samchain/econo-pairs-v1 huggingface dataset:
Given such diversity with global orientation, it is only fitting to label this programme as the ISRA Global Scholarship. Our aspiration is that this programme will continue to grow and makes a difference. We aspire that ISRA Global Scholars are acknowledged as potential game changers for the industry and a product of a highly rigorous selection process. Ideas to further contribute towards the industry’s transformation I would like to raise three issues for your consideration as alumni of the Shariah Scholarship 1/2  BIS central bankers' speeches  Award. First, continuously push and expand the frontiers of knowledge in whatever role you are in. As scholars, we know intimately the importance of knowledge and research. Research is where breakthrough thinking should originate, especially in the area of applied research that is solutiondriven and industry-related. But this will necessitate us to develop a greater understanding on the real issues facing the industry. It also necessitates us to learn other disciplines as well, just like the great scholars of yesteryears that venture into other areas of studies. They became very innovative because of the varied disciplines. Only then, are we able to develop practical and costeffective solutions. For example, most Islamic Finance industries around the globe are still domestically oriented and a majority of them still engage in consumer credit and simple form of banking products. If Islamic Finance were to expand we need to go beyond these domains.

Muhammad bin Ibrahim: Developments in the global Islamic finance industry Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the International Shari'ah Research Academy for Islamic Finance Alumni Hi-Tea, Kuala Lumpur, 5 September 2017. * * * I would like to thank ISRA for inviting me to this event with alumni of various nationalities and to deliver some remarks. We take pride in knowing that you have been enrolled to pursue studies in among the world’s leading universities in the field of Islamic finance and Shariah such as the International Islamic University Malaysia and Yarmouk University in Jordan. I believe that with the knowledge and competencies gained, you will now have a deeper understanding and appreciation of the fundamental importance of Shariah in Islamic finance. This deeper understanding and knowledge of Shariah matters serve as a springboard for you to play a meaningful role in the future development of the Islamic finance industry. Role of the alumni in developing the global Islamic finance industry Globally, Islamic finance has been making headways as it makes its presence felt. Many jurisdictions have offered Islamic finance as part of their banking system’s products and services. This is good progress. But Islamic finance should not be looked upon as a value proposition only for the Muslims. This thinking, in my view, is regressive. Islamic finance is for all. It incorporates universal concepts and values that cater to all and sundry. An important distinction that is worth reminding.
In addition, the rise in home prices led to an explosion of supply especially in areas like Arizona, Florida, Nevada and inland California, where buildable land was plentiful. As supply caught up to demand, this led to a downturn in prices. Once this occurred, the poor underwriting standards associated with subprime mortgage lending became apparent. Subprime borrowers could no longer easily refinance or sell the house at a higher price and repay the original mortgage. As Warren Buffett reportedly once quipped: “Only when the tide goes out do you discover who has been swimming naked.” So what does this analysis imply for a central bank that might want to limit the development of such bubbles? The first conclusion is that assessing whether there is a bubble or not or the size of the prospective bubble is going to be very challenging. Because there is an innovation, asset values should rise, but by how much? It is difficult to assess what is the new, appropriate valuation after an important innovation. For example, consider some questions that might have arisen relative to the technology bubble: What does the Internet mean for technology investment? How many of the new business startups will survive and prosper? Is an Amazon rare? How fast will the volume of Internet traffic grow and for how long? Similar questions arose with respect to the recent housing bubble: How much will subprime lending increase the demand for housing? How will this increase in demand translate into prices?

