samchain/econo-pairs-v1 huggingface dataset:
I will therefore merely outline the possible problems and challenges that could arise. To make my position clear: I am convinced that a strategy geared to medium and long-term price stability is vital for effective implementation of monetary policy. After all, the economic benefits of stable prices are undisputed. High and volatile inflation rates are detrimental to productivity and growth. Uncertainty about future price trends leads to inefficient investment and consumer spending decisions. That does not mean, however, that financial stability should be ignored completely in monetary policy considerations. Nevertheless, taking greater account of financial imbalances presents a number of practical difficulties. An initial problem is that a single instrument – namely the interest rate – would be expected to achieve two objectives simultaneously: price stability and financial stability. That does not seem to be a problem at first sight, because usually the two support each other, especially when taking a long-term view. Credible action to ensure price stability fosters a sense of security and market confidence, which in turn play a key role in ensuring financial stability. Similarly, a stable financial system is a key prerequisite for price stability. The recent financial crisis provided impressive negative evidence to confirm this rule. The bursting of a financial bubble can easily trigger a deflationary trend. So far, so good. However, a second glance reveals potential conflicts between these two objectives in certain situations.

Ravi Menon: Enabling FinTech for good Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Leaders' Session at Inclusive FinTech Forum, Kigali, 21 June 2023. *** His Excellency Paul Kagame, President of the Republic of Rwanda, His Excellency Hakainde Hichilema, President of the Republic of Zambia, distinguished guests, ladies and gentlemen, good afternoon. I am delighted to be part of this remarkable session bringing Africa and Asia together on the theme of Enabling FinTech for Good. There is much we can do together, and Singapore is proud to be part of this effort. Since coming here a couple of days ago, my colleagues and I have been struck by the energy and vitality of this place. Technology is transforming the world of finance. FinTech presents both opportunity and risk. We want to harness these opportunities while managing the risks. In Singapore, when we began our FinTech journey 8 years ago, we set four guiding principles for the use of FinTech: to increase efficiency; to manage risks better; to create new opportunities; and most important to improve people's lives. Eight years later, these principles continue to guide us. As we walked our FinTech journey, we learnt along the way. Two critical enablers have proven decisive in getting us to where we are: first, building foundational digital infrastructure second, fostering connectivity and collaboration Let me say a few quick words about each of them.
In particular, the Bank of England agrees that more of the vanilla OTC markets should be cleared via central counterparty clearing houses. LCH led the way globally in opening up central counterparty services to interest-rate swaps, breaking a mis-think that somehow CCPs could clear only exchanged-traded instruments. And recently it has made the welcome announcement that non-dealers will be able to access such central clearing, at least indirectly via “clearing members”, as for exchange-traded contracts. Central clearing can help to provide transparency and consistency in valuations and haircuts. It can help to promote greater standardisation in terms. It makes haircuts more visible to the market as a whole, and to the authorities, who as overseers of the system should be prepared to form a view when haircuts are too low – and the associated market leverage is too high – for system stability to be assured. The role of the authorities is important. It is absolutely vital that management maintain the integrity and soundness of the key clearing houses as they expand their range. 2 As overseers of the payments systems embedded in clearing houses, the Bank will work with the FSA and our international counterparts on this. It is often said that dealers resist such initiatives, as it can squeeze their margins.

But there is one other area – as investors in bank capital instruments. I am therefore sure you understand that the authorities, internationally, cannot avoid reviewing what should count in the medium term as regulatory capital for banks. It won’t do for banks to be able to leverage up on subordinated debt (or other forms of hybrid capital) if, just when it matters, the holders do not suffer because the authorities cannot let the banks concerned be liquidated without bringing system collapse down on us all. We either need a system where banks of any type can quietly fail and hybrid capital is actually useful in protecting the deposit insurer; or, more realistically, we shall need a much narrower definition of capital. Only equity can absorb losses and sustain a going concern. Finding a way through that in the current crisis remains a challenge. One helpful step might be for the investment industry to seek out opportunities to convert subordinated debt into equity; or, at a discount, into senior unsecured debt, as has occurred in a few instances already. It would probably entail a haircut, but I wouldn’t air it unless I thought it could be in your collective and medium-term interests as investors in our economy and the system of credit that supports and lubricates it. The new Special Resolution Regime for banks may create healthy incentives in that broad direction. In concluding, can I thank you again for inviting me to join you today.
The new objective would require the PRA to act in a way which, in advancing our primary objective, and subject to aligning with relevant international standards, facilitates the international competitiveness of the UK economy and its growth in the medium to long term. In a recent speech14 my colleague, Vicky Saporta, set out how we plan to take forward that new objective, through an approach based on ‘responsible openness’. In short this means we will provide a predictable and stable regulatory environment that is grounded in international standards (for example those set out by the Basel Committee), and we will collaborate closely with overseas regulators to maintain their trust in what we do, as well as that of investors and firms. But importantly and against that backdrop of responsible openness, there is still space to tailor rules to UK circumstances when it is appropriate and when we can do so in ways that maintain trust across markets and with fellow regulators. And that last point about supporting the specific needs of the UK economy is of particular relevance to our discussions here. I see it as precisely where the mutual sector comes in, through providing high quality financial products and services to households and businesses right across the UK, including some who might not have access through any other routes.

