samchain/econo-pairs-v1 huggingface dataset:
There are currently more than 6,000 publicly traded companies in the United States. Only a handful of these companies have been the object of concern this past year. At the end of the day, I have no doubt that the underlying depth and flexibility of the U.S. financial markets - combined with the heightened awareness of individual investors and the general public - will provide the necessary resilience to allow private and public sector initiatives to take root. Through these cooperative efforts, I believe that we will see an even stronger financial system evolve. In this way, we honor the memory of the man whose life we celebrate this evening. Thank you. 6  BIS Review 57/2002

Abdul Rasheed Ghaffour: Opening remarks - World Halal Business Conference 2021 Opening remarks by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the World Halal Business Conference 2021, 9 September 2021. * * * Assalamualaikum w.b.t and a very good afternoon to our distinguished guests and fellow audience. Thank you to the Halal Development Corporation (HDC) for inviting me to deliver the Opening Remarks today. I wish to congratulate HDC for organising this conference which I believe will be inspiring and enlightening. The timing of this event could not be better, echoing the pace of an ongoing global economic recovery. The theme of this conference, “Halal – the Catalyst for Universal Economic Recovery” spells out the potential for this multi-trillion dollar industry to facilitate the rejuvenation of the global economy. Within the global sphere, the prospect of the halal economy is huge. Global consumption of halal goods and services is expected to grow at 3.5% annually to reach USD2.4 trillion by 20241, largely driven by the fast-growing Muslim population. Another contributing factor is the rising trend on ethical consumerism that primarily considers the impact of consumption. This aligns with the practice of halalan-toyyiban that propagates good, pure, and wholesome elements in consumption. At a broader level, this is also relevant in addressing growing concerns on sustainability and climate change in halal production. These global trends on halal economy present an excellent narrative with enormous prospects for Malaysia, given our forefront position in the global halal economy.
For instance if, in the event of resolution, and after absorption of possible losses, it is expected that the institution in question would continue to perform its critical functions, the recapitalisation component would be equivalent to the new capital requirements estimated for the institution following the resolution process. In any event, the European regulations are currently under review, and will continue to be at least into next year, so it is still too early to know the precise details of the final requirements and, therefore, to accurately estimate the issuance volumes that institutions would need in order to comply with those requirements. Also, in order to allow the markets to absorb the foreseeably high issuance volume that would be needed to meet those requirements, there is a common understanding that an appropriate transition period is essential for implementation of the MREL requirements. That said, it is clear that although their introduction will be greatly beneficial for financial stability, they may pose a significant challenge for the banks themselves, especially for small and medium-sized banks that, owing to their business model, have less experience than 5/8  their larger peers in raising funds on the debt markets. It is to be hoped that the MREL requirements will not act as a further drag on these banks’ profitability, nor place excess constraints on their business models.

But when we look ahead, it is very probable that this will no longer apply; the rate of increase in the CPIX is expected to be lower than the rate of increase in the CPI for a fairly long period to come. Let me go into more detail as to why this is the case. When the CPIX is calculated, mortgage interest expenditure for home-owners is excluded. Mortgage interest expenditure for home-owners in the CPI is calculated as a product of two indices: an interest rate index and a capital stock index. The interest rate index consists of an average of interest rates on mortgages, from variable interest rates to interest rates with a fixed duration of eight years. The capital stock index, on the other hand, measures the acquisition value of the housing stock financed by the mortgages. But with the calculation method used by Statistics Sweden the rising house prices will only affect the capital stock index when the houses change owners. Even if house prices are increasing substantially, this will only have a limited impact on the capital stock index in the short term. After all, it is only a small percentage of houses that are bought and sold every year. On the other hand, an increase in house prices affects the index for a long period to come. If house prices increased, say, twenty years ago, this will still have some effect even on today's index.
The Fed’s normalization of interest rate demonstrated that its impact on the global economy and financial markets indeed has been large, giving rise to significant capital outflows from EMEs, large adjustments and volatility in exchange rates as well as widened EM spreads and interest rates. The adverse effects of the Fed’s interest rate normalization has been on average larger than those occurred in previous two financial turmoil episodes namely the Eurozone sovereign debt crisis and the US tapering tantrum. Moreover, the disparity between the effected countries has been large too. The plummeted commodity prices as well as other factors led to this outcome as commodity importers suffered from both the lower commodity revenues and the tightening global financial conditions. Financial markets also differentiated EMEs by policy frameworks and prudent policies. Those having rich and better policy frameworks and prudent policies have withstood the recent global financial turmoil better than others. Commodity-exporting and commodity-importing EMEs have different monetary policy options. While commodity exporters have limited monetary policy space, commodity importers have some rooms to counteract. In the former group, inflations increased and balance sheets weakened due to the currency depreciation. In the latter group, in some countries, inflations decreased and central banks cut policy rates thanks to the low oil prices. However, in several oil importing countries, inflation is near or above the target bands. For central banks in these countries, tightening the monetary policy may be a priority for the credibility of central bank.

