samchain/econo-pairs-v1 huggingface dataset:
Yet, about 1.7 billion adults remain unbanked with persistent inequality in account ownership between the rich and the poor3. In recent months, new and unprecedented challenges to sustainability and effectiveness of financial inclusion initiatives worldwide have surfaced. Workers, especially in the informal sector and low income segment, have experienced sudden loss of employment and income. Job replacement and reskilling programmes require time to complete before these workers are able to gain new employment opportunities. The limited employment prospects and labour mobility, especially for low-skilled, low income workers, may impede effective usage of financial services going forward. Containment measures, while necessary to contain the spread of the virus, have also reduced accessibility to financial services. This is especially so in areas with poor digital connectivity, and among communities with low digital financial literacy. From a human development standpoint, a United Nations Development Programme’s (UNDP) report estimated that the combined impact of income, health and education shocks arising from the pandemic could signify the largest reversal in human development on record, equivalent to erasing all the progress in human development of the past six years4. The risk of reversing progress in achieving financial inclusion is accentuating why financial inclusion matters now more than ever. Optimising Islamic finance for inclusive economic recovery Policy and regulatory responses across the globe, and likewise in Malaysia, have been focused on safeguarding economic resilience, managing risks to financial stability and minimising repercussions to society. This is done in tandem with the different stages of the pandemic – namely, containment, stabilisation and recovery.

3 The global gap between richer and poorer account ownership has not narrowed since 2014. 4  The simulations suggest conditions today would correspond to a steep and unprecedented decline in human development. With almost 9 in 10 students out of school and deep recessions in most economies (including a 4 percent drop in GNI per capita worldwide), the decline in the index –reflecting a narrowing in capabilities— would be equivalent to erasing all the progress in human development of the past six years. 5 Midrates on 6 October 2020 (USD: 4.15). 6  This includes RM10 billion under Prihatin Supplementary Initiative Package (Kita Prihatin) and RM295 billion under Prihatin, Prihatin SME Plus (for small and medium enterprises) and Penjana. 7 Includes Special Relief Fund (SFR). Source: Bank Negara Malaysia. 8 1H 2020: 65,597 accounts; 1H 2019: 57,367 accounts). Source: Bank Negara Malaysia. 9 990,000 (life & family certificates) and 170,000 (general certificates) Source: Bank Negara Malaysia. 4/4  BIS central bankers' speeches
Instead, we need to provide greater support to displaced workers so they can obtain the skills needed to find new well-paying jobs. We need to do better in preparing workers to deal with the challenges of globalization and technological change. These issues are important to me as a central banker, as they affect the long-term health and productivity of the economy, and the economic opportunities available to our people. The debate around globalization, particularly in advanced economies, reflects a range of factors. Undoubtedly, the global financial crisis and subsequent slow recovery have been significant. But, just as important have been longer-term trends, such as growing income inequality, the loss of middle-income jobs, and the rise of large emerging market economies such as China and India. Although the debate about globalization is not new, I believe we are at a particularly important juncture. If support for liberalized trade and an integrated global economy were to suffer a significant setback, the consequence could be slower economic growth and lower living standards around the world. While considerable effort has gone into liberalizing trade and developing the existing set of trade agreements, that does not mean they cannot be improved upon. I have no doubt some trade agreements could be enhanced or updated. Some may not adequately address recent changes in the global economy—such as the rise of digital trade—and may need to be refreshed. And, important trade barriers still remain and should be addressed.

