samchain/econo-pairs-v1 huggingface dataset:
Zeti Akhtar Aziz: Internationalisation of Islamic finance – bridging economies Welcoming address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Global Islamic Finance Forum 2012, Kuala Lumpur, 19 September 2012. *  *  *  This is a decade of profound change in the global financial landscape. The world is also being confronted by the repercussions of the ongoing global financial crisis. Despite this more challenging global financial and economic environment, Islamic finance has continued to remain on its growth trajectory. For Islamic finance, it has been a defining period. Its rapid growth and the intensification of its internationalisation in this decade is now enhancing its role in strengthening international economic linkages between different parts of the world. It is my great pleasure and honour to welcome you this morning to this third Global Islamic Finance Forum (GIFF) 2012. First of all, let me express our gratitude to the Honourable Deputy Prime Minister of the Republic of Turkey, His Excellency Mr. Ali Babacan for accepting our invitation to deliver the Public Lecture at our gathering here today. We are most honoured by your presence and we immensely look forward to your address. Islamic finance: fostering global linkages In this new era, in which the international dimension of Islamic finance has gained significance, Islamic finance has continued to demonstrate its viability and competitiveness in this more liberalised and globalised financial environment. The total Islamic financial assets size now has surpassed $ trillion – following unabated growth from the mid-1990s.

Moreover, many product and service sectors are represented by powerful lobby groups with vested interests that sometimes conflict with the interests of consumers and society as a whole. The Greek programme is one example; the authorities there faced strong resistance from pressure groups[25]. I have absolutely no doubt that one  BIS central bankers’ speeches  3  would meet similar obstacles when reforming, say, the German or French product and service markets. In fact, both these countries have been opposed to wider service sector reform at European level. And Germany is one of the countries that has realised the smallest share of potential benefits from the Services Directive according to the European Commission[26]. Strengthening the single market and governance If we view the euro area as a single economy and not as the sum of its 19 national members, we must have a common growth strategy based on identifying our structural weaknesses. The key words must in my view be “productivity” and “employment”, which are positive-sum games – not “competitiveness”, which could end up as a zero-sum game. The Member States will not lend much support to euro area growth by merely competing for their neighbours’ market shares. We have to act together to raise productivity and employment. Improving the functioning of the service market in the euro area is therefore important not only because of its large share of overall gross value added, 65% on average in the euro area, but also because 75% of the total labour force is employed in this sector.
In retrospect, it became clear that the crisis was greatly intensified by a myriad of unknown connections and interdependencies between financial intermediaries, within and outside the banking system, including some non-regulated financial sectors. Sophisticated market participants and investors were also apparently unaware of the degree of interconnectedness in the financial system. Otherwise, their behaviour in the months leading up to the summer of 2007 might have shown some anticipation of the developments (e.g. they might have seized some contrarian investment opportunities). In particular, •  the magnitude of the large off-balance-sheet exposures of banks to the US subprime-related structured finance products was widely unknown;  •  little information existed about the extent and implications of the activities of new financial entities – conduits and other structured investment vehicles – which are linked through management and liquidity arrangements to banks;  •  the probability that the various intertwined vulnerabilities could materialise simultaneously and combine in the way they eventually did was perceived as being very close to zero;  •  the extent of inter-linkages between financial intermediaries and across markets was not fully appreciated, and the possibility of tensions in one specific segment of the credit market spreading rapidly to other markets and continents was not foreseen. For more than two years now, we have been discussing the need for major improvements in supervisory and regulatory frameworks to respond to the weaknesses that came to light as the crisis unfolded. I will not address these issues again today.

My impression is that economic agents and analysts are generally fairly close to the mark in their analyses when they attempt to predict the interest rate level. Chart: Summary  BIS central bankers’ speeches  7  When the inflation target was introduced, Norges Bank stated that it would place particular emphasis on stabilising inflation in the initial years. As inflation became more firmly anchored, there was broader scope for giving more weight to stabilising output and employment. In addition, we now have ten years of experience and insight. Compared with the first years, inflation targeting is now more flexible. When Haavelmo received the Nobel Prize, he reminded us that economic policy can be demanding. A failure to react to the build-up of imbalances undermines confidence in economic policy. If we tighten policy to rein in imbalances – and succeed – we are viewed in retrospect as having been unduly pessimistic. There is, though, reason for a certain degree of optimism. Theoretically anchored models and improved methods for quantifying them empirically provide a better basis for conducting an effective economic policy. Moreover, we use professional judgement, which we take on board when we apply and further develop models and the analytical apparatus in Norges Bank. Knowledge about relationships in the Norwegian economy, in conjunction with professional judgement, provides a good platform. Thank you for your attention.
Among other things, in our own bank lending survey, banks have been reporting an increase in loan demand for all loan categories for two successive quarters, as well as an easing in credit standards for loans to enterprises. However, we should not forget that credit standards overall remain rather tight from a historical perspective. As mentioned before, it was exactly against the backdrop of weak credit dynamics contributing to a subdued inflation outlook that we decided in early September to adopt a number of additional monetary policy measures, specifically designed to support the  2  BIS central bankers’ speeches  extension of credit to the real economy. As they work through the economy, these measures will help inflation rates return to below, but close to, 2%. What else is needed: well, it is now in the hands of governments to act decisively on further structural reforms that will ensure higher sustainable growth and employment in the euro area. Also, on the fiscal policy side, governments should not unravel the progress made in fiscal consolidation, but use any leeway to make fiscal policies more growth-friendly. As regards monetary policy, we remain fully determined to counter risks to the medium-term outlook for inflation. As I said in the European Parliament last Monday, we stand ready to use additional unconventional instruments within our mandate, and alter the size or composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation. BIS central bankers’ speeches  3

