samchain/econo-pairs-v1 huggingface dataset:
The evidence suggests that investment is less 13  responsive to these commercial incentives the greater the degree of uncertainty about future returns . Nor is it just a matter of uncertainty: it’s unlikely that these propitious conditions will last forever. Either the currency market is right about the consequences of Brexit, in which case the UK’s trading relationships will become less favourable; or it’s wrong, in which case sterling is likely to recover. Yet even in normal times, currency moves generally have to endure for quite a while before multinationals decide to shift production from one 14  location to another . So these are not straightforward decisions. Put simply, firms in the tradable sector, and those thinking of entering it, will be weighing the boost in the current rate of return against any additional risk premium they currently require of such investments. The question is whether the first is big enough to compensate for the second. Summary and conclusion The adjective “post-Brexit” is bandied around quite a bit these days. The term’s a bit previous. A better description of the UK’s current economic circumstances is “post-referendum” but “pre-Brexit”. The result is something of a sweet spot for exporters. Sterling fell sharply after the referendum and, despite the strength of consumption since then, has remained close to record lows.

In other words it’s a matter of supply not demand. Chart 6 gives a stylised description. In a competitive market the demand curve facing an individual firm (and those in a relatively small country) is essentially flat. Domestic events don’t have much effect on the global price. When the currency falls, pushing up prices and profits of outward-facing firms, the response of export volumes depends on the slope of the supply curve: to what extent do firms in the tradable sector have the capacity to raise output and, where that is insufficient, the willingness to invest in more? Chart 6: For a small open economy tradable demand is highly elastic  Chart 7: Depreciations push up the sterling price of goods exports as well as those of imports  Source: ONS and Thomson Reuters Datastream. * excluding oil and erratics. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  Now commodities may be an extreme case. They’re essentially homogenous – one country’s output is much like another’s. But even in non-commodity goods markets you find a similar pattern. The UK is relatively small, accounting for only 3% of international goods trade (even including oil). Many UK firms are to a significant extent “price takers” in international markets. And you can see from Chart 7 the close correlation between the sterling price of the UK’s (non-oil) goods exports and the exchange rate. The reaction is a bit less than one-for-one but in general no less marked than that of import prices.
I have no doubt at all that the City has the professional and technical capacity, and the self-confidence, to make a major contribution to this process. Let me touch, finally, Chairman, on financial globalisation more generally. As we have seen, the increasingly free flow of capital internationally has the capacity to contribute massively to the expansion of the world economy; but it can become distorted, with the risk of destructive volatility, which in turn can pose a significant threat to financial stability on a world-wide basis. Since the sudden onset of the Asia crisis some three years ago with its global repercussions there has been a 3  BIS Review 49/2000  huge international effort to reduce the risk of volatility. This has involved drawing up codes of best practice - covering everything from fiscal and monetary prudence, external balance sheet and liquidity management and greater transparency, to increased financial regulation as well as higher legal, accounting and corporate governance standards - which national governments particularly in capital importing countries, are being encouraged to apply. It has involved extensive and ongoing reviews of the financial infrastructure and regulatory practice also in creditor countries. And it has involved a continuing review of the role of the international financial institutions in preventing and managing international debt crises.

In the context of the UK’s highly developed and increasingly integrated financial services industry, in which distinctions between banks, building societies, investment intermediaries, insurance companies and so on have been becoming increasingly blurred, the argument for moving away from a fragmented supervisory and regulatory structure, in which banks were separately regulated, was compelling - and Howard and his team have done a tremendous job in bringing all the different strands of financial services regulation together under the FSA umbrella seamlessly and in a relatively short space of time. A potential downside from the Bank of England’s perspective was the possible loss of information from, or contact with, the banking sector which might reduce our capacity to exercise our responsibility for the stability of the financial system as a whole. Now of course it is early days to begin to assess the new arrangements from this perspective. It is true that we have not had any serious threats to financial stability in this country over the past three years, but I suppose that putting that down to the new structure would be a bit like the man who claimed that the absence of pink elephants in Hyde Park was the direct result of his clicking his fingers there on his regular morning walks. We really haven’t been tested.
Furthermore, because the U.S. labor force participation rate for prime age workers is low compared to many advanced economies, the labor market could conceivably improve even further before encountering significant resource constraints. That said, the Federal Reserve should not overstay its welcome. It is important to get monetary policy back to a neutral setting before the labor market becomes so tight that wages and prices begin to rise at a pace inconsistent with the FOMC’s 2 percent inflation objective. Our mandate from Congress is maximum sustainable employment and price stability—not simply a high level of employment at one point of the business cycle. With respect to how far the FOMC should go in removing monetary policy accommodation, two major issues stand out. First, what represents a neutral monetary policy setting? Second, under what circumstances would it be appropriate to move beyond neutral to a restrictive setting? Unfortunately, we do not also observe the neutral real (i.e., adjusted for inflation) short-term interest rate, or r*. There is a wide range of estimates at any time, and they evolve as the economic environment changes. For example, all else equal, continued buoyant financial conditions amid recent and anticipated future rate hikes imply that r* may be higher than previously estimated. A shift to a more stimulative fiscal policy could also imply a somewhat higher r*, at least temporarily. One’s view of the neutral rate may also be influenced by one’s assessment of the longer-term economic environment.

