samchain/econo-pairs-v1 huggingface dataset:
I want to pause here to acknowledge that, as an overnight rate, SOFR has been the subject of criticism for sometimes being volatile from day to day, especially near quarter- and year-end. I think such criticism is misplaced. Most users of SOFR don’t use a single day’s rate to determine their payments; they use average rates, which are not much affected by daily volatility. Parallel work has been going on in other jurisdictions whose currencies are used in major benchmarks. Working groups for sterling, euro, Swiss franc and yen IBORs11 have all endorsed overnight rates as their preferred alternatives to those rates.12 Three of the alternative rates are (or will be) administered directly by central banks, reflecting the recognition that crucial interest rate benchmarks are a public good, and their integrity and sustainability are key to financial stability. I’ll note that, at the outset of these reform efforts, the idea was not to completely replace LIBOR. LIBOR was being reformed to address its weaknesses as far as possible in the expectation that it could continue to be used. Efforts to “fix” LIBOR proceeded alongside the program to identify better alternatives. The idea was that if there were a more attractive alternative, firms would gradually move away from LIBOR of their own accord, with a minimum of disruption, and that LIBOR then would be seldom, if ever, used. LIBOR could still be inherently unstable despite the 2/8  BIS central bankers' speeches  reform efforts.

But there’s a lot of value in a common approach. If LIBOR ceases and different instruments that use it fall back to different rates or at different times, basis risk will be higher and hedging more difficult. So the ARRC started its fallback work by adopting a set of guiding principles to apply across all product types.15 Among other things, those guidelines suggested that, to the extent practicable and appropriate, market participants should (1) maintain consistency of fallbacks across asset classes and minimize basis risk between products; (2) use SOFR or a benchmark based on SOFR as the replacement rate; (3) minimize value transfer over the life of the contract if the fallback is triggered; and (4) include specific triggers that activate the fallback. Following these overall principles, the ARRC commenced consultations on specific fallbacks for 16 4/8  17 BIS central bankers' speeches  four types of cash products: floating-rate notes,16 syndicated business loans,17 bilateral business loans,18 and securitizations.19 In general, the consultations proposed that following a trigger event—such as LIBOR being discontinued—the instrument would instead pay interest at SOFR or a rate based on SOFR, adjusted so the new rate is comparable to the old one. ARRC’s consultations recognized that different solutions may be necessary or preferable for different markets and products, but promoted common approaches as much as possible. The comment periods for the consultations have closed, and the ARRC is now reviewing the feedback. Final recommendations are expected to be published very soon.
But how can this be done in an environment where interest rates are already very low to start with? It is important to remember that there has long been a trend with falling interest rates around the world – a trend that has nothing to do with monetary policy, but rather concerns ageing populations and other structural factors that have pushed up savings in relation to willingness to invest. In the midst of this the central banks have also had to manage the effects of the financial crisis and a protracted economic slump. Many of them, including the large central banks like the ECB and the Federal Reserve in the United States, have conducted an expansionary monetary policy to support the recovery and bring up inflation, both via very low policy rates and via more unconventional measures such as various asset purchase programmes. Monetary policy in Sweden has also needed to take this into account. So to safeguard the upturn in economic activity and inflation in Sweden and to turn around the negative trend in inflation expectations, we have cut the repo rate down to a negative level, and with effect from the beginning of 2015 we have implemented an asset purchase programme to make our monetary policy even more expansionary. Our assessment is that this monetary policy has by and larger been successful. Market rates have followed our cuts in the repo rate and become negative. And the bond purchases seem to have pushed down interest rates more or less in the way we expected.

