samchain/econo-pairs-v1 huggingface dataset:
Zeti Akhtar Aziz: The future prospects of the Islamic financial services industry Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the IFSB interactive session, Bali, 31 March 2004. *  *  *  Our endeavour is to develop an Islamic financial system as an intermediation process that will contribute to overall wealth creation, growth and development and a greater shared prosperity. As the pace of globalization and liberalization accelerates, securing financial stability and confidence have increased demands for more robust and resilient financial systems. The challenge is therefore to evolve strategies that will promote a competitive, dynamic and sustainable Islamic financial services industry. Central to this common vision, to create a comprehensive Islamic financial system that will be able to respond to meet the requirements of the domestic economies and also to become an integral component of the international financial system. Distinguished guests, Assalamu’alaikum Warahmatullahi Wabarakatuh, It is my pleasure to be here today at this conference organised by the Islamic Financial Services Board to discuss the future prospects of the Islamic financial services industry. Malaysia’s experience in the development of our financial system is outlined in our ten year Financial Sector Masterplan. The Masterplan represents the blueprint that provides the strategic direction for the development of the sector that looks beyond the near term and takes a long-term perspective into the needs of the future.

Jean-Pierre Roth: Inflation and economic activity – are we at a crossroads? Summary of a lunchtime discussion by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the “Geneva Financial Center” organisation, Geneva, 28 August 2006. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  While the world economy is experiencing exceptionally vigorous expansion and inflationary pressure is contained, there is still a certain amount of uncertainty. Will the economy turn down again and inflation accelerate? The Swiss National Bank is not working with a scenario of imminent weakness in the global economy, even if the rate of growth slows somewhat. Certainly, the US economy appears to be heading for a soft landing, and economic activity in Europe is also likely to increase less rapidly in the second half of the year. On the price front, the recent surge in inflation in the consumer price index was largely attributable to the cost of goods and services directly linked to energy prices, while core inflation remained at a relatively low level. Given the slowdown in global spending and the normalisation of monetary conditions, inflationary pressures are likely to remain restrained. This assessment also applies to Switzerland.
On the benefits side, there is now stronger evidence on the costs of credit booms and the role of capital in constraining the severity of the downturn in the aftermath of these booms. It also suggests that the costs of raising extra capital are no larger, and may well be smaller, than originally anticipated. This strengthens the hand of macroprudential authorities when tightening capital requirements during a credit boom. Other things equal, it would also increase quantitative estimates of banks’ optimal capital ratio. On the other side of the ledger, the LEI study did not anticipate two factors. First, the role of TLAC in augmenting banks’ capital base in situations of stress, potentially reducing the probability and severity of crises. Second, higher capital requirements could impose liquidity-related costs on the financial system, though their scale (and whether they are a social cost) remains open for debate. These arguments, in particular around resolution, have been used by policymakers in some countries, including the UK, when coming the view that capital requirements should be lower than in the original LEI study. For example, having assessed all the factors and evidence within Table 1, the Bank of England’s Financial Policy Committee judged that the appropriate structural level of Tier 1 equity in the system would be 13 ½% of 18  See the Financial Policy Committee’s June 2016 Financial Stability Report (pp 27-33) for an assessment of market liquidity in UK markets more broadly.

Once translated into default probabilities, Acosta-Smith et al (2017) find that the second effect swamps the first: a one percentage point rise in the leverage ratio raises the odds ratio (on banks being in distress versus safe) through risk-shifting by 1-3.5%. But the reduction in the odds ratio from lower leverage is close to 40-50%. Second, the leverage regime is not a replacement for the risk-weighted capital regime but an addition to it. The capital regime places an automatic upper-bound on the extent to which banks can increase their risk-weighted assets. In other words, the capital ratio regime places constraints on incentives to risk-shift. Conversely, the leverage ratio can serve as an effective constraint on incentives to game or shade risk weights. Risk-taking incentives are, in effect, book-ended by the leverage and capital constraints. From an incentives perspective, if regulatory arbitrage incentives are two-sided, so too should be the constraints needed to straightjacket that behaviour. That is another way of rationalising the “multi-polar” regulatory regime operating internationally. When it comes to calibration, this means leverage and capital ratios need to be jointly determined to prevent incentives skewing in one or other direction. This is the approach in the UK when setting capital and leverage constraints (Bank of England (2015a)). 29  All speeches are available online at www.bankofengland.co.uk/speeches  29  There are other means of constraining adverse incentives.
In Europe, the uncertainty surrounding Brexit and the complex situation in Italy has taken on greater force. Finally, although we believe that the drop in the oil price responds primarily to supply-side factors—which reduces short-term inflationary pressures—it remains to be established to what extent this could be reflecting more permanent demand-side factors. Recent months have seen a substantial adjustment in financial asset prices in the developed world that could be signaling a change in risk premiums, consistent with a scenario of uncertainty that has prevailed for quite some time. On the domestic front, we estimate that risks for activity are unbiased. The economy has decelerated with respect to early in the year, which had been long expected. However, this deceleration could be more persistent if consumption fails to recover its expected dynamism. Meanwhile, the rebound of investment could be stronger as other large-scale projects progress. As for inflation, we estimate that risks are unbiased. Various indicators suggest that the economy will further consolidate the process of closing the capacity gaps, while others show the reaction of the more sensitive CPI components. Thus, expectations two years out are aligned with the policy target. It should be noted that this new Monetary Policy Report features greater insight of the implications of risk scenarios for monetary policy. This will allow having a better appreciation of the Central Bank’s reaction to deviations from the baseline scenario.