Although evidence on the extent to which jobs have been lost due to global trade is inconclusive, job losses that are attributed to trade tend to be viewed differently. That is, they are seen as having been “lost to foreigners” and are often viewed as a consequence of the policy decision to liberalize trade in the first place. Having said that, the challenge of adjusting to open trade is a serious issue that has not received the degree of attention it fully deserves. This may partly reflect the fact that the burden has been borne unequally and spread out over a long time period. It also may reflect the fact that the winners from trade have often tended to have a stronger voice than those who have been the losers. 3/6  BIS central bankers' speeches  Research has documented that the effects on individuals of job dislocation—including those resulting from trade—can be significant and long lasting. Older workers tend to suffer larger earnings losses, and may face larger transition costs. Displaced workers may not have the appropriate skills to find good jobs in other areas of the economy, including in growing export sectors. When the affected industry represents a large share of the local economy, the damage is often magnified. In this case, the burden is more widespread because wages across the community are likely to be hit as well.
In the Malaysian context, the various initiatives and developments taken place during the period of the Financial Sector Masterplan; between 2001 to 2010 have indeed sparked the growth and vibrancy of the industry. While achievements in various market segments have placed us at the forefront, more ground breaking initiatives are needed to seize the opportunities in new growth areas; and to reenergise the industry. An honest assessment on the existing business models and product offerings must be undertaken to recognise gaps and issues, which is a crucial step towards realising the true value propositions of Islamic finance. The future growth of Islamic finance, in my view, is underpinned by three key areas. This could also lead us to defining the future of Islamic finance as the ‘New Normal’ that can bring greater sustainable and equitable economic development. First, is to have a more cohesive efforts by industry players across all sectors in Islamic finance to realise its virtues that uphold social justice; equality; economic prosperity; and inclusivity. Indeed, these are challenging and daunting expectations. However, it is only through collaboration, that the Islamic finance industry could push its growth trajectory, into the next level of maturity. Working in silos should be replaced by promoting a culture of collaboration. Industry players should not only play a proactive role to enhance collaboration within the industry, it should also be extended beyond sectoral boundaries.

Home-host operational risk capital The third paper published in January laid down key principles regarding the cross-border recognition of operational risk capital charges for those banking organisations that use the advanced options. As you know, one of the improvements of the New Accord is that it will “unbundle” operational risk from other risks and apply a separate capital charge for it. This reflects the emerging view among leading banks and supervisors that we should evaluate and seek ways to reduce losses arising from  4  BIS Review 12/2004  failures in processes, systems, people, or external events. While operational risk is not as readily quantified as these other exposures, the Basel Committee has noted genuine progress among leading institutions in measuring and controlling it. Assigning an explicit capital charge was intended to support these private-sector efforts and to reward firms that develop better measures of operational risk. For the most sophisticated institutions, the “advanced measurement approach” - or “AMA” - is the ultimate expression of the Committee’s goal to incorporate banks’ own sense of risk into the capital framework. Because the AMA is not subject to supervisory “floors,” the Committee expects it to serve as a true catalyst for innovation. The January technical note on operational risk addresses an issue that banks raised concerning the allocation of AMA capital across the subsidiaries of an internationally active banking organisation. Many banks questioned whether operational risk capital requirements should be calculated on a consolidated, institution-wide basis rather than on a legal entity basis.
Even conservative estimates indicate a considerable rise in trade within currency areas, and attendant welfare gains. Other studies, which are directly based on trade dynamics in the last decade, suggest that trade between the euro area countries may have increased by 5-10 per cent as a result of the euro. BIS Review 47/2003  1  Another long-term gain is in price competition. The limited and temporary rise in prices of certain goods and services in conjunction with the introduction of the euro notes and coins should be weighed against the long-term gains from price transparency, the effect of easier price comparisons when prices in the entire euro area are expressed in the same currency. Previously, this particular gain was also perceived as minimal as cross-border trade is relatively small and companies themselves are said to be capable of converting prices regularly between currencies without suffering any major efficiency losses. However, at the same time, there were price differences in the EU of 20-30 per cent on a number of goods (cars, for example) that should be relatively easy to both transport over the border and compare in terms of price. These differences appear to have diminished quicker since euro banknotes and coins were introduced in 2001. New research also suggests that the effects of a common currency on prices may have been underestimated.

