samchain/econo-pairs-v1 huggingface dataset:
Muhammad bin Ibrahim: The money services business industry in Malaysia Keynote address by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Malaysian Association of Money Services Business (MSB) Annual Dinner 2015, Kuala Lumpur, 25 April 2015. *  *  *  Terima kasih kerana menjemput saya pada malam ini untuk bersama meraikan majlis makan malam Persatuan Perniagaan Perkhidmatan Wang Malaysia yang diadakan buat julung kalinya. Saya amat berbesar hati dengan kehadiran tuan-tuan dan puan-puan sekalian yang mewakili hampir keseluruhan penggiat industri pada malam yang bermakna ini. Ia jelas menunjukkan sokongan padu dan komitmen daripada saudara dan saudari untuk terus merealisasikan aspirasi untuk membina sebuah industri yang moden, progresif dan berdaya saing. I feel only a short time ago that I had officiated the official launch of the Association. Since then the industry has made significant progress on many fronts. Standards have been raised, business conduct modernised and the structure of the industry has changed significantly. In many ways the achievements by the industry had exceeded our expectations. I would like to believe that the regulatory reform instituted over the last few years was the catalyst that had transformed the money services business industry. We have seen very encouraging results. But these transformations would not be possible without the vision and shared commitments provided by the Association and the industry players.

New market segments can be created if the risk-return trade-off is appropriate. The new issues (Credit Suisse and Rabobank), have so far been very well received and we are aware of plans for funds being created to invest in these instruments. We see every reason to believe that new vehicles for owning contingent capital instruments can be created and existing mandates modified to allow them, as long as the market sees these securities as an asset class that will stay and reach critical scale, and subject to the normal market discipline of risk and return. This plays into a second lesson from the crisis. It is obviously crucial from a financial stability standpoint that contingent capital securities do not end up largely in the hands of other highly leveraged financial institutions, where losses could cause further spill-overs and thus generate financial instability. We believe that regulators could play a constructive role in allowing a broad range of “real money” investors to own sensible amounts of this systemic risk. Conclusion In this paper, we have given a number of examples taken from the financial crisis, where financial contracts undertaken for hedging purposes, or with optional features designed to protect the issuer or the investor, have not had the value expected at precisely the time when they needed to. These now look like classic time inconsistency problems coupled with partial equilibrium analysis. To avoid these pitfalls, a more extensive use of extreme and holistic stress tests could be used to assess individual counterparties as well as systemic risks.
While it may be tempting to conclude this is an isolated incident, there have been others, including the taper and bund tantrums. These could signal a broader problem of discontinuous market liquidity in stress. The solution is not to unwind post-crisis liquidity regulation, a recidivism that would only recreate, with time, the enormous systemic risks of the past. Moreover, the limited systemic consequences of these events should be noted. After all, the riskiness of an asset depends on who holds it. A “crisis” in the periphery is a bad day in the markets; one in the core is an annus horribilis for the real economy. Nevertheless, market infrastructure must evolve to take account of new dynamics. In one of Benoît’s (many) speeches last month, he identified one of the potential problems underlying the repo market stress: that what may look to be sufficient liquidity in aggregate can prove too little if it is asymmetrically distributed – either across institutions or national boundaries. As Benoît noted, this may require central banks to provide more liquidity in aggregate, including by widening access to their balance sheets. Prompted by the potential risks that come with Brexit, the Bank of England has come to a similar conclusion: we are already running weekly auctions in sterling, US dollars and euros that could be used to absorb pressures as they arise.

Same as most central banks throughout the world, the National Bank, as specified by the Statistical Research Program generates three sets of macroeconomic statistics: •  Monetary statistics that includes processing and presentation of data on the money supply (monetary aggregates), banks' interest rates on approved credits and accepted deposits, and many other data on the banking sector;  •  Balance of payments statistics that includes processing and compiling data on the developments in the balance of payments in the Republic of Macedonia; and  •  External debt statistics that includes processing and presentation of data on the foreign debt of the country. The National Bank has developed all these major sets of macroeconomic statistics in line with the international recommendations and standards. The harmonization of the method of developing such statistics with the international recommendations and standards has permanently been subject to verification by international institutions and organizations, primarily by the International Monetary Fund, as an institution that creates the methodological standards and recommendations in the area of central banking statistics. I would like to take this opportunity to mention the report of the so-called IMF ROSC (Report of the Observance on Standards and Codes) Mission, where the assessments of the  BIS Review 100/2006  1  central bank statistics are particularly positive, i.e. the development of the NBRM monetary and balance of payments statistics is largely harmonized with the international recommendations and standards.
Mr King looks at interest rates and the new Monetary Policy Committee in the United Kingdom Lecture delivered by the Deputy Governor of the Bank of England, Mervyn King, at Queen’s University in Belfast on 17 May 1999. Present at the creation Two years ago, when it announced that the Bank of England would be granted independence, the n(N)ew Labour Government surprised everyone, not least the Bank of England. Since then, decisions on interest rates have been taken not by the Chancellor but by the Monetary Policy Committee. Much has followed from that single bold decision to take interest rates out of day-today politics. The transfer of the operational responsibility for setting interest rates to a new Monetary Policy Committee was a major policy, indeed constitutional, innovation. The excitement of being involved in the construction of a new monetary institution for the United Kingdom has both motivated and rewarded the extraordinary efforts of the Bank staff who made the new process work, and I want publicly to thank them for that. In the words of Dean Acheson, to be “present at the creation” is an experience which few involved in policy are ever privileged to share. Inevitably there have been changes to the Bank. It has had to redirect its resources to focus on achieving and maintaining monetary stability in this country. Responsibility for banking supervision has been transferred from the Bank to the new Financial Services Authority. The job of managing public sector debt has passed to a new Debt Management Office.