The baseline scenario in our December Monetary Policy Report is still totally valid. Our aforementioned report and the market expect a moderate deceleration of Chile’s growth. Our economy is forecast to grow in the range of 3.75% to 4.75% in 2012, with y-o-y rates for every expenditure component below those of 2011. This would be the response both to a normal, sound convergence of the economy to trend-consistent growth rates, and to the effects of a less favorable external environment. The latest data show our economy gradually adjusting to lower growth rates, at the same time that expenditure indicators are still showing substantial growth. Sure enough, there are differences across sectors. In some branches of manufacturing, especially export-oriented ones, dynamism is milder. In other sectors, such as retail, there is some degree of higher  BIS central bankers’ speeches  1  caution in inventory management. By contrast, the consumption of durable and capital goods, which are normally the first to react to a change in the agents’ expectations, remains strong, the same as the construction sector. Meanwhile, various indicators signal a tight labor market. It has been recently reported that in December, the unemployment rate as measured by the Universidad de Chile survey for Greater Santiago dropped to a 15-year low, and that the creation of new jobs has, for the most part, been accounted for by salaried employment.
For instance, a review can be performed of the way the banks calculate borrowing capacity using discretionary income calculations, and the scenarios a borrower can withstand. As part of their credit assessment procedures, banks should also ensure that all mortgage customers can cope with amortising their mortgages at a certain rate. One way of influencing amortisation behaviour could also be to clearly inform customers about the long-term consequences of different rates of amortisation. The government has commissioned Finansinspektionen to investigate the conditions for placing requirements on banks to provide mortgage customers with tailored advice about suitable rates of amortisation, which is a step in the right direction. In terms of the possibilities of macroprudential policy, we can, with different types of capital requirements, increase the banks’ buffers and, with various supplementary measures, increase the buffers of borrowers (households in this case). The higher buffer requirements will affect the costs of borrowing, and could thus also contribute to curbing credit growth. Because all of these measures ultimately affect the cost of borrowing in one way or another, it might be appropriate to use a little of several tools rather than a lot of one, since different tools affect various groups in society slightly differently. Also, the use of several tools can reduce the possibilities of regulation arbitrage.

Placing responsibility on one body is well in line with international recommendations and proposals starting to take shape in other EU countries.10 The Riksbank should have an influential role in macroprudential policy In my view, the Riksbank has solid fundamentals to shoulder responsibility for macroprudential policy in Sweden. Over the last 15 years, we have built up extensive systemic risks analysis capabilities. As I briefly mentioned before, we also have in-depth knowledge in terms of studying the relationships between the financial and real sector, for instance, as a result of the monetary policy analysis apparatus. Placing responsibility for macroprudential policy on the Riksbank would also involve synergies with monetary policy. Because coordination with microprudential policy is also important, in our consultation response we propose the establishment of well-defined ways of cooperation between the Riksbank and Finansinspektionen. The central bank having a key role in macroprudential policy is also recommended by the European Systemic Risk Board (ESRB). The Riksbank is an authority with a high degree of autonomy, which raises the question about how autonomous macroprudential policy should be. A high degree of autonomy can be beneficial when it comes to preventing financial instability, more or less for the same reasons as in monetary policy. On the one hand, the decisions can be unpopular politically, and on the other hand expert knowledge is important. However, there is a crucial difference between monetary policy and macroprudential policy in one respect.
However, the cut-off of Russian gas is a major determinant of mediumterm inflation reaching such high levels under that scenario. In other words, the upside risks to the inflation projected under the baseline scenario reinforced the need to accelerate the interest rate rises. Looking ahead, we will continue our monetary policy normalisation, the pace and scale of which will depend on the materialisation of the risks to our medium-term inflation target At least two risks are and will remain central to our monetary policy deliberations and decisions. First, a potential de-anchoring of medium and long-term inflation expectations above the 2% level. The materialisation of this risk would be the worst-case scenario, since it would affect the price- and wage-related decisions that firms and households make in the present. This would cause even higher and more persistent inflation, requiring still more forceful monetary policy measures that would harm activity and employment. The information available to date shows no indications of expectations becoming deanchored. However, there are some early signs that need to be watched. The most recent surveys of professional forecasters put inflation in 2024 at, or just over, 2%. The latest data from inflation-linked derivatives markets (adjusting for risk premia) suggest likewise. However, the most recent round of the ECB’s monthly Consumer Expectations Survey (CES), published in early September, puts the median inflation expectation three years ahead at 3%, up from just over 2% at the start of the year. We will be extremely vigilant of these indicators in the coming months.

