samchain/econo-pairs-v1 huggingface dataset:
Heng Swee Keat: The first Shariah-compliant ETF in Singapore Congratulatory remarks by Mr Heng Swee Keat, Managing Director of the Monetary Authority of Singapore, at the Launch of Daiwa FTSE Shariah Japan 100 ETF at SGX Centre, Singapore, 27 May 2008. *  *  *  President and CEO, Daiwa Asset Management, Mr Michihito Higuchi Vice-President and Head of Listings, Singapore Exchange, Mr Lawrence Wong Distinguished guests Ladies and gentlemen, good morning. I am pleased to join you at this ceremony to mark the debut of the Daiwa FTSE Shariah Japan 100 Exchange Traded Fund (ETF), the first Shariah-compliant exchange traded fund to be launched in Singapore. The Daiwa FTSE Shariah Japan 100 ETF will provide retail and institutional investors the opportunity to access the Japanese capital markets via a Shariah-compliant product traded on the Singapore Exchange (SGX). ETFs are one of the fastest growing asset classes in the investment funds industry. They aim to track the performance of indices and provide access to a wide variety of markets. As at the end of 2007, global assets managed via ETFs are estimated to have increased by 41% over the previous year to reach about $ billion while the total number of primary listings has increased by 64% to 1,171. There are currently 18 ETFs listed on SGX covering regional markets such as the AsiaPacific and ASEAN, and individual markets such as China, India, South Korea, Taiwan and Japan, as well as alternative investments such as gold and commodities.

These provide investors with the opportunity to access key Asian markets, to diversify their investment portfolios and to execute their investment strategies. Daiwa’s FTSE Shariah Japan 100 ETF marks a key development for our Islamic finance industry. To facilitate the development of this growing industry, over the past few years, we have reviewed and refined our regulatory framework and tax structures. In February this year, the Finance Minister announced in the Budget that a 5% concessionary tax rate would be granted for income derived from Shariah-compliant fund management, lending, and insurance & reinsurance. The tax exemption on income from Sukuks that are Qualifying Debt Securities will also be extended to all investors. A few weeks ago, MAS announced that it will be developing a facility for the issuance of Singapore Dollar, sovereign-rated Sukuks to meet the needs of financial institutions conducting Shariahcompliant activities in Singapore. These Sukuks will be issued on a reverse enquiry basis, and will initially be priced off the Singapore Government securities market. These initiatives are catalysed by feedback from the industry, which has taken an active interest in the development of Islamic Finance in Singapore. I would like to thank the industry for your feedback. We have seen promising growth. A dozen Middle Eastern banks are operating in Singapore, adding Islamic financing activities to their conventional financing. Singapore's first Islamic Bank, Islamic Bank of Asia has just opened its first overseas office in Bahrain. International banks are structuring Islamic financial products in Singapore.
Confidence in the Swedish banks declined dramatically and they had problems in continuing to finance their short-term loans on the international interbank market. The bank crisis was upon us. To prevent the system from collapsing, the central government was forced to rapidly intervene with a general, overall blanket guarantee that promised that all of the Swedish banks would meet all of their obligations, existing and future, towards all types of lender. All in all, the bad loans for the seven largest banks, when they were finally mapped out, amounted to 12 per cent of GDP. Six of these banks risked falling below the minimum limit for their capital buffers and therefore needed more capital from their owners or from the central government. An important principle in managing this crisis was that banks that were not viable would be closed down and their owners would lose capital. One bank was closed down and its assets were transferred to another bank, while the original bank was declared bankrupt. The effects of the crisis The effects of the crisis were considerable, not only for the banks but also for society as a whole. Growth fell drastically and was negative for three years in a row. Unemployment rose from just under 2 per cent to over 8 per cent between 1990 and 1993. However, the effects were also substantial with regard to the financial system itself. As I see it, there are two reasons why the financial crisis in Sweden developed as it did and was so damaging.

