samchain/econo-pairs-v1 huggingface dataset:
Though this provided a temporary relief to CBP in the form of an augmentation of gross foreign reserves and a higher import cover adequacy, it forced CBP to take a huge loss amounting to 31 billion Pesos during 1983-90 on account of exchange rate risks. At the same time, the use of the foreign exchange balances so acquired for defending the currency led to an undue reserve risk by converting the foreign assets to a net negative position and forcing CBP to borrow abroad to settle its liabilities. The forward cover was provided by CBP to local corporations, especially the oil corporation, by guaranteeing the exchange rate when they borrowed abroad in the wake of the balance of payments crisis. When CBP had to relax its grip on the exchange rate from time to time due to the non-availability of reserves, the forward covers given by CBP resulted in massive losses. The total of such losses for the period 1983-90 amounted to 20 billion Pesos. 4  There have been a number of central banks which had become insolvent due to the erosion of capital. For a survey, see, Kazuo Ueda, “The role of Capital for Central Banks”, The text of Speech delivered at Japan Society of Monetary Economics on 25 Oct 2003. www.boj.or.jp. 5  A lucid description of the events that led to CBP’s insolvency is given by Mario B Lamberte in Central Banking in the Philippines: Then, Now and the Future Discussion Paper Series 2002-10, Philippine Institute of Development Studies.

All that happens in a central bank’s balance sheet is the creation of a liability item in the form of “currency liability” and an asset item representing the asset the bank has acquired. This would make both assets and liabilities to rise simultaneously. This extraordinary power is being enjoyed by a central bank due its functioning as the monetary authority of a country. However, the community has given such a power to a central bank with a non-violable obligation attached to that power: the responsible use of the discretionary power vested with it. There are two reasons why a central bank should use its discretionary power of issuing currency responsibly. 1  This is valid even when the financial system stability has been made either a core objective or an ancillary objective of a central bank. BIS Review 58/2009  1  First, the issue of currency over and above the needs of the society will expand the nominal aggregate demand creating an excess demand for goods and services. Since the aggregate supply is inflexible to meet this demand in the short run, the excess demand will put pressure for prices to rise. If this continues year after year, it generates inflation, reducing the wealth of people in real terms and creating a series of adverse consequences that hinder the long term growth. Second, in an open economy which most countries have today, the rise in the aggregate demand could partly be met out of imports.
That is why, as Federal Reserve Chairman Bernanke said in London last week, central banks will look to intervene only in markets that “normally play major roles” in the functioning of the financial system. Therefore, the Bank will need to be satisfied that there is a genuine private demand for an asset in normal conditions before it would be eligible for the asset purchase facility. We are aiming to complement and stimulate private demand, not substitute for it. 4  BIS Review 8/2009  The Bank is actively considering in which markets targeted purchases might stimulate new issuance. One example is the corporate bond market. Spreads on high quality corporate bonds have more than doubled since early September to an average of over 5 percentage points. Despite innovation in financial markets this is the highest spread since the mid-1970s. The Bank estimates that a significant element of this spread represents an illiquidity premium which could be reduced somewhat by increasing activity and liquidity in the market. Commercial paper is another case where purchases might help, although that market is considerably smaller in the United Kingdom than in the United States. In each case the Bank will keep the market fully informed, and more details will be published at the end of the month. It will be a matter of weeks not days before a programme of purchases can begin, but it will be weeks not months. There is another reason to tread carefully.

Thus, my dare to you is to get yourselves financially educated, and from thereon to be financially prepared for your future. Elon Musk, of PayPal, SpaceX and Tesla electric car fame, was once quoted to say that and I quote “It is OK to have all your eggs in one basket,as long as you control what happens to that basket”. Now, obviously Elon Musk is not in the insurance industry. And putting all your eggs in one basket seem to be the anti-thesis of diversification and proper risk management. Nevertheless, as someone known to be a successful serial risk taker, he may be up to something. Think about it. There may be times, especially so during your youth to take exceptional risks, to be bold in new ventures and move out from your comfort zone. But always remember, life does occasionally deal you with its challenges. Contingencies such as illnesses, accidents and personal tragedies can and will challenge you in the future in your pursuits of your dreams. Financial shocks can occur to any of us, at any stage of our lifecycle. In such situations, smart options like insurance and takaful are perhaps the only way to ‘control what happens to your basket’. With all these in mind, we must dare to make that leap in life to be financially protected, for the sake of our loved ones. Moving on to my last dare to our esteemed industry leaders present here today.
Finally, if economic shocks extend only to the home country and joint monetary policy is insufficient to absorb the shock, labour market flexibility could take the place of nominal exchange rate adjustment once the domestic currency has been abandoned. Consideration of these criteria based on historical data does not produce an unequivocal answer about Iceland’s suitability as a member of the eurozone. The Icelandic business cycle has been rather weakly linked to that of the euro area – and actually, to most other regions and countries as well (see Chapter 10). Iceland’s export sector differs in structure from that in most other industrialised countries (see Chapter 4). On the other hand, the economy is quite open to trade and the euro area is by far Iceland’s largest trading partner (see Chapters 4, 8, and 20). In addition, the domestic labour market is quite flexible, although downward flexibility of nominal wages has not been tested much and available data suggest that it has been relatively limited to date (see Chapter 14). The OCA theory has many shortcomings and does not take account of a number of potential benefits of participation in a large currency area such as the eurozone. Historical experience also suggests that currency unions can be successful even if the participating countries do not fulfil the OCA criteria at the outset (see Chapter 5). In this context, the following points are worth noting: •  Research indicates that currency union membership will stimulate trade with the currency union without reducing trade with other countries.