Indeed, as I have said, the need to guard against this risk is one of the reasons for the faster monetary normalisation that our latest decisions entail. 7  The second risk relates to possible second-round effects, i.e. when high inflation passes through to wage increases and these, in turn, push up consumer prices as firms seek to maintain (or widen) their margins. This scenario is to be avoided, since it would make inflation far more persistent and, thus, increase the likelihood of the feared de-anchoring of inflation expectations. On the information available, there is no evidence of such effects occurring at present, at least on a widespread basis. Wage settlements in the euro area have gathered pace since the end of last year, with increases reaching 2.5% according to the latest data. Although they are expected to rise further in 2023, the increases currently projected would, in principle, be compatible with the 2% inflation target once trend productivity growth is taken into account. Broadly speaking, profit margins have also remained moderate, although unevenly across sectors. However, the longer the current high inflation persists, the greater the probability of these second-round effects occurring. Naturally, the extent of the economic downturn, over which, as I indicated earlier, there is significant uncertainty, and its effects on wages and profit margins, will be key determinants of the medium-term inflation outlook and, therefore, of our monetary policy decisions.
To a large extent, Swiss companies, households and institutional investors would be in a position to call upon the services of international Swiss banks for their asset investments and business operations abroad. Third, the international position of the banking centre is closely related to the growth and expansion of the international business of the big banks, which has forged ahead since the 1990s.7 This expansion was motivated, not least, by the desire to move into new, potentially profitable investment banking areas. Thus, the expansion of the balance sheets of the two  2  Cf. Cihák et al. 2012. 3  Cf. BAKBASEL 2013. These comments here are limited to banks. Apart from banks, the financial industry also includes insurance service providers which, in Switzerland, generate 4–5% of additional value added. 4  In 2012, income from exports of bank services contributed some 20% to Switzerland’s current account surplus. Cf. Swiss National Bank 2013b. 5  Cf. Swiss Bankers Association 2013. In terms of the level of total managed assets, both onshore and offshore, UBS is also currently the leading bank worldwide. 6  Cf. Straumann 2006. 7  Cf., for example, Tille 2010. 2  BIS central bankers’ speeches  big banks in the 15 years before the financial crisis is largely attributable to investment banking.8 Manifold challenges for the Swiss banking centre Since the onset of the financial crisis, however, the international operations of the Swiss banks have come under increased pressure on a number of fronts.

BIS central bankers’ speeches  Nevertheless, from an economic point of view, Switzerland still has a major interest in a strong banking centre of international importance. However, great efforts are required to ensure that the Swiss banking centre can remain successful in the global arena in the future. It is the banks themselves which are mainly challenged. They must ensure that their services provide customers with value added which is well above average. At the same time, their crisis resilience must be considerably above average and their business conduct and reputations far beyond reproach. In this respect, politicians can support the banks. However, industrial policies in the area of finance should be avoided. Support for banks should rather come through the creation of an appropriate combination of business conditions. The emphasis should be on measures which strengthen the crisis resilience and reputation of both Switzerland and its banking centre in the long term. In my view, this can be achieved if the TBTF issue is alleviated, Switzerland’s stability in general preserved, and both the privacy of honest tax-paying bank customers and global market access for banks guaranteed. I believe that all players are aware of the major efforts that this requires. I am therefore confident that in addition to looking back over a great past, the Swiss banking centre can look forward to a successful future. References BAKBASEL 2013. Die volkswirtschaftliche Bedeutung des Schweizer Finanzsektors. Cihák, Martin et al. 2012. Benchmarking Financial Systems around the World. World Bank Policy Research Working Paper No. 6175.
This approach was reflected in the Open Letter procedure, which was an explicit part of the 1997 arrangements. This recognised that the MPC would not attempt to bring inflation back to the target immediately following a large shock, but required the Governor to write a letter to the Chancellor if, as a result, inflation deviated from the (then) 2.5% target by more than one percentage point. As Ed Balls commented in a lecture in 2001 4 :  2  “Inflation Targeting: A new framework for monetary policy?”, Ben Bernanke and Frederic Mishkin, Journal of Economic Perspectives, 1997. 3  “Constrained Discretion and Monetary Policy”, remarks by Ben Bernanke before the Money Marketeers of NY University, New York, February 2003. 4  “Delivering Economic Stability”, Oxford Business Alumni Annual Lecture by Ed Balls, June 2001. 2  BIS Review 20/2007  “Some have assumed it [the requirement to write an open letter] exists for the Chancellor to discipline the MPC if inflation goes outside the target range. In fact the opposite is true…… In the face of a supply-shock, such as a big jump in the oil price, which pushed inflation way off target, the MPC could only get inflation back to 2.5 per cent quickly through a draconian interest rate response – at the expense of stability, growth and jobs. Any sensible monetary policymaker would want a more measured and stability-oriented strategy to get inflation back to target.