Accordingly, the evolution of macroeconomic conditions makes it necessary to reduce the monetary stimulus, a process that will continue to be implemented gradually and cautiously, in a context where there is still high uncertainty coming from the external scenario. Recent economic developments As had been anticipated in a number of Monetary Policy Reports, in the third quarter GDP slowed down its annual growth rate with respect to the first half of the year. This is consistent with a scenario The Imacec (Índice Mensual de Actividad Económica) literally corresponds to the “Economic Activity Monthly Indicator”. 1  1  in which economic growth is closer to potential—estimated to lie in the 3% to 3.5% range—given the progress made in the process of closing capacity gaps, the end of specific factors that had favored growth in the first half and a more challenging comparison base in the second (Figure 1). In any case, the deceleration of the last quarter was sharper than expected, highlighting the worsened performance of mining and manufacturing. In the former, there were operational difficulties in some mines; in the latter a significant and greater than expected effect from a string of holidays in September. All of us who devote ourselves to analyzing the economy and its evolution should bear in mind how difficult it is to draw medium-term conclusions from the observation of high frequency data.
Eddie Yue: Towards a smarter, greener and more inclusive financial system Opening keynote speech by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Institute of Bankers (HKIB) Annual Banking Conference 2021, 28 September 2021. * * *  Towards a Smarter, Greener and more Inclusive Financial System Peter (Wong), Patrick (Fung), Carrie (Leung), distinguished guests, ladies and gentleman, 1. Good morning. It’s good to see you all. I am delighted to be here today at the Annual Conference of the Hong Kong Institute of Bankers (HKIB). 2. The topic for today’s Conference covers some important macro trends. These trends, like re-globalisation and sustainability, have wider impact that are relevant for the long-term development of the banking industry. 3. Over the past two years or so, the social unrest in Hong Kong followed by the pandemic have dominated, and sometimes overwhelmed, our attention. When the banking industry was so busy dealing with the pressing challenges to operational continuity and resilience, it is easy to lose sight of evolving trends with wider implications for longer term development. 4. One of these more profound trends is the increasing challenge in ensuring financial inclusion. This issue is closely linked to HKMA’s strategic priorities. And I believe the financial system does have key roles to play in addressing this challenge. Stronger need for financial inclusion 5. In fact, the challenge of financial inclusion is a global trend that has been exacerbated by the pandemic.

HKMA, as both a banking regulator and market facilitator, has the role of creating a conducive environment for this to happen. Therefore, we have launched a new Fintech 2025 strategy recently and will work hand in hand with the industry along this fintech journey. 18. Of course, we are mindful that technology can be a double-edged sword. If done properly, technology can enhance financial inclusion. But there are always risks. For example, the improper use of artificial intelligence and machine learning may lead to biased outcomes and even exclusion. Ill-constructed “model-based” lending could unfairly discriminate against some SMEs. And from a conduct risk perspective, customers could be advised to invest in products not in their best interests. Therefore, it is necessary to properly manage such risks and ensure fairness in the algorithms through rigorous validation and testing. 19. In other words, building a smarter financial system is not just about how much technology content we inject into it. What is more important is whether the outcome for customers is more inclusive and efficient, and whether banks can better manage the risks involved. 20. If we look at another key development priority pursued by the HKMA – Green and Sustainable 2/4  BIS central bankers' speeches  Finance – similar financial exclusion concerns could also arise. It is important that when we gear towards a greener financial system, we should also have financial inclusion in mind. This is the third role of the financial system that I want to talk about. 21.
This requires setting the right moral tone from the top. •  Boards and senior management in particular must send a clear signal that profits do not come before values and ethics. •  Compensation structures must motivate not just high performance but also right conduct. 6  BIS central bankers’ speeches  Conclusion Good fortune has played a role in the growth of Singapore’s financial sector. •  Our financial centre has benefited from connecting one of the fastest growing regions in the world with global markets. But fortune can be fickle and economic cycles will turn. To stay relevant and thrive as a financial centre requires us: •  to remain resilient through good times and bad;  •  to be dynamic in serving the changing needs of the region; and at all times  •  to be trusted as a clean and credible place to do business in. MAS is committed to working with the industry and all our stakeholders – including an inquisitive and fair media – to ensure that. Thank you. BIS central bankers’ speeches  7

