samchain/econo-pairs-v1 huggingface dataset:
While such a divergence of opinions in Islamic financial transactions is not a new phenomenon, it has now prompted increased international dialogue among the Shariah scholars from the different parts of the world. It is the closer linkages between the global Islamic financial markets and the increased platforms for greater engagement on Shariah issues that will contribute towards promoting an increased common understanding and mutual acceptance on the rules, standards and Shariah views, and for convergence to occur. This would evolve global Shariah standards for the Islamic financial industry. As Islamic finance continues internationalise with expanding scale, there will be greater financial intermediation linkages among the East Asian, West Asian, and the Middle East regions – creating the "New Silk Road". While this New Silk Road of financial flows is enhancing connectivity between Asia and the Middle East, both regions have, as in the case of the old Silk Road, extended the New Silk Road to the rest of the world. Global investors and the international financial community have already drawn benefits from the increased diversification of investment activity to the two regions. The expansion of the interlinkages of  4  BIS Review 136/2008  intermediation to and among these regions would in turn contribute towards a more efficient allocation of capital in the global financial system. Closing remarks Against a backdrop of an increasingly uncertain global environment, Islamic finance, as a form of financial intermediation in the international financial system, has continued to be viable and competitive.

Globally interconnected markets have resulted in a situation in which financial institutions everywhere have been hit, even if not exposed to the institutions or assets at the core of the crisis. My home country Sweden is a good example of this. What we have witnessed in recent months, since the default of Lehman Brothers, is the acute phase of a global financial crisis. To respond, authorities have taken action to prevent a systemic break down of the financial system. Both the US and the EU have delivered financial support plans committing governments and central banks to providing the necessary support to the financial industry. BIS Review 134/2008  1  These plans are now being implemented and we cannot yet be certain of their success. However, in my view, the support plans contain the necessary measures to solve the most critical issue right now, namely to restore market confidence by providing guarantees to creditors that their money will be repaid. Therefore, the prospects for restoring financial stability and enhancing the availability of credit for firms and households should be good. That the support plans also provide measures for government capital injections and takeovers is obviously good, but for the purpose of getting markets to function properly ownership issues really are of secondary importance. After all, what creditors are looking for is to get their money back. To them it should not really matter from where or from whom that money comes.
This transition also involves a downshift in China’s trend growth rate, which is inevitable given the level of economic development in China and the shrinking margin of underutilized labor market resources. Economic transitions are always difficult to manage, and invariably present policymakers with unexpected challenges. It is not surprising, then, that market participants are focused on the risk that the downshift in Chinese growth could prove to be more pronounced than anticipated. I want to be clear. The rebalancing process now underway in China is both necessary and appropriate, and will unfold over a period of years. How to pragmatically strike the best balance between progress on long-term reform and support for short-term growth is, of course, a matter for policymakers in China. You can be sure that you will have the backing of the official international community as you oversee this important transformation. Finally, the slowdown in Chinese and broader EME growth has been a key factor behind the sharp drop in global commodity prices since mid-2014. The income streams accruing to commodity export countries have been adversely impacted, requiring sometimes painful downward adjustments in investment and economic activity in these countries. Here, too, it may take time for markets to find a new equilibrium, as investment projects that were based on the price structure prevailing a few years ago are still coming online. In most cases, EMEs appear to have the tools and the resources to help manage their way through the current period of difficulties.

