samchain/econo-pairs-v1 huggingface dataset:
In two decades, the total assets of the Islamic banking industry have increased from USD97 million at the outset to USD20 billion as at end-June 2003. Similar expansion also took place in the takaful industry whereby the assets have increased significantly from less than USD30 million in 1993 to USD1 billion in June 2003. The Islamic capital market in Malaysia also recorded significant growth whereby the outstanding Islamic private debt securities accounted for USD17.8 billion, or 65% of the total outstanding private debt market while the new issuance of Islamic private debt securities in the first eight months of 2003 amounted to USD1.7 billion. What is more encouraging is that more than one third of the new issuance of Islamic debt securities were issued by companies owned by non-Muslims, some of which includes multinational companies. The evolution of an appropriate financial structure would need to take into account the role of the financial system in the economy and the objectives that need to be achieved. In the context of an emerging market economy, the financial system is a means to an end. The appropriate financial structure, particularly in emerging market economies, need to be designed to meet the requirements of the economy. The financial system needs to be in a position to support the real sector, changing and evolving with the changing needs of the economy. The strategy adopted in Malaysia is to develop a comprehensive Islamic financial system that is able to operate in parallel with the conventional financial system.

The policy actions the Fed takes will depend on how economic conditions develop. If circumstances change, our policies will adapt. No matter the circumstances, I assure you that we at the Fed are doing everything we can to achieve the goals of maximum employment and stable prices. Thank you very much. References Board of Governors of the Federal Reserve System. 2011. “Minutes of the Federal Open Market Committee”, June 21–22. Board of Governors of the Federal Reserve System. 2012. “Press Release”, January 25. Federal Reserve Bank of New York. 2010. “Quarterly Report on Household Debt and Credit”, August. Feroli, Michael E., Ethan S. Harris, Amir Sufi, and Kenneth D. West. 2012. “Housing, Monetary Policy, and the Recovery”. Presentation to the 2012 U.S. Monetary Policy Forum, New York, February 24. Jordà, Òscar , Moritz Schularick, and Alan M. Taylor. 2011. “When Credit Bites Back: Leverage, Business Cycles, and Crises”. NBER Working Paper 17621. Mian, Atif, Kamalesh Rao, and Amir Sufi. 2011. “Household Balance Sheets, Consumption, and the Economic Slump”. Presentation at American Economics Association meetings, Atlanta, GA, January 8, 2012. Reinhart, Carmen M., and Kenneth S. Rogoff. 2009. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press. 7  For more information, see Board of Governors (2012). BIS central bankers’ speeches  5  Williams, John C. 2012. “The Federal Reserve’s Mandate and Best Practice Monetary Policy”. Presentation to the Marian Miner Cook Athenaeum, Claremont McKenna College, February 13. 6  BIS central bankers’ speeches
We had recently issued a concept paper on Life Insurance and Family Takaful Framework. This Framework is set to transition the life insurance and family takaful industry into a new operating environment, characterised by changing market dynamics including demand for greater transparency, and driven by advancement in technology and changing consumer behaviour. The Framework’s main aim is to increase insurance and takaful penetration, and ensuring a fair deal to consumers. The framework is supported by three main pillars; the liberalisation of operating limits, diversification of delivery channels and strengthening of market conduct practices. The Framework will be implemented in two phases to allow the industry and the public sufficient time to adjust to the new operating environment before further liberalisation is  BIS central bankers’ speeches  1  considered. Under the first phase, greater operational flexibility is given to life insurers and family takaful operators to operate in a more competitive environment and allow greater product innovation to be delivered through a wider range of delivery channels. The Framework proposes for the current commission and other operating cost limits for investment-linked products to be removed. In addition, the commission limit for pure protection products, namely pure term, critical illness and medical and health is also proposed to be removed subject to certain preconditions. While allowing greater operational flexibility, the Bank will ensure consumers’ interest remains protected.

