samchain/econo-pairs-v1 huggingface dataset:
Federal Reserve analysis further indicates that a reduction in longer-term interest rates would be roughly equivalent in terms of the effect on the economy to a 40 to 120 basis points reduction in the federal funds rate (Bernanke 2011b). This is a large reduction in the federal funds rate. In FRB/US simulations discussed by Yellen (2011) and reported by Chung, Laforte, Reifschneider and Williams (2011), QE2 is assumed to lower 10-year yields by about 15 basis points, which reduces the unemployment rate by about 0.3 percentage points and increases core PCE inflation by about 0.2 percentage points. This is a significant effect of QE2 alone, on top of the effects of the previous LSAPs. I believe the Federal Reserve’s LSAPs have had a significant positive effect on the U.S. economy and that the objections raised against them are not convincing (Svensson 2011a). Regarding the increase in the monetary base that follows from the Federal Reserve’s asset purchases, the fact that the Federal Reserve can pay interest on reserves means that a large monetary base no longer by itself leads to inflation. In the standard textbook treatment, a large monetary base implies a zero policy rate. But when the Federal Reserve can pay interest on reserves, a large monetary base does not prevent the Federal Reserve from setting the policy rate at any level required to restrict aggregate demand and prevent too high inflation.

Confusion risks leading to a poorer outcome for both policies and makes it more difficult to hold the policymakers accountable. Trying to use monetary policy to achieve financial stability leads to poorer outcomes for monetary policy and is an ineffective way to achieve and maintain financial stability. However, the fact that financial-stability policy and monetary policy are distinct and different does not mean that there is no interaction between them. This interaction needs to be considered. Monetary policy should be conducted taking the conduct of financial-stability policy into account, and vice versa. This is similar to how monetary policy is conducted taking fiscal policy into account, and vice versa. Importantly, under normal conditions, financial stability is handled by financial-stability policy, not by monetary policy. Monetary policy should be the last line of defence for financial stability, not the first. BIS central bankers’ speeches  1  It follows that financial stability as an objective of monetary policy makes little sense, whereas financial stability as an objective for the central bank makes sense, if the central bank gets control over the financial-stability instruments. The standard monetary-policy tools are the policy rate and communication. During the crisis when policy rates have been at or close to their zero lower bound, we have seen other more unconventional instruments being used, including Large Scale Asset Purchases (LSAP) by the Federal Reserve.
Encik Adnan Zaylani Mohamad Zahid: Islamic finance - future trend Keynote address by Mr Encik Adnan Zaylani Mohamad Zahid, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 13th Kuala Lumpur Islamic Finance Forum 2016 (KLIFF) "Islamic Finance - Future Trend", Kuala Lumpur, 21 November 2016. * * * It is my pleasure; and an honour to be given the opportunity to speak at this forum today. Since the first introduction of KLIFF, more than a decade ago the event has gained recognition as a prestigious annual gathering for industry experts and key players in Islamic finance. I therefore wish to congratulate the organisers for its success in organising this event and maintaining its momentum. This year, in line with the chosen theme deliberations in the forum will revolve around strategies to elevate Islamic finance to the next level. As we are now at an important crossroads in Islamic finance, its continued dynamism in the journey ahead, requires the industry to strategically respond to the changing requirements of the global economy. My remarks today centres on the future trend of Islamic finance. In charting our growth for the industry, I will reflect on our achievements; and offer some thoughts on key areas that can accelerate the industry forward. I would then deliberate on the key underpinnings for the industry to successfully meet the intended objectives, in my conclusion.

