samchain/econo-pairs-v1 huggingface dataset:
The takaful and insurance industry also facilitated affected certificate holders by offering temporary deferment of contribution and premium to promote continuity of takaful protection coverage. More than 1.1 million9 certificate and policyholders have benefited from this relief measure. While the pandemic has yet to peak in some countries, others including Malaysia are heading towards periods of recovery while continuously managing the risk of virus resurgence. As this phase commences, Islamic finance has significant potential and role to play. Three attributes, at least, come to mind on how Islamic finance can respond and contribute meaningfully towards sustainable and inclusive growth:  First, Islamic finance must be value-driven and impact-focused to deliver Maqasid Shariah (the objectives of Shariah). The intrinsic values of Islamic principles are aligned with a vision of economic growth that is balanced, sustainable and inclusive. Shariah advocates for balance between wealth creation and wealth circulation. This in turn promotes fairness and ihsan in promoting the attainment of benefits as well as preventing harm. This crisis has indeed created a wealth of opportunities for Islamic finance. Shariah contracts can deploy a diverse range of capital that is risk-absorbent, patient and philanthropic in nature using instruments such as risk sharing, waqf and sadaqah to support inclusive finance. The flexible nature of such capital encourages allocation of resources towards entrepreneurial ventures and social impact projects that can improve and rebuild well-being of society. It can also to some extent help smoothen structural adjustments in the economy.

Banks were therefore willing to approve credits in order to establish a relationship with such a profitable customer as LTCM. At the same time, the fund’s reticence about its risk profile made it difficult for creditors to form an accurate picture of the total risks. The banks were evidently unaware of the size of the credits that other players had provided, which by itself is remarkable. Neither did they fully appreciate what the large positions might have for consequences if the collateral had to be called. In other words, the banks ought not to have relied to such an extent on the collateral, in the form of securities, they had accepted for their loans. Lending of this type requires that even the banks obtain a picture of the borrower’s total situation. Had they done so in the case of LTCM, the outcome would certainly have been different. The problems last autumn also revealed shortcomings in current risk models and the management of certain types of risk. The banks must pay more attention to how the models work in the event of a pronounced change in market conditions. The markets moved to such an extent that historical estimates of co-variations ceased to apply. The crisis accordingly offers several lessons:  7  BIS Review 23/1999  •  In the light of what happened in international financial markets last autumn, all participants in the financial system must improve their credit policies.
The policy rate in the UK has been 0.5 percent for some time. In the Bank of England’s assessment, a further reduction would not serve any useful purpose. 8 Nor has the ECB found it appropriate to reduce the policy rate further, but is prepared to expand its asset purchase programme if necessary. 9 Central banks also influence long-term interest rates For monetary policy to work, it must have an effect on more than short-term money market rates. The interest rates that influence inflation and employment are those facing enterprises and households. In economies with well-functioning money and credit markets, a reduction in the policy rate will relatively quickly push down market rates. In recent years, there have been cases where this did not happen. The most serious situation that has arisen occurred after the Lehman Brothers collapse. The resulting uncertainty led to very high risk premiums. Despite substantial policy rate cuts, market rates remained high. 8  Bank of England (2013): Note on Negative Interest Rates for Treasury Committee. 9  Cœuré, Benoît (2015), Member of the Executive Board of the ECB: “How binding is the zero lower bound?” (speech given on 18 May 2015), European Central Bank. 4  BIS central bankers’ speeches  In response, a number of central banks, particularly the Federal Reserve and the ECB, intervened directly in those money and credit market segments that had been hardest hit.