Vittorio Corbo: Monetary policy and international financial markets Presentation by Mr Vittorio Corbo, Governor of the Central Bank of Chile, in the Conference “Economic Projections – Chile: Economic Growth with Social Inclusion” organized by the Americas Society/Council of the Americas, Amcham Chile, and El Mercurio newspaper, Santiago, 28 August 2007. *  *  *  First and foremost, I want to thank the Council of the Americas, Amcham Chile, and El Mercurio newspaper for inviting me to participate in this event. I will begin my presentation by discussing the recent performance of the Chilean economy, to then address the developments of world financial markets over the last weeks and close with a review of the way the monetary policy framework operates in Chile and what can be expected from it at a time like this. Performance of the Chilean economy After unexpected slowdown of the third quarter of last year, the Chilean economy resumed strong expansion. Annual (year-on-year) GDP growth was 6.1% in the second quarter, outperforming the first quarter’s 5.8% and above projections in the latest Monetary Policy Report. This expansion has relied on good external conditions, a stronger fiscal impulse – associated to the more permanent portion of the copper price increase – and favorable financial conditions that partly reflect an stimulating monetary policy. Regarding domestic demand, it is worth highlighting investment’s renewed dynamism, with annual growth rate of 13.9% in the second quarter of this year, in contrast with the meager 2.6% of the second half of 2006.
But Beauty comes in a package along with the Beast, and the Beast in this case is the single monetary policy - the single, one-size-fits-all, interest rate. The trouble is that it may not in the event suit the domestic monetary policy needs of the different individual Euro-area countries. And if you don’t find that instantly repulsive I suggest you ask yourself how, at this particular juncture, we could keep the economic porridge - if I may mix my fairy stories - at just the right temperature if we were obliged now to have German-level interest rates. Now you can’t just hope the Beast will never appear. I don’t know of any serious analysis that doesn’t acknowledge that tensions could arise between the domestic policy needs of BIS Review 14/1997  -2-  the different member countries - as a result of different cyclical positions, or different fiscal policies, or as a result of external shocks which affect some member countries more than others, or as a result of structural changes in one member country as against another. The risks, like the potential benefits, are, as I say, real. You might more reasonably hope that Beauty’s Beast will turn into Prince Charming - and that all their problems turn out to be little ones. But I have to tell you that it was always at this point in the story that I began to wonder if my mother was making it all up!

In this same respect, in the case of households and non-financial corporations there are still some segments in a position of high financial fragility. For instance, in the case of companies, the smallest firms are more vulnerable to a scenario of declining revenues. But, moreover, in a crisis such as that at present where - as I have said - the pandemic is affecting different regions and sectors in differing ways, the downturn in institutions’ solvency will foreseeably depend on their degree of exposure to such firms. Third, the materialisation of losses in the credit portfolio as a result of the pandemic will directly affect bank profitability, as the preliminary results of significant situations for 2020 Q1 suggest. Profitability was already low before the outbreak of the crisis: as in most European economies, the profitability of Spanish financial institutions stood, on average, below the cost of capital last year. The crisis has meant that this spread has tended to widen. The COVID-19 crisis will adversely impact banks’ already modest profit-generating capacity. As in the case of solvency, it will affect different institutions differently depending on their business model and on the distribution of their exposures to the sectors and regions most affected by the pandemic. Moreover, the crisis has bolstered the prospect of the current scenario of low interest rates remaining in place.
In taking this action, the FPC took a view on the risks if the distribution of mortgages shifted towards a large share of high loan to income loans. We intended to limit the risks arising from increasing household indebtedness and the macroeconomic vulnerabilities this creates. The action was forward looking – limits were set at a level above the proportion of such mortgages being issued at the time and indeed have not subsequently been reached. And that brings me to my final point. The literature and theory of macroprudential policy is as yet relatively under-developed and concentrates on prudential regulation of banks and their role in the credit cycle. But it is apparent from my short time on the FPC that the time-varying risks we need to address go wider than the banking system. The action I have just described  2  6  See “The Bank of England’s approach to stress testing the UK banking system”, October 2015. BIS central bankers’ speeches  on housing is one example. The growing attention being paid to potential risks from market as opposed to bank-based finance is another. The time-varying macroprudential policy maker needs to look wider than the banking system. Conclusion To conclude, while the credit cycle remains hard to identify with the precision of a physicist, a key element of macroprudential policy is try to assess it and to address the risks that build up in the financial system over the cycle.

