samchain/econo-pairs-v1 huggingface dataset:
Eddie Yue: Islamic finance – its potential to bring new economic growth to Hong Kong Keynote address by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, for the Hong Kong Islamic Finance Forum, Hong Kong SAR, 25 November 2008. *  *  *  Ladies and gentlemen, I would like to thank the organisers for inviting me to speak at this forum, which is being held in Hong Kong for the first time. In the past several months, we have witnessed the unfolding of a global financial crisis. The sub-prime problem in the US and the ensuing credit crunch in the industrialised economies have spread and brought about a weakening of confidence in the solvency of the financial system. Concerns about credit risk exposures among financial market participants mounted following the failure of Lehman Brothers. Interbank money markets in many economies came under extreme pressure or seized up entirely. Extraordinary and concerted efforts by governments and central banks to restore confidence, inject liquidity and recapitalise the banking system appear to have paid off to the extent of preventing the collapse of the banking and financial system although credit and money markets remain stressed. As the turmoil deepened, people have also focussed attention on the wider impact of the crisis on the real economy, leading to a grimmer outlook for global economic performance.

The assets managed by Singaporebased fund managers grew by 24% to almost $ in 2006. 4  BIS Review 76/2007  Second, the sources of funds flowing into or through Singapore continue to diversify. The Middle East has becoming increasingly important, along with South Asia. Funds sourced from the Middle East and South Asia grew by 21% and 36% respectively year-on-year. One of our local banks, DBS Bank, recently formed a joint venture with a group of Arab investors to set up Singapore’s first Islamic bank. This will spur the development of Islamic financial products in Singapore. I understand that Japan is also moving into Islamic finance. We can learn from each other and work together. Third, the critical mass of asset management activity in Singapore is continuing to grow. In 2006, 57% of the total AUM in Singapore was invested in the Asian region. Fund managers continue to use Singapore as their regional headquarters because they see Singapore as a prime location to service clients, raise capital from the region, as well as invest into the region and beyond. Singapore has also grown as a centre for hedge fund managers. Not only have these alternative investment managers contributed to the growth of our asset management industry, they have also added to its breadth and depth. Why has Singapore seen such strong growth as a financial centre? I think much of it has to do with our continuous efforts to enhance Singapore’s position as a gateway to Asia by transforming Singapore into a global city.
These include targeted utility rebates that directly alleviate the higher cost of living for households. Similarly, SMEs received a one-off cash grant in this year’s Budget to help offset higher business costs. Implications for asset prices My third point is that it is important to respond appropriately to rising asset prices, including in the housing market. Following the recent financial crisis, major central banks reduced policy interest rates to historical lows. Credit growth in this region has recovered strongly, in Singapore and other Asian economies. There is a danger that systemic risk can develop and crystallise in a number of ways. For instance, low interest rates may encourage risky borrowing and lending practices, to create a build-up of leverage in households’ and banks’ balance sheets. Capital flows into Asia can also contribute to higher bank leverage, as well as asset price inflation, with the risk of sharp corrections in asset prices should these capital flows reverse quickly. Past experiences have shown that when highly leveraged asset markets correct sharply, they can lead to enormous stress on the banking system and significant collateral damage on the real economy. The views among central bankers have therefore increasingly shifted towards the need to take pre-emptive measures at an early stage. The global experience with monetary policy, however, suggests that broad policy instruments like exchange rates and interest rates have very significant collateral effects, and are often subject to long and variable lags before impacting asset markets.

