samchain/econo-pairs-v1 huggingface dataset:
10  BIS central bankers’ speeches  (i)  TABLE AND CHART ANNEX  Table 1: Similarity of industrial structures  EA (Core vs VEAPs)(a)  EA (17 countries)(b)  rUK and Scotland(c)  rUK and Scotland (oil on geographic basis)(d)  Energy  0.1  1.0  1.8  10.0  11.5  3.1  Construction  0.6  1.3  0.1  0.7  1.3  0.6  Manufacturing  1.3  6.1  0.7  0.5  4.8  4.5  Finance and insurance  0.3  2.5  0.8  1.4  2.2  3.2  Other  0.3  5.6  1.5  7.4  8.5  5.2  Sum  2.6  16.4  4.7  20.1  28.3  16.6  Canada (13 provinces and territories)  US (50 states + DC)  Sources: Bank calculations; Statistics Canada; US Bureau of Economic Analysis; Eurostat; ONS Regional Gross Value Added. rUK and Scotland data are for 2011; Euro Area (EA), US and Canada data are for 2012. Industrial classifications in the US and Canada are NAICS, in the UK SIC, and in the Euro Area they are NACE Rev2. These were consolidated into the five broader industrial classifications to ensure consistency. Notes: The table shows absolute differences between output industry shares in each region and the monetary union as a whole, which are then averaged for each industry in each monetary union.

What follows is not an assessment of whether Scotland will be overall better or worse off under independence – that is a multi-faceted judgement for the Scottish people. It does not pass judgement on the relative merits of the different currency options for an independent Scotland, but instead draws attention to the key issues. This is a technocratic assessment of what makes an effective currency union between independent nations. The costs and benefits of currency areas Let me begin by outlining the basic rationale for sharing a currency. BIS central bankers’ speeches  1  Economist Robert Mundell first wrote about what determined an “optimum currency area”1 Spurred by the breakdown of the Bretton Woods system and the move to floating exchange rates as well as by the formation of the European Monetary Union, others have elaborated and extended his work. We now have a fairly comprehensive sense of the costs and benefits of sharing a currency. For Mundell, the main benefit was that it eliminates the transactions costs associated with using, and switching between, different currencies. The European Commission estimated the size of these direct benefits for Europe to be almost 0.5% of GDP every year.2 Sharing a currency can promote investment by reducing uncertainty about currency movements and giving businesses access to deeper, more liquid financial markets.3 It can also reduce borrowing costs for countries with a history of high inflation and currency devaluation. By tying themselves to the mast of the monetary policy of others they can import credibility.
The analysis focuses on the effect of push and pull shocks on capital flows in the  contemporaneous quarter and the subsequent two quarters. In a second specification the role of a set of additional factors (X) in affecting the sensitivity of capital flowsat-risk to global push shocks is considered. This is done by adding an interactive effect to equation (1): 37 KF@R = α + β 𝑃𝑢𝑠ℎ + γ 𝑃𝑢𝑙𝑙 + δ X + θ (𝑃𝑢𝑠ℎ ∗ X) + 𝑢  (2)  A series of factors is considered: in one specification the focus is on the share of foreign currencydenominated debt and a measure of reserve adequacy, while in another specification the role of macroprudential policy is analysed. 34  The FCI is the first principal component of the following series: long term government bond yields, term spreads, sovereign spreads, interbank spreads, corporate spreads, equity returns, equity volatility and financials market capitalisation (normalised by the broader market). These indices are based on those presented by the IMF in their April 2017 GFSR. 35 The main difference between this specification and the one proposed by the IMF in their October 2018 GFSR is that they consider capital flows in aggregate across EMs and, consequently, can only look at the effect of push factors. The choice to do this in a panel setting with country-specific series means pull factors can be incorporated into the analysis. The current analysis also broadens the scope from portfolio flows to different types of capital flows.