First, looking back over the past three years, the big picture is that inflation has stayed surprisingly low, and output growth remarkably stable, given the scale of these cost increases. Inflation has never deviated by more than 1 percentage point from the 2 per cent target. But second, judging by the media and public reaction to the rise in inflation over the past few months, it is clear that even a small deviation in inflation from target can now look very significant after the stability of the past decade. This illustrates both the helpful and unhelpful legacy of a decade of remarkable stability for the UK economy. On the helpful side, there is no doubt that a highly credible monetary policy framework has helped to contain inflation, in the face of a very large cost shock. The UK has become a low inflation economy since the 1970s and people expect the MPC to keep it that way. That affects the way they behave when they take decisions about wages and prices. The less helpful legacy is that even a small movement in inflation away from target – one percentage point – has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run. How does this less helpful legacy affect the policy debate?
6  BIS Review 36/2004  Both the formulation of a precise inflation target and the aim of striking a balance between the objectives of stable output and inflation could invite a repeat of earlier attempts at fine-tuning. But here it is important to adhere to the lessons drawn from the 1970s and 1980s. The uncertainty underlying the decisions taken must not be underestimated. There is uncertainty as to the current state of the economy, the underlying driving forces and the economy’s functioning, including expectations formation and the impact of monetary policy. Economic models are tools that help us address some of this uncertainty. Inflation targeting places new demands on our models and our use of models. In an uncertain world, risk analysis is a very important part of the work. The aim is as much to understand the economics of the forecast as to produce quantitative estimates. In central banks, dramatic developments in macroeconomic modelling have taken place over the past 10 years. At Norges Bank, we have started work on developing modelling tools for inflation targeting. We are inspired by and work closely with other central banks and the IMF and draw on our long experience of model building in Norway. We are working on several different models and we are assessing other building blocks that we need to support our work in setting interest rates under an inflation targeting regime.

Such a commitment helps to strengthen confidence in the sustainability of public finances, reduces interest rate risk premia and improves the conditions for sound and sustainable growth. The implementation of credible policies is crucial in view of ongoing financial market pressures. Substantial and far-reaching structural reforms, complementing fiscal adjustment, should be urgently implemented to improve the prospects for higher sustainable growth and employment. Major reforms are particularly necessary in those countries that have experienced a loss of competitiveness in the past or that are suffering from high fiscal and external deficits. Increased product market competition and labour market flexibility would further support the necessary adjustment processes in the economy. All these structural reforms should be supported by the necessary improvements in the structure of the banking sector. Sound balance sheets, effective risk management and transparent, robust business models remain key to strengthening banks’ resilience to shocks and to ensuring adequate access to finance, thereby laying the foundations for sustainable growth and financial stability. We are now at your disposal for questions. BIS central bankers’ speeches  3
BIS central bankers’ speeches  3  Let us not short-change the consumers of life insurance and investment products in Singapore. I am heartened to note that some insurers are already consciously recruiting better qualified individuals who can provide value-added advice to their customers. These agents are better able to explain the intricacies of financial planning, and recommend solutions to meet the financial needs of busy professionals or less savvy customers. But we must level the playing field and make this the industry norm. Raising the quality of financial advisory firms Management expertise and financial resources of financial advisory firms The second thrust of our approach is to raise the quality of financial advisory firms. While banks and insurers are generally well resourced, financial advisory firms vary in size. Some firms are so small that shareholders or directors double up as representatives, CEO, CFO, and compliance personnel. Under FAIR, we will review the management expertise and financial resources of financial advisory firms, to ensure they are well managed and financially sound. We will take this review into consideration when admitting new financial advisory firms. Making financial advice a dedicated service Besides raising the quality of FA representatives and financial advisory firms, we must make financial advice a dedicated and professional vocation. Customers looking for financial advice deserve to be served by representatives whose primary focus is to provide quality advice on regulated financial products. Unregulated activities of FA representatives We want an industry where providing financial advisory services is the primary focus of FA representatives.

The Single Resolution Mechanism contains three essential elements: First, a single regulatory framework. This will be established with the Bank Recovery and Resolution Directive (BRRD). The trilogue of the Council, the European Parliament and the Commission is currently ongoing and from an ECB perspective a desirable trilogue outcome would contain two elements. First, bringing forward bail-in to 2015 as markets will anticipate bail-in anyhow. Having the rules in place earlier will give investors’ bigger security. Second, the flexibility and scope for national solutions should be somewhat reduced so that market participants will have sufficient confidence about the rules of the game in Europe. The second element of the single resolution mechanism is the single resolution authority and the third, a single resolution fund, funded by contributions from the financial industry. The last two elements are currently in the legislative process and we strongly support the envisaged timeline for their entering into force (1 January 2015), as it ensures that the establishment of the Single Resolution Mechanism would follow shortly after the effective start of the Single Supervisory Mechanism. Private banking union The “private banking union” in the US is created by its integrated financial market, which includes both the banking sector and capital markets. In the banking sector, the US has genuinely nationwide banks, which allows them to better diversify risk.