The key development in the housing market however has been the rise of mortgage lending to “buy to let” purchasers – ie landlords – rather than to owner occupiers. The private rental sector in the UK has been growing rapidly over the past 15 years partly due to structural reasons. The stock of mortgage lending for buy to let has increased from £ to £ over the last decade. And it is growing quickly now, by around 9% a year. Buy to let now represents 16% of the overall mortgage stock and accounted for 80% of net lending over the past year. Buy to let mortgages pose different risks to owner-occupied mortgages. Buy to let mortgages are typically interest-only, so loan to value reduces more slowly than for owner occupiers. New owner-occupied mortgages are now almost entirely amortising. There is normally a larger initial equity cushion as buy to let mortgages in the UK are typically at lower loan to value ratios at origination than loans to owner occupiers. It is not clear how buy to let investors will behave when interest rates go up or if house price growth moderates. The greater initial equity in buy to let may mean that investors are more  BIS central bankers’ speeches  3  resilient to small falls in house prices and higher servicing costs than owner occupiers. But they may prove more vulnerable to larger falls in house prices and increases in rates that stretch their rental cover.
One way of doing it is to calculate the average expected future real interest rate, which provides a benchmark if nothing else. Figure 12 shows how an estimate of the Swedish long-term real interest rate has moved since the mid-1990s until now. 20 According to this estimate, it was around 1.5–2 per cent in the middle of the 1990s. Since then, it has shown a downward trend to around −1 per cent. This downturn is primarily due to a trend decline in international interest rates. Figure 12 also shows that the long-term real interest rate has fallen in large and important economies such as the euro area, the United Kingdom and the United States. The Swedish long-term real interest rate followed the level of the euro area fairly closely until the financial crisis in 2008–2009, after which it has been a little higher. There are several reason why international real interest rates have shown a falling trend. At an overall level the willingness to save has increased more than the willingness to invest, which has meant that the long-term real interest rate has fallen. The former Federal Reserve Chairman Ben Bernanke pointed to the increasing saving in China and other Asian countries as one reason for the global increase in savings, partly because of deficiencies in the social insurances systems in the rapidly-growing countries.

Uncertainty over long-term trends – more cautious monetary policy A large part of today’s speech has concerned long-term levels and trends on the labour market and the financial markets. When such trends change, it often takes some time before one notes the change and this can also be difficult to assess. One example of this is our forecasts of labour force participation. Figure 13a shows the forecasts for labour force participation at different points in time, together with actual outcomes. The forecasts do not appear to have succeeded in capturing what appears to be an increasing trend in labour force participation. This is partly because we have underestimated the population increase, which is based on Statistics Sweden's forecasts, and partly because labour force participation has risen as a share of the population. The latter could be due to reforms that have stimulated the labour supply and an increase in labour supply that is not registered in the population database. However, the forecast errors can be smaller 19 [24]  when it is not a question of changes in trends, which can be illustrated by the forecasts of GDP growth, see Figure 13b. One uncertainty factor in the monetary policy decisions is thus the difficulty in detecting changes in trends, but there are also other uncertainty factors to take into account. Alan Greenspan put it like this: “Uncertainty is not just an important feature of the monetary policy landscape; it is the defining characteristic of that landscape”.
But it is equally important not to give rise to unrealistic expectations about how fast potential output can grow. The Central Bank’s analysis and forecasting work always aims to answer this question, which is one of the most important in monetary policy implementation. Inflation subsided somewhat in 2012, falling from 6½% at the beginning of the year to just over 4% at year-end. The Bank’s February forecast assumed that this trend would continue, provided that the króna did not weaken further. According to the forecast, inflation should be close to target around the middle of next year. Whether that happens earlier or later depends primarily on developments in the exchange rate. It was therefore a disappointment to see how much prices rose in February, raising twelve-month inflation once again. It is always imprudent to read too much into individual measurements, and it has yet to come to light how much of that increase was based on temporary factors. Furthermore, the exchange rate has risen more than 5% since the beginning of the year, which could affect the next measurements. Nonetheless, this inflation measurement gives good reason for caution, and if the role of temporary factors proves smaller than might appear at present and inflation declines to the target more slowly than previously forecast, it will be necessary, other things being equal, to withdraw monetary accommodation sooner than would otherwise be required. The Central Bank’s interest rates have been unchanged since November 2012, when they were raised by 0.25 percentage points.