The role of central banks has been to counteract an even deeper and more prolonged downturn. This is the challenge to which monetary policy has responded. Chart: Investment and consumption But there have been strong headwinds. We have had an illustration of the claim that downturns following financial crises are deeper and more persistent than other downturns. 12 As a result, the impact of monetary policy has been weaker than otherwise. Enterprises, households and governments made use of ample capital and low interest rates in the precrisis years to debt finance consumption and investment. When the downturn occurred, there was a need for considerable deleveraging, while weak growth prospects have dampened the willingness to invest. In many countries, the downturn was further amplified as banking systems with low resilience had to deal with large loan losses. The uncertainty that arose during the financial crisis has persisted for a long time, dampening the willingness to take on financial risk, and the willingness to save has increased. Chart: GDP The pace of global growth is expected to pick up gradually in the coming years. In the US and the UK, the first two countries to introduce quantitative easing, the recovery is on a firm footing. Unemployment has come down. Increased economic activity has contributed to a substantial reduction in government deficits. In the euro area, the recovery continues to be fragile. A large portion of the workforce is unemployed and production equipment stands idle. However, growth is gradually picking up.
This has had a considerable influence on the inflation outlook. The interest rate has been reduced by 4.5 percentage points, and the krone has appreciated by about 10 per cent. The interest rate reductions this year will make a significant contribution to bringing inflation back to target. In the short term, the effects will primarily be channelled through a weaker krone. In the somewhat longer term, the fall in interest rates will also lead to higher inflation than would otherwise have been the case through stronger demand in Norway. Inflation back on target at the two-year horizon We now expect inflation to move up and stabilise around the inflation target at the two-year horizon. Output and employment are picking up. In our projections, capacity utilisation is stable with an output gap, as calculated by Norges Bank, close to zero.3  Uncertainty associated with inflation projections Projections are uncertain. Experience of uncertainty surrounding inflation forecasts would indicate that when monetary policy is oriented towards reaching the target of 2½ per cent, inflation will remain within the interval of +/- 1 percentage point around the target in four out of five years. This is consistent with the experience of other countries with an inflation targeting regime. It should be noted, however, that this level of accuracy is based on a period of stable inflation in the OECD countries.

In recent years, capacity utilisation has declined from a high level and is now on a par with the level prevailing in the years 1995-1997, before the rise in costs accelerated. Consumer price inflation in 2003 and the background for the deviation from the target In the years 1998-2002, the Norwegian economy was characterised by substantial labour shortages and a considerably higher rise in labour costs than among trading partners. Last year was the fifth consecutive year of very high annual growth. Wage growth was substantially higher than the level that over time is consistent with the inflation target and with normal productivity growth. Pay increases varied widely across the different groups. In Norges Bank’s view, there was therefore a substantial risk of new wage-wage spirals. Further rounds of such strong wage increases might have led to a decline in output and employment. Monetary policy was therefore tightened through an interest rate increase last summer while the krone remained strong. At the one-year horizon, the strong krone would push down inflation to below 2½ per cent, but subsequently the effects of strong wage growth would dominate. Last year, Norges Bank’s Executive Board struck a balance between the consideration of stable inflation developments in the short term and the consideration of stabilising developments in output and employment. Inflation was thus expected and intended to be low in 2003. In the October 2002 Inflation Report, inflation was projected to fall to 1¾ per cent in summer 2003.
As chairman of the Global Economy Meeting which takes place every two months in Basel, under the auspices of the BIS, I mentioned regularly in 2006 as well as in the first months of 2007 that my colleagues and I were judging that there was a significant underpricing of risks in global finance. This situation was substantiated by a very low level of spreads, a very low level of risk premia, an abnormally low level of volatility in a large number of markets. We had explicitly and publicly called for institutions and markets to prepare themselves for a correction that was both unavoidable and necessary to pave the way for more sustainable path of global finance. Such analysis and diagnosis were reflected pretty well in most Financial Stability Reviews published by central banks, not the least in the ECB publication a long time before the market correction. The BIS publications were themselves equally clear in this respect. Second, a good analysis and a pertinent diagnosis are a necessary condition for future necessary market corrections to be as smooth and as orderly as possible. But it is not a  8  See European Commission (2006), Financial services: Commission proposes self-regulatory improvements to deposit guarantee schemes, Brussels, 28 November. 6  BIS Review 17/2008  sufficient condition per se as is clearly demonstrated in the present episode of turbulence and as was regularly observed in the previous periods of sharp and abrupt market corrections.

Transparency because enhanced public information on institutions as well as on financial instruments is the only way we have to avoid contagion and herd behaviour in times of difficulty. Holism because, technology and globalisation helping, we have progressively built global finance on the basis of the very close interconnections of all markets, all institutions, all economies. We must continue to improve our full understanding of the functioning of the financial system as a whole. The Financial Stability Forum gathering banking, insurance and market surveillance authorities, central banks, international financial institutions, treasuries etc., was the first major illustration of this necessity to address the global financial system as a whole. We have to reinforce considerably this holistic approach. And Anticyclicality because a number of rules and regulations, on the one hand, and of behaviours of public and private institutions as well as of markets, on the other hand, have a tendency to be largely procyclical, amplifying the booms as well as the busts in the cycle. We must look at all parts and parcels of global finance with a view to diminishing progressively their procyclical components which implies, in particular but certainly not exclusively, eliminating as much as possible asymmetry in the treatment of booms and busts and extending as much as possible, where needed, the time horizon adopted by all the institutions concerned. Many thanks for your kind attention. BIS Review 17/2008  7
Confidence in the credibility and stability of private money are fundamental components of financial stability. Innovation But let’s go back to stablecoins and innovation in payments. Stablecoins are digital tokens that aim to maintain a stable value vis-a-vis existing forms of money6. Their origin stories generally trace back to the crypto world. Most forms of cryptoassets, like Bitcoin, are too volatile to be attractive as a widespread means of payment. We have seen time and time again that if money is not reliably stable most people will not want to use or accept it as payment. There is no reason to think this time is different7. To solve this, stablecoins have turned to the age-old solution of anchoring their value to national currencies, often with a promise to ensure that the value remains 1 for 1 at all times. Stablecoins therefore could potentially serve as a substitute for a commercial bank deposit. Both stablecoins 2/5  BIS central bankers' speeches  and banks are offering a representation of what a private company owes its customers – an IOU – which can be transferred as a means to pay for things. Both are promising (or at least aspiring to) stability against and interchangeability with money issued by central banks. It is possible in this context that stablecoins could scale up and grow rapidly, and become widely used as a trusted form of sterling-based retail payments. To be clear – I don’t know if this will happen.