Euromoney Conferences: The Greater Mekong Investment Forum “Confidence in Connectivity of the GMS” Speech by Dr. Veerathai Santiprabhob, Governor of the Bank of Thailand Bangkok, June 1, 2017 Excellencies, Distinguished Speakers, Ladies and Gentlemen. A very good morning to you all. Let me first thank Mr. Tony Shale, the CEO of Euromoney Asia, for organizing this conference and inviting me to join you once again this year. It is always a great pleasure to speak at the GMS Investment Forum. Let me also extend a warm welcome to those of you who travelled from abroad. *** Ladies and gentlemen, Established way back in 1992, the GMS marks a quarter of a century milestone this year. To me, the GMS today is like a promising 25-year-old graduate from a prestigious university, full of energy and potential, on her way to making a mark in her career. The GMS is a dynamic region, linked by the richness of the great Mekong river, with abundant endowments and opportunities awaiting to be further explored. Last year, I expressed my confidence in the future of the GMS, as a result of synergy and connectivity that had been harnessed over the years. Today, I would like to once again reiterate the importance of regional connectivity, as prospects for trade and investment opportunities in the GMS have improved with a more positive global economic outlook.
I find relevant what Agustín Carstens, General Manager of the BIS, said in his lecture held at the London School of Economics in May 2019: “The textbook version of the inflation targeting framework, which prescribes pursuing inflation stability with floating exchange rates through adjustments of a short-term interest rate, is obviously too narrow for EME central banks. In particular, the financial channel of the exchange rate gives rise to difficult trade-offs for monetary policy, while at the same time complicating the conduct of monetary policy by weakening its transmission. EME central banks have risen to this challenge through their innovative use of additional policy instruments. They have turned to FX intervention to deal directly with the financial channel or insure against undesired exchange rate swings, and to other non-orthodox balance sheet policies as well as macroprudential tools to deal with specific imbalances or vulnerabilities in a targeted way.” Not only that I share his view, but I have to say that, in Romania, we started practicing what he speaks about now even before the outbreak of the global crisis. We resorted to forex interventions in order to mitigate the exchange rate volatility and we took prudential measures to contain excessive growth of credit (of forex lending in particular). The IMF mentioned the NBR as being among “the pioneers” of what was later referred to as “macroprudential instruments".

Mugur Isărescu: How CEE economies can face future policy challenges amid changing trade and monetary landscapes Opening remarks by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the ECB conference ”Resilience to global headwinds? CESEE responses to a changing trade and financial landscape”, Session "Responses to monetary policy and financial shocks", Frankfurt am Main, 12 June 2019. * * * Ladies and gentlemen, The two keynote speakers shared with us insightful thoughts about the consequences of monetary policy and financial shocks and about the responses of CEE countries. My intervention will be structured around three issues. First, I will refer to the impact on emerging economies in the EU expected to be exerted by monetary policy normalisation in the euro area. Second, I will tackle the subject of how inflation targeting has adapted to the post-crisis global economic and financial landscape. Finally, the topic of what the CEE economies need to do in order to cope with any strong volatility headwinds will be touched upon. There is no doubt that the recovery of the EU economy in the past years was largely due to major central banks’ non-standard operations, as well as to very low interest rates. We all know that the reversal of this process also has substantial implications for the economic development, mainly through the influence of monetary policy normalisation on financing conditions or capital inflows.
Portfolios are evaluated and re-optimised on a monthly basis, based on a $ initial stake. How would these strategies have fared historically? Charts 7 and 8 show cumulative returns to these strategies in the US and UK. They suggest a dramatic evolutionary pattern. The speculator’s $ stake in US equities in 1880 would by 2009 have grown to over $ The fundamentalist’s same $ stake would have fallen to be worth around 11 cents. Impatience would have trumped patience by a factor of half a million. This out-performance is mirrored in the UK, if less dramatically (Chart 8). Starting in 1920, the value of the speculator’s £ stake would have risen to around £ while the fundamentalists’ stake would have fallen to 32 pence. Momentum would have mopped the floor with fundamentals. The sheep would have defeated the goats. In an evolutionary game, these profit profiles would alter the balance of investors. Impatient investors would have profited and thrived, while patient investors would have lost and died. Nature would have deselected the patience gene. As Keynes predicted, market inefficiencies would have supported the myopic and irrational at the expense of the solvency of the far-sighted. 31  For example, French (2008). BIS Review 114/2010  9  Patience and trading If impatience strategies flourish, we would expect this to be reflected in a secular fall in the average duration of asset holdings, as the fraction of short-term investors rises. Again, what does the evidence suggest?

