the economy that was deemed to be lower than normal. The forecasts in July and September were that inflation was expected to rise towards two per cent in 2015 and that resource utilisation was expected to increase as growth picked up. The assessment was that the expansionary monetary policy would contribute to this. I personally voted to keep the repo rate at the historically-low level of one per cent at both the July and September meetings. Figure 1 Repo rate remains low Repo rate, per cent 5  5 July September  4  4  3  3  2  2  1  1  0  0 07  09  11  13  15  Note. Outcome data are daily rates and forecasts are quarterly averages. Source: The Riksbank  BIS central bankers’ speeches  1  What were the trade-offs behind my decisions? On the one hand an even lower repo-rate path could, according to the Riksbank’s calculations, lead to inflation reaching the target somewhat sooner and to resource utilisation improving somewhat faster, while on the other hand there were other circumstances to take into account that made the decisions more complicated. For example, there is always uncertainty about exactly how monetary policy will affect the economy during the forecast period.
Most importantly, if the strategy causes companies and households to question the MPC’s competence or its commitment to maintaining low inflation, and this starts to be reflected in wage and price setting. If that were to happen, we would be forced to tighten policy, potentially aggressively so with all the output costs that would entail, in order to avoid a return to the bad old days of the 1970s and 80s with truly high and volatile inflation. My single most important message to you this evening is that the MPC remains as hard-nosed as ever in its determination to hit the inflation target. That is the remit given to us by Government, and for which we are accountable to Parliament and the public. To sum up my progress report for 2010: it has been a busy year; substantial progress has been made, both in terms of starting along the road to economic recovery and responding to some of the fault lines exposed by the financial crisis; but there is still a long way to go. There will be as much to do in your 22nd year as there was in your 21st. Happy birthday.

But it also meant that financial institutions were able to sell loans or take them off the balance sheet, which weakened lenders’ incentives to conduct prudent screening and constant monitoring of credit  BIS Review 66/2009  1  risk. So underwriting standards and lending oversight declined, and contributed to the excessive credit growth in the second half of the 1990s. In sum, the observer would have concluded that the factors that fuelled the credit and asset price boom of the past decade also created the conditions for a bust. In mid-2007 we started to see the backlash. The start of the financial turmoil was sudden but not unexpected. The financial system as it worked over the past decade – with its flawed incentives and its overly complex products and with global imbalances as its macroeconomic backdrop – was no longer sustainable. The asset cycle turned, the weaknesses were exposed and investors suddenly lost confidence. After years of exceptional risk appetite and high profits, the pendulum swung in the opposite direction, as markets became extremely sensitive to financial risk. In September last year, the crisis escalated sharply. In particular, a major financial player collapsed, which was directly involved in about 30 large payment and settlement systems worldwide and had a balance sheet of USD 600 billion. Its failure turned a large-scale crisis of confidence into a global financial panic. Financial intermediaries restored liquidity buffers, tried to economise on capital and to scale down their balance sheets. They sold assets and tightened lending conditions.
A shared decentralised digital asset register can enhance efficiency, as business ledgers no longer need to be reconciled, and can reduce counterparty risk. DLT solutions can also reduce operational risk as this technology does not rely on a central operator. DLT has many potential applications in the financial infrastructure, such as in the securities settlement system. The Australian exchange ASX is replacing the existing system for clearing and settling trades with a new DLT-based system. Another example is cross-border payments; several projects have been launched and the potential for improvement is considerable. A number of Norwegian operators are exploring opportunities for using DLT-based solutions in Norway’s infrastructure. Central banks have also explored the use of DLT. The European Central Bank and the Bank of Japan have considered how secure delivery versus payment systems could be organised where the assets are stored in a decentralised accounting system. Some central banks, such as the Bank of Canada, have evaluated and tested DLT for use in central bank settlement. At the same time, the use of DLT poses a number of challenges, including the immaturity of the technology and how to prevent unauthorised access to confidential information. New technology also makes new forms of money possible. The functions of money as a medium of exchange, a store of value and a unit of account are dependent on public confidence in the currency. Most of our money is in the form of bank deposits or cash. So-called cryptocurrencies have attracted considerable attention in recent years.