That would not prevent some analysts from saying that, if GDP growth slows to 6 from 9 percent, the growth rate plunged by 33 percent. An 8-9 percent growth means overheating? What is your opinion? I have never ventured to say that one figure alone would mean the economy is overheated. I usually present things in a more nuanced manner, just like they are in reality. What does  2  BIS Review 113/2008  overheating actually mean? A development that substantially exceeds the growth potential, leading to an overheating of output factors, especially to a chronic lack of labour force and a fast increase of wages and prices. For this year, I believe we need a sectoral approach. On the one hand, we have a significant rise in farming output due mainly to natural factors. And there is no overheating there. On the contrary, prices of most agricultural products are falling and production factors – especially land, but also labour force – are obviously underexploited. Romania's great farming potential has yet to be turned to account. On the other hand, in construction, another major contributor to this year's growth, there are visible signs of overheating: scarce labour force, substantial increases of prices for building materials, higher wages, etc. Of course, a wise policy should stimulate only the sectors where the potential is not fully exploited (such as agriculture) or where we have bottlenecks, as it is the case of road infrastructure in Romania.
Together with other government agencies, we launched a national financial education programme “MoneySENSE”, aimed at improving the basic financial literacy of consumers. The “For the Consumer” portal on MAS’ website provides a one-stop access to financial education materials, including consumer guides. V.  MAS workplan for 2004  The past year has been a challenging one on many fronts, but MAS has made good progress in meeting its business priorities. With the global and regional economic recovery, many new opportunities will emerge. To capitalise on these opportunities, we have identified three key thrusts for our 2004 workplan. Enhancing our competitive operating environment The first thrust is to enhance our competitive operating environment. We aim to do so in the following areas. We will enhance the transparency of supervisory initiatives and policies. To improve financial institutions’ understanding of their statutory responsibilities, MAS will articulate more explicitly and systematically the intent of significant changes in legislation and regulation. We also intend to share best practices for compliance. We will also be reviewing our process for conducting monetary policy in light of the ongoing structural changes in the economy. We will be looking at how we make decisions, how we communicate the Monetary Policy Statement, how we implement the policy, as well as studying the transmission mechanism through which the exchange rate affects the real economy. Next, we will seek a judicious cost-benefit balance in our regulatory and supervisory work. MAS will not compromise the safety and soundness of individual institutions or systemic stability.