Safety nets have also been developed and enhanced, such as in the form of liquidity support to member countries via the ASEAN+3 Chiang Mai Multilateral Swap initiative which consists of a USD120 billion currency swap facility, aimed to support countries with short-term liquidity needs and to supplement existing international financial arrangements. These various developments certainly have significantly enhanced the region’s capability to holistically manage the inflows and to safeguard against the risk of sudden capital flow reversal and the instability that it would bring. Malaysian market developments Let me turn to some recent key developments in the Malaysian financial sector. The domestic financial landscape is undergoing transformation due to our continuous efforts in financial deregulation and liberalisation. Pursuant to financial liberalisation measures announced by Prime Minister Dato’ Sri Najib Tun Razak, the central bank has granted 5 commercial banking licences to foreign banks in June this year, with mega Islamic banking licences to follow suit. Foreign equity limits in investment banks, Islamic banks and insurers have been raised while more operational flexibilities have been granted. In addition, the government has announced plans to increase foreign investment limits for the government linked investment companies such as the Employee Provident Fund. Importantly, these  2  BIS Review 162/2010  liberalisation measures will further strengthen our inter-linkages with financial markets in other parts of the world.
By providing another avenue for financing with the development of the corporate bond market, firms are able to improve their ability to balance debt and equity to better manage the degree of leverage while reducing the impact of shocks arising from over-dependence on any single form or source of financing. The development of corporate bond markets in the region has also enhanced the efficiency of capital allocation by providing an avenue for investing one of Asia’s hallmarks - its large reserve of savings arising from trade surpluses. By developing the regional bond markets, it would enable firms to tap alternative sources of financing at competitive cost thereby contributing to increased efficiency, higher investment and consequently to overall growth. The launch of the Asian Bond Fund (ABF) in June 2003 marks the first significant step in regional financial co-operation and integration, and augurs well for the future development of the Asian regional bond market. The Asian Bond Market will not only serve to facilitate the re-investment of a portion of Asia’s reserves back into the region but what is equally important is that it allows for the efficient allocation of savings for productive investments and at the same time broadens and deepens the regional bond markets. In the process, the level of corporate governance in the region would be enhanced as well. Indeed, developing such an alternative source of financing would serve as a more resilient source of long-term financing with improved matching of the currency and maturity profiles of assets and liabilities.

Policy makers in the region recognise the challenges that emanate from a more competitive environment and have continued to re-examine and redefine strategies geared towards building the capacity of domestic enterprises and thereby enhancing their contribution to growth of the domestic economy. In addition, efforts have also been made to develop new areas of growth to ensure a more diversified economy. Countries have increasingly shifted to areas of their natural comparative advantages, whether in agriculture, ICT, construction and infrastructure or services-related sectors in order to benefit from their inherent strengths. Seven, a new wave of FDI in the region Apart from intra-regional trade, intra-regional foreign direct investment (FDI) flows have increasingly operated as a strong force for growth in the East Asian region. Regional FDI has largely been traderelated. Early FDI in East Asia was mainly derived from Western multinationals, particularly the US. The second wave of FDI after the late 1970s was predominantly Japanese capital which flowed into East Asia, in search of lower costs of production. Today, the cumulative stock of Japanese FDI has surpassed that of American investments. Since the late 1980s, as Taiwan, Hong Kong and Singapore transformed into capital surplus economies that moved up the value chain, investments by these newly industrialised economies gained significance in Asia. This has represented the “third wave” of FDI in the region. The East Asian region is thus witnessing a steady inflow of FDIs from the NIEs to ASEAN and China.
The MPC’s post-meeting statement made clear of the need to monitor the situation in the global market closely so that the stance of monetary policy can be appropriately and flexibly calibrated to ensure price stability and steady growth. Finally, the last point I want to stress is that the ability of the Thai economy to weather external shocks and global slowdown at this time are now much greater compared to the situations say ten years ago. 2  BIS Review 29/2008  First, the country’s economic fundamentals have improved from the crisis years, with solid external positions marked by current account surpluses, high level of international reserves, and much lower level of external debt. This stronger financial position will enhance the ability of the economy to cushion itself against external shocks. Second, our banking sector is in excellent shape, with good profitability, strong capital base, and improved asset quality. The corporate sector is also in good financial shape with strong earnings and low financial leverage. These qualities will make the private sector more resilient to the impact of economic volatilities from outside. And third, policy regime in Thailand has become more flexible, especially the exchange rate, with market force now playing a dominant role in allocating resources. Such attribute provides the private sector with a mechanism to efficiently adjust to the impact of external shocks.

