samchain/econo-pairs-v1 huggingface dataset:
Fostering strategic alliances with the right entities will not only accelerate innovation and development but will also bring about considerable values in the formulation and implementation of new approaches, new technologies and specialisation in new product. These in turn, will pave the way for takaful operator to be competitive and in a position to be industry leaders at the national and global front. Let me share with you Malaysia's recent initiatives on this front. In January this year, Bank Negara Malaysia has agreed to award four new licences for takaful operators, bringing the total number of takaful operators to nine (9). The new takaful licences are offered to joint ventures or consortiums of sound financial institutions with experience in Islamic banking, takaful or insurance business. Such joint ventures or consortiums that include foreign partners would enable the new  BIS Review 13/2006  5  takaful operators to leverage on the expertise, experience and infrastructure of their partner financial institutions. These are strong institutions from the Middle East, the United Kingdom and Japan that agreed to combine efforts and share expertise and resources with Malaysian institutions in these new ventures. In line with the liberalisation in the Islamic banking industry, foreign equity interest of up to 49% is allowed in the takaful entity to secure commitment of strong shareholders, and foster meaningful strategic alliances.

Would it be acceptable to use tax-payers money to refund foreign depositors at a larger scale? This might pose problems both for the home and host country. The wide divergence of national systems clearly needs attention. Potential solutions might include increased co-operation and harmonisation regarding fees and entry and exit rules. Crisis management. National central banks have national mandates in extending emergency liquidity assistance. In a future integrated European financial market, the mandate of the lender of last resort will not be as clear-cut. How should this function be organised when the largest banks might be systemically important in several EU member countries? There will also be banks that are very important in one country while being completely insignificant in a European context. Another issue is whose interest a national supervisor will protect in a crisis involving a cross-border banking group strictly its own national interest (the case now) or the interest of all member countries where the group might have operations? Conclusions These issues, or challenges, are essentially political. They are about how to share the risks and costs of financial integration. And as long as these challenges are left unaddressed they constitute political barriers to integration. We all say we want financial integration but as usual, nothing comes for free. Financial integration brings some difficult issues for authorities and politicians. Public authorities will have to rethink their roles and priorities.
Given Malta’s dependence on foreign trade and investment, the Bank’s commitment to price stability and its positive track record with a fixed peg, a narrow band, and the lesser degree of uncertainty and volatility associated with it, would be preferable. I should add that as real convergence is progressively achieved and as structural reforms are implemented, a narrow band should become even more feasible. A smooth transition to EMU indeed requires more than satisfying the exchange rate criterion and the other four Maastricht criteria. To be able to implement the ECB’s monetary policy without difficulties, new euro area members should also achieve a minimum degree of real convergence. The ECB will, in fact, give its opinion on the level of real convergence achieved by each country before it is allowed to enter EMU. In reflecting on the future evolution of exchange rate policy in Malta, the Central Bank will thus also continue to monitor developments in the rest of the economy, particularly in so far as they affect the sustainability of the Maastricht criteria. Implications of the single currency for the composition of the external reserves From the date of EU accession until the end of the ERM II phase, Malta would qualify as “a Member State with a derogation”, the lira would remain the national currency and monetary policy would continue to be set by the Central Bank.

