samchain/econo-pairs-v1 huggingface dataset:
Despite the global financial crisis and European sovereign debt problems, the Islamic capital markets have shown unparalleled resilience over the past few years. In particular, the sukuk market climbed to new heights for the fourth year in a row, with global sukuk issuance exceeding $ billion in 2012, three times higher than that before the global financial crisis.2  1  Source: KFH Research. 2  Source: KFH Research. BIS central bankers’ speeches  1  Strengths of Hong Kong in developing Islamic finance 6. Hong Kong is well positioned to add momentum to the globalisation of Islamic finance. As a free and open economy and major international financial centre, Hong Kong has developed a highly liquid and deep capital market with a strong presence of international financial intermediaries and a diverse base of borrowers and investors, a well-established financial infrastructure, a sound legal system, a transparent regulatory framework and a simple tax regime. 7. In addition to these general capabilities in financial intermediation, Hong Kong can play a unique and pivotal role in bridging the investment needs from the Middle East and the funding needs in Mainland China. 8. Many Middle East investors are now actively looking for investment opportunities beyond their domestic borders to diversify their investment portfolios. This trend has been supported by the huge pool of oil-driven liquidity in the Middle East.

Last year alone, oil revenues in the Gulf Cooperation Council countries were estimated to be about $ billion.3 Mainland China has been one of their favourite investment destinations given its strong economic growth and emerging market opportunities. 9. On the other side, Mainland China is facing huge funding needs for infrastructure development projects. As China’s global financial centre, Hong Kong is an important conduit for Mainland companies to access the international markets and the preferred offshore capital raising centre for Mainland issuers over the past decade. This is apparent from the fact that over half of our stock market capitalisation is Mainland-related and from the high participation of Mainland entities in our dim sum bond market. 10. Against this backdrop, we believe Hong Kong is well-placed to meet the strong investment demand from the Middle East and other parts of the world for Mainland-related Islamic financial products. At the same time, Hong Kong can also provide an ideal platform for issuers from the Mainland and other parts of Asia to issue Islamic financial instruments for satisfying their funding needs. Bringing Islamic capital markets to the mainstream 11. Addressing one of the key issues to be discussed today, Hong Kong’s involvement in Islamic finance will also help to bring Islamic capital markets to the mainstream in two ways: provide a level playing field and encourage market participation in Islamic finance. 12. To bring Islamic financial products to the mainstream, a key task would be to level the playing field with their conventional counterparts.
We created the Tracker Fund in a little under 6 months, from the time the EFIL Board recommended on 21st June 1999 that this was the way to launch the disposal programme. We did this at a time when market sentiment in Asia was just beginning to become less negative. If this were not enough of a challenge, we also had the shadow of Y2K hanging over us! By some miracle or rather due to the sheer hard work, long hours and perseverance on the part of the project team, we overcame countless operational, IT, legal and regulatory challenges thrown at us. Just to add to the degree of difficulty, we had to work in the full glare of the public eye, knowing that any miscommunication (however slight) could have a severely negative effect not only on our stock market but also on the international perception of Hong Kong. I have to tell you that making the decision to use an ETF as the disposal strategy was not an easy one. The strategy was then unorthodox and unproven in Asia, as was the investment appetite for such a product. The investment banking community was perplexed that we should launch an ETF when a block trade or a convertible bond option was so much more “familiar” or “safer”. Our legal advisers were perplexed that we should launch a fund through an IPO.