Bandid Nijathaworn: Economic volatility in the Year of the Rat Speech by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at a seminar on “Economic Volatility in the Year of the Rat, Fight or Flight”, organised by the Foreign Correspondents’ Club of Thailand, Bangkok, 6 March 2008. *  *  *  Thank you and good evening, Let me begin first by thanking the FCCT for the invitation. It must have been a long while since I last visited or spoke at a FCCT event, so it is good to be back. Tonight’s topic is economic volatility in the year of the Rat. According to Chinese astrology, Rat is an auspicious animal, and the year of the rat is usually a year of plenty, bringing opportunity and good prospects. So, I think we have a good start. And judging from what has been happening, this year looks to be interesting and challenging both for the markets and policymakers. At this time, we are seeing widespread fears of recession in the US, a deepening of the credit problem, and stubbornly high oil prices. These developments are definitely a negative setting for the global economy and financial markets. Tonight, my talk will focus on global economic volatility and possible implications for Thailand. And I want to do this by offering a perspective on how we see things developing from a financial regulator’s point of view. First, the US economy. Latest economic data from the US are not positive.
Two other excellent papers on this topic are the ECB’s “Distributed ledger technologies in securities posttrading” at https://www.ecb.europa.eu/pub/pdf/scpops/ecbop172.en.pdf; and ESMA’s “The distributed ledger technology applied to securities markets” at https://www.esma.europa.eu/sites/default/files/library/2016– 773_dp_dlt.pdf. BIS central bankers’ speeches  7  and consultation on new functionality to deliver synchronisation with innovative technologies. –  Second, as regulator and supervisor, we will ensure that financial market infrastructures are subject to high standards of resilience and soundness, whatever technological form those infrastructures take in the future. That in turn means developing a supervisory net that is sufficiently flexible to cover the risks posed by new technologies, in a proportionate manner, as they develop. –  Third, we will continue to act as a catalyst for change – through our research work on the policy and technical questions raised by the distributed ledger and central bank digital currencies 9; and working with innovative firms on applications of new and existing technology to central banking topics through our new Fintech Accelerator 10. It is not our job to second guess the market where innovation is rife. But where direction is required on standards, consistency with regulatory needs or policy requirements, we will play our full part, alongside other national central banks through the FSB, G20 and Basel processes. Conclusions We have come a long way from those mouse-jabbing days in Wapping.

The learning and sharing among peers will also encourage cross-fertilisation of ideas, identification of best practices, and collaboration in green investments. 11. Asia is a good starting point for this global alliance. It represents a good mix of developed and emerging economies at different stages of economic development. Each has its unique set of environmental challenges but together we share a common commitment to creating a greener and more liveable region. Closer to home, Hong Kong hosts three quarters of the world’s 100 largest banks, with many of their Asia Pacific headquarters based here. So, we are uniquely placed to serve as the testing ground for the Alliance by connecting banks in the region to their global peers to facilitate sharing and learning. We are confident that the experience gained in Asia will provide useful insight and reference for the IFC to promote green banking in other parts of the world.10. Equally important, by helping banks build their capacity, the Alliance will complement the efforts of banking regulators across jurisdictions to enhance the banking sector’s management of climate-related risks and promote sustainable banking. Participating banks will benefit greatly from the IFC’s wealth of knowledge and expertise in the field of green finance. The learning and sharing among peers will also encourage cross-fertilisation of ideas, identification of best practices, and collaboration in green investments. 12. The Alliance is a new initiative for both the HKMA and the IFC. Today marks the first step of an exciting journey.