At this point, the Bank would practically act as an interface between those parties eligible to participate in the euro area’s open-market operations and foreign exchange transactions and the ECB. This function has implications for both the Bank’s institutional set-up and its operational framework. First, the Bank must have the necessary legal power to carry out these tasks. In this regard, the Central Bank of Malta Act already permits the Bank to hold and exchange virtually any financial instrument and foreign asset. Additionally, however, it requires a good understanding of the operational framework governing such transactions, including the financial instruments and legal documentation that apply to transactions with eligible counterparties, the criteria which determine a counterparty’s eligibility to participate in these transactions and those that determine whether a particular asset can be used as collateral. Whereas most of the instruments currently used by the Central Bank are already in line with those of the European System of Central Banks (ESCB), further adjustments are necessary to achieve full compliance. To this end, the Bank has set up a Monetary Operations Committee and a Foreign Reserves Operations Committee to identify the appropriate additional adjustments to the Bank’s operational framework. The ability to interface with the ECB also requires that the systems which each Member State uses for the settlement of cross-border payments and the transfer of assets – in other words, the payment system and the securities settlement system – are somehow linked with those of the other members.
For example, the delicate decision of how the MPC should communicate its opinion that the effective lower bound for Bank Rate has declined was in part informed by the opinion of our money market desk who were able to tell the MPC what the existing assumptions were in the market. And I expect market intelligence to make a strong contribution to the FPC’s pursuit of its medium term priority of ensuring the existence of diverse and resilient sources of market based finance. Recent episodes (such as a sharp decline and reversal in US Treasury yields in October, a close to 50% decline in the price of oil and the removal of the Swiss Franc peg) have reminded us that volatility in financial markets has certainly not been consigned to  9  As described in Wormell (1985). 10  Also known as “the Government Broker”, the Senior Broker to the Commissioners for the Reduction of the National Debt was by convention a senior partner of Mullens & Co, a firm of stockbrokers, until 1986 when the job formally moved into the Bank of England. 6  BIS central bankers’ speeches  history. A key question for both the FPC and the PRA Board will be whether markets’ ability to recover reflects their resilience to shocks; or conversely whether these incidents are symptomatic of an underlying fragility. Market Intelligence can play a key role in answering that question. But the expanded responsibilities of the Bank have also revealed that elements of our approach need to be strengthened.

As Figure 2 shows, the membership of the Bank’s Sterling Monetary Framework has increased from 70 in 2007 to 139 and counting. And the collateral we will accept in our regular operations now extends from AAA bonds all the way to own name raw loans. Changes such as these provided the basis for Governor Mark Carney’s declaration that the Bank of England is “open for business.” I think changes made since 2007 indicate that we are also “open about our business.” The Winters Report highlighted that ambiguity around the Bank’s published liquidity insurance framework is rarely constructive. And the Bank is committed to providing clarity around the circumstances under which it would provide liquidity in the event of market-wide or large idiosyncratic stress: •  The Bank’s Red Book 7 clearly sets out the aims and objectives of the Sterling Monetary Framework with regard to the provision of liquidity insurance. •  Each SMF participant has a “relationship manager” and we aim to give them clarity about the circumstances in which they can expect to borrow. •  We have improved our external accountability by producing an Annual Report overseen by the Bank’s Court which assesses how the framework has performed relative to its objectives. But hardwiring the lessons learned from the last crisis into our operations will not necessarily provide the agility to provide the liquidity insurance that may be required in the future.
Even when the countries deregulated financial systems and freed their capital accounts, they did too little to strengthen financial supervision and regulation, develop liquid markets, and promote sound corporate governance. International creditors were eager to participate in the Asian miracle, and accepted a close nexus between borrowers and lenders as the "way" business was done in Asia. But lending on the basis of familiarity and relationships is prone to abuse and a recipe for financial mishaps. The Asian crisis of 1997/98 vividly brought home the risks of this approach. The Asian crisis is now past, but we are not back to the status quo ante. The situation today is troubled, but it is different from that in 1997/98. Unlike then, there is no contagious financial panic, no more hot money to flee the region, crashing currencies and economies one after the other. The markets are more subdued, although they are not immune to shocks, especially from political developments. Global investors and traders have been chastened by the experience of the 97/98 crisis, and now differentiate more carefully between economies, the different problems that they face, and the varying degrees of seriousness with which they are tackling their problems. Part of the current problem is cyclical: Asian countries are major exporters to the US, and have been affected by the current slowdown in the US economy. This will pass when the US economy picks up. But many Asian economies also have serious structural problems, especially in their financial systems. Resolving these problems will be an arduous task.

