samchain/econo-pairs-v1 huggingface dataset:
Then comes a layer that describes the financial landscape. This consists of financial players, institutions, markets and  1  Joseph Mallord William Turner (1775–1851), British artist most famous for his Romantic landscape paintings, whose style can be said to have paved the way for Impressionism. BIS Review 41/2009  1  instruments. Over this there is yet another layer that describes the regulatory landscape, that is the special legislation, regulations and supervisory arrangements that cover the activities of financial companies. Somewhere in the middle of the picture, symbolised by the steam boat that is trying to navigate the right course through the snow storm, we have the Riksbank which is fighting to both meet the inflation target and safeguard the stability of the payment system. For the Riksbank, as for steam boats at sea, the room for manoeuvre is determined by the conditions in the surrounding landscape. We have to understand how the weather, visibility and other prevailing factors affect our chances of steering the boat in the right direction. This becomes particularly important when conditions are difficult, when there is a snow storm raging at sea. This – in a nutshell – is what my speech today will be about. First, however, it may be interesting to look at how we sailed into the storm. From fair weather to the perfect storm – what went wrong? The metaphor of the different layers in Turner's painting can be used to describe the causes of the current crisis.

The banks have thus increased their reserves at the Riksbank. The Riksbank has also lent almost SEK 200 billion in US dollars. We have financed this partly by borrowing against the currency reserve and partly by means of a loan agreement with the Federal Reserve. The fact that the currency reserve appears to have increased is primarily due to exchange rate effects. The liabilities item "Other" includes the Riksbank's net income and the revaluation account. This item has increased mainly due to exchange rate effects, but also because we have earned quite a lot of money from these transactions. Some other central banks, such as the Federal Reserve and the Bank of England, have gone one step further. Apart from increasing their lending to the banks, they have also bought various types of domestic financial assets. When a central bank lends money to the banks, or purchases different types of assets, the banks' access to funding increases. This in turn increases the so-called monetary base on the balance sheet's liability side, that is the total of outstanding banknotes and coins and the banks' deposits in the central bank. A common feature of the measures taken by the central banks is thus that they have inflated the balance sheets and increased the monetary base. There are, nevertheless, some differences and different central banks have also described their measures in slightly different ways.
The explanation must instead be sought among more long-term structural factors. This is reflected in particular in the fact that employment has not recovered since the heavy fall in connection with the crisis at the beginning of the 1990s, despite historically high economic growth. Another sign that the unemployment problems have a structural nature is that there are large differences between regions and between professions. Although monetary policy is common for the Swedish economy as a whole, unemployment figures are twice as high in certain regions of the country as in others, and certain professional groups have twice as many people collecting unemployment benefit as others, and these differences appear to persist over a long period of time. This indicates that the problems are partly related to a low level of mobility in the labour market. The long-term solution to problems of this nature lies outside of the field of monetary policy. Let me now explain in a little more detail why it is so important for us to also follow asset prices, such as house price developments and household indebtedness. It is important both in view of the Riksbank's task to promote financial stability and of the monetary policy objective to maintain price stability. Aspects of household indebtedness and house price developments In addition to maintaining price stability, the Riksbank is responsible for promoting a safe and efficient payment system. This requires, for instance, a safe and efficient banking system. The banks’ activities are closely interwoven with the rest of the financial sector.

Based on the backdrop of the economic development and the outlook for continued high energy prices ahead, a mechanical application of the 4 per cent fiscal rule implies that the use of petroleum revenues will increase by more than NOK 31 billion from 2006 to 2009. With continued solid growth in the Norwegian economy, it would be in line with the fiscal rule if the use of petroleum revenues is lower than the expected real return on the Government Petroleum Fund – Global over a few years. We estimate an approximately unchanged structural non-oil deficit in 2007, and assume that fiscal policy will provide some stimulus to aggregate demand and output in 2008 and 2009, but somewhat less than a mechanical application of the fiscal rule based on our oil price assumption would imply. The authorities conduct fiscal policy knowing how monetary policy will react. Today’s flexible inflation targeting regime, giving weight to both variability in inflation and variability in output and employment, establishes a firm framework for monetary policy and provides clear guidelines on how monetary policy is to respond in different situations. Monetary policy in Norway is oriented towards low and stable inflation, with annual consumer price inflation of close to 2.5 per cent over time. Flexible inflation targeting builds a bridge between the longterm objective of monetary policy, which is to keep inflation on target and provide an anchor for inflation expectations, and the more short-term objective of stability in the real economy.
But if you buy the argument that ASEAN is a good place to be, then Thailand is not a bad place to be to take advantage of the opportunities in ASEAN. Even though we are neither the largest economy nor the fastest growing economy, in many ways, Thailand is the most connected economy in ASEAN, not from a financial standpoint but from a real standpoint. Let me share some thoughts on why Thailand is a very connected economy. What kinds of things do we think of if we think about the well-connected economy? It has to have strong trade and investment linkages, good logistics, a good production hub, and a high degree of labor access. If we look at each of those dimensions, Thailand is still an interesting place to be. In terms of trade, if we look at the share of intra-ASEAN exports, the top of the list is Singapore. However, it is not entirely their export because roughly 40 percent of Singapore exports are transshipment from other places, so let us exclude Singapore. Next on the list is Malaysia accounting for about 20 percent of intra-ASEAN exports, but a large share of Malaysian exports goes to Singapore. Thailand is next on the list at 18 percent. But if you ask which economy in ASEAN is the most closely linked in terms of trade with other countries, and more broadly, in terms of diversity of products it exported and coverage of the countries it traded with, it turns out to be Thailand.