That solution could take many forms, and these would affect the subsequent approach to lifting the controls. A revised liberalisation strategy would therefore look quite different depending on what route is chosen for the settlement of the failed banks’ estates. A solution to this problem must therefore come first. I won’t discuss these possibilities at greater length here, as a great deal of work lies ahead, and it would be unwise to show our hand at this point. Furthermore, it is necessary to have more than one option at hand, in case the one that seems best at the outset proves infeasible later on. It is possible, however, to make a few comments that will enhance the general understanding of what needs to happen. If a portion of the estates are settled through composition agreements, it is of key importance that the ISK asset recoveries add as little as possible (or nothing at all) to the stock of volatile ISK assets owned by non-residents. It is important to bear in mind that selling the banks at a relatively low price to foreign investors interested more in the short term and in handsome dividend payments does not solve the problem and could even exacerbate it. BIS central bankers’ speeches  5  It is the role of the estates to divest the assets and make payments to creditors. The question is, however, what is a realistic price for the assets, and at what exchange rate will they be converted into foreign currency.
What is important to underline, though, is that the paths we publish on the basis of implied forward rates should not be taken as a sign of our own judgement of the future path of the repo rate. Experience also shows that the situation often changes so that the actual repo rate path turns out to be a different one than that implied by forward rates. Allow me also to stress that we intend as usual to present a forecast on the assumption of an unchanged repo rate in order to maintain continuity and transparency in our analysis. Communication One advantage of using implied forward rates is, as I just mentioned, that it becomes more meaningful to produce forecasts over a longer time frame. It also makes it easier to estimate and present scenarios that can illustrate some of the problems that we face. Allow me to considerer two different issues, both of which have come to the fore in recent years, and thereby show how our developed methods can be used to improve primarily our communication but also our own understanding of the problems we have to address. The first relates to situations when there have been particular shocks to the inflation outlook that we have judged to be of a temporary nature. Perhaps the best example of this is 2002 to 2003, when electricity prices suddenly began to rise to record-highs as a result of lower water levels in Sweden and Norway as well as colder weather than usual.

An insurance company like GE Life, which is located in the heart of a dynamic growth region, is well-positioned to capture the growing opportunities. Achieving sustainable long-term growth, however, is highly complex. Among the many segments in financial services, the life insurance industry has probably the longest time horizon. The industry takes on assets and liabilities that literally last a lifetime. Good actuarial data and analysis provide an important basis for risk pricing and management. But future trends and developments such as increasing longevity or medical breakthroughs are harder to predict. Hence, a sound framework on asset-liability management and a continual focus on risk management are critical. At the same time, markets are changing and innovating rapidly. Competition comes from many sources, while the needs of customers will continue to evolve. To keep up with the competition, intermediaries have to continue to invest in research and development, and provide value-adding products and services in risk management, underwriting, actuarial analysis, investment and financial advice. This is especially important in the context of Singapore’s maturing population who will need good retirement planning services in order to remain financially independent through their golden years. Another key implication of the long time horizon is the special relationship with the policyholder. In general, both the insurance company and the policyholders are entering into a long-term financial commitment. In any long-term relationship, the quality of trust is of utmost importance. This relationship of trust can only be sustained by good advisory and sales practices.
The banks have always passed the stress tests, most recently the one carried out on their balance sheets at year-end 2007. At that time, the equity ratio of Iceland’s largest banks ranged from 11.2% to 11.8%. The result of the stress test was that, even if various severe shocks inherent in the premises of the test were to occur simultaneously, the banks would still have an equity ratio ranging from 10.4% to 11.2%. Their liquidity position was ample at year-end, so there was no driving need to seek funding in the international credit market. But at some point in time, they will need to return to the capital markets. All of Iceland’s large commercial banks have an international credit rating. Though these credit ratings are comparable to those awarded to similar banks in other countries, there is an abiding suspicion in the market toward Icelandic banks. This is difficult to explain fully, and it results, for example, in CDS spreads that are higher than in foreign banks, although CDS spreads also differ among Icelandic banks. It is worth remembering that Kaupthing Bank’s CDS spreads rose when the bank announced its intent to acquire a Dutch bank last August. As the autumn progressed, the other banks’ CDS spreads increased also. That trend continued intermittently until now. When Kaupthing abandoned its plans to acquire the Dutch bank, the reason for the increase last August vanished. Spreads declined slightly thereafter, as a large uncertainty factor had been eliminated.

Emilija Nacevska: Strengthening the capacities of the system for fight against counterfeiting of the euro Speech by Ms Emilija Nacevska, Vice Governor of the National Bank of the Republic of Macedonia, at the opening conference of the Twinning Light Project "Strengthening the capacities of the system for fight against counterfeiting of the euro", Skopje, 15 January 2019. * * * Dear Minister Oliver Spasovski, Your Excellencies Samuel Zbogar and Thomas Gerberich, dear Project Leaders Biljana Celeska Anevska and Peter Spicka, dear Mr Damir Bichanic, distinguished representatives of the Delegation of the European Union in the country and representatives of the Ministry of Interior, distinguished colleagues, dear guests, It is my honor and pleasure to greet you on the behalf of the National Bank and to welcome you to today’s event held in our institution, marking together the beginning of this very important Twinning Light Project aimed at strengthening the capacities of the institutions involved in the system for fight against counterfeiting of euro. At the very beginning of my speech, I would like to express the gratitude of the National Bank to the European Union, because it has recognized the determination of our key institutions responsible for fighting money counterfeit to put their maximum in establishing a strong and efficient system for protection of the national, as well as the financial interests of the Union.