And, finally, in developing early warning indicators for different types of inflationary pressures, and assessing the efficacy of various macroprudential instruments. Partnerships with academia can also play a key role in public insights and understanding of structural issues, challenges and the policy trade-offs. In this regard, I encourage SKBI to be at the forefront of applied financial and economic research that can help shape policy thinking. An American opera soprano and actress turned self-help guru, Dorothy Sarnoff, once said: “Make sure you finished speaking before your audience finished listening”. This morning, I am sure many of you are looking forward to the keynote address by Sir James Mirrlees as much as I am. So allow me now to end my opening address here. Thank you for your kind attention. 4  BIS central bankers’ speeches
In keeping with previous examples, it illustrates the extreme non-contractual lengths some of the asset managers were willing to go to in order to protect their reputations. It also shows how the equivalent of a “bank run” can happen in the shadow banking system. And it shows the potential importance of public sector support – another complicating factor that makes the true risks in a tail event difficult to assess. As a final example in this section, we have Deutsche Bank’s decision in December 2008 not to call a lower tier 2 subordinated debt issue (a € 2004/2014 bond with a call date of Jan 16 2009), despite the fact that it was customary for banks to call such bonds at the first possible date. The reason that this is interesting is that it was actually economically rational  13  In Japan, money market funds lost much of their appeal after principal losses due to Enron-related investments, and investors largely returned to bank deposits. 14  See Brewster and Chung, 17 September 2008, “Fear of money market funds ‘breaking the buck’ ”, The Financial Times, and Moody’s Investor Service, August 9.2010, “Sponsor Support Key to Money Market Funds”. 8  BIS central bankers’ speeches  in isolation for Deutsche Bank not to call, and it was fully within its right not to do so, but still, investors became infuriated and the consequent short-term adverse reaction almost certainly cost Deutsche and its shareholders a multiple of the gain it received from not calling the bond.

William C Dudley: Lessons learned from the financial crisis Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Eighth Annual BIS Conference, Basel, 3 July 2009. *  *  *  In assessing the lessons of the past two years, I will focus on five broad themes that are interrelated: •  Interconnectedness of the financial system  •  System dynamics – How does the system respond to shocks? •  Incentives – Can we improve outcomes by changing incentives? •  Transparency  •  How should central banks respond to asset bubbles? As always, my views are my own and may not necessarily reflect those of the FOMC or the Federal Reserve System. Interconnectedness This financial crisis has exposed how important the interconnections are among the banking system, capital markets, and payment and settlement systems. Focus on only one part of the financial system can obscure vulnerabilities that may prove very important. For example, the disruption of the securitization markets caused by the poor performance of highly-rated debt securities, led to significant problems for major financial institutions. Banks had to take assets back on their books; backstop lines of credit were triggered; and banks could no longer securitize loans, increasing the pressure on their balance sheets. This reduced credit availability, which increased the downward pressure on economic activity, which caused asset values to decline further, increasing the degree of stress in the financial system.
MFIs – SEEDS (SKS)  Male  % Received by Women  NA – refers to the non-availability of disaggregated data Source: Regional Development Dept., Central Bank of Sri Lanka  As shown in the table, the Small Farmers and Landless Credit Project (SFLCP), Poverty Alleviation Micro Finance Project (PAMP) and SANASA Thrift and Credit Societies have been successful in providing loan facilities at 93%, 76% and 70%, respectively, for women. Approximately 8,681 women have obtained financial and credit facilities under the SFLCP revolving funds loan scheme, while 39,388 women have benefited under PAMP as at the end of 2007. Again, due to lack of statistics and information, it is difficult to assess the ratio of loans granted exclusively for women by commercial banks. Among others, the Sarvodaya  6  BIS Review 40/2008  46.00  (SEEDS) has been in the forefront, reporting a total loan value of Rs 1.9 billion at the end of 2007, of which 67% has been for women borrowers. As shown in Table IV, exclusivity conditions are not necessarily applicable to Sri Lanka given the large-scale membership of women in the widespread banking arm of the Cooperative Societies, i.e. about 1,500 cooperative rural banks and 7,400 Sanasa Societies, both providing banking and financial services. In effect, in the micro finance delivery chain, Sri Lanka’s Cooperative Societies and Sanasa Societies appear to be very significant.

Comparatively, however, we are ahead in the region as 51 per cent of about 89 million farm households in India have no access to formal or informal sources of credit while 73 per cent have no access to formal sources of credit. Although both in India and Sri Lanka, the shares of noninstitutional sources of credit have decreased compared to the 1970’s and 1980’s, there still remains a significant gap in accessing the formal financial sector by men and women in rural areas and the unemployed in the urban areas. Among many reasons for financial exclusion of women from the formal system, however, literacy barriers and language barriers are becoming less important factors. It is primarily the approach of banks and financial institutions and the strenuous processes and procedures adopted by them, which matters more in financial exclusion. The second important area of financial exclusion is the denial of access to efficient and safe payment systems. This area of activity is unknown to many and it has been taken for granted. Among the main payment instruments, cash is straightforward. However, the other payment instruments, such as cheques, bank drafts, electronic payments, card payments etc., can have delays in both clearing and settlement, which can cause problems to those who receive money through these payment modes. This is common to both men and women.
Governments in the G7 agreed that intervention in the currency markets should be undertaken only when there was a collective view that exchange rates had become out of line with their longer run fundamental values. That reticence served us well. But over the past two decades, some governments, particularly in Asia and the euro area, have tried to fix exchange rates without putting in place mechanisms to ensure that competitiveness could be rebalanced by other means. That has contributed significantly to the problems facing us. It is crucial to the health of the world economy that we find ways of allowing competitiveness to adjust so that trade imbalances, and hence the present scale of indebtedness, can be reduced. Neither liquidity nor austerity are answers to the question of how to restore a loss of competitiveness. Dealing with these structural issues will take time. Meanwhile, how do we resolve the immediate crisis of confidence in some banks and sovereigns? Since the summer, there have been renewed concerns about the adequacy of the capital of banks in the euro area to absorb likely future losses, thus jeopardising their ability to raise funds. Wholesale funding dried up for many banks over the summer, and share prices of European banks are around 35% lower today than at the start of July. A transparent recognition of losses and a substantial injection of additional capital are necessary to restore market confidence.