Furthermore, those that voted against the single currency may have been strengthened in their belief by the fact that the ‘no’ vote was not followed by any speculation against the krona, which instead has appreciated against both the euro and the dollar since the referendum. What didn’t feature in the same way in the debate was the longer-term perspective - and it is this perspective that I believe speaks in favour of the euro. It proved difficult to explain that the underlying causes of the crisis in Germany and France were mainly domestic structural problems, partly in the labour market. Those problems had existed long before EMU and could not be remedied by a separate currency and monetary policy. At the same time, the economic slowdown overshadowed the long-term transaction gains of a single currency for trade and the financial markets. In earlier economic research, the gains associated with a single currency were often viewed as uncertain and very small at best. As there were very few contemporary examples of currency unions, comparisons were made instead between fixed and floating exchange rates, in which fixed exchange rates did not appear to result in any definite welfare gains. More recent research has concentrated on the smaller currency unions that have nevertheless existed, and has excluded other factors in socalled gravitation models. This research has pointed to quite substantial gains from currency unions (a shift in the magnitude of 50 per cent or even more according to researchers such as Andrew K Rose, at Berkeley).
In some countries the authorities already have the option of splitting up a bank and subsequently selling it in parts, or the option of transferring vital parts to a bridge bank for continued operation. A newer instrument in the international debate is what is called internal recapitalisation – or bail-in. Internal recapitalisation means in principle that debt is converted into equity capital. This can provide a basis for the bank to continue operating. Creditors have to take the losses and the authorities do not have to provide capital. With such a crisis management system, lenders will have a stronger financial incentive to monitor banks’ risk-taking. They can price funding so that it reflects to a further extent the risk taken by banks. This will reduce the risk of excess debt growth and lessen the likelihood of crisis. Conclusion As I mentioned by way of introduction, our most important task in the work on financial stability is to contribute to containing imbalances and secure a robust financial system. Prevention is thus a key component of the work: that is to say prevention by means of a sound, general framework that does not stimulate risk-taking among financial market participants; prevention through surveillance of financial imbalances and through active use of instruments when we see clear signs of a build-up of serious imbalances. It is unlikely that we will be fully immune to financial instability. But with solid work in the area of prevention we will be better poised, also in turbulent times. Thank you for your attention.

As shown in Chart 3, there was also a clear build-up of financial vulnerability in Norway prior to the financial crisis.   The rise in both house prices and debt in Norway was on a par with countries that were much harder hit by the crisis.   In addition, Norwegian banks had also increasingly financed strong lending growth over a long period with market funding, of which a considerable share was shortterm funding. The Norwegian banking sector became increasingly dependent on well functioning international money and capital markets, enabling banks to roll over their funding. Nonetheless, the liquidity crisis never developed into a solvency crisis in Norway. Perhaps financial sector operators had learned from the previous banking crisis and engaged in more responsible banking during the upturn. Furthermore, they were subject to stricter banking regulation in some areas. But other factors also played a role.   Macroeconomic developments after the outbreak of the financial crisis were more favourable in Norway than in other countries. The decline in output and the rise in unemployment were far more limited. Because of particular features of the industry structure in Norway, it took time for the full impact of the international downturn to reach our economy. In the meantime, an expansionary monetary and fiscal policy had begun to take effect. Against the background of relatively favourable macroeconomic conditions, the vulnerability related to a high household debt burden and elevated house prices never translated into higher losses for banks.
Back in 500 BC Sun Tzu, Chinese general and author of a book on the art of war, observed: “Where the army is, prices are high; when prices rise the wealth of the people is exhausted.”1 What this refers to is, of course, that an army of perhaps tens of thousands of soldiers requires a lot of resources just to stay alive and these can be difficult to raise in a geographically restricted area. Demand simply rises in relation to the available supply of food and other necessities, and this causes inflation to rise. If, as has often been the case throughout history, the army supports itself by looting, it may be able to survive for a while, but for the civilian population, prices will rise because supply decreases. Of course, an army could not survive indefinitely in one place, because resources sooner or later run out. In his book “Ofredsår” (“Years of Trouble”), Peter Englund has likened the Swedish army during the Thirty Years’ War to a shark that must be constantly on the move to avoid succumbing.2 Once a war had started, the armies of the time lived partly their own lives, separated from the state, and largely organised their own supplies, especially of course during campaigns abroad. Inflation therefore increased more locally depending on where the armies happened to be, as a result of the demand for food and other necessities exceeding supply.

Global investors’ allocations to the region have been rising, alongside Asia’s increasing weight in global indices. The region has become a favourite hunting ground for investors, in search of the next unicorns. Households and institutions in the region have themselves become ample sources of wealth looking for investment opportunities. These pools of capital can be mobilised through our capital markets, to finance the region’s high-growth enterprises. Asia has an abundance of channels through which companies and capital can meet. There are established bourses as well as newer, tech-focused exchanges. There is also a growing number of blockchain-enabled platforms. Example: DBS Bank has launched the DBS Digital Exchange for the tokenisation, trading and custody of digital assets. Singapore’s Value Proposition Singapore is well poised to become one of the leading fund-raising centres in Asia. There are four key dimensions to Singapore’s value proposition: a vibrant ecosystem for private equity and venture capital; the premier Asian hub for solutions in investment risk management; a rapidly growing debt capital market; anda promising equity capital market. First, a vibrant private equity and venture capital ecosystem. The thriving start-up and 1/4  BIS central bankers' speeches  Fintech scene in Singapore and Southeast Asia have drawn active interest from PE/VC players from around the world. PE/VC assets under management in Singapore have doubled over the last five years. They grew by over 50% last year despite the COVID-19 pandemic and recession, testament to the resilience of the ecosystem. Technology and innovation are making private equity and venture capital investments more accessible.
So the gain in leaning monetary policy against the wind is small in relation to the relatively large costs of such a policy in terms of inflation undershooting the target and negative effects on the real economy. Ultimately, the size of the gains and the costs is an empirical question, as is the question about the effectiveness of macroprudential policy. But judging by the debate in Sweden, both of these questions appear to have been decided already, and it would appear that the only correct point of view is a modified Jackson-Hole consensus, to return to Smets. My impression is that the debate in Sweden has to a large extent been coloured by the few existing quantifications of the costs of leaning against the wind and of the effects of monetary policy on the risks linked to household indebtedness. This is despite all of these quantifications being very uncertain. This uncertainty should also permeate the policy conclusions drawn from the quantifications. Take, for instance, the estimates of the effects of monetary policy on indebtedness.