Rather, it is to enable the entry of high-quality global talent in a more transparent and flexible way to complement the local workforce in Singapore. The enhanced framework has three key features that facilitate bringing in of talent that businesses need. First, the framework is based on a transparent points-based system. It clearly lists out the criteria that will be assessed for each application. Second, the system is more flexible. If an application for an employment pass falls short in certain criteria, the shortfall can be offset by scoring well in other criteria. Third, the framework facilitates applications where there is a skills shortage locally for specific job roles. A list of job roles where there is local shortage, will be developed for each sector. We want this list to reflect the needs of our financial institutions. MAS will be seeking the industry’s inputs in the next 1 to 2 months, to identify job roles where there is a shortage. The framework has been designed such that most existing employment pass holders will have no problem meeting its requirements. Of course, some financial institutions may need to adjust their workforce profiles, as they transition to the new framework. But they will have ample time to make these adjustments – at least 15 months for new employment pass applications and 27 months for renewals. MAS will work closely with financial firms to ensure they have access to the talent they need to grow and that is in short supply locally.
The value of the Petroleum Fund, measured as a percentage of GDP, will rise in the years ahead. On the other hand, Norway, like many other countries, is facing substantial fiscal challenges. The expected dependency ratio, i.e. the ratio of persons over the age of 67 to persons aged 20 to 66, will  BIS Review 34/2005  5  rise sharply in the years ahead. The National Insurance Scheme’s spending on old age and disability pensions, based on the current social security rules, is increasing. The return on the Petroleum Fund can only cover a small portion of this increase. According to Ministry of Finance calculations, a funding requirement equivalent to 6 per cent of GDP will still be uncovered in 2060 given an oil price of NOK 230 (2005-kroner), or around USD 35 per barrel. Oil futures 6-7 years ahead are now higher than this. If oil prices remain as high for the foreseeable future, the funding requirement will be somewhat lower. To base decisions on this, however, would be a very risky strategy. Even though Norway’s petroleum wealth is substantial, it is our human resources that account for most of our national wealth. Even a small increase in the “return” on human capital might generate considerable gains. The return on this capital partly depends on our pension schemes and the application of social security rules. These should be designed in such a way that they provide incentives and opportunities to work. Labour market legislation must also promote production and employment.

To conclude, I should like to join the Chairman of the National Securities Market Commission in expressing my sincere and deep gratitude for the work and effort over the past eight years of all those persons and institutions who have collaborated directly or indirectly on the Financial Education Plan. Thank you very much your attention and I hope you will enjoy this event. 5/5
2  BIS central bankers’ speeches  considerable losses for other financial institutions, including the central bank itself.5 In this environment, a bank’s private choice of liquidity buffers will not reflect what is socially optimal.6 In the presence of such externalities, there is indeed a need for explicit regulation. This leaves the choice open between regulating liquidity through prices (i.e. through interest rates) and through quantities (i.e. liquidity buffers), hence the intimate interaction between monetary policy and prudential regulation of liquidity.7 Similarly, an expectation of public sector intervention and support for banks in crisis can create moral hazard and distort the incentives faced by financial institutions.8 As a consequence, the liquidity buffers chosen by banks could be insufficient. Such considerations call again for regulators to set and enforce prudential rules, and for central banks to act in a way that jointly is socially optimal. The new liquidity regulation: Basel III liquidity standards Let me now discuss in some detail the Basel III liquidity standards agreed upon in December 2010. The international community, through the Basel Committee on Banking Supervision (BCBS), drew up a proposal for liquidity risk regulation. The proposal includes two ratios, the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR). Under the LCR, banks are required to hold a minimum level of unencumbered high-quality liquid assets (HQLA), the numerator of LCR, to withstand total net cash outflows over an acute stress scenario lasting 30 days, the denominator of LCR.

Incentives on the liability side of banks’ balance sheet Having discussed how a bank can operate on the asset side of its balance sheet to improve LCR compliance, I now turn to the liability side of its balance sheet. A bank that faces the possibility of a LCR shortfall has the incentive to (i) decrease its reliance on short-term unsecured funding, (ii) decrease the 30 days net cash outflow, and (iii) to replace it by longer-term funding or, if this is too difficult or too expensive, by secured funding. Since outflow rates are zero for secured funding obtained from the central bank, but higher for secured funding obtained from other sources, the bank is more likely to borrow from the central bank by pledging non-HQLA assets, either in tender operations or in the marginal lending facility.14 As a result, this lessens the need of banks to seek funds in the short-term interbank market to ensure that the LCR requirement is met.15 A reduction in the reliance on short-term unsecured funding is an intended consequence of the LCR. However, the implementation of the LCR might then lead to an overall decline in unsecured money market activity, which could be problematic for the euro area. Money markets play a central role for monetary policy transmission in the euro area. This is because the euro area financial system is largely bank-based, and interbank money market interest rates represent the marginal cost of funding bank loans.
In the case of Malaysia, the High Court of Malaysia has dedicated high court judges to preside over litigation on matters relating to Islamic banking and finance. To undertake a holistic legal review, the Central Bank of Malaysia has set up a Law Review Committee to review the common law-based domestic legislations to assimilate the Shariah principles. The aim is to remove any legal impediments and ensure the unhindered and efficient functioning of the Islamic banking and  BIS Review 49/2005  5  financial system. The Central Bank Act has also been amended to provide for the establishment of a Shariah Advisory Council at the Central Bank as the sole authority and reference on all Shariah matters pertaining to Islamic banking and finance. The Islamic financial system today has emerged as an important component of the overall Malaysian financial system that contributes to the growth and development of the Malaysian economy. Since 2000, the domestic Islamic banking industry has been growing at an average rate of 18% per annum in terms of assets. As at end-2004, total assets of the Islamic banking sector increased to RM94.6 billion, accounting for 10.5% of the total assets in the banking system. The market share of Islamic deposits and financing also increased to 11.2% and 11.3% respectively. As the domestic Islamic banking industry progresses into a more advanced stage of development, significant developments are shaping the industry's financial regulatory infrastructure.

