samchain/econo-pairs-v1 huggingface dataset:
For tail risks in particular, the dark corner where we shine the light may not necessarily be the place where those risks reside. Many of the risks inherent in Islamic Finance are similar to those of conventional finance, including credit risks, market risks, market conduct risks, operational and reputational risks. However, the exposure to those risks could differ between conventional and Islamic finance. For instance, Islamic banks are generally exposed to substantially more liquidity risk than their conventional counterparts, as the range of liquid instruments and hedging instruments are more limited. Islamic banks tend also to be more exposed to the property and infrastructure sectors, in part because these are the prevalent asset classes in the Gulf and also in part because Islamic finance has to be based on physical assets. Given the “large and lumpy” nature of such transactions and the tendency for asset bubbles to build up quickly, it is a risk that merits special attention. In addition, there are also risks unique to Islamic Finance such as Shariah-compliance risk. If products are later found to be non-Shariah compliant, the institutions not only face reputational damage, but also costly unwinding of such structures, with possible losses to investors. The third point is that to achieve a good outcome, an effective regulatory approach needs to embrace a tripartite approach. Regulators, financial institutions and investors all have a role to play. Allow me to share briefly the approach that MAS takes.

Many of the assessments were based on complex modeling and did not give sufficient regard to the tail risks in these financial products including the illiquidity risk. In some instances, there may not have been sufficient diversity of views of the risks and pricing of structured credit, with a heavy reliance on rating agencies. Against these key causes, we must include the backdrop of unsustainable macro-economic imbalances that were building up in the global economy, and policy responses which effectively allowed yields to fall to very low levels. The aggressive search for returns also led to severe compression of yields which distorted investor behaviour and long-term valuations. The interaction of high leverage, excessive complexity and compression of yields meant that when sentiments turned, the magnitude of price falls across asset classes have been sharp, and the dynamics of the deleveraging process unpredictable. Financial institutions and markets have also become so highly interconnected that an event in one area sets off a chain of events that magnify and exacerbate the initial shocks. The shocks in the financial markets have now been transmitted to the real economy in the developed countries. Through both the financial as well as the trade and investment channels, these shocks are also propagated to emerging economies. The negative feedback loop between the deterioration in the real economy and sell-offs in financial assets have added to the uncertainty. It will take some time before the crisis runs its course.
What are the fiscal implications of large central bank balance sheets? 23 More research on these topics seems highly desirable. Conclusion To conclude, I want to congratulate Ulrich for an excellent paper that should be required reading in central banks that are thinking about their monetary policy implementation frameworks. Ulrich provides a unique blend of academic and practitioner insight from which I learned a lot. I do believe that there remain some important unanswered questions when it comes to evaluating monetary policy implementation frameworks. Ulrich’s paper starts us on the right path and hopefully the broader research community can start to work on some of these important issues. References Bank of England (2013). “Liquidity Insurance at the Bank of England: Developments in the Sterling Monetary Framework.” Carlson, Mark, Burcu Duygan-Bump, and William Nelson (2015). “Why Do We Need Both Liquidity Regulations and a Lender of Last Resort? A Perspective from Federal Reserve Lending during the 2007–09 U.S. Financial Crisis.” Finance and Economics Discussion Series 2015–011. Washington: Board of Governors of the Federal Reserve System. Eisenbach, Thomas, Andrew Haughwout, Beverly Hirtle, Anna Kovner, David Lucca, and Matthew Plosser (2015). “Supervising Large, Complex Financial Institutions: What Do Supervisors Do?,” Federal Reserve Bank of New York Staff Reports, no. 729, May. Federal Reserve (2007). Press Release August 17, 2007. Goodfriend, Marvin and Jeffrey M. Lacker (1999).“Limited Commitment and Central Bank Lending.” Federal Reserve Bank of Richmond Economic Quarterly,Volume 85/4, Fall. Keister, Todd (2016). “Bailouts and Financial Fragility.” Review of Economic Studies, Vol. 83: 704–736. Tarullo, Daniel K. (2014).