We have enough evidence by now that interest rate policies can have effects on indebtedness, risk-taking (through maturity transformation,  Page 7 sur 11 search for yield, or other channels) and the profitability of financial actors. It would therefore be short-sighted to ignore the side effects of monetary policy on financial stability. Second, are these effects large enough to make it possible to preserve financial stability without compromising price stability? At this point, the precise terms of a possible trade-off are still being debated. xii The issues are complex: as Nuno Coimbra here at PSE emphasises in a paper with Hélène Rey, a decrease in interest rates can encourage risk-taking when interest rates are low, but discourage it when interest rates are high.xiii We need more work on this important issue. Let me just suggest two thoughts on this open issue. a/ Incorporating Financial Stability Concerns with an Extended Monetary Toolkit First, the binary opposition between the traditional separation principle and “leaning against the wind’’ makes less sense when monetary policy has itself several instruments at its disposal. A median way, which we could call “coordinated” or “integrated” is possible. Indeed, that several instruments can allow to pursue several objectives is just what the old Tinbergen rule asserts. This is particularly relevant within monetary policy in our current context. Over the past years we have brought innovations to our operational framework, and we have considerably extended our toolkit with balance-sheet policies such as quantitative easing and (T)LTROs.
Today I will focus on the economic trends themselves. Let’s consider first the consequences of this dynamic for consumer spending – that is, households’ purchases of goods and services. Families’ expenditures rose at a slow 2 percent annual rate over the first half of 2010 and (so far) this sluggishness appears to have continued in the third quarter of 2010. Families have not yet boosted their spending above the levels preceding the severe cuts they made during the recession. This frugality stands in stark contrast to the first year of recovery from previous deep recessions. Several factors are inhibiting families from spending. Many people have lost their jobs and are still unemployed, or have had their hours or pay reduced. Confidence in the economy remains quite low. And households’ net worth, which fell substantially as real estate and stock prices dipped, remains well below its previous peak compared with disposable income. So, households have been saving more. The personal saving rate, which rose to 5.5 percent by the end of 2009 from a recent low of 1.2 percent in the third quarter of 2005, seems headed even higher in the third quarter. Households are “deleveraging”; they are paying down their debts. Of course, lenders have also reinforced this tendency as they have tightened underwriting standards for consumer credit, relative to their pre-recession standards. Have households completed their deleveraging, so they will soon spend more? Although we believe that substantial progress has been made, it is hard to tell how much further this process has to run.