The prices of other goods and services, on the other hand, have been posting quite modest growth rates. Therefore, the inflation expectations of entrepreneurs and consumers have remained close to the historical average. If the price hike of commodities stops, the increase in the euro area’s prices could remain below 2% already next year. However, looking at the data from another angle, we can find proof to arguments which insist that the current euro-area interest rate level is not suitable for guaranteeing the low inflation rate that corresponds to the price stability goal. Although the general public focuses on the debt crisis of certain European countries, the developments of the economy itself have, on the whole, exceeded expectations. Economic growth has remained above average and the utilisation of production capacity no longer resembles a crisis situation. Though unemployment is still high, it is decreasing and the indicators of the industrial and service sectors are posting quite high results from the historical perspective. If we add here the fact that global price rise pressures have been annoyingly enduring and do not show any signs of abatement, the risk of a persistently higher inflation rate in the euro area has increased. Therefore, at the press conference after the most recent meeting of the Governing Council of the European Central Bank it was pointed out that, to withstand this threat, the Eurosystem might increase the price of money in the markets earlier than expected, maybe already in April.
Acharya and P. Schnabl (2010), “Do Global Banks Spread Global Imbalances? The Case of AssetBacked Commercial Paper During the Financial Crisis of 2007–09,” paper presented at the 10th Jacques Polak Annual Research Conference, 5–6 November 2009. 6  BIS Review 83/2010  better managed public finances will pay lower risk premia, and therefore lower interest rates, which, in turn, will help them to keep budget deficits and the stocks of national debt under control. Countries with larger budget deficits and higher stocks of national debt, on the other hand, will face higher risk premia, and therefore higher interest rates, which, in turn, will affect their ability to control the dynamics of their public finances. How will a central bank committed to price stability and endowed with the constitutional guarantees necessary to enforce a price stability-oriented policy pursue its mandate in a high-debt / high-risk environment? Sovereign securities have traditionally been the prime form of collateral for central bank credit. In the future, given the greater importance of this type of debt instrument in the total portfolio of the economy – to which I was referring before – this primary role is unlikely to diminish. So, a central bank will continue to emphasise strongly the maintenance of orderly market conditions for this type of instrument. The ECB’s Securities Markets Programme has demonstrated how critical it is for a central bank to safeguard the functioning of this segment of the market. 1.

And there is scope for greater deployment of our savings within our two regions, as investors in both regions look for improved returns. We are seeing the beginnings of a fruitful and meaningful relationship in financial sector cooperation. There is much scope for regional financial centres like Singapore and Kuala Lumpur to provide a gateway for fund flows between the Middle East and Asia. Singapore can by no means be a complete financial centre for the Middle East. That role will be played by financial centres in the Middle East. But we can and will complement and work in partnership with financial centres in the Middle East, and other Asian centres like KL. We can provide a gateway to take Middle Eastern investors into Southeast Asia and China, and to take investors from the region into the Middle East. What can we do to facilitate and spur on these financial ties and build sturdy bridges? Allow me to make three observations. First, the wealth management industry can play a pro-active role in helping investors to diversify their portfolios by introducing them to opportunities in Asia and the Middle East. In so doing, we will also help Asian and Middle Eastern capital markets grow and become deeper and more liquid. We are already seeing asset managers based in Singapore receiving investment mandates from investment agencies in the Middle East.
The question is more whether we can identify and understand the drivers of what, when the future arrives, turns out to be over extension of credit and overvaluation of assets. And how, in the light of that, we can ensure corrections can happen without the major economic dislocation that we call loss of financial stability. The underlying driver of course is that expectations about the future turn out to be incorrect. Human beings are probably unique in being able to imagine the future. I say ‘probably’ because there is some academic evidence that suggests that some animals may, to a limited degree, share our ability to engage in what has been termed ‘mental time travel’ – the ability we have in our minds not only to recall the past but also to form expectations about the future. The development of ‘episodic memory’, our ability to remember personal experience is linked to our ability to use the past to contextualise the present and imagine what will happen. “Memory allows us to use the past to create the future.” 8 It is an imperfect tool. We can imagine the future, or a range of possible futures, but we cannot know it. And, as research evidence is increasingly demonstrating, what we remember is by no means a perfect or reliable record. Our memory of past experience is malleable and changes in the light of what we are experiencing in the present: “you don’t remember what happened.