Salaries, earlier paid monthly would become payable first fortnightly, then weekly and daily and finally hourly. It would entail a tremendous cost on the employers to meet the demand for paying salaries every hour. Similarly, all other contracts would also be very short term contracts. People would not think of the future, but only on the passing moments. This type of short-term behavior on the part of people would cause the economy concerned to collapse on itself due to a lack of long term commitments. Inflation normally brings in several other irreparable damages to an economy. In the first place, inflation discourages exports, encourages imports and widens the gap between the imports and exports known as the trade gap causing problems for the balance of payments and the exchange rate. If the domestic prices are higher, there is no reason for exporters to sell a product abroad. For instance, if inflation raises the price of a coconut to Rs 100 in the domestic market and its given price in the international market is Rs 50, an exporter would sell the product in the domestic market to gain the price advantage. Similarly, imports are encouraged, because of the lower price in the international markets than the domestic market. This is equivalent to imposing a tax on exports and giving a subsidy to imports. Second, inflation favors borrowers and discourages savers, if interest rates are not adjusted to reflect the going inflation rate.
Speech by François Villeroy de Galhau, Governor of the Banque de France, Centre des professions financières Paris, 17 February 2023 How monetary policy will defeat inflation: channels and locks  Page 2 of 19  Introduction Inflation is currently the number one concern for our fellow citizens and for us. Admittedly it has started to fall back slightly, to around 8.5% in the euro area, and it could have halved by the end of this year. But that will still be too high. Inflation that becomes entrenched at above 2% would be the worst enemy of confidence and therefore growth. The initial causes of this return of inflation are well known, and are primarily external to the euro area: disruptions to global supply chains with the exit from the pandemic, energy prices, Russia’s war against Ukraine... Their indirect repercussions have been felt gradually, first in manufactured goods prices, then in services prices. To sum up, inflation has not only become higher but also more widespread; not just imported but also domestic; not just linked to a transitory supply shock but also potentially persistent. In light of this, no one can seriously deny that monetary policy must respond. Today, therefore, I shall not talk about why the central bank must combat inflation but about how, in the current context, it needs to act to be effective.

The SNB will closely monitor the effectiveness of the revised self-regulation. In  1  Federal Council (2019): Bericht des Bundesrates zu den systemrelevanten Banken. www.admin.ch/opc/de/federal-gazette/2019/5385.pdf  Page 2/4  Berne, 12 December 2019 Fritz Zurbrügg  News conference  parallel, it will continue to regularly reassess the need for an adjustment of the countercyclical capital buffer. Climate change and financial stability  Let me now turn to climate change, a subject already addressed by my colleague Thomas Jordan. Climate change can pose longer-term risks to financial stability. There are primarily two ways in which climate risks can affect the financial system. One is through the increase in the frequency and severity of natural disasters with all their consequences, and the other is through changes to climate policy and to the corresponding regulations. It is the responsibility of individual financial system participants to fully understand climate risks relevant to them and to correctly assess the potential consequences from a business perspective – just as with other risks. For its part, the SNB is focusing on how climate risks could impact on the stability of the Swiss banking system as a whole, as well as on systemically important financial market infrastructures. Currently, the SNB considers the likelihood of risks linked to climate change threatening the stability of the banking system as a whole to be low. In the case of financial market infrastructures, climate risks are minimised, for example, by stipulating that technical facilities be distributed over different locations.
BIS Review 70/2002  3  Sector composition of NOREX exchanges. September 2002 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% Stockholm Industrials and materials Financial services  Copenhagen  Oslo  IT/Telecom Energy  Consumer goods and services Other  Source: NOREX SG 240802  Correlation with world index. USD based price indexes 1  0,8 Dec 93 - 97  0,6  1998-2002  0,4  0,2 Denmark  Finland  Norway  Sweden  Source: EcoWin / Financial Times SG 240802  FDI to/from the US. Total at end 2001. Per cent of GDP 12 to US 10  from US  8 6 4 2 0  Sweden  Denmark  Finland  Norway  Source: National Central Banks, IMF SG 240802  4  BIS Review 70/2002  The links with the US economy are many and complex. The US is one of our major trading partners. But the ties are perhaps even more evident in the capital markets. All the Nordic countries have relatively large direct investments in the US economy. In addition, US capital markets today have a decisive impact on developments around the globe. American capital has also been important for investments in the Nordic economies. US direct investments in Norway. End of year 2000 . M ining and extraction incl.