Home prices have generally stabilized across upstate New York, with some parts, such as Buffalo, Rochester and Syracuse, even experiencing price increases over this period. However, home prices have continued to decline in the greater New York and New Jersey area. By contrast, the number of home sales have generally increased throughout the region over the past year. But the pattern has been erratic because of various policy changes. In particular, the introduction, initial expiration and subsequent extension of the home buyer tax credit introduced volatility as it boosted, slowed and then boosted sales again. With the final expiration of this tax credit, the recent rise in home sales across New York and northern New Jersey may well be short-lived. Regional housing trends: focus on New York City I’ll end with a few remarks about New York City’s housing market – a very large market that stands out as unique in many respects. Let me remind you of some of these key differences:   Compared with the rest of the region, and with the rest of the country, New York City has an exceptionally large share of rental housing: 67 percent of homes citywide versus 33 percent for the United States.   The market is dominated by multi-family structures, especially in Manhattan and the Bronx. When these units are owner-occupied, they are more likely to be co-ops than condominiums, and, thus, to have comparatively low leverage rates.   New York City has very high housing prices and long construction lags.
This means that, while the responsibility for the stability of the financial system lies with the competent authorities of the Member States, the Eurosystem may intervene to support, coordinate or complement the actions of those Member States whose currency is the euro. The specific tools given to the ECB by the SSM Regulation[52] to tighten up macroprudential measures adopted by the national macroprudential authorities (but not to ease them) in order to address the risk of cross-border spill-overs also reflect this division of competences between the Union and national levels: the adoption procedure for those top-up ECB decisions[53] may be initiated only at the initiative of the national macroprudential authorities, thus emphasising the national character of macroprudential competences. The Treaty does not set macroprudential supervision as a basic ESCB task or financial stability as an ESCB objective. The reasoning appears to be that it is national, rather than Union, developments which contribute to systemic risks, and that the bearing of costs arising out of financial crises is predominantly a national rather than a Union matter. [54] Accordingly, the macroprudential authorities are accountable to their respective national stakeholders. Although, after the 2008 financial crisis, there were calls for greater central bank involvement in the oversight of macroprudential aspects of banking activities,[55] in the end, no changes beyond the contributory role of the ESCB were initiated. The ESCB contribution to the work of national authorities in this area can be seen as a contributory task rather than an own competence.

Compared to these other countries, we are not badly off, though we are still far from having solutions to all our problems. Lessons drawn What lessons can we draw from these international and historical comparisons? How do they apply to Singapore in the current remaking process? Remaking is essential The first lesson is that no system works forever. As the external environment changes, and as economies evolve, institutions and policies that used to work can become outdated or even dysfunctional. Countries will adjust incrementally over time to these changes, but eventually incremental change is not enough. Then it becomes necessary for countries to break the mould and remake themselves - a difficult but essential process. This applies directly to us. However difficult the changes we have to make, the status quo is not an option. Our system is still working - the economy continues to grow, investments are still coming in, business carries on. But the world around us has changed, and is continuing to change. If we delay adapting ourselves to the changing environment, we will only make the eventual adjustment harder and more painful. The ERC's proposals to remake the economy will not be the final solutions to our problems. Policies will need to be constantly reviewed and updated as situations unfold. New challenges will arise, and we will need to set fresh goals for ourselves. We will need to remake Singapore again, and again.
Prasarn Trairatvorakul: Limitations of monetary policy – the context of Thailand Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Foreign Correspondents’ Club of Thailand (FCCT), Bangkok, 17 June 2013. *  *  *  Good evening ladies and gentlemen, I would like to thank the Foreign Correspondents’ Club of Thailand for the invitation. It is my honor and pleasure to be back here again to share with you my views on Thailand’s economic outlook and monetary policy. We indeed live in a volatile and uncertain world. Just a few months ago we still talked about a two- or three-speed global economy as a fact of life, with robust growth expected of emerging markets and sluggish recovery to remain with the major economies. Today, with some possibility of an earlier-than-expected tapering off of QE, coinciding with the apparent slowdown in many emerging market economies, the convergence of the world economy is already expected by some. One obvious consequence is the market overreaction to these premature signs of the convergence. The unsettled sentiments over a potential end of cheap money may have contributed to sizeable outflows of capital from emerging markets during the past few weeks. As a consequence, emerging market currencies including the Thai baht depreciated sharply, reversing gains since the beginning of the year. One lesson from this recent episode is that, expectations can go a long way in influencing people’s behavior, and often with implications for policymakers.

However, I believe all of us who have experienced this environment have emerged with a very different lesson learnt. Indeed, we cannot overstate the extraordinary potential this setting offers to an institution such as ours which has always valued, and legitimately so, the soundness of its judgement. With that conviction, we should devote most of our efforts to forging closer insertion, collaboration and coordination-based links with our European partners with an essential aim in mind: to reinforce our weight and ability to influence decision-making. This is a challenge and it is also an opportunity, but it is above all a responsibility to support, from the vantage of the Banco de España, the project for European construction. The second objective has to do with our contribution to financial and macroeconomic stability. After an unprecedented financial crisis, the reputation of economic policymakers, of central banks in particular and, indeed, of the economics profession as a whole was enormously dented. 4/5  Testifying to this were the regulatory and institutional changes set in train to prevent similar situations from recurring. However, the real test, where we place our social prestige and credibility on the line, will involve us truly being able to identify risks and vulnerabilities in due time, being able to issue warnings about them and, within our remit, being able to act to mitigate them or to contribute decisively to other players acting when they must.