2  BIS central bankers’ speeches  A robust counterparty framework, specifically one that provides reliable execution capacity of sufficient scale and is facilitated by a liquid and smoothly functioning secondary market for Treasury securities, aids the Desk in pursuing our objectives with respect to the implementation of monetary policy and the activities we undertake in support of the Treasury. But these benefits must be balanced against the cost of maintaining counterparty relationships. Staff time and resources are required to monitor and manage these relationships to ensure that we are getting good value not only in terms of trade execution, but also in terms of market monitoring, an important function that the Desk provides for the benefit of the Federal Reserve System and the Treasury. A large, diverse set of counterparties can contribute to competitive trade execution and richer sources of market intelligence, as well as the increased operational coverage and resiliency that support adaptation to changes in market structure or operating directives. But diversity also entails complexity and requires initial and ongoing investment in infrastructure to support a wider range of firm types. Evaluating and onboarding firms, setting up transactional systems and account arrangements, and monitoring and evaluating counterparty performance and risk all take time and resources that must be balanced against the potential benefits of a larger list.7 One final consideration that bears mention is the concept of an imprimatur that some market participants associate with status as a New York Fed counterparty.
This was not the case; inflation expectations in the slightly longer term were fairly well anchored around 2 per cent. At the same time, the Riksbank’s forecasts showed that economic activity would remain strong. This period illustrates how important it is for monetary policy to analyse the driving forces behind inflation and for the policy to be forward-looking. When inflation rose last year, this was also largely due to supply factors, such as the price of oil and other commodities, which could not be checked even in the short term by monetary policy. However, in the background was a long period of high growth and increased tightness in the labour market. At the same time, productivity growth was declining and wages were rising. This entailed increased cost pressures, which justified a higher interest rate. Monetary policy continued to tighten even when signs of weakening in economic activity began to appear. When we look ahead we can see that prices measured in terms of the CPI will fall this year and inflation will thus deviate substantially from the target. The primary cause of this is that mortgage rates and energy prices are falling rapidly when calculated as an annual percentage change. If we exclude the effect of our own interest rate cuts and the effects of falling energy prices, prices are not expected to fall.

In the euro area, the cumulated output loss from the second quarter of 2008 (when growth turned negative)  1  The total potential writedowns on the assets of global financial institutions (including banks pension funds, insurance companies and hedge funds) over the period 2007-2010 have been estimated at USD 4.1 trillion, of which about two thirds (USD 2.8 trillion) are expected to be borne by banks (see International Monetary Fund (2009)). These estimates, which include future potential writedowns until the end of 2010, are based on a number of projections of future economic activity and assumptions about asset market developments, and estimates of the likely impairment charges on loans. They are, therefore, subject to a substantial margin of error. 2  Figures based on S&P European 350 Index. It should be noted, however, that this index has recovered significantly since March 2009; market capitalisation rose from € trillion on 9 March to € trillion by 26 May 2009. BIS Review 65/2009  1  until the first quarter of this year, amounts to 5% of GDP, which is equivalent to about EUR 400 billion. 3 In order to mitigate the effects of the crisis on the financial sector and the real economy, governments and central banks have taken strong and decisive action. Indeed, in many cases they have implemented measures that are extraordinary in size and scope.
A big part of that reflects recent success in averting tail risks that were weighing on investor confidence. Europe’s common currency hasn’t fragmented, the U.S. didn’t go over its fiscal cliff, and China hasn’t had a hard landing. But in each of these cases, there is plenty of unfinished business, and important challenges remain. In the euro area, while there are grounds for cautious optimism, much remains to be done to restore confidence and growth. Fiscal adjustment is far from complete and is likely to continue to weigh on growth for some time to come. Financial conditions in the periphery have improved, but remain much less supportive than in the core. Plans to build a banking union and deepen economic, fiscal and political integration remain very much works in progress. And, as the elections in Italy have reminded us, there is an important political counterpart to the economic and financial challenges and risks confronting the region. In the U.S., we are only part way toward addressing our fiscal challenges. Recent measures are chipping away at the deficit, but the approach hardly corresponds to anybody’s ideal of efficiency. While there is little mystery about what ultimately needs to be done, we simply have not yet mustered the political will to make the compromises needed to get there. And, unfortunately, with deadlines coming – and one just having passed for decisions on mandatory spending cuts and spending and borrowing authorizations – we can’t be comfortable that this is going to go smoothly.