It should also be noted that, among other considerations, the projections at any given moment are based on a future path of euro area interest rates – implicit in the financial market data available when the projections were prepared. For instance, the September projections were prepared on the information available at 22 August 2022, and incorporated the expectation of a 50 bp hike at our September meeting, followed by subsequent further increases14. Given that the medium-term inflation forecast was above 2%, returning inflation to our target demanded that we accelerate the path of interest rate hikes as compared with that foreseen in the projections. Hence the exceptional increase of 75 bp. 14  Specifically, the projections were based on short-term interest rates of 0.2% in 2022, 2.0% in 2023 and 2.1% in 2024. It should be borne in mind that market expectations for interest rates include not only expectations for ECB policy rate increases at any given time, but also a risk premium component. 8  Ensuring that inflation returns to our target levels will require additional interest rate hikes. Of interest in this analysis are not only the baseline projection scenario, but also the associated risks. These can be seen, for instance, in the adverse scenario described, in which, as already noted, inflation stands at 2.7% in 2024, above the figure forecast in the baseline scenario (2.3%) and further still from our 2% target. One of the assumptions underlying this downside scenario is a complete cut-off of Russian gas supplies.
The deliberate work on liberalising trade and capital flows, as well as payments for these transactions, within a strong multilateral framework began almost sixty years ago and is an important explanatory factor behind the increased economic growth we have experienced since then. The strategy was mainly based, within the framework of the GATT, on a gradual removal of trade barriers and the building up of a multilateral trade system via regular negotiating rounds and, within the framework of the IMF, to jointly promote financial stability and free payments, initially for current account transactions and later for an increasing number of capital account transactions. Moreover, the World Bank was established, whose primary purpose is now to reduce poverty in the world. The endeavours towards liberalisation have been, and still are, very successful. With regard to trade, this can be illustrated by the fact that average tariffs on manufactured goods have fallen from over 40 per cent at the end of the Second World War to under 5 per cent today. Trade liberalisation has led, through increasing specialisation and competition, to a more efficient distribution of labour between countries, which has contributed to higher growth, and also to greater options and lower prices for consumers. However, the adjustments have not been easy, as we know from our experiences of the  1 Branchföreningen för Kontorsartiklar, Emballage, Papper och Angränsande produktområden  BIS Review 60/2004  1  changes in the Swedish shipyard and textile industries.

It is therefore probable that the increased structural changes entailed in the liberalisation of sectors such as agriculture and the textile industry would entail demands for support to manage the changes and a better business climate in many industrial nations in order to facilitate mobility between sectors. I have previously mentioned the important work conducted with regard to creating and implementing norms and standards to prevent economic crises in different countries around the world. Despite good results, historical experiences show that crises will probably occur nevertheless. In a few cases this will lead to states experiencing payment problems. We therefore need to have a multilateral framework that can efficiently deal with any problems that arise. Both the IMF and other international forums have put a lot of work into improving crisis management in recent years. Several improvements can be noted, including collective action clauses, which are increasingly used in sovereign bond contracts and will facilitate renegotiation of sovereign bond debts in the future.3 Some progress has also been made within the framework for cooperation between the public and private sectors with regard to a voluntary code of conduct for states’ payment problems. Of course these improvements are very positive. However, my impression is that we need a coherent framework for orderly renegotiations of sovereign debt in countries facing insolvency that cover all types of debt.
François Villeroy de Galhau: Europe at a crossroads – how to improve economic governance and growth performance of the Eurozone? Presentation by Mr François Villeroy de Galhau, Governor of the Bank of France, at the German Institute for Economic Research – DIW Berlin, Berlin, 8 June 2016. *  *  *  I am delighted by the opportunity, kindly offered by DIW, to share some remarks on Europe here in Berlin. As you may know, I have strong ties with Germany. In particular, I completely share the German culture about the importance of responsibility and long-term vision. At this juncture we probably all agree on two things – and my focus today will be that these two things are closely intertwined: •  Monetary policy cannot be the only game in town. •  Although Monetary Union is a success, Economic Union remains to be built. I want to pay tribute to Helmut Schmidt, who said in October 2011: “There was a failure to set the economic rules of the game for the currency union. A powerful authority with responsibility for fiscal and economic policy was not set up.” 1 I will first argue that monetary policy has been doing its fair share (I). I will then discuss the need for a “full coordination” of national economic policies in the Euro area, and discuss what concrete progress can be made (II). Finally, turning to private risk-sharing in the Eurozone, I will focus on the importance of building an efficient Financing and Investment Union (III).