Harmonization of standards and codes to international best practice must be done. Hedging markets must be available for both currency risk and interest rate risk, and this may mean a rethink on capital controls. Perhaps a gradual step-by-step relaxation in needed. 2  BIS Review 28/2003  Transparency is also required both in price discovery and the management of both the macroeconomy and the individual corporates. The legal system must respect creditors’ rights, and for investment products to be available for sale across Asian countries, a uniform single passport of consumer production by the SEC’s must be made. Now comes the final question. What is the purpose of the Asian Bond Fund? You may recall that the Asian Bond Fund was announced on 2 June 2003 at US $ billion by 11 central banks in East Asia and Pacific countries. Initially it will invest in sovereign and quasi-sovereign bonds issued by Asian governments in the international markets. This by itself already sparked a keen interest in Asian bonds. I know of at least one Asian central bank that had not invested in Asian bonds before, other than in JGB’s, but has now started buying directly in addition to investment in the Asian Bond Fund. Thailand is now looking at doing this also. I am sure there will be more central banks both in Asia and outside looking at Asian bonds at the international level because of this initiative.
This consists of three parts: an expenditure ceiling entailing that the Riksbank annually sets up an upper limit for nominal government expenditure for the next three years, a surplus target requiring public finances to have a surplus of one per cent of GDP over an economic cycle1 and a stipulation that municipal and county council budgets may not have deficits. This framework has worked well. Unlike many other countries, Sweden was able to enter the most recent financial crisis with a large public finance surplus. Secondly, the monetary policy regime has been changed. Instead of a fixed exchange rate, we now have a floating exchange rate and an inflation target. After the fixed exchange rate was abandoned in November 1992, the Riksbank decided in January 1993 on a new “nominal anchor” in the form of an inflation target of 2 per cent, to apply from 1995. The new monetary policy regime has worked significantly better than the old one with the fixed exchange rate. Inflation has decreased considerably since the 1970s and 1980s (see Figure 3). In addition, this has not been at the cost of lower average GDP growth than previously. On the contrary, since the mid-1990s, GDP growth has been higher than it was in the 1970s and 1980s. Thirdly, and perhaps not as widely-known, wage formation has improved since the mid1990s. The changes had already started by the early 1990s.

The allocation of responsibility and mandate are of course important also because there are both an interest rate lever and a regulation lever to pull, and that these can in some cases have similar effects. It is not difficult to imagine situations where regulations and the interest rate counteract one another. For instance, one might have a situation where the prospects for inflation and the economy as a whole look bleak, but where there are nevertheless signs that a credit-driven bubble is inflating. There may then be reason to use macroprudential measures to counteract the bubble. But these will reduce lending and thus further weaken the economy. Such counteracting effects need not be a problem, if one single authority is controlling both levers, or if they are controlled by different authorities that are essentially trying to achieve the same aims and make similar assessments. For instance, they may both agree that the economy is weak, but that there may be reason to take action to counteract a bubble. Then it is a question of coordinating and trying to find a suitable dosage, or mix, of interest rate and regulations. It is clear that the problems can be aggravated if the levers are controlled by different authorities that do not have the same aims and make completely different assessments of the situation. It is thus important to try to coordinate monetary policy and macroprudential policy. Of course, there has always been a need to coordinate monetary policy and the work to promote financial stability.
I have also tried to show how this affects the bank’s capacity to make a profit. Some changes are the result of active decisions by the Riksbank. Decisions the Riksbank has made as a preventive measure to be sufficiently prepared to manage a changed situation. I am of course mainly thinking of the reinforcement of the foreign currency reserve here, but also the decision to acquire a portfolio of Swedish securities again. Other changes, such as the decline in the use of cash and international interest rates, are beyond the Riksbank’s control. BIS central bankers’ speeches  9  Changes in the Riksbank’s balance sheet will lead to the bank’s profits slowly shrinking. We must therefore consider more carefully than before how we can best fund our assets. The expected rise in interest rates has a much greater effect on the bank’s profits in the short term, but on the other hand the effect is temporary. Although there is no lack of challenges, the Riksbank is financially strong. This is important to be able to perform our task in the best possible way. The bank has substantial equity, which may well be needed if the Riksbank is forced to adopt unconventional methods to bring up inflation. Finally: Does the Riksbank have to make a profit? Yes, it does actually. We must be able to cover our costs. And we must be able to build up buffers.