Few times ago, I have been informed about a new EU initiative, which requires to set up, within a certain period of time, among others a unified payment system within the euro area, including payments with cards. Presently, small and medium businesses in the euro area have not the same payment opportunities as they have in their respective countries on a national scale. Such a case includes credit cards, which cannot be employed equally across the borders. For this purpose I would suggest that respective experts from the Association and Bank of Albania be as soon as possible informed about this project, making the relevant suggestions in this direction. I personally remain consistent in my position that in Albania we have to adopt the most advanced solutions in all the infrastructure projects that we are going to implement. I believe that we do not need to examine old-fashioned models, which, in addition to the initial cost, will continuously require other funds for maintenance and modification. Besides the developments in the field of payments I would welcome from you a broader commitment even in other directions. I think that the system must further expand its geographical coverage, aiming at including also areas, which, though having at first sight the appearance of being inactive, have large financial potentials in the form of threasurised savings outside the system. Also, the service level should be further improved.
As mentioned, twelve of the seventeen national central banks of the Eurosystem are prudential supervisors, while the others are also involved in supervision. The Treaty and the Statute of the ECB and the Eurosystem also foresee the activation of a role in prudential supervision. Therefore, it would be an alternative step which would be also fully consistent with the institutional requirements of a financially integrated monetary area. Fourth: financial crisis management and resolution A fourth pillar for financial stability governance in the euro area is crisis management and resolution. This is a very challenging process. Public authorities must aim to “square the circle” of preserving financial stability in a highly integrated financial area, while the competent authorities maintain national mandates reflecting their fiduciary responsibility to domestic taxpayers. Nevertheless, important progress is being made within these constraints. The recent Commission proposal on cross-border crisis management, for example, foresees a mediation  BIS central bankers’ speeches  5  role for the EBA in order to facilitate compromise in situations where national interests and assessments diverge. Whilst these proposals should contribute to effectiveness, in the longer term, I would also favour a more centralised framework for resolution within the euro area, as a necessary counterpart to the enhanced supervisory function for the euro area that I have just advocated. Ex ante burden sharing by public authorities appears unworkable as it creates misaligned incentives as well as the risk of moral hazard and free-riding.

Adequate and consistent information on capital flows will also greatly improve Balance of Payments Statistics for Zambia and serve as an early warning system for Government on potential financial crises and other external shocks. Mr. Chairman, Zambia has adequate technical capacity to collect, analyse and disseminate data and information on foreign private investment. It has, however, lagged behind in terms of the frequency of these surveys compared with some other countries in the region. For instance, while we are now at the third phase of the Survey, Uganda, Tanzania and Malawi are in their eighth, fifth and fourth phases, respectively. This only emphasises the critical need to conduct this enterprise survey more regularly. To this end, I wish to reiterate the Bank of Zambia’s, continued support and commitment in working in close collaboration with Government and other Balance of Payments Statistical Committee member institutions in ensuring that the collection of this vital information is done on an annual basis. Accordingly, it is my hope that participants at this workshop will appreciate the importance of this survey and find the results useful. Distinguished Guests, I am particularly happy to learn that compared to other countries in the region, the Zambian team has conducted this enterprise survey in record time. It shows true commitment and dedication of the team to this project. Please keep up the good work. Be reminded, however, that you have established a benchmark, which can only be improved on.
The increased complexity of the financial system is illustrated by the rapidly expanding market of credit derivatives. This is a relatively new financial instrument that comes in many and complicated forms. While contributing positively to greater flexibility in risk management, there is also the possibility that risk is more easily concentrated, and that economic agents can take on risks without being fully aware of their ramifications. Analysing risk originating inside the financial system, it can be useful to divide the approach into two areas.3 The microprudential analysis focuses on the developments within individual institutions, and is concerned with limiting the distress of individual institutions, thereby protecting depositors. The macroprudential analysis focuses on the financial system as a whole, and aims at limiting system-wide distress and avoiding output costs. An important concept here is systemic risk; the risk that liquidity or solvency problems in a bank may cause liquidity problems or insolvency in other institutions. Thus, correlation and common exposures across institutions are important in the macroprudential approach. The second approach deals with risks originating from outside the financial system. This field has increasingly been recognized by researchers and policymakers in later years. Strong growth in debt and asset prices, as well as macroeconomic disturbances like a surge in commodity prices or the unwinding of large imbalances in the world economy, can ultimately affect financial stability in a negative way. To identify potential sources of instability, we need indicators that contain useful information.