Imported goods become more expensive, and inflation in Norway remains high. Chart 3 Frequent devaluations in Norway Krone exchange rate. Index 8.4 Krone in terms of the currency basket index Currency band for the exchange rate target Devaluations  8 Weaker krone  7.6 7.2 6.8 6.4 6  Stronger krone  5.6 1973  1976  1979  1982  1985  1988  Source: Norges Bank – Historical Monetary and Financial Statistics  Norges Bank  Economic perspectives 2023  4  The devaluations reflect a well-known economic policy problem. The authorities can draw up a long-term plan, such as maintaining a fixed exchange rate. But because it will be tempting to deviate from the plan to reap short-term gains, any promises to stick to it are of little value. In the economics literature, this is called the “time-inconsistency problem”. 3  A new monetary policy framework emerges Over the following decades, economic reforms are implemented in both Norway and other countries. Many of the changes are directly motivated by the experience of the 1970s. It had turned out that it was difficult for the authorities to commit to an objective of price stability. It had also proved impossible to bring about a permanent decrease in unemployment by pursuing an expansionary monetary policy over time. Eventually, such a policy will only cause wages and prices to surge. And if high inflation becomes entrenched, it can be costly to bring it back down.
Perhaps markets have - after all - learnt something from previous crises in Europe and Latin America. They did not see the crisis coming but once it started, they reacted more rapidly. 4. Crisis management I will now turn to the issue of how to resolve a crisis, once it has erupted. It is obviously necessary to tackle macro and micro problems in parallel since the two are interlinked. As I stated earlier, I believe that the origin of the Swedish crisis was primarily macroeconomic, due to policy mistakes in the 1980s and early 1990s, and triggered by the policy shift to a low inflation regime. (Although there were also structural weaknesses in the financial sector). The solutions were also primarily macroeconomic in kind. Once the krona peg had been abandoned, demand got a stimulus. The task confronting policy makers was to restore the credibility of economic policy. This required in our case, given the weak fiscal position, very strong fiscal measures (some 8 per cent of GDP 1994-98). But it also called for a consistent monetary policy. However, and this is important to underline in the present context, if the financial problems had not been managed properly, they could easily have been a drag on the macro economy. For example, by taking prompt action it seems that we largely avoided a “credit crunch”, which was a possibility that worried people a lot at the time. Credit volumes obviously fell, but this could be explained by the reduction in demand.

This is because, after ten years of rapid expansion at a rate that has recently exceeded potential growth, the actual buoyancy of tax revenue has naturally been associated with the buoyancy of domestic demand and, in particular, with the vigour of the real estate sector, and therefore has a temporary component that would tend to disappear in an economic slowdown. It is therefore imperative to preserve the stabilising potential provided by the current state of public finances so that phases of less dynamic private spending can be faced with strength and the ability to react and, above all, so as to be prepared for unexpected contractionary shocks. This approach is especially valid in the current climate of uncertainty, in which a continued economic policy of rigour and budgetary stability is one of the most valuable resources when it comes to preserving internal and external confidence in our economy. Perseverance in the strategy of budgetary consolidation is also necessary from a mediumterm perspective so as to be in the best possible position to address the foreseeable impact of population ageing, aside from the required further progress in reform of the pension system. Regarding the co-ordination of this strategy, I would like to add two more comments. First, it is very important that all tiers of government contribute effectively, particularly the regional governments, whose weight in public spending policies has become most substantial.
Measures of broad (commercial bank) money globally rose by only around 85% in the decade following the global financial crisis and by even less  11  Global figures are based on data on OECD M1, while UK figures based on central bank reserves plus notes and coins in circulation. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  in the UK. Put differently, the money multiplier in the UK – the ratio of broad money to central bank money – fell by around two-thirds following the global financial crisis (Chart 9). Chart 9: Ratio of Broad Money to Narrow  M4ex/(Reserves+ Notes and Coins)  35 30 25 20 15 10 5 0  06  07  08  09  10  11  12  13  14  15  16  17  18  19  20  Source: Bank of England and Bank calculations. This should come as no surprise. The global financial crisis impaired financial intermediation, slowed the growth in bank credit and money and thus contributed to the sluggish growth in money spending. Interestingly, the relationship between broad money growth and money spending growth – the velocity of circulation of broad money – remained relatively stable following the global financial crisis (Chart 10). The velocity of circulation of narrow money, by contrast, fell dramatically. The Covid crisis has added to these long-standing disinflationary pressures.