BIS central bankers’ speeches  9  •  Possible improvements to the monetary policy framework, including a longer target horizon for policy formation, which offers greater flexibility to take account of longer-term risks to price stability, including those due to financial stability risk. •  Changes to the financial system should also aim at improving monetary policy transmission. This option has the advantage that Iceland retains monetary independence and a flexible exchange rate and can therefore respond to future idiosyncratic shocks. Another advantage is that a domestic run on the Treasury and/or solvent banks would be manageable. Furthermore, there is reduced risk of financial instability due to excessive capital inflows and a subsequent run on the external funding of the banking system and the Treasury. The disadvantages of this option lie in the fact that the possibilities for external trade without exchange rate risk will remain limited, and the domestic financial system will continue to be more expensive and less integrated with the global financial system than it would otherwise be. In that case, prudential rules restricting domestic financial institutions’ cross-border operations will be needed. The feasibility of this option is also dependent on support for the necessary reforms. But even though that condition is fulfilled, it is not likely that excess exchange rate volatility will disappear, as it is also rooted in the inherent volatility of asset prices and the small size of the domestic foreign exchange market.
It can also be tomorrow the major digital platforms – the GAFA – and today the transformation of banks and insurance companies. They have committed themselves to it, much more actively in 2016; monitoring the consequences for their business models is one of the priorities of European supervision in 2017. New opportunities will also have to be seized: the possible exploitation of data, while protecting customers and ensuring a real level playing field with the GAFA; or the development of cyberinsurance. 2/3  BIS central bankers' speeches  The third challenge is the protection of the customers of banks and insurance companies, which is of course one of our core tasks. The ACPR received more than 6,500 letters in 2016, an increase of almost 20% in two years, and made more than 600 interventions among the bodies, institutions or intermediaries concerned. The ACPR has also continued to work towards the dissemination of good practices, with five recommendations adopted or revised in 2016, notably regarding the new practices related to social media or “complex products”. Finally, in its audits, the ACPR focused on providing advice on health insurance contracts, the de-linking of home loans and borrower insurance, and on compliance with obligations related to unclaimed life insurance policies.

And it goes without saying that the ECB will not be acting in a legal vacuum – in considering the proportionality of its actions, it will have to take into account existing secondary law and justify any measures it takes. And the Court of Justice would be the ultimate arbiter to determine whether the ECB is respecting the principle of proportionality. Conclusion Let me conclude. It has become evident that disturbances affecting CCPs can have an impact on monetary policy, on payment systems and, ultimately, on price stability. The Commission’s proposal to amend the EMIR framework is a step in the right direction as it reflects the responsibilities of the ECB – as a central bank of issue – in the supervisory framework. However, we also need to adjust the ECB’s monetary policy toolkit to ensure it can fulfil its role. This requires amending Article 22 of the Statute in a manner that respects the principle of central bank independence and the ECB’s exclusive competence for monetary policy. Moreover, any change to Article 22 must preserve the ECB’s flexibility and autonomy to react to unforeseen circumstances and effectively address risks to its mandate. Ultimately, amending both EMIR and Article 22 will establish a comprehensive legal framework to address the risks CCPs pose to the Union – both its financial markets and its currency. It will ensure that the EU’s legislators, supervisors and central bank – acting in their respective roles – can adopt the wide range of measures needed to safeguard stability.
Governor’s Speech - the Budapest Eurasia Forum 2022 “Challenges facing small, open economies in the changing global landscape” Dr. Sethaput Suthiwartnarueput, Governor, Bank of Thailand Magyar Nemzeti Bank, Budapest, 19 September 2022  Excellencies, distinguished participants,  It is a great pleasure and privilege to be here at the Budapest Eurasia Forum. While the global landscape is constantly changing, the speed and scale of the changes happening now are particularly large and rapid. Many of these changes pose particular challenges for small, open economies. I would like therefore to focus my remarks on three key challenges facing small, open economies in this changing global landscape. Part 1: The first challenge is rapid and synchronized monetary policy tightening •  We are going through one of the most rapid and concerted monetary policy tightening cycles in recent memory. About this time last year, the Fed Funds rate expected for the end of this year was under 0.5%; markets now expect it to be around 4%. Almost all central banks have raised rates as part of what one might call the “Great Policy Normalization”. This reflects the rapid return of inflation. Two years ago, of the 60 countries tracked in the BIS database, 42 had inflation below 2%. Today, that number is zero. •  Adding to the challenge, the prevailing initial conditions under which the major economies are embarking on this “Great Policy Normalization” are far from ideal.