However, the corporate sector faces major challenges down the road. Against a backdrop of lower expected cash flows and higher debt, the solvency position of some firms has worsened, especially in the case of those operating in sectors more adversely affected by the pandemic that are still facing some restrictions. Thus, with the crisis stretching out, concern has now shifted from liquidity risk to the deterioration of the solvency position of firms. Therefore, economic policies should now focus on supporting viable businesses whose solvency has worsened as a result of the COVID-19 shock, given that the potential liquidation of these firms would be a drag on economic recovery via different channels. First, due to the loss of employment and capital that follows the closure of any company. Second, firms’ solvency problems may end up affecting the health of lenders if these problems are significant and widespread within the corporate sector. And third, in extreme scenarios, the ability of of some banks to provide new lending could be affected, generating negative financial loops. We should take into account as well that a high level of corporate debt, even if not leading to defaults, can still be a drag on investment in the following years, lowering productivity and economic growth, as the experience from the global financial crisis indeed shows.
(Exhibit 5) Of course, the Federal Reserve’s large scale interventions in the Treasury market over this period may also have had an impact on this measure. Turning to corporate bonds, given their heterogeneous nature, liquidity in the corporate bond market depends on the ability and willingness of dealers to hold these securities on their balance sheets while they find buyers. Disaggregated data on dealer balance sheet holdings have only been published since April 2013. While limited in terms of its history, these data indicate no clear reduction in investment grade security holdings over time, but do show a significant reduction in high-yield security holdings since the end of the financial crisis. This might be indicative of deterioration in market liquidity in corporate bonds. To investigate corporate bond market liquidity in more detail, let’s examine three liquidity measures: the average trade size, “effective” bid-ask spreads and price impact. The evidence on the average trade size for investment grade corporate bonds indicates a slight reduction from between $ to $ in the early 2000s to around $ in the last few years. (Exhibit 6) However, price measures of corporate bond liquidity do not substantiate the trend in this quantity measure. The effective bid-ask spread has been trending down since the early 2000s, around the same time that TRACE reporting was introduced. The spread spiked during the financial crisis, but is now lower than its pre-crisis levels.

Even if one were to read the evidence as supporting the notion that liquidity has become somewhat more costly, this does not imply that we should simply unwind recent regulatory requirements. First, as I discussed, there are non-regulatory factors that could be more important factors. Second, even if a connection could be made to regulatory causes, the costs of any reduction in liquidity or increase in liquidity risk might be low relative to the benefits of the regulations. As I noted at the outset of my remarks, recent regulatory changes have been designed to produce a safer and sounder financial system. Higher capital and liquidity requirements have made major financial institutions less prone to failure. This can be seen in the sharp fall in credit default swap spreads for major dealers in recent years. Moreover, other steps have made the financial system more robust to the failure of a systemically important firm. For example, the shift to central clearing of over-the-counter derivatives through central counterparties (CCPs) has reduced bilateral risk exposures, and significant progress is being  2  The Federal Reserve’s large scale asset purchases presumably have also played a role by removing a large volume of Treasury securities from the marketplace. BIS central bankers’ speeches  5  made on how to resolve the failure of a systemically important financial firm in a way that does not threaten the entire financial system. 3 As I see it, the prior regime did not sufficiently foster financial stability, a necessary condition for sustained economic growth.
Paul Tucker: Inflation, growth and stability – balancing the Bank of England’s economic priorities Remarks by Mr Paul Tucker, Deputy Governor of the Bank of England, at The Institute of Economic Affairs’ 27th Annual Conference ”The State of the Economy”, London, 23 February 2010. *  *  *  Many thanks for input to Peter Andrews, Roger Clews, Iain de Weymarn, James Proudman, Gareth Ramsay and Victoria Saporta. For background work to Michael Grady and for secretarial support to Sandra Bannister and Cheryl Feeney. It is an understatement that the current macroeconomic conjuncture poses major challenges for policy. There are also major lessons for the overall framework for preserving stability in our economy. I shall talk about both. Both the challenges and the lessons stem from the source of the crisis: a crash in the credit system affecting a domestic and global economy which had become severely imbalanced. Broadly, from the autumn of 2008 onwards, the sharp falls in economic activity were most pronounced in areas heavily dependent on credit and optimism (Chart 1). There was a vicious spiral down in world trade, where supply chains had become longer, with more counterparty risk and so more dependence on credit. Likewise in industrial production (Chart 2). Business investment collapsed (Chart 3). There was sharp destocking, helping to alleviate firms’ financial pressures. Things are better than they were. Capital markets have mostly reopened, but spreads are still higher than before funding markets deteriorated during 2007 and bank lending has been very weak.