The 1960s were a time of hope and promise for New York City, with the World’s Fair, the opening of the Verrazano Bridge, and the beginning of construction of the World Trade Center. The city benefited from a booming stock market and strong overall job growth. My memories of New York City during that period were very glowing. Visiting from Massachusetts, I remember going to the World’s Fair and to a Mets game at the new Shea Stadium—heady stuff for an 11-year-old. As a boy who planned to be a nuclear physicist when he grew up, I particularly recall the General Electric exhibit at the World’s Fair that highlighted the potential of hydrogen fusion as a future power source. Although that turned out to be like flying cars—always somewhere just over the horizon—it was exciting to contemplate as an aspiring scientist. Unbeknownst to me,there were also some ominous signs for the city. The city’s manufacturing sector was losing jobs at a worrisome pace, population growth had slowed to a crawl, crime was on the rise and racial tensions were growing. As the sixties unfolded, there were also a number of major strikes affecting public services, most notably the 1968 teachers’ strike. Perhaps most importantly, the city’s finances were on a reckless path. Despite growth in the economy and the tax base, the city was taking on more short-term debt, relying increasingly on state aid and grossly underfunding its pensions.
At its most basic level, the government exists to provide services that otherwise cannot be carried out by private market – things like infrastructure, law enforcement, or national defense. Public policy may also pursue social welfare objectives in accordance with its citizen’s wills, for example to promote income equality or access to health care and education. Finally, but no less important, public policy must provide a stable environment for the nation to prosper, and avoid being the cause of malaise itself. Based on these basic tenets, the present challenges for Thai policymakers are twofold. Public policy must first aid the private sector in overcoming structural bottlenecks and lift the economy’s potential growth by addressing areas where market has failed. Secondly, the policymakers must restore and maintain macroeconomic policy credence, and lay a stronger foundation for the economy to grow on a sustained basis. Let me take each of these in turn. 1. Structural policy to boost potential growth  The Thai economy is growing at a pace well below what a typical country with the same level of income should be able to attain. Failure to sustain a higher pace of growth over an extended period, even when demand pressure has eased, suggests that part of the problem could be from the supply side. It is no secret that infrastructure in Thailand needs an overhaul. Indeed, very few would dispute the merits of large-scale public investment.

Of a total of NOK 1 021 billion in loans to wage earners, pensioners, social security recipients and students at the end of 2004, NOK 208 billion represented non-mortgage loans. Since the third quarter of 2004, growth in mortgage loans has slowed while growth in other loans has increased. Growth in mortgage loans, however, remains higher. In the last decade, loans from finance houses to households have increased from three to four percent of household loans and now amount to a total of NOK 47 billion. Each quarter Kredittilsynet (Financial Supervisory Authority) conducts a survey of selected finance companies that are engaged primarily in consumer financing. Consumer loans are defined here as both card-based loans and other unsecured consumer loans. The survey shows that several of the finance companies in the sample have recorded strong growth in lending. However, growth has slowed. The survey shows that compared with total loans to the household sector, the number of defaults on consumer credit is high but relatively stable. Losses are low. Profitability in these companies has improved considerably in recent years, illustrated here by net interest income as a percentage of average total assets. This indicates that the enterprises take into account the high risk when pricing consumer credit. At the same time, it is surprising that more new participants have not entered the market when profitability is so high. Some consumer loans are probably extended as mortgage loans. This possibility is closed to households that do not own their own dwelling.
Similarly, our market intelligence helped ensure that the other elements of the policy response last year were also rapid, decisive and well calibrated to the underlying risks. Of course, diversity has affected our other outreach activity too. When I first started working at the Bank of England in the mid-1980s, the Bank’s only public statements came mainly from the Governor for instance at the annual Mansion House speech. We have moved a long way since then, and we see outreach as core to how we operate. In an important sense this change naturally accompanied the decisive shift to the Bank having clear and independent responsibility for monetary policy and the stability of the financial system. With those responsibilities went a duty to reach out and communicate much more broadly. Our network of regional Agents help us with ensuring we speak to companies and organisations from across the country. We created Citizens Panels – held regularly all over the country in person and, for the time being, virtually – to understand how the public view the economy. 7 Our Community Forum programme enables us to meet with those who run third-sector organisations, as well as the people they support, across the UK. Our work in diversity and inclusion extends to our role in creating an inclusive financial sector and I am pleased that with the input of many in the Islamic finance community, we are launching the Alternative Liquidity Facility (ALF) during the course of 2021.8 So diversity matters to us.