We must therefore consider whether cash has any important characteristics that are not shared by bank deposits and whether there is a need for other forms of central bank money in addition to cash. Cash has a number of unique characteristics: It is a credit risk-free alternative to deposit money. It is an independent back-up solution if electronic systems fail. It is legal tender that can be used by all. 4/5  BIS central bankers' speeches  For Norges Bank, the question is whether a CBDC could supplement cash to maintain confidence in the monetary system and ensure that Norway’s future payment system is safe and efficient. A list of factors that should be given weight in an assessment of whether Norges Bank should issue a CBDC was presented by a Norges Bank working group in May. Phase 2 of the assessment is now in progress. The working group is focusing on the purposes of a CBDC, the solutions that best serve these purposes and their impact. The working group’s report will be published in spring 2019. This is a long-term process and it is too early to draw any conclusions. A premise underlying the work is that a CBDC must not impair the ability of banks and other financial institutions to provide credit. Conclusion The various developments reflect a payment system in change. It is important to look up and envision the situation a few years ahead. Where do we want to be then?
Mr. Heikensten looks at the intellectual framework for monetary policy in Sweden Address by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikensten, at the Monetary Policy Forum held in Stockholm on 26/5/97. Economic policy developments during the early 1990s were marked by the after-effects of the overheating in the 1980s. At the beginning of 1993--after the krona had fallen--the Riksbank made clear its intention to meet an inflation target. An important task since then has been the firm establishment of a policy of low inflation in Swedish society and the clarification of the principles that guide monetary policy. We think that we have now come a long way in the effort to secure low inflation. At the same time, support for the policy of low inflation has increased. The Government and the Riksdag have positioned themselves behind the policy and recently proposals have been put forward to, among other things, make price stability an objective of the Riksbank prescribed by law. Against this background it may now be appropriate to try to clarify the intellectual framework within which the Riksbank is working. To contribute to such a more fundamental discussion on the principles of monetary policy formulation, I will today consider four related issues: First I intend to comment on how I view the connection between price stability and growth for different time perspectives. One issue that I will dwell on somewhat is how the balance between the two appears in the short term.

As a result of these decisions, the Federal Reserve is currently adding $ billion in longer-term securities each month to its holdings, in addition to reinvesting principal payments from its holdings of agency MBS and agency debt securities into agency MBS.1 We have bought about $ billion in Treasury securities since January and about $ billion in agency MBS, excluding reinvestments, since mid-September, bringing the total par value of the Federal Reserve’s SOMA (System Open Market Account) portfolio to over $ trillion.2 The FOMC’s current asset purchase program has some key differences from earlier policy initiatives. In the past, when announcing previous programs to change the size or composition of its balance sheet, the FOMC communicated an expected total size of each program and an anticipated date by when it would be completed. Under the current asset purchase program, the FOMC has announced only the monthly pace and composition of purchases and noted that purchases will continue until there is a substantial improvement in the outlook for the labor market in a context of price stability. The Committee has also indicated that, in determining the size, pace, and composition of its asset purchases, it will take appropriate account of the likely efficacy and costs of its purchases as well as the extent of progress toward its economic objectives.
The relaxed monetary  and third quarters of the year and  policy stance pursued in the past and the  subdued demand conditions in the major  increase in wages in the economy also  export destinations affected this  exerted some demand pressures on  growth. Industry-related activities grew  prices. Accordingly, headline inflation, as  substantially in 2016 with considerable  measured by the year-on-year change in  contribution from the recovery of the  the Colombo Consumers’ Price Index  construction sector. Notable growth  (CCPI, 2006/07=100), was 4.1 per cent in  was also witnessed in manufacturing,  December 2016 compared to 2.8 per  and mining and quarrying activities. cent in December 2015. Headline  Meanwhile, the growth in Services  inflation, as measured by the year-on  activities also remained buoyant,  year change in the National Consumer  supported by improvements in financial  Price Index (NCPI, 2013=100), was 4.1 per  services, and wholesale and retail trade  cent in November 2016 compared to 4.2  activities. Based on these developments  per cent at end 2015. Accordingly, overall  so far, it is projected that the economy  inflation has been contained within our  would grow by around 4.5 – 5.0 per cent  mid-single figure target of 4 – 6 per cent. in 2016.