To be clear, this is not going against the wish of Parliament in establishing these structures; rather, it is designed to reinforce that wish by making the pieces work closely together. And, it also emphasises that the Bank of England is a public policy institution with the overarching objective and responsibility of serving the public good. Interestingly, the language that we found to describe this public good comes from the Bank’s original Charter of 1694, though I should recognise that the detail of the description of what constituted the public good in 1694 is rather different from the one we have today. The key thing about a public good is that no individual or group of individuals can be excluded from using or consuming it, and use by one individual does not reduce the availability to others. Fresh air is a public good, and so is the stability of the economy. In our world, history shows that it takes a crisis to provide a decisive impetus to create and maintain the emphasis on the public good. Thus, stable low inflation – monetary stability – received its decisive impetus in many countries, including the UK from the painful experience of high inflation, most notably in the 1970’s. Out of that came a broad consensus on a central idea – low inflation is a necessary condition for stable economic growth and its resulting benefits for well-being.
It is almost impossible for those who are not undertaking full-time studies on the subject to keep pace with these developments. Yet, all of us who are interested in systems that stimulate business and keep the wheels of economies moving at a rapid space, would continue to have a strong interest in the subject. I am also hopeful that, the banking and financial community will continue to promote and foster these studies and practices since these provide the lubrication for the smooth functioning of our complicated financial systems in our ever-changing corporate regimes. We also know that a large portion of global business is in the banking sector. In addition, all business entities, maintain direct relationships with banks and financial institutions. In that context, the preeminent position that is applicable to the banks and enjoyed by them cannot be over-emphasized or under-estimated. Therefore, our efforts to enhance the governance capabilities and capacities within banks and financial institutions have to be at the forefront of our agendas. The trend in the world of targeting governance practices in the banking and financial sector to be at the cutting edge of prevailing practices worldwide is a significant step in the right direction and should continue to be so in the future as well. Let us therefore together and collectively dedicate ourselves to promote and apply good Corporate Governance principles and practices in our respective banking and financial sectors.

Thomas Jordan: No end to the debt society without a culture of stability Summary of a speech by Mr Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank, held at an “NZZ Podium” event, Zurich, 28 February 2012. *  *  *  The complete speech can be found in German on the Swiss National Bank’s website. The most recent financial and economic crisis has resulted in an unprecedented rise in public debt. However, a chronic tendency towards deficits and higher indebtedness has already been observed in a number of countries for the past few decades. Excessive public debt has a negative impact on long-term economic growth, and deprives a country of its freedom of action during a crisis. Sound state finances are thus essential for ensuring an economy's competitiveness and maintaining its social security system, and hence also for social solidarity. Last but not least, excessive public debt also poses a serious threat to price stability and monetary policy independence. Yet how can state budgets be consolidated over the long term? There are limitations on how far fiscal policy powers can be delegated to independent groups of experts. Because fundamental decisions on taxation or expenditure – unlike monetary policy – are aimed at redistribution, they have to be taken at the political level. Even fiscal rules such as a deficit cap or debt ceiling can only achieve a lasting improvement of budgetary discipline if they are supported by a broad political consensus on the advantages of sound finances.
We are six different individuals on the Executive Board. We have different backgrounds and different perspectives. Sometimes this leads to our assessments differing, even if we work towards the same objective. It applies in particular to very uncertain situations like the present one. But the whole idea of having an Executive Board is that disagreement is permitted. Different approaches and opinions enrich the discussions and hopefully lead to better decisions. BIS Review 115/2008  5  My own assessment So how did I reason at the most recent meeting, when I voted for another increase of a quarter percentage point? Well, to begin with it is important to put an individual decision in the right perspective. Monetary policy acts with a time lag and what affects inflation a couple of years ahead is a series of interest rate decisions rather than an individual interest rate increase, or cut, for that matter. My decision in September was therefore closely connected to both the interest rate policy we have conducted over the past few years and the interest rate path I expected to see in the future. A new phase We have experienced a long period of low inflation and high growth from a global perspective, but we have now entered a new phase. In developed economies like the United States and the euro area growth is falling, while it remains high in emerging economies such as China, India and Brazil.