The room for its policies directed towards micro and small business, household finance, rural sector finance is even wider. Thousands of micro and small enterprises, thousands of families have no access to financial services and products whatsoever, and most of those who do, cannot borrow under the existing borrowing costs and required collaterals. Some has already noticed: "one micro-financing loan could change the future of a family, few could change the future of a local community and thousands of such credits could make an enormous contribution to the development of the overall economy". This Fund will make its contribution to this purpose, since it offers long-term source of financing and because it is aimed at target groups the access of which to the financial injection is most difficult. Let us encourage them by noticing that they have wide opportunities to help them accomplish their mission. And, profit and development for the region. 2  BIS Review 25/2007
In addition, through what are known as fine-tuning operations, the Riksbank normally offers the banking system financing or investment of the deficits or surpluses that can arise in the daily payment flows between the banks and the Riksbank at a rate close to the repo rate. The Riksbank uses its advertisement of the repo rate to provide signals regarding monetary policy. The repo rate is now usually changed only after the monetary policy meetings held by the Executive Board of the Riksbank, which means that the rate remains the same for 6-8 weeks. To summarise, therefore, the interbank market rate is steered so that it closely follows the repo rate. The Riksbank's steering of interest rates – in common with that of many other modern central banks differs from the models described in most macroeconomic textbooks. There the starting point is often that the central bank affects the volume of money or liquidity in the economy by buying and selling bonds on the market. According to the simple textbook model, the banks maintain a liquidity buffer in the central bank in the form of a deposit with no interest compensation - known as reserves. When the central bank buys or sells bonds via the banks, the payments are made through the banks' deposit  2  BIS Review 80/2001  accounts in the central bank– the central bank can thus steer the size of the reserves the banks have invested in the central bank.

Over time, such a monetary policy will lead to higher inflation, not higher employment. Unemployment has declined markedly and is now very low. At the same time, wage earners’ share of corporate earnings has declined. Historically, there has been a clearly negative relationship between unemployment and wage shares. Developments in recent years have paved the way for strong growth in employment, also today when the cyclical upturn is in a mature phase. Developments in the past years must be seen against the background of the effects of a number of positive supply-side conditions on the Norwegian economy. High export prices and low import prices have led to a low rate of increase in consumer prices and an increase in household real wage income, but also to high corporate earnings and solid growth in employment. 1  See, inter alia, Rogoff, K. (2003), “Globalization and Global Disinflation,” Federal Reserve Bank of Kansas City Economic Review, Fourth Quarter, 45-78. BIS Review 102/2007  3  At the same time, productivity growth has been unusually high. The effects of this are more complex. In the early phase of the recovery, this delayed a pick-up in employment growth, but also contributed to low inflation. Increased productivity means that demand can remain high without rising inflation. The interest rate was set at a low level to bring inflation back to target. At the same time, this also enabled enterprises to make use of a higher growth potential. Eventually this also resulted in higher demand for labour.
The approach will also continue to be risk-based, in which the expectations in governance and risk management are higher for the larger and more complex financial institutions, and when these expectations are not met, the Bank will respond with supervisory actions. The Bank will continue to act pre-emptively to deal with the risks, at the institutional and system levels. Judgements will be applied based on a broad range of information available on the potential build-up of risks. The regulatory framework adopted will continue to be consistent and aligned to international standards to safeguard the stability of the financial system. In this regard, Bank Negara Malaysia will implement the changes by the Basel Committee to improve the risk capture of Basel II for trading book, securitisation and counterparty credit risk exposures. We will also positively consider developments by the International Association of Insurance Supervisors to achieve internationally consistent capital standards for insurance companies. We will be introducing changes to improve the liquidity framework and strengthen the quality of capital, focusing in particular on equity as the predominant form of capital. We also support the global initiatives that are aimed at reducing the complexity of products, strengthening transparency and improving incentive structures. An area of current international deliberation which will have a significant implication on the domestic regulatory and supervisory environment is the increased emphasis on the macroprudential dimension of regulation and supervision. A key lesson drawn from the crisis has been the inadequacy of supervision that was primarily focused on individual institutions.

These are the role models for the next generation. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8