Indeed, many new areas of growth in Malaysia would benefit from higher investment, such as in niche growth segments in the services sector, as well as in the development of enabling infrastructure such as in broadband and green technology. Investment in green technology has the potential to not only increase the efficiency of the economy, but also to open up new sources of growth. As Malaysia moves from a cost-competitive economy to one that is more knowledge and innovation-driven, it is not just the quantity of investment that matters, but the quality of investment that would dictate our ability to move up the value-chain. An important consideration in ensuring high quality investment is the availability of complementary factors. Here, I would like to highlight three of these factors, namely a private sector-led competitive environment, high quality workforce and the availability of enabling infrastructures. A business friendly environment with minimal market distortions is critical to ensure that the private sector can direct its investment activities efficiently and to areas of the greatest growth and return potentials. Similarly, the availability of skilled workforce and modern infrastructures such as high-speed broadband is key in ensuring that high value-added and high knowledge-content investments take place. Much is currently being discussed and debated on the issues of high quality workforce and information age enabling infrastructures, especially given the Government’s renewed emphasis on them in the recent efforts to transform the Malaysian economy.
In turn, CDO tranches may be repackaged into 'CDOs of CDOs' or leveraged in other ways. For example, a popular product has been so-called 'leveraged super-senior' in which an investor sells credit protection on part of most senior tranche of a CDO but earns an additional return by agreeing to bear losses if, say, the tranche’s market value breaches a trigger point. For further information see Belsham, T. N. Vause and S. Wells, ‘Credit correlation: interpretation and risks’, Bank of England Financial Stability Review, December 2005, pages 103-115; and Rule, D., ‘The credit derivatives market: its development and possible implications for financial stability’, Bank of England Financial Stability Review, June 2001, pages 117-140. 6  BIS Review 47/2006  A counterpart to whether market volatility could occur is the question of whether risk could flow back to the banking sector in adverse circumstances. Over the past decade, many banks have moved towards business models based around originating and distributing credit assets rather than holding them. But no one suggests that banks escape the risk completely. They warehouse risk before it can be securitized, and those warehouses will probably have grown with the volumes flowing through the securitisation markets. To a greater or lesser extent, they hold on to loans and securitised participations if they think them attractive, or perhaps punitively expensive to distribute. Through their prime brokerage operations, they finance leveraged holdings against collateral. And they sometimes provide committed lines of credit.

In parallel, new techniques for unbundling and distributing risk, and possibly also asset managers working under fewer constraints than in the past, may have made financial markets more efficient. For any given level of expected volatility in the economy, that may have enabled investors to hold more diversified portfolios, reducing the excess returns (or risk premia) required for bearing the residual undiversified risk. Taken together, other things being equal, these factors would tend to work in the direction of reducing inflation risk premia and term premia in government bond yields, credit spreads, equity risk premia, and implied volatilities derived from options. But there are important qualifications to this story, especially regarding what it implies looking forward. First, various cyclical developments, such as corporate sector balance sheet repair, have probably reduced risk. And, of course, growth is currently robust pretty uniformly across the world economy. Those features of the environment may have reduced risk premia, cyclically. There is no way to separate out with any precision the cyclical and structural, potentially more persistent, influences on  BIS Review 47/2006  5  the price of risk. Second, the importance of some of those structural factors may be exaggerated by market participants. Closest to home for me, I would not want anyone to think that central banks are capable of delivering uninterrupted growth indefinitely.