Measures that raise trade barriers typically would protect lower-wage, import-competing jobs, but would also weigh on the prospects for jobs in the more efficient export sector, which tend to be higher-paying. The outcome would be countries producing more where they have a competitive disadvantage, and less where they have a competitive advantage—the exact opposite of what we should be aiming for. For example, in the United States, one of our largest manufacturing exports is aerospace parts (which requires skilled labor) and one of our largest imports is apparel (which requires less skilled labor). These second-round effects would also likely hurt productivity growth. Scarce resources would be used less efficiently and trade protection would likely lessen the level of competitive pressure that helps drive innovation. Moreover, lower productivity growth would likely lead to a slower improvement in a nation’s living standards over time.7  Better Approaches to Deal with Globalization Rather than protectionism, a better policy would be to help domestic workers and companies compete more effectively, rather than compete less. We need additional mechanisms that allow us to more fully capture the benefits from liberalized trade and to more proactively mitigate its costs. Ideally, policy should also better address job losses and income inequality from automation and other technological advances. How we respond should depend on regional and industry circumstances. These include the nature of trade impacts, the skill sets and location of the workers that have been affected, and the amount of resources that can be mobilized to facilitate adjustment.
Export companies are also facing a decline in demand, while the picture for companies producing for the domestic market is more mixed. In many companies, concern has been expressed about the sharp wage growth of recent years and attention is being increasingly focused on cost reductions. Companies are making less use of temporary labour, with man-hours being reduced more than the number of permanent employees. Some think than downsizing may be more in focus in the period ahead. In general, companies are uncertain about the next three-month period, but a majority expects conditions to stabilise. In my address here last year, one of the themes was the outlook for manufacturing industry. This year, I would like to look more closely at developments in private service industries. From 1991 to 2001, total employment increased by about 280 000. In the same period, employment rose by about 120 000 in the public sector and by 145 000 in private service industries.1 In manufacturing, employment increased by 40 000 up to 1998, then fell by 25 000. A total of about 900 000 were employed in private service industries in 2001, about three times as many as in manufacturing. The decline in manufacturing over the past four or five years is more than offset by the rise in employment in service industries and the public sector. In the years ahead, the planned use of petroleum revenues will increase demand for public and private services, at the cost of manufacturing employment.

The common thread of geopolitical tensions is that while they’re difficult to predict, they’re also impossible to ignore. On a backdrop of low r-star and slowing global growth, they drive businesses to be more cautious, more vigilant, and more conservative in their approach. Data Dependent, Not Data-Point Dependent The long-term factors driving low r-star and slowing global growth, as well as the more near-term geopolitical tensions, are afflictions from which we all suffer. So what’s the solution? Where do we as policymakers, researchers, and regulators go from here? At press conferences I’m often asked: if growth slows by X percent, or unemployment increases by Y percent, will that mean that the FOMC is going to do Z at its next meeting? If the Fed had a motto, it would probably be “data dependent.” When asked about this, it’s important to clarify that while I’m data dependent, I’m not data-point dependent. It’s not about being guided by one single data point—GDP or job growth—but by all of the data and information that tell us where the economy is, and where the economy is heading. Importantly, it’s not about looking at things merely as they are—it’s about trying to read how the economy is likely to evolve over the next couple of years, and what risks lie ahead, based on a broad range of evidence. Monetary policy is a long game. The policy decisions we’ve made this year will continue to have a ripple effect years into the future.
In Germany, structural reforms are being implemented, particularly in the labour market, which could promote growth. It is possible that low long-term interest rates will boost investment. Nevertheless, there is uncertainty as to future economic developments, which is not fully reflected in prices, interest rates and premiums. There is also a risk that large imbalances in world trade and low employment in Europe will trigger protectionism, which could reduce growth capacity even further. Low interest rates in Norway Norges Bank’s key rate, the sight deposit rate, is at a historically low level. Real interest rates are also low. Between December 2002 and March 2004, the key rate was reduced by a total of 5.25 percentage points. The interest rate decline can be ascribed to a number of factors. In late autumn 2002, inflation started to fall. The inflation projections were also revised down. Gradually new information about the outlook for other countries and the Norwegian economy indicated that inflation might be very low. Short-term interest rates fell by close to 4 percentage points. It would seem that it is not only changes in the real interest rate that have an influence, but also the level of real interest rates. Between December 2002 and March 2004, the interest rate has moved from a high to a low level. The real interest rate is now lower than a neutral interest rate. A real interest rate that is lower than the neutral rate will stimulate activity even after the effects of the interest rate fall itself have been exhausted.