Norges Bank is the source for figures from 1996. BIS Review 16/2009  Equity capital in investment banks in the US and Europe was very low, as low as 2-3 per cent of total assets. Many of these banks have now collapsed. The authorities in many countries are working to enhance financial market resilience. For Norway, it would not be appropriate to return to the regulatory regime of the postwar period. Interest rate regulation, credit budgets, a wide range of state banks, regulation of crossborder capital movements and a fixed exchange rate are not the answer. Instead, new and higher capital requirements must be imposed on banks. Banks calculate how much capital they need using their own risk models. The models capture losses and gains previously generated by lending. Equity capital requirements are determined by previous experience of the risk exposure of investments. One drawback is that the historical basis for the models, and hence for the risk assessments, is too limited. With losses now rising, as a result of the abrupt and pronounced turnaround, banks must increase equity capital. Thus the rules governing capital requirements amplify the economic cycle. Three changes are particularly relevant: First, for a given risk assessment, capital requirements must be higher. Second, banks must not be able to reduce capital below a minimum level even if they extend loans that, according to the models, seemingly involve low risk. Third, banks must build up strong capital buffers over and above the minimum requirement in normal times.
Finally: as things look today there are, in my opinion, specific circumstances in Sweden, especially structural vulnerabilities, that justify continuing to complement the internationallyagreed requirements with stricter requirements in certain areas. One of the greatest risks I see as far as Sweden is concerned is the mortgage market. The measures needed to come to terms with this have not been in focus here today, but this is certainly an issue I will return to. Today, I have instead talked about international regulations and about Sweden’s need to go further in some respects. Those I have mentioned today are higher capital requirements, LCRs per currency, risk-weight floors for mortgages and the countercyclical capital buffer. In the case of the leverage ratio and the NSFR, we need to examine more closely whether the Riksbank should work for stricter requirements in Sweden than the upcoming international minimum requirements. BIS central bankers’ speeches  7

The report aims to provide insights to our stakeholders, namely investors, analysts and the business community on the current state and future potential of the Islamic financial sector in Malaysia. In documenting our journey, the report also seeks to present the lessons learned. Its in-depth information, featuring Islamic banking, takaful, Islamic capital market and education; and independent due diligence position the report as a potential beacon for interested investors. While we hope that the strong value propositions of Islamic finance in Malaysia are selfevident, today’s global markets would require accurate, timely and objective information that would enhance the confidence of businesses to use the services offered by this sector. The publication of the five Islamic finance country reports by IRTI would certainly add greater depth to the wealth of information available for the global community. In highlighting the Islamic finance prospects and opportunities across regions, it is my hope that trade and business linkages would further expand in the future. I would like to highlight a specific issue in my remarks today. The need to elevate Islamic finance to another notch; intensifying cross-border linkages among jurisdictions that practise and promote Shariah compliant financial services. An ambitious undertaking; but a necessary initiative that I thought would spearhead the next exponential growth of the industry. There are many prerequisites, but I would like to touch on four of them. Firstly, the global supply of a wide range of high-quality, competitive and innovative Islamic financial products and services that meet the requirements of international businesses.
A common basis of information and analysis may facilitate assessment and comparison of climate risk in individual institutions, and lead to a more correct pricing of risk. International cooperation could be fruitful in this work, including in the NGFS context. Responsible investment at Norges Bank In its role as the GPFG’s owner, the Norwegian Ministry of Finance specifies the investment universe, benchmark index, risk limits, and requirements. Norges Bank shall make investment 1/3  BIS central bankers' speeches  decisions and exercise ownership rights independently of the Ministry. Within this framework, Norges Bank works on climate risk across the GPFG’s three asset classes – listed equities, listed bonds, and unlisted real estate – within a general framework of objectives. By end-June 2019, the total market value of the fund was close to USD 1.1 trillion, corresponding to more than three times mainland GDP of Norway. The United States is by far the greatest receiver of funds, amounting to 41 percent of the total. To spread risks and capture global growth, the assets were invested in over 9,000 companies in more than 70 countries. We benefit from free and open markets that enable an efficient global allocation of resources. The objective is to achieve the highest possible return with acceptable risk. Responsible investment supports this in two ways. First, it seeks to improve the long-term economic performance of the investments. Second, it seeks to reduce the financial risks associated with Environmental, Social and Governance (ESG) practices of companies in the portfolio.

As you can probably tell by now, the internationalisation of the RMB poses many unique opportunities for Hong Kong and it is time to do our part. We continue to look to the TMA’s active participation in this journey for Hong Kong. 4/4  BIS central bankers' speeches