The second phase of the project, which is scheduled to start on 2nd January 2004, would involve the implementation of the electronic data submission on financial institutions’ foreign exchange transactions. Whether the project could meet the setforth schedule very much depends upon continual support from every participating financial institutions. The third phase of the project involves the economic data system and is scheduled to commence its operation on 2nd July 2004. Each set of economic statistics would be compiled by its corresponding official organizations while the degree of success of the electronic data transfer and submission would mostly depend on the readiness of the government agencies. At present, there are quite a number of project initiatives which have already been implemented; for instance, the EMIS project, which is a joint project in conjunction with the Fiscal Policy Office, Ministry of Finance. The project would link databases of 4 participating agencies; namely, the Fiscal Policy Office, the National Budget Bureau, the Bank of Thailand and the National Economic and Social Development Board (NESDB). With this  BIS Review 43/2003  1  regard, the Bank of Thailand would inform about the data linkages with the Fiscal Policy Office, accordingly. And finally, I hereby would like to take this opportunity to thank all financial institutions, the Bank of Thailand executives, all staff in the DMS project, the IBM (Thailand) Company Limited including all related officials who greatly help push this project along the way throughout its first phase.
But the identification of the different channels of propagation does not suffice. The robust modelling of the system is, in itself, a formidable challenge. In practice, analysts can rely on early warning indicators and models, indicating when clusters of financial institutions or markets of systemic relevance are approaching “danger zones”. In assessing the resilience of the system, macro stress tests have become an important part of the risk assessment tool-kit. They can also help in prioritising the risks identified and are a pertinent tool to support the formulation of policy recommendations. Central banks and supervisory authorities around the world are working to enhance and develop these tools. In my view, the European Systemic Risk Board (ESRB) can make a significant contribution in fostering systemic risk analysis, coordinating analytical efforts and concentrating central banking and supervisory expertise from all EU countries. I am also confident that the role of the ESRB in translating risk assessments into appropriate riskprioritisation, early warnings and concrete policy recommendations to mitigate systemic risks will contribute to the much more resilient EU financial system we are all looking forward to. 4  BIS Review 161/2009

While these initiatives bode well for inclusiveness, the government must be careful not to excessively gear government spending towards populist policies that eventually add financial burden to the already-tight budget and sovereign debt in the future. In particular, it is important that the government prioritize and balance between public consumption and public investment accordingly. More importantly, efficient management with good governance will be the key ingredients to policy success in this regard. For our part, the Bank of Thailand has also put inclusiveness as one of the main agenda in the Financial Master Plan II, other than efficiency and provision of financial infrastructure. The objective is to provide financial access for all, particularly to the underserved, in an efficient and financially viable manner without compromising financial stability and prudence. This is still an on-going process which we are committed to. Ladies and Gentlemen, Before ending my talk this evening, I would like to address some of the concerns raised by Japanese corporations in Thailand, as reported in a survey from JETRO (Japan External Trade Organization). The key concerns include political stability, development of customs-related system and human resource development. On politics, I have good faith that the upcoming election is another important step towards political stability, while commitment to improving inclusiveness mentioned earlier would bring a long-term solution to the country.
When thinking about the set-up of national fiscal stabilisation policy in a monetary union intended to create credibility, these five guiding principles – consistency, commitment, transparency and accountability, coupled with independence of policy makers – are a good starting point. Fiscal stabilisation policy set-up Turning to its design, three relevant questions provide a framework for discussing the set-up of a fiscal stabilisation policy regime for a country in a monetary union: what is to be stabilised, how should it be stabilized and who should do the stabilising? 6 Addressing what is to be stabilised, two alternatives that were discussed in Sweden were the output gap and the inflation rate. Irrespective of what target is chosen, it should apply in the medium term, thereby allowing temporary deviations in the event of shocks hitting the economy. In the case of an  6  6  This discussion is based on Boije, Borg and Eklund (2002) and Boije and Shahnazarian (2003). BIS Review 73/2006  inflation target, it should be designed in such a way as to take account of necessary changes in relative prices; i.e. allowing for adjustments in the real exchange rate. Different targets have different advantages and drawbacks. For our purposes, when discussing the framework, it is more important to stress that the motives and forecasts behind the stabilisation policy decisions should be presented in a clear and open fashion. In turn, this helps build credibility through accountability. How is the policy objective to be stabilised?