This context provides useful information for how and why our stance has evolved over time. During the summer of 2018, the economy was growing above trend as businesses rode the wave of fiscal stimulus. The unemployment rate had fallen below 4 percent, a figure not seen since the peak of the tech boom in 2000. The global outlook was still quite positive, and inflation was close to our 2 percent goal. Against that backdrop, very gradually bringing interest rates back to more normal levels was appropriate in order to keep the economy on a sustainable path of growth. But the economic outlook and the uncertainty around that outlook have evolved considerably since then. While there’s not been a dramatic change seen in the overall numbers yet, the more detailed picture that emerged by summer of this year pointed to an outlook of slowing growth and inflation falling short of our goal. This in turn argued for a somewhat more accommodative monetary policy stance. The combination of muted inflation, slowing global growth, and uncertainties related to trade and other global developments led the FOMC to adjust the federal funds rate down by a quarter of a percentage point and conclude the run-off of the Fed’s balance sheet two months earlier than previously indicated. Our policy actions and communications have contributed to an easing of financial conditions that should help sustain the expansion and get us closer to our dual mandate goals.
The reaction to the budget for 2008 is a case in point. Attention has been focussed primarily on the perceived adequacy or otherwise of the proposed increases in incomes and benefits. The media regularly carry suggestions for still more handouts and other measures that would result in even higher consumption rather than investment. In contrast, little is said about where the “more” would come from. Neither has there been any serious discussion as to whether current levels of combined private and public consumption, at 87% of GDP in 2006, and of gross fixed capital formation, which was barely 20% of GDP  2  BIS Review 143/2007  last year, are appropriate. This imbalance is reflected in the persistent, if reduced, current account deficit, which suggests that consumption levels are indeed too high. Mr. President, the members of the financial community, and the credit institutions in particular through their lending policies, can play a useful role in seeking to correct this bias towards consumption, which occurs at the expense of improving the economy’s long-term growth potential and, therefore, weakens its ability to narrow the income gap with the more advanced members of the euro area. In this regard, we should be aware that despite the recent economic recovery, Malta’s per capita GDP measured in purchasing power standards is still just below 70% of the euro area average. Lessons from euro area country experiences Policy prescriptions for bridging the remaining income gap are readily available.

In this regard, the recent, widely different experiences of Ireland and Portugal are highly instructive. 1 Thus, whereas real per capita income in these two countries was not very different in the early 1990s, it had roughly doubled in Ireland by 2006 to 131% of the euro area average, but had only improved slightly in Portugal to 68%. How can such divergent performances be explained? Before joining the euro area Portugal pursued a pro-cyclical fiscal policy, which reinforced domestic demand, while in Ireland the fiscal stance was more disciplined. Whereas unit labour costs and inflation rose fast in Portugal, cost and price pressures were more contained in Ireland. As a result, competitiveness declined in Portugal, reflected in a growing current account deficit, whereas Ireland remained competitive and enjoyed a roughly balanced current account. These different policy approaches left their mark in the post-euro period. In Ireland, real output growth in the years 1999-2006 continued at a strong pace, 6.5% per year on average, and the fiscal balance was in slight surplus. In contrast, Portugal experienced an average growth rate of 1.7%, continued weak competitiveness and a substantial current account deficit. A major factor behind Ireland’s success was a 3% average annual increase in labour productivity growth, compared to less than 1% in Portugal. Another lesson that has emerged from the experience of these two countries, and is also widely documented in the literature, is that cost levels are not the only determinant of competitiveness.