The broader economy should see a recovery in the second half of this year alongside strengthening global demand and further progress in our vaccination programme. Trade-related activities such as manufacturing and wholesale trade will be supported by resilient global trade flows and robust upswing in the global tech cycle. Modern services, particularly the financial and ICT sectors, are set to expand at a firm pace this year, amid a pickup in credit intermediation activities and the ongoing digitalisation of business processes which has been accelerated by the pandemic. Moreover, compared to a year ago, Singapore is much better equipped to handle the pandemic, with more effective testing and tracing, swift isolation of infected cases, and vaccination. Singapore’s GDP growth could exceed the upper end of the 4 to 6% forecast range, barring a setback to the global economy. Last month, the official forecast range was maintained at 4 to 6% in light of the deterioration of the domestic COVID-19 situation and consequent Phase Two (Heightened Alert). MTI, together with MAS, will review the forecast range in August when preliminary estimates for Q2 GDP are available. The resident unemployment rate should continue to gradually decline. Total employment expanded by 14,000 in Q1 this year, the first expansion after four consecutive quarters of contraction. The Phase Two (Heightened Alert) measures and continued restrictions under Phase Three (Heightened Alert) however will have a transitory impact on employment in the domesticoriented services sector.
Mervyn King: Reform of the International Monetary Fund Speech by Mr Mervyn King, Governor of the Bank of England, at the Indian Council for Research on International Economic Relations (ICRIER), New Delhi, 20 February 2006. *  *  *  Sixty years ago delegates from around the world were gathering on Wilmington Island in Savannah, Georgia, to celebrate the baptism of the Bretton Woods twins, the International Monetary Fund, or, simply, “the Fund” and the World Bank, “the Bank”. India was represented by Sir Chintaman Deshmukh, Governor of the Reserve Bank of India, and Britain by John Maynard Keynes, Lord Keynes as he had become. The two men got on well, as can be seen from their official reports on the Savannah Conference. As Sir Chintaman wrote later: “this meeting remains memorable mainly as the occasion when the Indian delegation worked in effortless accord with the British delegation under Lord Keynes and there were many occasions when there happened to be agreement between us on the need to take some steps which would increase the utility, independence and creativity of the international bodies". 1 In his speech at this first meeting of the Fund, Keynes drew an analogy with the christening-party in The Sleeping Beauty, which, as Chairman of Covent Garden, he had seen danced at the reopening of the Garden only two weeks earlier.

The Fund should be a forum in which countries can discuss these risks. It should also hold countries to account. In these ways, it can indirectly support global monetary stability. With countries naturally reluctant to cede any control over their own monetary and fiscal policies, it is likely that the IMF will have as instruments only the powers of analysis, persuasion, and, in Keynes’ own favourite words, “ruthless truth-telling”. That phrase does not conjure up many memories of any of the many international meetings I have attended. But unless the IMF has the self-confidence to play  4  BIS Review 11/2006  that role, its deliberations and statements will carry little weight. The Fund requires an independent, respected and clear voice. The Fund should focus its work on the international monetary system around three tasks. First, it should provide and share information about the balance sheets of all major countries, their composition and size, and the links between them. The Fund has been in the forefront of the analysis of balance sheets for emerging market economies, and it needs to extend this approach to its surveillance of the industrialised world. In conducting this analysis, the Fund must look at countries’ exchange rate choices. But no one price is a sufficient statistic for the effect of one country’s policies on the rest of the world - even one as important as the exchange rate. Balance sheet analysis should be at the heart of the surveillance process.
BIS Review 76/2000  6  We should focus more on systemic risk rather than protecting individual firms, or preventing risky products from reaching the market. We should allow investors to judge and take business risks for themselves. We should rely more on market discipline and full information disclosure to protect investors, rather than extensive formal and informal regulation. We need to shift emphasis from regulation to supervision, and from one-size-fits-all rules to oversight tailored to the characteristics of individual institutions. We decided on these fundamental changes in our policy framework for the financial sector in 1997. We went ahead to launch it, just as the storm clouds were gathering, because we saw it as an essential strategic shift, independent of short-term ups and downs of economic fortunes. We felt confident of weathering the storm, although we did not know it would turn out to be a super hurricane. We decided to make a phased transition over several years, rather than have a single big bang. We had seen how big bangs in some other countries had led to excesses and problems later down the road. We could not afford this risk, unlike the more established financial centres like London. Our regulators, financial institutions, and investors all needed time to develop new expectations of one another, and understand the new way things worked. We needed to manage the reform process in an environment made difficult by the Asian crisis, and keep the system on an even keel.