The economies of Southeast Asia are particularly exposed to such reconfigurations as they have high participation in global value chains, but are located mostly downstream in those value chains, and thereby face higher risks of being left out. •  At the same time, greater importance attached to ESG considerations have led to new standards and expectations--new global rules of the game--about how countries can participate in international trade. •  For small open economies, the challenge is to find their place in the rapidly evolving international trade landscape. How should they position themselves between the major trading powers? To what extent can regional trading blocs help to increase their voice in the international arena? Where are the best opportunities to plug themselves into a new configuration of global supply chains? •  Small open economies can best navigate and benefit from the shifting trade landscape by keeping their outward orientation, strengthening domestic institutions, and undertaking structural reforms that enhance flexibility. This would allow them to harness technology to upgrade their production capabilities and adapt to new trade patterns, including integration into evolving global supply chains. Services trade, especially in intermediate services such as telecommunication services and IT management, offer large growth potential. As world trade bounces back following the pandemic, opportunities for exports of services are likely to exceed those in goods. Active engagement in bilateral and regional free-trade arrangements will also help to diversify the trade base. •  Our economies must also quickly adapt to the new global rules of the game.
Second, firms which are already covered in emissions trading systems can tap on the voluntary carbon market to decarbonise further, going beyond their mandatory targets. There is great opportunity to scale the voluntary carbon markets. Globally, the demand for voluntary carbon credits is expected to grow 15-fold over the next 2/5  BIS central bankers' speeches  10 years, to 2 billion tonnes in 2030. More governments and companies are committing to net-zero targets. Last year, 1,500 companies across the world made net-zero commitments, a three-fold increase from the year before. This number will continue to grow rapidly. There is also greater international impetus for growing the voluntary carbon markets. The Taskforce for Scaling Voluntary Carbon Markets, sponsored by the Institute for International Finance, has set out 20 recommendations for building trusted and wellfunctioning markets for voluntary carbon credits. Climate Impact X This is why today’s announcement of Climate Impact X, or CIX, is significant. CIX is a visionary idea for a global carbon exchange and marketplace anchored out of Asia, centred on trust and innovation. It is an initiative borne out of the Alliance for Action on Sustainability under the Emerging Stronger Taskforce The Sustainability Alliance proposed to develop an Asian voluntary carbon credit market, and I am happy to see more partners coming together to take forward this meaningful work. CIX is a promising solution to the problem we face today of fragmented carbon credit markets characterised by thin liquidity and credits of questionable quality.