This proposal is an important step to encourage a strong corporate and market focus on how Islamic financial institutions are generating value, not just for shareholders, but for the communities which they are a part of. On-going collaboration and active engagement with the industry are currently being undertaken under this initiative to ensure proactive behaviours and sustained momentum towards the creation of a sustainable development. Another precondition for long term sustainable value creations is the availability of top-notch talent to drive and execute innovative business strategies that will realise the full potential of Islamic finance. Based on market assessments, a greater pool of quality professionals are required to sustain the growth of global Islamic finance that is estimated to surpass $ trillion total assets size by 2020. The challenge in meeting this demand however goes beyond the numbers. The next phase of growth and development of Islamic finance calls for a deep talent pool that not only has a strong foundation in the application of Islamic finance principles, but also the much broader set of competencies required to use those applications effectively to provide and implement solutions to real world problems. And such talent must be developed not only within Islamic financial institutions, but also the professional ancillary service providers that are part of the Islamic finance ecosystem. In Malaysia, there are close to 40 professional ancillary services entities under the MIFC Community which play an important role in the development of Islamic finance.
One of the important pillars of this development has been the construction of benchmark indices. Indeed the launch of Asian Bond Fund 2 is accompanied by the development of benchmark indices that are fully replicated by the fund manager of each individual country sub fund, as well as in the umbrella Pan Asian Index Fund. Meanwhile, the Islamic Sukuk international market's expansion is gaining momentum. Wider acceptance by investors and greater awareness of issuers of this alternative structure has seen increased issuances over the past few years. In the sovereign markets; Malaysia, Qatar and Bahrain have come to the market with Sukuks. Supranational institutions such as the Islamic Development Bank, World Bank and the International Finance Corporation (IFC) have also ventured into issuing Sukuks, with the latter two institutions issuing the ringgit-denominated instruments in our domestic bond market. The first USD1 billion-issue size was launched in 2004 by the Government of Dubai. In 2005, it is estimated that a total of more than USD5 billion of Sukuk is in the pipeline globally in a range of currencies. The market is indeed growing. Ladies and Gentlemen, The introduction of a benchmark index can act as a catalyst for a more rapid pace of development of the financial market and the recognition of a new asset class. The conditions are timely for the crafting of a benchmark index to further spur the growth of the Islamic financial and capital market to meet the needs of a larger pool of Muslim savers and investors.

Charles Dow himself chose these stocks, nine of them being railroad companies, the key growth industry at the time. Over time, he would revise the index as he saw appropriate to be reflective of ongoing market and industry developments. Ladies and Gentlemen, The construction and use of benchmark market indices today has undergone much advancement since then. Indeed, financial markets have undergone dramatic transformation. Economic, industry, and corporate expansion; the sophistication, proliferation and diversity of instruments; the expanding investment communities are all factors that have led to an increase in the number of benchmark indices and their greater use. Benchmark committees deliberate over the construction of the index and determine the rules of the benchmark. Investors need the benchmark indices to be used as performance indicators of the broad market and for an indication of the market direction and investors' sentiment on the corporate sector and economy. The representative stocks within a benchmark index need to be highly liquid and reflective of the key corporate sectors that drive growth in the economy. At the same time the index should also reflect the underlying changes in the economy incorporating the emergence of new industries. Thus, for an index to be a useful benchmark and to be used as a reference by investors and market players, the index needs to be regularly reviewed and adjusted accordingly in line with market developments and the transformations taking place in the economy. Indeed, benchmark market indices would reflect the broader investor participation and growing maturity of a markets.
As at year-end 2009, the total number of branches and agencies amounted to 530 from 517 at the year-end 2008. 17 new bank branches were opened while 4 existing branches were closed. 2.2  Banking system supervision  The medium-term strategy for banking supervision approved in 2009. The main pillar of this strategy is the adoption of a new philosophy: risk-oriented supervision. The main highlights of this new supervisory policy are:   further interaction and harmonization among monetary policy, financial stability and supervision;    harmonization of our supervisory framework with the acquis communautaire;    interaction between the domestic and foreign supervisory authorities and the Financial Supervisory Authority;    harmonization with the third pillar of Basel II, encouraging the process of self-regulation and consumer protection. The Bank of Albania has been constantly engaged in a process of deep analysis and supervision of the legal and regulatory framework compliance and enforcement from the licensed entities. This process has been achieved through on-site inspections, which in 2009 were more frequent and rigorous. Besides the observance of the supervisory cycle, banks were constantly contacted for phenomena that have represented a concern during the year, taking appropriate measures to address potential problems in due time. Overall, the banking system has acted with caution in conducting the operational processes of their activities and in compliance with the regulatory framework of the Bank of Albania.