Once the appropriate level of the key interest rates has been set, the Executive Board of the ECB implements its monetary policy stance so that the effects of its interest rate decisions are transmitted to the financial markets and the real economy effectively. In this sense, the ECB had to act swiftly and decisively to avoid that tensions in the money market would spill-over to other markets and adversely affect the real economy. So we had to clearly convey two complementary messages. One was that the ECB was determined – from the onset of the financial crises in August 2007 – to ensure the orderly functioning of the euro area inter-bank money market by offering supplementary liquidityproviding refinancing operations or – more recently – by widening the collateral framework to facilitate the provision of liquidity to merchant banks and to engage in unlimited provision of liquidity for all our refinancing operations at a fixed rate. The other message which is fundamental was to raise the public’s awareness that the exceptional interventions aimed to alleviate the tensions in the money market would not compromise the longer-term achievement of price stability in line with our definition less than 2%, but close to 2%. Conclusions Let me conclude. The fundamental changes in central bank communication have helped to enhance the effectiveness, predictability and credibility of monetary policy and have notably contributed to lowering both inflation rates and volatility in the real economy.
companies or legal entities that are established either in Malaysia or in Labuan). Based on the assessment, legal entities are rated as “medium risk”. Taking into consideration experiences from the investigations conducted by the LEAs, there are various instances where legal entities have in the past being used to facilitate laundering activities by the criminals. Similar assessment was also conducted for the Non-Profit Organisation (or the NPO), especially from the perspective whether these NPOs are being used to facilitate financing of terrorism. Although, based on the LEAs investigations there are no known NPO involve in the terrorist financing activities, minimum supervision on the NPOs makes the sector vulnerable to be used by criminals or terrorist. The NRA on its own has no meaning unless the results are used to facilitate greater understanding among all stakeholders involved, including the financial institutions to better understand the money laundering and terrorist financing risks in their own sectors, as well as other sectors that they have dealings with. This will allow financial institutions to better assess the adequacy of their internal AML/CFT controls in mitigating the risks identified and to strengthen these controls where necessary. As the country gathers its understanding of money laundering and terrorist financing risks through the NRA, similar expectations are also incumbent upon the financial institutions.

In this regard, we have already implemented several measures, including removing the double-imposition of stamp duty for Shariah-compliant financing structures, and refining our rules to allow banks to offer Murabaha financing and deposits. As a further step, I am happy to announce that with effect from today, Singapore-based banks may enter into Murabaha interbank placements and offer Ijara Wa Igtina financing. These changes will enable the financial institutions offering Islamic finance a wider range of instruments in their management of liquidity and in their matching of assets and liabilities. These changes have been made after detailed consultation with the industry. MAS will continue to work closely with the industry to ensure that our regulatory and tax framework, and other necessary infrastructure and conditions are in place to foster good risk management and the further growth of Islamic Finance in Singapore. I announced at the World Islamic Banking Conference in Bahrain two months ago that we were in the final stages of setting up a facility to issue sukuk. Today’s signing ceremony marks a further milestone in our developmental efforts. With the help of our financial and legal advisers, the work on the legal structure has been completed. The sukuk, which is based on the Al-Ijarah structure, has been carefully studied by the eminent Shariah scholars advising the Islamic Bank of Asia and Standard Chartered Bank for its full compliance with Shariah principles. This sukuk is the Sharia-compliant equivalent of Singapore Government Securities (SGS), and is of the highest credit standing.
Mervyn King: No country is an island Speech by Mervyn King, Deputy Governor of the Bank of England, at the Institute of Petroleum Annual Dinner, London, 21 February 2001. *  *  *  No country is an island - in terms of economics, if not geography. Trade and capital flows link all the economies of the world. Since 1970 the volume of world trade has increased more than five-fold. Globalisation is not a slogan; it is a fact. The economic winds can rapidly alter direction bringing significant changes in the economic weather. What happens in the world economy is of great importance to your industry. But no business in a country, such as the United Kingdom, which exports and imports almost a third of its national output each year, can ignore global economic developments. Recent events have reminded us of just how volatile that economic weather can be. Only a few short months ago, the United States was experiencing rapid economic growth at a rate which surprised us all. The new frontier had become the new economy, and some had forgotten that economic downturns are a regular feature of a market economy. Share prices had reached levels four times that of a decade earlier, and the price earnings ratio of America's top 500 companies was over forty, an unprecedented level. Now, after a swift and sharp fall of business and consumer confidence, the business cycle appears to be alive and well, and living in the United States.

Nevertheless, the differences between recent developments in the UK and the US are more significant than the similarities. Perhaps the most striking difference between the US and UK economies has been the remarkable resilience of business and consumer confidence in the UK in recent months. Of course, further weakness of the world economy, emanating perhaps in emerging markets, could change the outlook. Nevertheless, Mr President, I am confident that the British economy can withstand the storms and vicissitudes of the international economic weather. But it is in the interests of all of us to work to ensure a prosperous international economy. No country is an island. As John Donne expressed the thought so vividly in his aptly-named Devotions upon Emergent Occasions "all mankind is of one author, and is one volume." BIS Review 16/2001  3