Abundant Savings in the Euro Area Current account balance (% of GDP)  10,0  10,0  7,5  7,5  5,0  5,0  2,5  2,5  0,0  0,0  -2,5  -2,5  -5,0  -5,0  -7,5  -7,5  -10,0  -10,0 2001  2003 Spain  Source : Eurostat, Banque de France  2005 France  2007 Italy  2009  2011 Germany  2013  2015  Euro area  This is why we need to foster more extensive private risk-sharing in the Eurozone, which requires a more integrated financing and investment framework. As the so-called Fratzscher report on Increasing investment in Germany puts it: “the key to a sustainable recovery in Europe lies in faster growth that must be bolstered first and foremost through a joint investment and modernization campaign “. I will come to this issue. But we also need to achieve better coordination of public policies. To that effect, we need to think through the concrete role of a euro area Finance Minister could play. 4  BIS central bankers’ speeches  II. Why we need a “full coordination” institution in the euro area, embodied by a finance minister  Clearly, monetary policy cannot be a substitute for economic policy coordination or for the lack of reforms. If only for that reason central bankers need to take part in this debate, although taking action will obviously remain a decision for political leaders.
1  BIS Review 92/2000  The objective of monetary policy Norway has a tradition of having a fixed or stable exchange rate, although we cannot say that we have had a high degree of continuity in monetary policy. On the contrary. In the 1970s and 1980s, the economy lacked a nominal anchor. Interest rates were low in nominal terms and they were politically  determined. Frequent devaluations were used to redress the negative effects of high price and wage inflation on competitiveness. The average rate of increase in prices between 1973 and 1987 was almost 10%. The value of the Norwegian krone against the German mark was nearly halved from 1973 to 1987. We paid about 2 kroner for a mark in 1973 and close to 4 kroner in 1987. The low interest rate and devaluation policy collapsed in the mid-1980s. Following a shift, which can now perhaps be said to have occurred in 1986, monetary policy has created nominal stability. Through the 1990s inflation in Norway was on a par with the level elsewhere in Europe. At the same time, the value of the krone against European currencies is about the same today as it was in the early 1990s. The exchange rate against the German mark is still around 4 kroner. BIS Review 92/2000  2  Norway abandoned a fixed exchange rate system in 1992 in the wake of heavy speculation against the krone during the period of turbulence in European foreign exchange markets.

Because of the stagnation in the 1990s, inflation has been particularly low in Europe in recent years. Norway, on the other hand, experienced a long period of economic expansion in the 1990s. Since 1997, price inflation in Norway has been higher than in euro area countries, which is reflected in the higher level of interest rates in Norway compared with the euro area. The effects of monetary policy In theory, Norges Bank has two monetary policy instruments: the interest rate and exchange market interventions. However, in Norges Bank’s experience, extensive and sustained exchange market interventions to influence the exchange rate have yielded poor results. Interventions can often lead to game situations where market operators perceive the central bank’s attempt to influence the exchange rate as an interesting opportunity to make a profit. Events in autumn 1992, at the start of 1997 and autumn 1998 show that exchange market interventions cannot stem the pressure on the krone. Norges Bank does not want to intervene in such a way that these game situations arise. However, the Bank may use interventions to a limited extent if the krone exchange rate moves substantially out of line with what we consider to be reasonable based on fundamentals or in the event of exceptional short-term volatility in thin markets. In such situations, there is less risk of ending up in a game situation against exchange market operators.
An inflation targeting framework combines two distinct elements: (a) a precise numerical target for inflation in the mediumterm and (b) a response to economic shocks in the short term. The inflation target provides a rule-like framework on which the private sector can anchor its expectations about future inflation. As Gordon Brown put it in his Mais Lecture in 1999, "a credible framework means working within clearly defined  12  6  To be precise, the angle of gaze remains within a certain range - reported by Gigerenzer and Selten (2001). BIS Review 36/2005  long-term policy objectives, maximum openness and transparency, and clear and accountable divisions of responsibility". It is a natural heuristic around which agents can form their expectations. And the discretion in responding to shocks afforded by inflation targeting allows the central bank to adapt its strategy to new information. That is why inflation targeting is sometimes referred to as a framework of “constrained discretion”. Following a shock which moves inflation away from target and output from its normal level, there is discretion about the horizon over which inflation is brought back to target. But the exercise of that discretion must be clearly explained and justified in terms of the need, in the words of the remit of the Monetary Policy Committee, to avoid “undesirable volatility in output”.