Non-bank players have also been aggressively competing for market share in the personal loan and credit card market, although with focus on people in the lower range of income groups. Considerable amount of investment has been made to revolutionize network channel, operational process, and risk management system in order to reduce the operational cost and service delivery time, and to manage risks more effectively. Functionalities of traditional delivery channel such as ATM have been greatly expanded, while new e-banking tools such as internet banking, mobile banking, and electronic money service have been introduced. Use of ATM, debit and credit cards continues to grow steadily, whilst internet banking transactions and use of electronic money services increase markedly both in terms of the number of users and the value of usage. Modernization of operational process and risk management system includes automating application process, credit approval process, and increasing use of credit scoring models and credit information system. Ladies and Gentlemen, We view increased competition and innovation in the retail banking business as beneficial to consumers and the financial system as a whole. Banks’ loan portfolios have become more diversified, while a greater number of people have been given access to financial services. Many of you will recall that one of the primary objectives of the Bank of Thailand’s first Financial Sector Master Plan was to broaden access to financial services for the underserved segments of our society, including people in the lower income group, in the rural areas, and small and medium-sized companies.
From the onset of the financial crisis that started towards the end of 2007 real output in the UK has fallen about 10% relative to the upward path it might have been expected to follow. In Ireland the fall in economic activity has been greater: the level of output is about 13% lower than at the end of 2007; if one had expected growth of 3% a year – significantly lower than the average in the preceding 10 years – output is now more than 20% below where it seemed likely to be. I want to ask two questions about monetary policy prompted by the financial crisis and the resultant recession. First, should we fundamentally re-think the inflation targeting framework for monetary policy? Is the focus on a target for consumer price inflation flawed? This is a long-term issue. There is a second, in some ways more immediate, question. How should monetary policy be set now in what I hope it is not too optimistic to call the aftermath of the financial mess? In considering that issue I will be talking specifically about the UK, as befits a member of the Monetary Policy Committee (MPC) at the Bank of England. I want to start with the longer-term issue of the appropriate goals of monetary policy.

That estimate becomes very substantially smaller if we make less conservative assumptions and allow for several offsetting impacts from banks holding more capital. Specifically: 1. Allowing for a partial offset because as a bank holds more equity capital, its equity becomes less risky, and therefore requires a lower return. (A Modigliani-Miller effect – which I will assume is not zero but only 30% as big as it would be under perfect markets)  2. Allowing for the value to the government of the extra tax revenue received as a result of banks having more equity capital which is less tax sheltered than is debt. 10  BIS Review 133/2010  3. Allowing for a somewhat lower use of bank funding for investment than in the baseline. 4. Allowing for a lower sensitivity of investment and the capital stock to a rise in the cost of funds to non-financial firms. Table 2 shows how rapidly the estimated long-run economic cost of requiring higher bank capital falls as we sequentially allow for each of these offsets. I conclude from this that the long-run costs of having banks hold more capital is likely to be small – plausibly it is negligible. If that is so then the benefits of having much more robust banks would far exceed its costs. If it is right that the benefits of raising capital requirements to much higher levels far outweigh their economic cost, how we did we get into a situation that bank capital was so low relative to total assets?
And in practice, estimated relationships of this sort have all sorts of dynamics within them – consumer spending won’t adjust instantaneously to shifts in the right-hand-side variables – allowing the model to fit the data that much better. But the core relationship for consumption, in most macro models, will have something like [1] within it. And the important thing here, for our purposes, is that there’s no identifiable and direct role for money. The same is true of the relationships used to model business investment. So at least according to this description, monetary policy affects demand (and thereby inflation) only to the extent it influences “r” or “p”. You might think that there’s another, more direct channel, via the wealth term “W”. At least as far as their gross financial assets are concerned quite a bit of households’ (and overall private-sector)  Page 9  wealth is held in the form of deposits in commercial banks. These also account for the vast majority of money in the economy (sometimes called “broad money”). So wouldn’t the creation of new deposits add directly to W and boost demand that way, even if there were no change in interest rates or asset prices? The answer is “no”. What one has to remember is that, for every pound of deposit liabilities, a bank has on the other side of its balance sheet a pound’s worth of lending, or something like it: a matching obligation from the private sector to the bank.

The implication, as my colleague Silvana Tenreyro emphasised in a recent speech[13], is that it makes more sense to think of the impact of the policy through the lens of prices – what it does to bond yields – than quantities. This was also the recommendation of the Bank’s Independent Evaluation Office in a report issued a couple of years ago: “Rather than explaining QE in terms of ‘injecting’ or ‘printing’ money, QE could be framed as a continuation of conventional monetary policy that pushes down long-term interest rates …Framing QE as a change in an interest rate rather than the creation of a quantity of money may also reduce the perception that QE is a transfer of wealth to the rich or to banks.” I think this makes a good deal of sense. The demand for commercial bank money: If desired holdings of central bank money can move around (even for given levels of aggregate spending and economic activity), the same appears to be true of commercial bank deposits. As we’ve seen, the supply processes aren’t the same: in the case of broad money it’s the commercial banks themselves (not the central bank) that directly create the deposits, and effectively accommodate such shifts in demand[14]. But the basic intuition is the same.