This means two things: improving the resilience of the financial system to climate-related and environmental risks; and encouraging the scaling up of the financing flows needed to support the transition towards a sustainable economy. To give substance to its Glasgow Declaration, the NGFS has just announced its new work programme. It comprises six key initiatives: enhancing supervisory practices with respect to managing climate risks; designing actionable climate scenarios; assessing the implications of climate change for monetary policy; providing guidance for central banks on their own net-zero transition; analysing nature-related financial risks; and building capacity among its membership. Let me start with SUPERVISION. The NGFS will take to the next stage its ongoing work to incorporate environmental risks within supervisory frameworks and practices. One of the new areas of focus will be financial institutions’ transition plans to manage environmental risks. To be credible and impactful, financial institutions’ transition plans must be based on how they will facilitate the transition of their clients and customers towards greater sustainability. This will in turn depend on the respective industry transition pathways relevant to their clients and customers. The NGFS will examine the role of supervisors in assessing financial institutions’ transition plans. We will study potential ways to assess transition plans’ resilience to environmental risks. We will identify good practices among supervisors on overseeing financial institutions’ transition plans, along with the necessary data needs. We will examine how financial institutions should consider their counterparties’ transition plans with respect to exposure analysis, transition risk management processes, and their own transition plans.
That means that instruments issued under foreign law must contain explicit contractual provisions to bring them within scope of the authority’s powers, unless there is explicit and watertight statutory provision for this. •  Third, the instrument must be easy to value in resolution, and operationally straightforward to expose to loss (and this is easier for debt than it is for deposits) without disrupting the critical functions of the G-SIB. Otherwise it may not be possible to stabilise the firm quickly whilst achieving the resolution objectives. •  Fourth, exposing the liability to loss must not be likely to give rise to valid legal challenge or “No Creditor Worse Off” compensation claims (NCWO) for breach of the NCWO creditor safeguard. There is a broad consensus amongst regulators and resolution authorities that capital instruments and long-term, vanilla unsecured bonded debt meets all of the above conditions, subject to a couple of caveats. One of the main ones being that if senior debt ranks alongside liabilities that are less reliably loss absorbing, such as sight or other short-term deposits and derivatives, then such debt cannot meet condition four above without bailing in instruments that fail condition three. This is because if equally-ranking liabilities are not exposed to loss, and the resolution authority departs from the creditor hierarchy, then the senior bond holders may have valid NCWO compensation claims. This could put public funds at risk. Equally as importantly, the protection afforded to senior bondholders by the NCWO compensation claim could mean that market discipline is diluted.

We have also seen Germany under tremendous pressure both at home and abroad with regard to its role in solving the crisis. Moreover, the future of Greece, where it all started, also remains unclear. We have seen various attempts in engineering debt restructuring for Greece, even an “orderly default”; and in late October we have seen agreement between Eurozone leaders and banks on Greek debt’s haircut. Personally, I am concerned that many of these steps are merely “technical” solutions that do not address the situation at its root causes, and only time will tell how these “technical” steps would play out as well as what the eventual fate of Greece in the European Union would be. Looking beyond Greece, some contagion of the sovereign debt crisis to the financial sector and the real economy of other European countries and beyond seem to be inevitable at this point, with countries that are “too big to bail” such as Italy also on the list. Private holders of PIIGS bonds face substantially higher risks, which have already led to recent downgrades of several financial institutions. Without decisive actions and unreserved collaboration in solving the debt crisis, the outlook for Eurozone economy is likely to be affected – given the possibility of further fiscal consolidation in countries like Italy, Spain, and even France. Ladies and Gentlemen, I would like to restate that what happens on both sides of the Atlantic will likely shape the global economy over the years to come.
And that lies four square within the Bank of England’s mission to promote the good of the people of the United Kingdom, Muslim and non-Muslim alike. Global growth in Islamic Finance Islamic finance is a global success story, with assets of $ trillion in 2019 (Table 1). That’s 11% higher than a year earlier, and fully a third bigger than in 2015. Table 1: Size and composition of Islamic Finance Services Industry $ 2019)  *  *Gulf Co-operation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates). Source: Islamic Financial Services Industry Stability Report 20202  Three quarters of those Islamic finance assets are held by banks – and are large enough to play a  1  For a summary of these principles, see eg https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2017/islamic-banksand-central-banking.pdf?la=en&hash=15D94BD65C2EFA6962989D10E21543B7B7013C1C. 2 https://www.ifsb.org/download.php?id=5724&lang=English&pg=/index.php. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  systemic role in thirteen countries.3 There’s also a nascent Islamic insurance industry (takaful) – and a much larger capital market, anchored around the growing stock of sukuk4 issued by companies and governments (Chart 1), and over 1,500 Shari’ah compliant investment funds. Chart 1: Global sukuk issuance and stock outstanding  Source: Islamic Financial Services Industry Stability Report 20202  The role of the UK and the Bank of England in supporting Islamic Finance So far, so impressive.