The lags between a change in interest rates and its effects on output, demand and, ultimately, inflation mean that rough weather and occasional storms in the world economy are likely to blow us off course, at least for a time. A true test of the MPC is not whether it hits the target when the sea is calm, but how it reacts to the storms, or economic shocks, that will inevitably arise. The most immediate challenge for the MPC is that, although inflation may fall below the target over the next year, before long the inflation prospect further ahead will depend more on domestic inflationary pressures than it has over the past year or so, when external factors made a major contribution in holding down retail price inflation. Lags mean that the MPC needs to look ahead. The test of the MPC will be how it responds to the inflation prospect. Even in the absence of unexpected shocks there are major uncertainties. Trying to understand changes in the way the economy behaves is a crucial part of the MPC’s work. In recent years we have seen a combination of lower inflation, lower earnings growth and faster output growth than previous relationships would have led us to expect. The reasons for this benign combination of growth with low inflation are not easy to diagnose. Some have talked about a new era or a “new paradigm”, in which productivity growth has permanently risen. We should be cautious about those who speak of new paradigms.
Technological progress, innovation, and new models of competition are changing the financial industry and there will undoubtedly be winners and losers. Understanding all of the factors that drive successful transformations will be a critical insight for both risk managers and supervisors. Conclusions 3/4  BIS central bankers' speeches  The financial sector is large, complex and constantly evolving due to a wide range of technological, business, and macro factors. Your job, and ours, is to be vigilant and open-minded in our thinking, constantly questioning our traditional assumptions and scanning the horizon to understand how the risk landscape is changing. The topics covered at today’s conference are some of the most important risks that the industry faces. Climate change and digital transformation are two powerful trends with the potential to fundamentally change financial services. We all need to be forward-looking and proactive in order to promote our ultimate goal of a safe and sound financial system that supports the sustainable provision of financial services and economic growth. Thank you for your attention. 1 NOAA National Centers for Environmental Information (NCEI), Billion-Dollar Weather and Climate Disasters  (2019), National Oceanic and Atmospheric Administration. 2 The Impact of Higher Temperature on Economic Growth, Riccardo Colacito, Bridget Hoffmann, Toan Phan and  Tim Sablik, Economic Brief, August 2018, No. 18–08; Climate Change and the Federal Reserve, Glenn Rudebusch, FRBSF Economic Letter, 2019–19, March 25 2019; Fourth National Climate Assessment, Volume II: Impacts, Risks and Adaptation in the United States, U.S. Global Change Research Program.

To counteract the risks to our price stability objective, we first recalibrated our policy stance last December and then unveiled another comprehensive set of measures at our last monetary policy meeting in March 2016. In discussing our recent monetary policy measures, it is essential to consider the global environment in which they were taken. This environment was characterised by subdued growth, historically weak trade developments and low inflationary pressures reflecting sharp falls in energy prices. The more recent developments have been affected in particular by the outlook for emerging markets contributing to global financial market volatility in the second half of 2015 and again in February this year. In this respect, these developments are analysed in the box in the Annual Report entitled “Financial stress in emerging market economies” in order to understand their impact on the euro area economy. This is against the background of the discussions carried out in international fora, most recently at the meeting of G20 ministers and central bank governors, as well as at the BIS meetings in February in Shanghai. Risks to the global outlook and global financial stability will feature prominently on the agendas of the various meetings in the context of the IMF and World Bank spring meetings next week.
But the scale and scope of broader international activity here suggests that clustering effects such as labour market externalities, specialised inputs and knowledge transfer have become even more powerful in a world of financial globalisation. It is conceivable that given time these effects and the benefits they bring in terms of more efficient allocation of capital and risk could be replicated elsewhere in Europe. It is in my view more likely that if they are lost in London they would be lost to Europe – for the foreseeable future at the least. Fragmentation of wholesale financial markets activity in Europe, to the extent it occurs, is likely to have a general cost to European economies, including the UK. And to the extent that the transition to whatever new arrangements will apply is not orderly and smooth, the costs and risks will be greater. This is of course a technocrat’s view and these issues, rightly, will not be settled by technocrats. The impact of Brexit on European financial markets is only a part of a much broader set of considerations. As an ex EU negotiator, I have some inkling of how many other factors can come into play. Whatever the outcome, and the twists and turns on the way, the Bank will continue to focus on its role in protecting financial stability. Financial markets have come a long way since Cunliffe Bros became a founding member of the Accepting Houses Committee at the end of the first wave of financial globalisation.