It imposes only one restriction: non-residents may not borrow $ for activities unrelated to the Singapore economy, though they may buy and sell as much $ as they wish. This restriction on borrowing $ is to make it harder for non-residents to accumulate ammunition through borrowing for a speculative attack on the $ Despite the non-internationalisation policy, there is virtually complete capital mobility in Singapore. Empirical studies have shown that domestic $ interest rates are almost entirely determined by parity with offshore US Dollar interest rates, adjusted for future exchange rate expectations. In economist’s jargon, the “interest parity condition” holds. The role of hedge funds in the Asian crisis is controversial. There is evidence that the hedge funds were active in a number of the regional currencies before and during the crisis. Although some observers are convinced that hedge funds were the main culprits in bringing currencies down, the evidence is not conclusive. Nevertheless, we believe that our policy of non-internationalisation helped to protect the $ against excessive volatility during this unstable period. Of course the policy could not have been effective if Singapore’s economic fundamentals had not been sound, and if we had not had a floating exchange rate which could be managed flexibly in line with these fundamentals. We had an easier ride than Hong Kong, which also had a sound economy, but whose currency was, for good reasons, pegged to the US dollar.
Today, I will mainly focus on what we have done at the ECB to deal with the crisis and to support the euro area economy and its banking sector. In particular, I would like to explain the policy that the ECB has adopted to support credit flows in the current environment. This policy has provided a tangible support to households’ disposable incomes and firms’ credit conditions in all member countries. The people of Spain – a country where a large share of the outstanding mortgages have adjustable rates – have benefited from this policy considerably. I will draw some key lessons for the stability, resilience and health of the financial system, the global economy and the individual economies more specifically. BIS Review 150/2009  1  Structural reforms in Spain – as in other euro area countries – cannot be avoided or postponed. But in facing these challenges, Spain can build on its past of consistent progress and success since its entry into the European Union, on a young and well-educated labour force and on solid institutions. I. The ECB’s response to the crisis  As you all know, the start of the turbulences began on 9 August 2007. The interactions of very bad risk management and wrong incentives in the financial industry, excessive complexity in financial products and underlying global imbalances were responsible for the previous credit boom and the ensuing bust. The asset cycle turned, and many of the missing links in the financial chain were exposed.

This weakened incentives to conduct prudent screening and a thorough monitoring of loan quality. Credit became plentiful and market liquidity expanded at a pace that could ultimately no longer be justified. Looking ahead, three steps will be required to a more resilient system. •  First, the tendency for finance to become pro-cyclical even at a system-wide level needs to be strongly mitigated. The quality and quantity of bank capital and their liquidity buffers have to be improved in good times to provide a sufficient buffer for bank equity when the cycle turns. The cyclicality of market economies is inevitable. But the financial system should not be allowed to amplify swings. •  Second, the transparency of the financial structures needs to be enhanced. Informed decisions by market agents are a key element of market economies. Lack of transparency of financial products masked abuse and led to disaster. Looking into the future, all institutions, instruments and markets of any relevance for systemic stability need to enhance risk disclosure. •  Third, once more, incentives need to be aligned. Market participants – traders, loan managers, risk committees and boards of directors – were given strong economic incentives to focus on short-term profits. Long-term value creation was not a concern in the pre-crisis world. Collectively, this has resulted in excessive risk taking. A reform of the executive compensation schemes and practices is an essential part of our effort to secure financial stability. At the financial level, reform in Europe will follow a two-pronged approach.
Since in our survey we have utilized a panel design, we will have the ability to make progress in understanding how expectations are formed and revised over time. Initial analysis suggests that the differences in individual forecasts are persistent and probably related to different forecast models and reference information and not just different experiences. We have also found that a respondent expressing higher-than-average uncertainty in the previous survey is more likely to change their point forecast in the current survey. A better understanding of the factors affecting individual inflation expectations will also help evaluate and predict the impact and effectiveness of central bank policy decisions and communication strategy. Specifically, it will improve the central bank’s capacity to evaluate the strengths and weaknesses of various communication tools and strategies designed to keep inflation expectations well anchored. The ability to do so is especially important at times such as the current one, in which central banks have been expanding their toolkits and conducting traditional as well as non-traditional monetary policy. The third and final broad question that would benefit from additional research is whether and how people act on their expectations. The theoretical link between inflation expectations and realized inflation and consumer decisions occurs through several channels. In addition to affecting future wages and prices through influencing the outcomes of nominal wage contract negotiations and through price-setting behavior of firms, there is the crucial link of real interest rates (nominal rates less expected inflation) with intertemporal consumption and investment decisions.