Other requirements on maximum LTV ratio and debt-servicing ratio applicable to commercial and industrial property mortgage loans also apply to standalone carpark space mortgage loans. The above measures take effect immediately. However, loan applications in respect of property transactions with provisional sale and purchase agreements signed today or earlier will not be affected. The HKMA is also aware that the risk weight allocated by Hong Kong banks adopting the Internal Ratings-Based (IRB) Approach under the Basel Capital Accord to residential property exposures is at a relatively low level. This may not fully reflect the existing and future risks of property market volatility. To further enhance the risk management of banks in Hong Kong, the HKMA has decided to introduce a risk weight floor of 15% for residential mortgages approved by banks on or after 23 February 2013 under the IRB Approach. Mr Arthur Yuen, Deputy Chief Executive of the HKMA, will explain the above-mentioned measures in more details later. BIS central bankers’ speeches  1  Meanwhile, the Hong Kong Mortgage Corporation will introduce revisions to its Mortgage Insurance Programme in line with the latest developments in the property market and will announce the details later. I hope the public would understand that Hong Kong is facing an extremely unusual macromonetary environment. The ongoing quantitative easing by advanced economies is unprecedented in both scale and duration. Interest rates have been artificially maintained at extremely low levels, and we see huge volumes of liquidity flow into emerging markets like Hong Kong.
It will not only reinforce the need for constant vigilance from all parties, but also help create an environment where everyone is risk conscious and responsible in protecting the interests of each other. These initiatives would not achieve the desired outcomes without effective  BIS central bankers’ speeches  1  communication, and the media has a critical role to play in conveying the message from the banks. We have always acknowledged the importance of the media and I would like to record Bank Negara Malaysia’s appreciation for the assistance rendered by the media in creating awareness of this issue in the past. We hope that with the support of the media on this occasion too, this campaign will be a success, and the public will have heightened levels of understanding and vigilance over this issue. On behalf of Bank Negara Malaysia, I would like to thank all the banks for taking this initiative to undertake this joint e-banking awareness campaign. Our thanks also to Cyber Security and the Police Force for your ongoing efforts to collaborate with the banking industry. I wish all of you the best and assure you that Bank Negara Malaysia will continuously support you in this noble effort. 2  BIS central bankers’ speeches

Human resource development functions is integral to the talent management process and in supporting the human capital management strategy. Of equal importance is that this should occur at all levels in the organisation. In essence, the accountability for talent development requires concerted efforts throughout the organization and needs to be embedded as part of the working culture that is communicated, shared and understood at all levels. While the need for human capital development is apparent, what is less apparent are the appropriate methods and policies that should be adopted to advance human capital development. The financial services industry needs to identify the appropriate strategic direction for human capital development. Attention need to be given to the entry level, to the specialists and to the senior management levels. This would benefit from greater industryuniversity linkages which is a major channel through which the talent requirement and talent gap can be narrowed. The industry involvement in the curriculum design and delivery will ensure graduates are equipped with the relevant knowledge and skills that meet the requirements of the industry. Participation by the industry players may be in the reform of the academic curriculum and methodologies and in providing other forms of practical support to the institutions of higher learning. This will contribute directly towards meeting the human capital needs for the future. The quality of human capital is the cutting edge of competitiveness.
To maintain the IMF’s effectiveness, it is essential for our membership to resolve the difficult issues that have been raised about our own governance – notably, the voice and participation of emerging market economies and developing countries in our institution. All members countries should have adequate voice and participation in the IMF’s decision-making, and the distribution of our quotas should reflect developments in the global economy. In this connection, the ongoing 13th general review of IMF quotas provides an opportunity to make progress on this front. 4  BIS Review 43/2005  Further, given the demands placed on the IMF by its members, it is clear that the institution’s resources must be commensurate with the tasks it is asked to perform. This ongoing strategic review will help us to identify needs, define priorities, and consider possibilities to redeploy resources from lower-priority areas. Regardless of the outcome, IMF management, and our Executive Board, are committed to making the most effective use of resources entrusted to them by our membership. Efforts must therefore continue in the search for greater efficiency gains. One important aspect of this concerns the cooperation and division of labor between the IMF, the World Bank, and other international organizations. This is an issue which may bear revisiting, and I am very much looking forward to working with President Wolfowitz, and to learning his views and vision for the Bank.

By helping to build institutional and human capacity for the making of sound economic policies, IMF technical assistance contributes to the building of strong economies and stable growth. The IMF’s purposes, and its operational activities, were therefore designed with a key objective in mind – that is, the fostering of healthy national economies, linked by finance and trade, as the foundation for a robust global economic system. I think it correct to say that this vision for international peace and stability has produced remarkable results, for the past fifty years have been a period of growing economic prosperity and freedom. Global per capita income has more than tripled, and most of the world has experienced major improvements in literacy and life expectancy. Among the biggest gainers have been the developing nations, home to half of the world’s population. Many of them have been quick to take advantage of the opportunities afforded by the global economy, especially during the last two decades. These countries – whose ranks include Brazil, Chile, China, India, Korea, and Mexico – were able to double their share in world trade, raise per capita incomes, and lift millions out of poverty. Their experience demonstrates that integration into the global economy can bring major benefits. The IMF’s evolution The world has witnessed many changes and developments – in technology, politics, culture, as well as economics – over the years, and the IMF has adapted itself accordingly.