The securitisation figure covers US and European securitisation markets. 3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  As a knowledge intensive service industry, the financial sector depends crucially on the availability of specialised labour. Complex financial service firms rely on access to a large pool of skilled workers. For example, 390,000 people work in financial services in London and 330,000 in New York, the two largest financial centres. Financial services have an increasingly complex production chain that depends on the availability of specialised intermediate inputs of both financial and non-financial services. A modern financial market transaction may be the simple purchase or sale of a single financial asset. But it is more likely to be a complex chain of transactions involving a range of financial markets and intermediaries. One can see this complexity in the value chains of financial services. In 2014, every £ of Gross Value Added created by the financial services sector in the UK relied on £ of inputs from other financial services firms and £ of inputs from legal, accounting, consultancy, information, IT and business support services. Knowledge and information is a critical input to financial services – perhaps more than any other industry. Quick access to information can lead to better decisions about the allocation of capital. Information about successful innovations in financial firms’ production processes can lead to more efficient production across the industry.
4  BIS Review 67/2006  Considering the fact that seasonal price movements are determinant in consumer prices, it will be helpful to analyze the Special CPI Aggregates (SCA), excluding seasonal products, with respect to the course of inflation. The decline in the annual rate of increases in the SCA-E* index that has been continuing since the beginning of 2005, which is calculated by excluding seasonal products from the SCA-E index excluding energy, alcoholic beverages and tobacco products, had slowed down by the first quarter of 2006. On the other hand, it is observed that the downward trend in the seasonally adjusted SCA–D* index, which is calculated by excluding energy, unprocessed food, alcoholic beverages, tobacco products and gold, continued in the first quarter of the year as well and the main trend of inflation was downwards (Graph 6). Graph 6. CPI and Special CPI Aggregates (E* and D*) (Annual Percentage Change) 10  9  8  7  6 CPI E* 5  D* (Seasonally Adjusted)  Mar-06  Feb-06  Jan-06  Dec-05  Nov-05  Oct-05  Sep-05  Aug-05  Jul-05  Jun-05  May-05  Apr-05  Mar-05  Feb-05  Jan-05  4  E*: CPI excluding energy, alcoholic beverages, tobacco products and seasonal products D*: CPI excluding energy, alcoholic beverages, tobacco products, unprocessed food and gold Source: TURKSTAT, CBRT. Producer prices rose by 2.48 percent in the first quarter of 2006.

It is important for central banks to strike the right balance in this regard, and for financial risks to be correctly measured, properly understood and sufficiently contained. Moreover, the European Court of Justice, in its judgment on outright monetary transactions, has confirmed the need to provide sufficient risk management measures that are “likely to reduce the risk of losses to which the ECB is exposed”. Speaking in a country with a proud history of maritime exploration let me recall the words of Seneca, the Younger: When a man does not know what harbour he is making for, no wind is the right wind. The “harbour” of a central bank is its mandate. The principles it seeks to adhere to are the “compass” that helps it fulfil this mandate. When a central bank is facing a crisis, it needs to consider whether its monetary policy operations are still proportionate. This need stems from the obligation under primary law (proportionality principle) to properly weigh up all the components of a given measure against one another. The aim is to determine whether the expected benefits of the measure outweigh its costs. As a general rule, a stable risk management approach and a through-the-cycle approach are advisable. However, extraordinary circumstances may require extensions of the framework, such as the acceptance of additional collateral. If this still proves insufficient, unprecedented types of monetary policy measures may call for entirely new operations, accompanied by new risk management measures.
If the channel is thought to work through broad money, as transactions balances, 22 then of course it is the supply of bank lending that matters. Essentially, when “liquidity” is plentiful, it may be undervalued. That may build a bridge to the literature on how the supply  18  See Cochrane, J, “Financial Markets and the Real Economy. 19  See Tucker, PMWT “Reflections on Operating an Inflation Target”, Bank of England Quarterly Bulletin, 2006 Q2 pp 212-224. 20  See Tucker, PMWT (2007) “A perspective on recent monetary and financial system developments” Bank of England Quarterly Bulletin 2007 Q2 pp 310-316. 21  Including the current G of the BofE and myself; see King, M (2002) “No money, no inflation – the role of money in the economy” Bank of England Quarterly Bulletin 2002 Q2 pp 162-177. 22  See Thornton, D. L, (2008) “Monetary policy: Why monetary matters and interest rates don’t”, Federal Reserve Bank of St Louis Working paper 2008-011. 10  BIS Review 112/2008  of credit from the banking sector can influence the liquidity of asset markets. 23 This echoes my earlier discussion of the potential utility, as indicators, of the data on money and credit quantities when the degree of credit rationing shifts. We’d do better at making sense of those issues if we had a better understanding of the determinants and macro-significance of risk premia in the first place.