But what, you might ask, does all this have to do with the UK or the Bank of England, when the centre of gravity for Islamic finance lies in the Middle East, North Africa, South and South East Asia? Well, the fact is that, outside those regions, the UK is the pre-eminent centre for Islamic finance. And that reflects its significant, well-established domestic Muslim population; its strong relationships with the wider Muslim world; and its deep expertise in financial market origination and distribution, embedded in a mature legal and regulatory framework.5 Indeed, Islamic finance in the UK goes back many decades (Table 2): from commodity-based short term liquidity management and trade finance in the 1970s, to the first UK Islamic bank, investment funds and takaful in the early 1980s.6  Defined by the Islamic Financial Services Board as countries where at least 15% of banking assets are (self-declared as) Shari’ah compliant. 4 Islamic financial instruments conferring direct partial ownership of underlying assets. 5 See for instance ‘Challenges and Opportunities for Islamic Banking and Finance in the West: the United Kingdom Experience’ by Rodney Wilson [1999, 2000] 7(1&2) Islamic Economic Studies 35-59; or ‘Islamic Finance in the United Kingdom: Factors Behind its Development and Growth’ by Ahmed Belouafi and Abdelkader Chachi [2014] 22(1) 37-78. 6 Al Barakah International Bank, Dar Al Mal Al Islami, and Takaful UK Ltd respectively.
We participate in the process of making the most important decisions regarding the banking sector in the euro area, i.e. not only the Bulgarian banks but the European banks. In making all these decisions, our vote matters as much  2/5  BIS - Central bankers' speeches  as the vote of Germany, France, Italy, Spain, or any one of the other euro area Member States. So, instead of waiting for the relevant decisions to be sent to us for implementation, we actively take part in the process of making these decisions. I must assure you that there is a big difference. Financial implications are another important aspect of our membership. You can probably recall some observers' concerns as to how our membership in the Banking Union would burden the Bulgarian banks with unbearable fees. Indeed, the Bulgarian banks pay fees related to Banking Union membership, but the financial benefits are considerably greater. The Single Resolution Mechanism alone saves the Bulgarian banks not less than BGN 160 million a year which, in turn, improves their financial result. Or, if we use the terminology of insurance, the Bulgarian banks get a much greater protection for a much lower premium. As regards the BNB which, as I said, is already a part of the euro area in terms of its key activities, at this stage the preparedness for full accession is related most of all with technical and logistic issues. Organisation has been set up for monthly reporting on the progress and the outstanding challenges.

Over time the private sector will develop a wider range of products referencing SONIA. Futures contracts have already been created. We can expect Floating Rate Notes and loans referencing SONIA to follow. The end point should be an ecosystem for interest rate markets which has an altogether healthier foundation than at present. Developing the infrastructure around the near risk-free benchmarks globally, and assisting market participants in dealing with legacy Libor portfolios, is a significant opportunity for innovation. Firms here in London are well placed to take advantage. As mentioned, international authorities are working closely together, and I know Bill Dudley is going to pick up the baton and talk more about the transition to risk-free rates from a US perspective. It is an immense pleasure to introduce Bill. It is an honour that he is here at this Markets Forum to give his last keynote speech as President of the New York Federal Reserve. And it is appropriate given his deep commitment to fighting misconduct and improving standards of behaviour in the institutions we regulate and supervise. Bill had the wisdom to appreciate quickly how cultural and ethical issues lay at the heart of the global financial crisis, and he has been a consistent and strong voice in arguing for what needs to be done to improve individual behaviour, firm culture, and industry ethics. On behalf everyone, I would like to thank you Bill for your many, invaluable contributions throughout this exceptional period for financial markets and the global economy.
The traditional form of regulation was to set very strict rules or to forbid banks from conducting certain activities. The modern form is to be more flexible. Regulations set the boundaries while allowing the banks to operate within these boundaries if they can prove that they have the skills and resources to do it in a sound manner. Modern regulation puts much more responsibility on the banks themselves and their owners and management. In Sweden, the former Banking Act actually prohibited the banks to engage in any activity that was not explicitly permitted in the law. The new Banking Act starts at the other end, permitting the banks to do whatever they find suitable except for certain activities that are explicitly forbidden. Today’s financial institutions, instruments and markets are, of course, much more sophisticated than earlier. There is also much broader diversity in the sector. For example, the needs of customers are satisfied in many different ways and by many different actors, certainly not only by banks. As a consequence, modern regulation needs to be more flexible than in earlier days, when the market was more homogeneous. The regulation should encourage competition and innovation, but at the same time discourage unsound risk taking and generally unbecoming or even illegal behaviour. Only when there are strong arguments should the regulator outright restrict or prohibit certain activities. Instead, regulations should provide incentives for banks and others to behave in a sound manner.