The resulting effect on inflation is thus only temporary. Over recent months, inflation has been observed to be edging back up towards the zero mark. Mandate The SNB’s statutory mandate is to ensure price stability while taking due account of economic developments. We equate price stability with a situation in which the inflation rate is below 2%, but still positive. Unlike other central banks, we do not have a percentage inflation target. There are good reasons for this. A small open economy like Switzerland is continuously exposed to powerful outside influences. Monetary policy cannot always entirely offset these influences. It therefore makes sense for us to stabilise inflation within a range over the medium term. In the case of very large or recurrent unfavourable influences from abroad, inflation may temporarily turn negative. Often, this is also part of the process of real economic adjustment. The global economy has been exposed to a series of powerful shocks over the past ten years or so. Central banks worldwide have reacted with interest rate reductions and unconventional measures. We too have resorted to unconventional methods and, as in the past, we will not shy away from using these methods if it is in the interests of the country as a whole. However, any action we take will always be based on careful consideration of the costs and benefits in the short and long term. 2  BIS central bankers’ speeches  Outlook Let me conclude the first part of my speech with a brief look into the future.
Since 2000, and especially in recent months, the picture has changed. The mines have opted for another strategy and have cut back on price hedging. This strategy change can be partly attributed to more positive expectations regarding the gold price. As a result of the central bank agreement on gold sales, producers no longer fear large-scale sales by the central banks. Moreover, it seems that producers have recently become more upbeat in their assessment of private investment demand. It is interesting, in this respect, that gold producers' hedging activity tends to accelerate market trends. When they expect price decreases, prices do in fact decrease faster as a result of hedging, and when they expect price rises, prices do rise faster owing to the decrease in hedging. Such strategy changes, which are always due to changed market expectations, have to be reckoned with in future as well. •  Reviving private investment demand in the industrialised countries has also contributed to giving the gold price a boost. This phenomenon has been particularly pronounced in Japan, but Europe and the United States have also seen gold demand booming. Economic imponderables, concern over the financial health of some companies, heightened political tension in different parts of the world, the terror attacks of September 2001 and concomitantly subdued stock markets have caused investors to increase their holdings of the  BIS Review 39/2002  1  yellow metal. It seems as if gold is, for the time being, once again assuming its role of a safe haven investment.

I will not take the risk and predict the development of the gold price, but one thing is certain: it will remain volatile. Our possibilities to actively hedge the gold risk are restricted by the agreement of September 1999. In particular, we may conduct hedging transactions only in the amount of the sales quota allocated to us for the current year. We are therefore all the more convinced that our strategy of regular sales remains appropriate. The principles that have guided our operations for the past two years – namely fulfilment of our commitments under the central bank agreement, transparency in communication and situationadapted handling of day-to-day business – remain relevant. Management of the free assets The market value of the free asset portfolio – consisting of the as yet unsold portion of the 1,300 tonnes of gold and the proceeds from the already effected gold sales – amounted to Sfr 21 billion at the end of May. The free asset portfolio is managed separately from our other reserves, which will facilitate its transfer to the future beneficiaries once the legal framework has been put in place. As I mentioned earlier on, our possibilities of actively hedging the gold risk against an unfavourable development of the gold price are restricted by the agreement on gold sales of September 1999. However, we limited the risks of a weak US dollar that might reduce the value of our future sales by hedging 35% of the future proceeds in US dollars against the Swiss franc.
Constraints on earnings distributions through dividends, share buybacks and discretionary bonus payments to staff will be imposed on a bank when the conservation buffer is breached. The closer a bank’s regulatory capital ratio approaches the minimum requirement, the greater the constraints on earnings distributions. BIS central bankers’ speeches  3  incorporated banks will have to maintain at least 9% Common Equity Tier 1, compared to the Basel III minimum of 7%. Let me explain the reasons for this. (i)  First, the Basel III minimums do not adequately take into account the systemic importance of banks. Each locally-incorporated bank is systemically-important in Singapore and has a substantial retail presence. Together, they account for more than half of the total non-bank resident deposits and loans in Singapore. Hence, higher capital levels are required to strengthen their ability to absorb unexpected losses effectively in a crisis. This is necessary to protect depositors, reduce risks to the real economy, and safeguard our financial stability. The experience of countries at the centre of the crisis in Europe and the U.S. showed that the total cost of a financial crisis to the economy and the public can be substantial. (ii)  Second, Common Equity Tier 1 capital requirements that are significantly above Basel III will not result in a large reduction in economic output but would be beneficial in reducing the likelihood and cost of a crisis. Several empirical studies confirm this.