As you can all see, a lot has happened over the past ten years. For instance, we can observe that:   The foreign currency reserve is SEK 325 billion larger. This increase is mainly because we have borrowed the equivalent of SEK 200 billion in foreign currency through the Swedish National Debt Office to strengthen the foreign currency reserve. The Riksbank’s balance sheet 2004 and 2014 SEK billion  Source: The Riksbanken  2  The formal term in the balance sheet is “lending to credit institutions in Sweden related to monetary policy operations denominated in Swedish kronor”. BIS central bankers’ speeches  3    We have once again acquired a securities portfolio in Swedish krona. The Riksbank previously had a portfolio of Swedish securities but then this was phased out more than ten years ago.   The stock of notes and coins has declined, partly due to card payments and electronic payments becoming more common. As a consequence of this, we now have monetary policy liabilities instead of a monetary policy claim. This means that we are now borrowing excess liquidity from the banking system instead of lending money to cover a liquidity deficit. I will return to this issue later on.
- A successful CBDC should be attractive enough to be used by households and firms in their everyday payments. However, it should avoid the above-mentioned risk of excessive shifts from bank deposits to CBDC accounts, which would involve unwanted bank disintermediation and a possible destabilization of the financial system. A balance must be found to meet both goals. -  This could imply for example both a zero remuneration of CBDC (i.e. similar to cash) and a 3/4  BIS central bankers' speeches  limit to CBDC accounts holdings. Under such a scheme, the CBDC is likely to be used for daily payments, while households and firms would not be able to hoard large amounts of CBDC for investment or risk-aversion motives. A second model would involve no limit on CBDC holdings amount, but a differentiated remuneration rate beyond a certain threshold (a so-called “tiered CBDC remuneration”), which would disincentivize large CBDC holdings. - Whatever the model chosen, with its own benefits and drawbacks, it may have impacts on monetary policy implementation. I already mentioned the potential effect on the liquidity position of the banking system. Another question relates to how a new remuneration rate should be articulated with the current key policy interest rates and whether there could be a case for changing some CBDC parameters together with central bank key policy rates. In any case, CBDCs should be designed so as to not constrain nor influence in any way central bank monetary policy decisions and desired stance. 3.

Without them, it would have been impossible to make sense of the chaotic dynamics of global economies and financial systems at the time. In other words, nothing could have provided a better case study of the importance of Max’s work than the crisis. And it is lessons from the global financial crisis with which I want to begin. These are of course many and varied. But among the most important is also perhaps the simplest: to safeguard against systemic risk, the financial system needs to be managed as a system (Haldane (2009)). As put, this statement seems rather obvious, perhaps even tautological. Yet, pre-crisis, it was far from obvious. The orthodoxy then was that safeguarding individual financial firms was a necessary and sufficient condition for system-wide stability. This was the financial stability equivalent of the English aphorism: “look after the pennies and the pounds will look after themselves”. And so it appeared during the long pre-crisis period of stable growth and stable banks – the “Great Moderation” (Bernanke (2004)). The crisis has rewritten that orthodoxy. It revealed that the safety of individual banks was neither a necessary nor sufficient condition for systemic stability. Not necessary because, in any well-functioning system, individual banks can and should fail. Not sufficient because, in an integrated web, the chain is only as strong as its weakest link. In focussing on individual banks, policymakers had been, to coin another English aphorism, “penny-wise but pound-foolish”. That is why Great Moderation gave way to Great Recession (Gai and Kapadia (2010)).
Much as it did in 1994 in the U.S., the hard part lies ahead. Appendix Graph 1 Average Annual GDP Growth Rates 0  1  2  3  4  5  6  7  8  9 [%]  France Germany Ireland Italy Japan Korea Spain Switzerland United Kingdom United States  1970-1980 1980-1990 1990-1995 1995-2003  EU-13 (EU-15 excl. Austria and Luxembourg)  Source: OECD, Productivity Database, February 2005. 4  BIS Review 27/2005  Graph 2 Average Annual Growth Rate of Labour Input: EU-13 vs. U.S. [%] 1.5  1.0  0.5  0.0  -0.5 1990-1995  1995-2003  -1.0 EU-13 (EU-15 excluding Aust ria and Luxembourg)  Unit ed St at es  Source: OECD, Productivity Database, February 2005. Graph 3 Growth of Labour Productivity: EU vs. U.S. 4.0% EU - U.S.  U.S.  EU  3.0%  2.0%  1.0%  0.0%  -1.0%  -2.0%  -3.0% 95  96  97  98  99  00  01  02  03  04  05  Source: Datastream (OECD Economic Outlook). BIS Review 27/2005  5  Graph 4 Average Annual Growth Rates of Labour Productivity: EU vs. U.S.  [%] 4 3 2 1 0 EU-11 U.S. EU-11 minus U.S.  -1 -2 1970-80  1980-90  1990-95  1995-2000  2001-2003  Source: OECD, Productivity Database, February 2005. 6  BIS Review 27/2005