Albeit many people today acknowledge that the traditional kind of regulations do not produce the desired results, we tend to keep them too long. Let me give you an example. In Sweden, we had foreign exchange controls in place until 1989. Even though it was obvious that the controls were easy to circumvent and quite inefficient, the authorities were worried by what might happen if they were 1  BIS Review 66/2000  abolished. Perhaps there would be a huge capital drain? Hundreds of pages were written in attempts to map the consequences, but no comfort was provided this way. Eventually the central bank decided to go ahead in spite of the remaining uncertainty. To some surprise and some disappointment, nothing particular happened in the market. The move had been anticipated and the controls inefficient enough to allow the capital flows to adjust prior to the move. Credit controls and interest rate regulation had been abolished in Sweden four years earlier, in 1985, again probably far too late. Some people argue that the banking crisis we had in the early nineties might have been much less severe if the banking system had been forced into a competitive environment by deregulation a decade earlier. Keeping regulations too long is a danger, getting rid of them too quickly is another. This may sound peculiar, but let me again give you an illustration. When, in 1985, credit controls were abolished in Sweden, they had been in operation for more than forty years.
For example, the National Payments Systems Act was enacted in June 2007, while Access Bank, the fourth largest bank in Nigeria is expected to open a branch in the country by July 2008, raising the number of commercial banks to 14. 2.6  Capital market developments  The Lusaka stock exchange performed remarkably well, market capitalisation increased by 45.0% to K18,872.9 billion compared to the increase of 13.9% in 2006. The Lusaka All Shares index almost doubled, rising by 92.9% to close the year at 3,533.52 points compared to an increase of 47.7% in the previous year. This robust performance was a reflection of strong macroeconomic fundamentals in the economy and positive investor expectations in the growth and earnings prospects for both listed and quoted companies. Government introduced 7, 10 and 15-year bonds to help deepen the financial markets in 2007. Foreign investments in Government securities rose to K830.5 billion as at December 2007 from K539.8 billion recorded end-December 2005, an indication of the rising confidence in the economy. 2.7  Fiscal developments  On the fiscal front the Government is expected to limit domestic borrowing to 1.2 percent of GDP in 2008. By reducing levels of government borrowing and enforcing prudent budget execution, this should result in greater mobilisation of domestic resources and effective coordination with the monetary authorities. Zambia has articulated its long-term development objectives in the National Long Term Vision 2030, which is aimed at raising Zambia to a middle income status by 2030.

2.0  Recent economic developments  2.1  Real Gross Domestic Product (GDP)  During the period 2001-2007, growth in real Gross Domestic Product (GDP) averaged about 5.1% per annum, largely due to investment in the mining, tourism, construction and transport  BIS Review 76/2008  1  and agriculture sectors. This has set a strong basis for further favourable economic growth in the medium to long-term. Thus GDP growth is projected to rise by no less than 7.0% in 2008 and beyond. Consistent with the developments in the economy, GDP per capita rose to US $ in 2007 from US $ in 2001. 2.2  Interest rates  Commercial banks’ lending rates have also been declining, though not as fast as the reduction in inflation and Treasury bills rates. For instance, the commercial banks average lending rate fell from 54.6% in December 2001 to 24.4% in December 2007. Lower lending rates are expected in the current environment of low inflation and will contribute to reducing the cost of doing business in Zambia. 2.3  Inflation  Inflation has declined from 18.7% recorded in 2001 to single digit level of 8.2% in 2006 and 8.9% in 2007. It is projected to slow down further to 7.0% by December 2008. This inflation outturn was largely credited to the conduct of appropriate monetary policy coupled with prudent fiscal policy and relative stability of the Kwacha, assisted by lower food prices following the favourable 2005/06 and 2006/07 farming seasons.