Ravi Menon: A vibrant carbon market for a low carbon future Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Climate Impact X Announcement Event, Singapore, 20 May 2021. * * * Minister for National Development Mr Desmond Lee, ladies and gentleman, good afternoon. Let me start with the big picture. To limit global warming to 1.5°C, global annual greenhouse gas emissions need to be halved by 2030 and reduced to net-zero by 2050. Yet, the trajectory of carbon emissions is still on a steady uptrend. Just on energy needs alone, demand in Asia is projected to double in 2030. Economic development will drive demand for fossil fuels, which is still the cheapest way to generate electricity in many parts of Asia. The switch to cleaner energy sources cannot be made in one leap. Coal accounts for about half of Asia’s total energy supply today. We need to shift the energy mix progressively, first to relatively less emissions-intensive fuels like natural gas, and then to renewables. This shift will require fundamental infrastructure changes: refurbishing power plants to generate cleaner fuels; and upgrading the power grids to manage different energy sources and to minimise the intermittency of renewables. To make this progressive shift to a low-carbon future, Asia will need a lot more transition financing than is available today. To spur more green finance for transition, we need to have two things in place: a price on carbon, and a market for trading carbon credits.
It will make price comparisons across Europe more transparent and reduce transaction costs. In addition, the single currency area will enjoy price stability and sound public finances, which will lead to a high level of confidence and to low market interest rates. Last but not least, the euro will be a major international currency and this will facilitate international monetary cooperation. EMU is not only based on solid economic grounds. It is also a realistic economic process. EMU is based on convergence criteria which have to be met on a sustainable basis. The fulfilment of the convergence criteria is not only a legal condition for participating in EMU but, of course, corresponds to the sound policy management which is in the interest of all Member States. I am convinced that EMU will create an environment of stability I know how important the concept of stability is to the German people. This culture of stability, which explains to a large extent the economic success of your country, is shared by many Governments, central banks and citizens all over Europe, not least in France. I know that the German people have expressed some qualms about the disappearance of the Deutschemark and its replacement by the euro. But I will try to convince you that the euro will be as stable as the Deutschemark, as stable as the French franc today, for the sake of European economic prosperity and growth. Indeed, EMU will contribute to reinforcing stability in Europe. EMU will bring legal, fiscal and monetary stability.

More often than not, there will be a number of possible interest rate paths that might be said to provide a reasonable balance, in view of the uncertainty involved. The results of this trade-off are presented in the Inflation Report in the form of a chart that presents baseline scenarios for the interest rate, the exchange rate, inflation and capacity utilisation in the economy. The formulation of a precise inflation target, our projection for the interest rate 3 – 4 years ahead in time and our desire to achieve a balance between output stability and inflation may perhaps give an impression of excessive optimism with respect to managing the economy and invite a repeat of earlier attempts to fine-tune the economy. But it is important to bear in mind the lessons drawn from the 1970s and 1980s, i.e. high stabilisation policy ambitions may lead to wide fluctuations in the economy, with high and variable inflation. In our conduct of monetary policy, we must not underestimate the uncertainty surrounding the decisions taken. Even if the Bank publishes a forecast for the interest rate, this does not mean that the interest rate will follow the forecast throughout the projection period. Forecasts of inflation, output, the interest rate and other variables are based on an assessment of the current situation and a perception of how the economy functions. Disturbances to the economy may result in changes in the forecasts. Data revisions imply that the current economic situation is not fully known.
I would like to cite the following legal maxim:  which means “the law on a matter depends on the perspective on the matter.”  states that “the law may change over time, place and background.” The application of this method is more evident in matters relating to ijtihad where the preservation of the benefit of the society is paramount. I always believe that when the contemporary environment and current reality are taken into consideration in any Shariah research, the ijtihad will be more substantive and mature while not compromising with the principles of Shariah. 2  BIS central bankers’ speeches  It is also important to stress on the need to document the decisions and resolutions of the Shariah in a structured and orderly manner, supported by the richness of the debates in arriving to the decisions. This is integral as a starting point to facilitate discussions among Shariah experts, either domestically and internationally to encourage greater understanding and clarity of this treasure of knowledge. It can also serve to provide guidance and culture of knowledge that can be inherited by future generations. And more importantly, opinions and justifications for a particular deduction must be documented. The spirit of mutual respect within the diversity of Shariah interpretations The third point that I wish to share is fostering mutual respect in dealing with diverse Shariah interpretations. Differences in views and opinions among scholars are inherent in the area of Shariah, particularly in fiqh.

For example, all jurists in the region could agree that the tawarruq contract can be used in certain circumstances, and cannot be used in other circumstances;  ii. This Dialogue could agree to disagree on specific Shariah issues, and not only taking respect those of different views, but also to defend the right of a jurisdiction in the region using arguments that may be seen controversial to others. Let’s assume Malaysia allows the use of Bai ‘Dayn in certain circumstances, but another jurisdiction disagrees with this decision. Nevertheless, the decision made by the Malaysian jurists to allow Bai ‘Dayn is respected and in the spirit of Nusantara, will defend Malaysia’s right to use such contract as it is made in accordance with the culture, tradition as well as existing economic system and legislation. iii. This Dialogue should explore a collaborative approach to develop a Shariah framework that is standardised at the regional level. Malaysia has embarked on this initiative with the development of 13 Shariah standards. It would be desirable if other countries in the region can also develop equivalent standards that could eventually be consolidated as Shariah standards that are applicable to the whole region and to even serve as benchmarks to other Muslim countries. Conclusion The rapid transformation of the Islamic financial sector will certainly affect the ascertainment of Islamic law on contemporary issues.