Together, these resulted in a financial network: •  Which was at the same time both robust and fragile – a property exhibited by other complex adaptive networks, such as tropical rainforests;  •  Whose feedback effects under stress (hoarding of liabilities and fire-sales of assets) added to these fragilities – as has been found to be the case in the spread of certain diseases;  •  Whose dimensionality and hence complexity amplified materially Knightian uncertainties in the pricing of assets – causing seizures in certain financial markets;  •  Where financial innovation, in the form of structured products, increased further network dimensionality, complexity and uncertainty; and  •  Whose diversity was gradually eroded by institutions’ business and risk management strategies, making the whole system less resistant to disturbance – mirroring the fortunes of marine eco-systems whose diversity has been steadily eroded and whose susceptibility to collapse has thereby increased. This evolution in the topology of the network meant that sharp discontinuities in the financial system were an accident waiting to happen. The present crisis is the materialisation of that accident. Given that diagnosis, Part 2 of the paper provides some tentative policy prescriptions. The experience of other network disciplines suggests a rather different approach to managing the financial network than has been the case in the past, if future systemic dislocations are to be averted.
This largely reflected a slowdown in the high pace of growth of overnight deposits, presumably reflecting the unwinding of the influence of some special factors related to the start of Stage Three and the introduction of the euro. As the February figures were somewhat higher than those observed in late 1998, the three-month moving average of M3 growth covering the period from December 1998 to February 1999 still increased by 0.2 percentage point to 5.1%. The Governing Council does not regard current monetary trends as constituting a signal of future inflationary pressures, taking into account that the rate of growth of M3 is still close to the reference value of 4½% and considering that it may to some extent mirror the specific environment related to the start of Stage Three. The Governing Council noted that the Harmonised Index of Consumer Prices (HICP) rates of increase for the euro area have now been below 1% for several months, and even though some increases are likely to be seen in coming months owing to the reversal of energy price trends, the more lasting effect on the outlook for future prices comes from the economic environment. Indeed, reflecting the economic environment, many projections for future consumer price increases in the euro area have been revised downwards. In our current assessment of the situation, it appears unlikely that HICP increases will be out of line with the Eurosystem’s definition of price stability.

For this to happen in the best possible way, customers themselves need to pay due attention and obtain accurate information on bank products and services. When necessary in this process, more specialised external expertise may be requested. Secondly, Bank of Albania aims to offer a concrete incentive in this process for commercial banks, by further reducing their costs for the use of AIPS and AECH, payment systems during their transactions in Lek, on their own or their clients’ behalf. We believe that through a more competitive policy in products pricing by the banking sector clients get more benefits and we may see an increase in their number and, subsequently, generate an increase in the revenues of the banking sector. Third area, in which we are focused relates to the requirements to increase accountability in banking institutions management, asking repeatedly that professionalism, dedication and accountability be transformed into a work culture for all banking institutions staff. For that matter, we are continuously reviewing the processes through which the banks realise their decision-making, ensure control of certain activities and reporting chain within their institutions, as well as their interaction with the public. Internal control systems define, mostly, the capacity of an institution to operate securely. These are necessary to avoid any gap that may be abused to the disadvantage of the institution. Hence, in its regular communication with banks, the Bank of Albania has requested that they undertake all necessary measures; in terms of money, human resources and technology; to guarantee the security of any banking [trans] action.
8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  In contrast, in the pursuit of price stability, central banks deploy a handful of policies, primarily changes in interest rates and purchases of assets, that all relate to the current and future price of money. Third, the time horizons are different. The costs of macroprudential interventions can be felt today but their benefits are often realised far into the future. And fourth, these benefits – moderating downturns and avoiding crises – are not directly observable. The bad outcomes that macroprudential policies prevent have to be estimated. But counterfactuals are difficult to sell: “it could have been worse” doesn’t quite have the ring of “you’ve never had it so good.” All these complexities and uncertainties make it challenging to implement macroprudential policies and harder to communicate the rationales for them. Over time, and particularly during good times, these challenges can feed a bias towards inaction. As memories of the last crisis fade, complacency sets in and pressures to ease policies re-emerge. When it comes to financial stability, success is an orphan. These tendencies can be exacerbated by similar time inconsistency problems to those that plague monetary policy. Lighter-touch regulation can be a powerful tool for authorities to boost near-term growth, a temptation that is reinforced by governments motivated by electoral cycles and the complacency curve of the financial cycle. In the long-run, the cost of such indulgence is financial and macroeconomic instability, bringing fiscal strains, lower growth, and higher unemployment.

For this reason, we support the Managing Director’s call for greater progress in implementing the 2010 quota reform and re-composition of the Executive Board. We also emphasise the importance of completing a review of the quota formula by January 2013. 2  BIS central bankers’ speeches