In addition and as a crucial complement to its operational responsibilities, the Markets Group has responsibility for monitoring and analyzing financial markets. These activities serve to support existing operations and provide vital knowledge as new types of operations are contemplated. They also supply an important source of unique market intelligence for policymakers on developments in an array of financial markets that could affect the economy or have policy implications. These efforts tend to focus on understanding broad financial market conditions, expectations for monetary policy and the real economy, and financial stability risks. My use of the phrase “market monitoring” is intended to capture much more than following prices and trading activity in asset markets and conversing with market participants globally about the causes behind market developments, as important as that is. It includes broader responsibility for analyzing both immediate and longer-term trends in global financial markets and linkages among financial institutions, and it rests upon a deep understanding of the microstructure of financial instruments and markets and of the motivations of market participants.2 By maintaining deep expertise in particular asset classes and detailed knowledge of market behavior and infrastructure, the Desk is able to structure and execute operations to achieve the objectives of policymakers. This deep expertise also enhances the quality of the information and staff assessments about current market developments that is communicated to policymakers throughout the Federal Reserve System through a variety of briefings, conversations and written products.
Jean-Claude Trichet: The financial crisis and the role of central banks – the experience of the ECB Keynote address by Mr Jean-Claude Trichet, President of the European Central Bank, at the international symposium marking the 50th anniversary of Bank Al-Maghrib, Marrakech, 29 May 2009. *  *  *  Dear Governor Jouahri, Dear Governors, Ladies and gentlemen, It is an honour and a great pleasure for me to be a speaker at this celebration marking the 50th anniversary of the Bank Al-Maghrib. I would like to congratulate Governor Jouahri on this occasion, and wish him and the staff of the central bank all the best for the future. The Eurosystem has a well-established framework for dialogue with the Bank Al-Maghrib, the Euro-Mediterranean Seminar. This forum regularly brings together the governors of Eurosystem central banks with those of the “Barcelona Process: Union for the Mediterranean”. The Euro-Mediterranean Seminar has, since its first meeting in 2004 in Naples, strengthened our dialogue by addressing various topics relevant to central banks around the Mediterranean. The Bank Al-Maghrib and Governor Jouahri have contributed to this fruitful exchange of views and will no doubt do so at the next meeting in March 2010 in Cyprus. In addition, the Bank Al-Maghrib has close bilateral relations with some of the central banks in the Eurosystem and in particular with the Banque de France on various aspects of technical assistance. We are living in a very challenging time. Morocco, like all countries worldwide, has been hit by the global crisis.

Banks and other financial institutions drastically reduced their exposure to the risks that they had imprudently accumulated during the phase of financial euphoria. Financial intermediation and loans to companies were curtailed in the wake of a forceful process of “deleveraging”. This was the point when important spillovers of the financial crisis set in. We saw the almost immediate spillover from the financial sector to the real economy. The credit squeeze and loss of confidence started to take a toll on the real economy, and a negative feedback loop developed between the financial sector and the real economy, and has since become a major feature of economic and financial developments. Almost simultaneously, the crisis that originated in the advanced economies spilled over to the emerging market economies. Since the fourth quarter of 2008, virtually all economies – both those of the industrialised countries and the emerging markets – have faced synchronised business cycles. Since half a year, we are facing a highly synchronised global economic downturn. The ECB’s response to the financial crisis Turning to the ECB’s response to the crisis, let me first insist that none of my remarks should be interpreted in terms of the future course of monetary policy. I stick rigorously to what I have said during my last press conference. We are indeed in the one-week “purdah period” before the next meeting of the Governing Council. Since the start of the financial turmoil, central banks around the globe face unprecedented challenges.