It was established to promulgate the international regulatory and supervisory standards for Islamic financial institutions worldwide aimed at achieving harmonisation of Islamic banking practices, fostering best practices and securing soundness and stability in Islamic finance. Another initiative to accelerate the integration of Islamic finance was the setting up of the International Islamic Financial Market or IIFM in 2002. The IIFM provides the environment to link all the financial centres around the world that participate in Islamic finance, thereby encouraging active participation by both Islamic and non-Islamic financial institutions  6  BIS Review 49/2005  in the secondary market for Islamic financial instruments. As the volume increases, it would strengthen the inter-linkages and integration amongst the Islamic financial centres. While having a Master Plan will provide a shared vision and a common goal, it needs to be recognised that the evolution of an Islamic financial system with all its component parts cannot be achieved within a short period of time. Having the medium and longer term goals outlined however, provides a basis to ensure the short term initiatives will be consistent and coherent with the long term objective. In other words, the construction of the building blocks must move in the right direction. As part of the process, each Islamic banking institution needs to formulate its own strategic plans and short-term action plans within this longer term perspective. With the foundations built and the plans in place, the future is by no means secure.
Finally, 2 See the EMI report: “The single monetary policy in Stage Three - Elements of the monetary policy of the ESCB”, February 1997. 3 See, for instance, Lars E.O. Svensson, “Inflation forecast targeting : Implementing and monitoring inflation targets”, European Economic Review 41 (1997), 1111-1146. 4 Lecture given by Mervyn King at the London School of Economics on Wednesday 29 October 1997 to mark the tenth anniversary of the LSE Financial Markets Group. BIS Review 112/1997  -3-  monetary targeting by the ESCB would be in continuity with the strategy implemented by the Bundesbank since 1975 and by the Banque de France since 1976. However, this strategy hinges on the stability of money demand. Preliminary research has shown that EU-wide money equations often perform better than comparable national equations.5 Nonetheless, this may provide no safe guidance for the starting period of EMU in so far as the move to Stage Three constitutes a change of regime which might lead to breakdowns in empirical relationships. 1.3. Indicators: an important role for the exchange rate and long term interest rate of the euro It is likely that, while avoiding a “looking-at-everything” approach, the ESCB will closely monitor, in addition to the intermediate objective, a broad set of other economic and financial indicators to help assess the risks to future price stability. In this set of indicators, emphasis will probably have to be laid on the exchange rate and the long-term interest rate of the euro, for at least three reasons.