This Policy Document sets six principles or outcomes which financial service providers are required to deliver in their dealings with financial consumers. Key of which includes the requirement for the board and senior management to set clear expectations on fair treatment and ensure that these expectations are embedded in the institution’s corporate culture and core values. The existence of such rules coupled with effective enforcement when these rules are breached is essential, given that failures of corporate governance have been at the root of many wellknown cases of institutional failure. A recent example being the successful conviction of the operators of the infamous Genneva gold investment scheme for illegal deposit taking, which has landed its former directors and advisers in jail. And certainly there are many more. Let us all work together to weed out and prevent such nefarious schemes from taking root in Malaysia. Role of Financial Practitioners Most financial decisions at the individual level are determined by a person’s behaviour and mindset. In view of the uncertain economic conditions we are faced with, you play an important role in nurturing strong relationships with consumers to facilitate positive behavioural changes in them. Given the right intervention, motivation and self-discipline, we can elevate the level of financial literacy of any individual while promoting healthy financial attitudes and behaviour. In relation to this, I would like to extend my sincere thanks to the MFPC committee members for its effective support and partnership with the Financial Education Network1 or FEN.
A high standard of professionalism, laced with strong ethical values and integrity also form the prerequisites to create a new cadre of Islamic finance scholars. The pursuit for intellectual diversity and professionalism among scholars is best demonstrated through Shariah interpretations and lines of reasoning that evolve with peculiarity of circumstances, demonstrating a high degree of tolerance and respect of other Shariah school of thoughts. It is only by having talents with these ingrained ethics and characteristics that we could elevate Islamic finance to greater heights in our endeavour to improve the wellbeing of the ummah. Tonight, as we commemorate this prestigious award, let us celebrate this year’s and past years’ winners for their contributions to drive the Islamic finance agenda forward. It is not just their academic and working credentials that merit them this award, but it is also their relentless pursuit of al-falah (success) through their drive, knowledge and wisdom. I believe that this year’s RAIF winner and past winners have paved the path for future talents of 2/3  BIS central bankers' speeches  Islamic finance to embark on breakthrough ideas and thinking. It is for this very reason, that this year’s award is conferred to the visionary talents that had made impactful and significant contributions to Islamic finance.

Allow me to express our utmost gratitude to His Majesty Seri Paduka Baginda Yang di-Pertuan Agong and Her Majesty, and His Royal Highness Sultan of Perak Darul Ridzuan, the Royal Patron of Malaysia International Islamic Financial Centre (MIFC) and Her Royal Highness, for gracing tonight’s Gala Dinner. Our sincere appreciation to Securities Commission Malaysia, for jointly hosting this dinner with Bank Negara Malaysia, under the Malaysia International Islamic Financial Centre (MIFC) initiative. Since the introduction of the Royal Award for Islamic Finance (RAIF) in 2010 as a biennial event, it has given due recognition to three individuals. Tonight, another individual will be awarded the 2016 RAIF, for outstanding contributions in the development of Islamic finance. The Islamic finance industry has continued to gain strength and stature, recording robust global growth of between 10 to 12 percent annually over the past decade. Amidst a highly challenging global economic environment, the growth reflects the steady advancement and maturity of the industry in meeting the needs of the economy. As we progress into the new era of growth, our endeavour to enhance the vibrancy of the industry warrants a new way of thinking in the face of increasing competition and profound changes brought about by technological advancements. In facing these challenges successfully, one of the prerequisites is a pool of talent that is dynamic, adaptable and visionary. 1/3  BIS central bankers' speeches  In Malaysia, we have invested substantially in cultivating talents equipped with the required skill sets and knowledge needed to compete, to think and to innovate.