Banks were granted access to essentially unlimited liquidity at our policy interest rate in our regular open market operations. This support enabled them to maintain their crucial role in financing the real economy. 1  See the speech “The ECB’s enhanced credit support” (Munich, 13 July 2009). BIS Review 103/2009  3  As a second measure, we expanded the collateral eligible in our liquidity providing operations. This offered an opportunity for banks to refinance assets that had become less liquid in the wake of the market turmoil. While the quantitative impact of this measure was not large in aggregate terms, it was important as it gave reassurance to banks that a larger share of their balance sheet could be refinanced at any time in case of need. A third motivation was to give banks a more medium-term perspective in their liquidity planning, making them less vulnerable to short-term shocks and attenuating the maturity mismatch on their balance sheet. By giving banks a longer planning horizon we could further support their credit provision to the economy. A fourth issue we needed to address was the currency mismatch in banks’ balance sheets and the malfunctioning of the international swap market. This was particularly relevant for US dollars, given the need of European banks to fund their dollar assets. We therefore began to supply liquidity to European banks in US dollars, backed by a swap facility established with the Fed. Finally, the Eurosystem acted in financial markets directly.
I trust this regulation will be approved shortly, in accordance with the objectives set by the new European Commission, and that this taxonomy will finally provide us with a common definition of what may be considered “environmental” or “sustainable”. The role of supervisors – external initiatives As supervisors, we clearly have responsibility for urging on these changes. We need to be proactive; in particular, we need to enter into a dialogue with banks to analyse how they are incorporating environmental risk. At the Banco de España we are intent on pressing ahead with this dialogue. Let me mention just a few examples of recent steps taken. To assess the level of preparation for environmental risk, we conducted a survey among the 12 banks directly supervised by the SSM and several other smaller banks. Subsequently we discussed the survey findings with the participating banks, conveying to them the importance of this issue and the supervisory expectations. According to the survey findings, many banks that were already explicitly considering environmental risk have included it in their social responsibility areas. Almost all have a team dedicated exclusively to Sustainable Finance and some also indicate that they have established specific committees, reporting in some cases to the Area General Manager or Corporate Secretary and in others directly to the Board of Directors. 4  In general, the Green Bond Principles are updated once a year, to reflect the latest market developments.

Even so, nonbank lenders may be captive to perceptions of their investors (who may be less informed and more skittish), resulting in preemptive reductions in exposures to some bank counterparties and contributing to market freezes in spite of lenders’ own analysis. 8  The leverage ratio creates a direct cost only if it is binding but banks also appear to take into account the possibility of it binding in the future and how it might be treated in stress tests. BIS central bankers’ speeches  3  illustrates is that interbank trade increases the aggregate size of the balance sheet of the banking sector. Suppose, instead, that a nonbank that is currently lending to Bank A would lend to Bank B. As a result Bank A would have fewer reserves and deposits, so its balance sheet would decrease in size. Bank B would have additional reserves and its balance sheet would increase in size, just as in the above example. However the size of the aggregate balance sheet of the banking sector would not change, as shown in the lower part of Figure 4. The two sets of transactions achieve the same movement of reserves from Bank A to Bank B, but if there is a cost associated with the size of banks’ balance sheets, then the second option would likely be preferred. The three parties would be expected to find a way to share the surplus generated by the lower balance sheet cost.