These guidelines will include prior approval by the ECB for transactions exceeding thresholds to be specified and will also apply to member states’ transactions with their foreign exchange working balances. The ESCB will have the technical capacity to conduct, if need be, foreign exchange intervention in order to counteract excessive or erratic exchange rate fluctuations of the euro against the major non-EU currencies (e.g., the US dollar). The need for intervention could also arise either in the context of G7 concerted operations or within the framework of the ERM II. To this end, the ESCB will use the pool of foreign assets transferred from the NCBs to the ECB. The framework that has been designed for domestic as well as foreign exchange operations allows the ESCB to build on the expertise that NCBs have acquired over the years and to make an extensive use of existing operational capacities in NCBs (dealing room, front office, back office). Common sense dictates making use of equipment, human resources and expertise currently available at NCBs. 2.4. A decentralised execution of operations A key feature of the single monetary policy is indeed that it will be decided in a centralised manner, by the Governing Council of the ECB, and executed in a decentralised manner, by the national central banks.
Further, several measures are in the pipeline, including the issuing of regular Monetary Policy Reports, which will be developed into Inflation Reports in the future and expanding the public awareness outreach programme, which will be implemented during next two years as set out in the road map for FIT. As another important step, we re-commenced publishing an advance release calendar for regular monetary policy announcements last year. Continuing this practice, we wish to present the advance release calendar for monetary policy announcements for the year 2019 as set out below. 21  Monetary Policy Announcements in 2019 Announcement No. Date of Announcement  1  22 February, Friday  2  10 April, Wednesday  3  31 May, Friday  4  12 July, Friday  5  23 August, Friday  6  11 October, Friday  7  15 November, Friday  8  27 December, Friday  Currently, although the global economy is somewhat less robust than it was in the first half of 2018, the pace of global growth remains strong pointing to further normalisation of monetary policy in major economies. This has necessitated most emerging market economies to adjust their monetary policy in view of addressing economic imbalances associated with capital flows, currency depreciation, trade wars, etc. Taking such trends into consideration and responding to domestic economic developments, we will continue to remain vigilant in formulating our monetary policy to ensure sustained economic and price stability in Sri Lanka. 22  3.

This trend has the potential to contribute to the rebalancing of global growth and thus to address the structural imbalances currently prevailing in the global economy. Households therefore need to be financially strong if this trend is to be sustainable. Financial literacy will allow households to have the increased confidence to make sound decisions regarding their consumption expenditure. Of importance to Central Banks is that consumer credit remains within prudential limits and do not impose undue risk to the consumers that can often result in financial stress. Consumers not only need to be able to assess their capacity for expenditure, savings and debts but also have to be able to select from the array of financial products and delivery systems that will best meet their requirements. Households need also to be aware of and understand the financial risks associated with their transactions. Greater financial literacy can contribute to mitigating these financial risks. The growth in household debt is an increasingly evident phenomenon in Asia. Over the period of 2000 to 2004, the volume of consumer loans across seven major Asia Pacific economies grew at an average annual rate of 9 percent, relative to total loan growth of 5.2 percent and corporate credit growth of 2.6 percent. The risk emerges when debt reaches a level where it cannot be sustained, and ultimately leads to increased financial stress. It is therefore important that borrowers are financially savvy to manage financial risks in a proactive and constructive manner.
It is of course also possible that regulatory changes and levels of compensation have had some 1 significance for the rise in sick leave. The next diagram shows that if the figures for sick leave are divided up according to duration, it is mainly the long-term sick leave that has increased in recent years (see diagram 2). The number of persons who have received sickness benefit for one year or more increased by an average of 26.8 per cent during the period 1999 to 2001. One explanation for this development may be that the rules for qualifying for sickness pension, which is often preceded by 2 a very prolonged period of sick leave, were made more stringent in 1997. There are also studies that show a connection between changes in the levels of compensation for sickness or other rules in the national insurance system, and behaviour with regard to reporting sick. For instance, when the system of no compensation on the first day of sick leave was abolished and sickness benefit was raised in the 1980s, sick leave increased, and when the rules were made stricter and the benefits less generous in the 1990s, sick leave declined. Incentives connected with the interactions of unemployment insurance with sickness insurance may also play a part in the increase in the number of persons reporting sick.

This means that the curve normally has a negative slope. An outward shift in the curve can be interpreted as deterioration in matching in the labour market, as the number of vacancies for each given level of unemployment is higher. Movements along the curve may depend on economic changes. When there is an improvement in the level of economic activity, the number of vacancies and recruitment rise, but at the same time the difficulties and time required to fill the vacancies increase. The large rise in the unemployment rate in Sweden at the beginning of the 1990s was followed by a reduction in the number of vacancies, which can be interpreted as a movement along the curve. During the mid-1990s, unemployment appeared to have stabilised at a high level, but in recent years unemployment has been held back, while the vacancy ratio has risen. The Beveridge Curve appears to lie further out than before, which could indicate that the matching process has deteriorated and that the labour market has become less flexible. One reason for a possible outward shift could be that the persons who became unemployed during the crisis years of the 1990s have had difficulty in returning to the labour market.