But of course speculative situations cannot be ruled out either in the present ERM or in ERM 2, as is clear from developments in Finland in recent months. The Swedish position has been to avoid making the new exchange rate arrangement mandatory. Basically, we consider it would be better to achieve coordination in Europe with a single inflation target. We find the present construction of Swedish monetary policy satisfactory. But we can get along with the system that has been chosen. Cooperation will not be mandatory, which means that monetary policy can be conducted with an inflation target as well as with a fixed exchange rate with the euro. Still it is clear that there will be strong pressure on us to participate in ERM 2. It is also conceivable that a period of participation in the exchange rate mechanism will prove to be a condition for EMU membership. In any event, as a EU member state we have undertaken to conduct exchange rate policy as “a matter of common interest”. Changeover plan for the financial sector It is the Riksdag (Sweden’s parliament) that decides if Sweden should join EMU. The Riksbank has the task of helping to ensure that Sweden does in fact have a choice when the time comes to decide, so that Sweden is ready to join if a Riksdag majority so requires. The Ministry of Finance and the Riksbank each have an organisation for the euro’s practical introduction.
More broadly speaking, the RMB is now the seventh most used payment currency according to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), and the ninth most actively traded currency according to the Bank for International Settlements (BIS). 4. To me, the extent and pace of the development of offshore RMB business depends on three key factors. The first factor is the relaxation of controls and restrictions by the Mainland authorities. The second factor is the availability of the necessary financial market infrastructure, such as clearing and settlement systems. The third factor is the awareness and willingness of corporates and financial institutions, especially banks, to develop RMB business opportunities. 5. Since the RMB trade settlement pilot scheme was launched back in July 2009, the Mainland authorities have incrementally removed many controls and restrictions on the flow of RMB out of and into the Mainland. Presently all trade and current account  BIS central bankers’ speeches  1  transactions between Mainland China and other parts of the world, as well as inward and outward direct investment into and out of China, can be conducted in RMB. Moreover, some cross-border portfolio investment flows, such as investments into China’s bond and equity markets, can also be made in RMB via the RMB Qualified Foreign Institutional Investors (RQFII) scheme. 6. More importantly, in April this year the Mainland and Hong Kong authorities announced a milestone project, i.e. the Shanghai-Hong Kong Stock Connect scheme.

First, domestic demand, supported by the large and fast-growing middle income and young population in the region, will increasingly have a greater role in driving economic growth in Asia. This would contribute towards a greater balance between domestic and external sources of growth. Second, the diversification of external markets will accelerate, towards greater economic inter-linkages with emerging economies in other parts of the world. Part of this trend includes the creation of the ASEAN Economic Community by 2015 in which ASEAN will transform into a single market with free movement of goods and services. This will include the lifting of restrictions to the flow of capital in the region. And third, is the greater financial integration within Asia that will result in an increased part of the savings in Asia being reinvested in Asia. The new spending patterns as incomes rise in the region will drive the modernisation of the retail sector across the region. Financial services to the household sector will become increasingly important in this new environment. Reforms to pensions and retirement benefit systems will be key to providing a more comprehensive social safety net, thus reducing the need for high precautionary savings and encouraging consumption. In addition, the large trade sector in Asia and large capital investments required to move towards higher valueadded activity will also provide an expanding market for financial services. The more regionally integrated financial system will allow firms and investors increased options in the regional financial markets for financing and investment.
This is, by the way, of the same order as some calculations of the impact of QE produced by the Pension Corporation late last year.7 There are a couple of conclusions I want to draw from this. The first is that while the change in the deficit is certainly not trivial for a substantially underfunded scheme, the impact of QE is nevertheless small compared to the movement in the deficit associated with other factors, such as the collapse in equity prices as a result of the financial crisis and the  6  This is broadly consistent with the NAPF Annual Survey for 2011, which suggests an average mix of 40% fixed income, 40% equities and 20% other assets, the prices of which I have assumed evolve in line with equities. The bonds are assumed to move in line with 15 year gilts, while the equities are assumed to move in line with the UK FTSE All-share index. 7  See Pension Corporation (2011), “QE’s impact on pension fund liabilities”, December. 4  BIS central bankers’ speeches  recession. In particular, it would be an error to attribute the deterioration in pension deficits since the start of the crisis solely to the impact of QE. The second observation is that QE does not inherently raise pension deficits. It all depends on the initial position of the fund, with the movements in liabilities and assets likely to be broadly comparable when a scheme is fully funded.

Changes also create difficulties It is positive that the market for payments is developing and can meet the new payment requirements that arise. Payments are increasingly based on technology and this trend will probably continue and expand. However, at the same time this development leads to new problems and tensions that need to be overcome. The problems we have identified include the following: Households and companies need even better access to different payment services. The capacity in the mobile network is not always adequate to manage temporary peaks and it may then be difficult, for instance, to make a card payment for a hot dog and soft drink at a sports event attended by several thousand people. Some groups in society, such as the visually impaired and very short people, can face problems as card terminals and ATMs are not always adapted to their specific needs. Other problems concern to a greater extent the tensions that may arise in relation to new payment services. Households may also have access to the technology needed to use a new payment service, but nevertheless prefer to use the old technology. As the latter technology becomes less accessible, tension may arise when the individual feels that his or her needs are not met. For instance, an elderly person may want to continue depositing and withdrawing cash over the counter in a bank or to pay payments there, but as fewer bank branches handle cash manually; this is becoming more difficult in practice.