As you may well know, we have been implementing floating exchange rate regime since 2001 and exchange rates are determined by supply and demand conditions in the market. However, we can directly intervene in the markets by selling or buying foreign exchange in case of any unhealthy price formation, which is driven by a vanishing market depth, is observed. Yet, I would like to remind you that we have not directly intervened in the market after our last direct selling intervention during the global financial turbulence in May-June 2006 period. 49. The second pillar of the floating exchange rate regime is the foreign exchange buying auctions held for accumulating reserves. We hold foreign exchange buying auctions in line with a pre-announced schedule in order to minimize the impact of the auctions on supply and demand conditions, and strive not to make any changes on this schedule unless extraordinary changes occur in foreign exchange liquidity. The foreign exchange buying auctions, which were suspended in October 2008 to enable banks to strengthen their foreign exchange liquidity positions amidst global crisis conditions, were resumed on August 4, 2009 on the back of the increased liquidity and stronger risk appetite and relatively stabilized foreign exchange market fuelled by favorable expectations about the global economy. Accordingly, the net amount of foreign exchange purchased in 2009 was 3.4 billion USD and the gross foreign exchange reserves reached 69.6 billion USD by the end of 2009.
On this issue, I would like first of all to pay tribute to EIOPA which has done remarkable work to promote sound and consistent European regulation and harmonised supervisory practices within the European Union, since it was established in January 2011. The creation of EIOPA, following the Larosière report, reflected the need to move towards more integrated European supervision following the 2007–08 financial crisis, and I believe that it has been a success. In a context of increasing financial market integration, EIOPA has contributed to ensuring a true level playing field for all actors in the insurance and occupational pensions sector at the EU level, in coordination with national authorities and the other European Supervisory Authorities (ESAs). This well-balanced supervisory framework helps us deal with the “institutional” innovation – this is my first point – that we are starting to see as a consequence of the Brexit vote. Some British entities are indeed considering the possibility of simply setting up empty shell corporations in the European Union, mere company nameplates, while keeping their resources in the United Kingdom. I fully agree with EIOPA that vigilance is called for in this respect. Moreover, Brexit brings with it certain risks, and consequently the need for contingency plans. I am thinking in particular of the European policyholders who took out insurance directly with British undertakings and who should continue to benefit from the same protection.

In line with this principle, the validation of internal models, for instance, should preferably remain the responsibility of the NCA in order to reflect the close link between this decision and the on-going dialogue that takes place between the insurer and its national supervisor; EIOPA for its part could concentrate more efficiently on the essential task of enhancing the harmonisation between national practices. In addition to these desirable adjustments of the European institutional framework, there is a need to make concrete progress towards a European resolution mechanism, which would provide more adequate tools to limit the impact of an insurer failure and increase trust and confidence. France has been working along these lines at national level and such a mechanism will be in place in our country before December. 1 The French resolution insurance regime requires insurers of a certain size to set up preventive recovery plans, which will form the basis for preventive resolution plans. Moreover, the ACPR is entrusted with several powers to be used in a resolution context, such as the possibility of appointing a resolution administrator in the insurance undertaking, limiting the distribution of dividends, or organising portfolio transfers to another insurer. 2. Economic innovation Let me now turn to my second point: economic innovation. As Europe’s economy is close to the “technological frontier”, businesses need to innovate more. As such, they need to be able to take more risks, which requires more equity financing, over the long term, rather than debt financing.