When we probed survey respondents about their understanding of changes to “prices in general” (the Michigan Survey question), we found that a significant fraction believed we were inquiring about the prices they themselves recently paid – often prices that had increased or decreased markedly, such as those for food or gasoline. This tendency to think more about prominent price changes in one’s own experience is less common among respondents with higher financial literacy. By contrast, when we asked about expectations for the “rate of inflation,” respondents tended to think less about a few salient price changes specific to their own experiences and more about price changes across a broader set of items or about changes in the cost of living – a result that aligns more with economists’ definition of inflation as a sustained increase in the overall price level. Asking about the rate of inflation directly therefore produces answers more consistent with the concept of forward inflation expectations of interest to central banks. Chart 4 plots the time series of median responses from our experimental survey to a “prices in general” question and a rate of inflation question. One can see that the median expectation for the rate of inflation question is less variable. We also find that the dispersion of responses is significantly larger with the “prices in general” question.
Some economists stress that a published interest rate forecast may create problems in the practical implementation of monetary policy. Results published in the literature, however, seem to point in a different direction. First, any constraints a published interest rate forecast might entail are not necessarily a disadvantage; on the contrary, they may be an advantage. Indeed, if interest rate expectations can be influenced, a response pattern that is binding for a shorter or longer period will in many cases be useful for a central bank. By being committed to a response pattern, the need for interest rate changes today may be reduced. From mid-2003 to mid-2004, for example, the Federal Reserve was concerned that inflation might fall too low. The Fed therefore indicated that market participants should expect an expansionary monetary policy for longer than usual in periods of increasing activity. 5 Norges Bank has made similar statements about the future interest rate. For example, from mid-2004 to the beginning of 2005, the Bank stated that “the prospect of continued low inflation in Norway also implies that we should lag behind other countries in setting interest rates at a more normal level”. Statements such as this are intended to influence market expectations. Similarly, there may be advantages of publishing an explicit interest rate forecast. This may lead to commitments that increase the credibility of consistent interest-rate setting by the central bank.

Growth in demand and output is expected to remain high in the near term. Unemployment may fall somewhat more quickly than has been the case over the past year. The output gap is expected to be positive in 2005. Higher demand for companies’ goods provides scope for increasing prices. Experience shows that inflation is directly influenced by the level of capacity utilisation in the Norwegian economy. Some of the rise in prices for domestically produced goods and services can be attributed to higher margins in the business sector. The effects of the interest rate decline on demand, output and employment have been pronounced. It has taken time for inflation to pick up. This partly reflects low external interest rates and high oil prices, which have moderated the impact on the krone exchange rate. Higher imports from low-cost countries, competition and improved efficiency in Norwegian production have also kept inflation at a low level. Initially, it was the fall in prices for imported consumer goods that pushed down underlying inflation. After a period, the rise in prices for domestically produced goods and services also decelerated. This was due in particular to increased competition in some goods and service markets. At the same time, wage growth slowed as a result of lower capacity utilisation in the economy. A slower rise in house rents also contributed. Inflation measured by the CPI-ATE reached its lowest level in the first months of 2004. Inflation remained at less than ½ per cent until after the summer before picking up in autumn.
The negative impact of capital controls is likely to be greater the longer they last and the more lenient their enforcement is. The aim, therefore, is to remove the controls as soon as it is safe, while enforcing them very strictly, not least during the liberalisation phase. If it is unavoidable and desirable to lift the controls, how can this be accomplished without risking exchange rate instability? The strategy presented by the Central Bank last summer describes the principal aspects of the liberalisation process. While I do not intend to repeat what it says on this occasion, I would like to take the opportunity to point out that resolving the problems of Treasury financing is actually a precondition for renewed progress in economic recovery and for relaxing the capital controls without substantial risk. During the period of overheating leading up to the financial crisis, the non-tradable sector expanded far beyond what export sector growth could sustain for the long term. In many cases, production capacity in the non-tradable sector is excessive over the short to medium term. Hence the scope for economic recovery led by the non-tradable goods sector is scant; recovery must mainly commence in the tradable goods sector. Export growth will be weak, however, unless export companies have ready access to external financing. But their access to foreign capital markets will be difficult until the Treasury has blazed a trail, or as long as it faces terms that raise doubts about the sustainability of public debt.

In addition, the implementation of NSFR increases the costs of infrastructure financing as it asks these types of assets to be covered with longer term and more expensive funding. Albeit there are many other angles within the new regulatory reform which have been discussed in light of their consequences to the EE’s (for instance policy measures for dealing with systemically important banks, the impact of some other national and regional reforms 1, the two above elaborated dimensions of the Basel III, seem to depict, or to be a good represent of what the main impact boils down to. Rising cost of finance, restrained credit availability and more conservative treatment of some of the forms of financing, crucial for the growth of EE’s are the most important consequences being discussed, which should be seriously addressed. As for the quantitative impact studies, they do indicate a growth impact of the new regulatory changes, though with varying intensity. While BIS Macroeconomic Assessment Group finds rather modes effect, assessment of the International Institute of Finance and some assessments of the banking industry point to a non-negligible growth effects. A BBVA 2 research, conducted in early 2011 estimates the impact of higher liquidity and capital requirement on the quantity and price of credit, and hence its impact on the GDP per capita. The estimation results point to a larger effect of the regulatory changes on the GDP per capita of the emerging markets, compared to the one in the more advanced countries.