The  BIS Review 30/2009  1  combined effect now is a painful deleveraging process that drives down asset prices, shrinks balance sheets, and feeds straight into the real economy in the form of credit contraction. Adverse feedback loops between the financial system and real economy have become entrenched. The Eurozone, which accounts for the second largest share of global GDP, has deep financial linkages with the US. Through these linkages, financial stresses were transmitted across the Atlantic rapidly. Many banks in Europe, as well as other financial institutions such as insurance companies and asset managers had large exposures to US assets. Many were over-leveraged and dependent on benign conditions for liquidity to continue flowing. So they got sucked into this vortex. We have a similar story of credit evaporating and strains being felt in the real economy. Over in Japan, recovery from a decade of economic growth stagnation has been derailed by the collapse of external demand with serious knock-on effects on domestic activity. Japan’s capacity to support the growth of other advanced and emerging economies is now diminished. So a global recession is now upon us. The three economic giants – the US, Europe and Japan – together accounted for just over 50% of global GDP in 2007. All three cylinders are sputtering. The impact has already been felt worldwide. How long and how deep this recession will be is still an unknown, though many economists are predicting a long L-shaped trajectory.
In May and June we purchased about $ million per day, or about one percent of average daily trading volume in the secondary market, and that pace declined to about $ million per day by September, or less than 0.1 percent. Currently, the SMCCF holds about $ billion of overall exposure across corporate bonds and corporate bond ETFs. This is less than 0.2 percent of the outstanding bonds in this $ trillion market.15 As we’ve said previously, if further improvement in market functioning occurs, we could slow SMCCF purchases further and potentially pause daily purchases entirely. Conversely, if market functioning measures indicate deterioration, the SMCCF remains available to ramp up support. Despite the small footprint of the CCFs, we know the signaling effects have been potent—indeed, this is the main channel through which these facilities have had an impact—and we remain watchful for the risk of creating distortions. One possibility could be that companies issue shorter maturities than they would otherwise to benefit from presence of the CCF backstop. So far, we see no evidence of this behavior; if anything, there has been a tendency toward refinancing maturing debt at longer tenors.16 Another distortion could be excessive amounts of corporate debt issuance based on future expectations of an official sector backstop. This “moral hazard” risk will bear watching over the coming years, but there are at least a couple of reasons to believe it’s muted in the current circumstance. For one thing, global pandemics are an extremely infrequent occurrence.

6 Anna Kovner and Antoine Martin (2020), Expanding the Toolkit: Facilities Established to Respond to the COVID-19 Pandemic, Liberty Street Blog, Federal Reserve Bank of  New York. 7 For more details on the measures of corporate bond market functioning, please see the facility FAQs. 8 See Federal Reserve announces extensive new measures to support the economy, March 23, 2020. 9 CCF eligibility was designed to target domestic non-financial issuers, concentrating our resources on firms that do not have access to funding through deposits, as do banks  and bank holding companies 10 To focus on U.S. businesses and not banks, the facilities exclude depository institutions and depository holding companies. Eligible bonds are non-depository institution  bonds maturing within five years, issued by companies domiciled and incorporated in the U.S. For full details on eligible bonds, see term sheets for the PMCCF and the SMCCF. 11 The preponderance of the Federal Reserve’s ETF purchases—87 percent at September month-end—are rated investment grade. 12 The weightings are determined after limits are applied at the issuer’s parent company level (10 percent of all bonds subject to an $ billion cap) and allocated across  eligible bonds. 13 See New York Fed Announces the First Wave of Firms Selected To Broaden its Counterparty Base for CPFF and SMCCF, September 9, 2020. 14 Nina Boyachenko, Anna Kovner, and Or Shachar (2020), It’s What You Say and What You Buy: A Holistic Evaluation of the Corporate Credit Facilities, Federal Reserve  Bank of New York Staff Reports No. 935, July 2020.
11  Jun.22  Figure 3 Inflation Expectations (annual change, percent) Surveys to analysts (1) (2)  Surveys to firms (1) FTS two years out EES two years out FTS one year out EES one year out  10  8  PDES two years out (4) PDES one year out (4) IMCE one year out (3)  10  8  6  6  4  4  2  2  0  0 17  18  19  20  21  22  17  18  19  20  21  22  (1) Response medians are shown. (2) FTS considers the survey for the first two weeks of each month through January 2018. From February 2018 onwards, it considers the last survey published in the month, including the one prior to the June 2022 Meeting. In months in which the survey is not published, the latest available survey is considered. (3) Average of trade and manufacturing medians. (4) Price determinants and expectations Survey carried out on companies by the Central Bank of Chile. Sources: UAI/Icare and Central Bank of Chile.

Although its fundamentals suggest that it should start to weaken in the short term, it cannot be ruled out that it will continue to be stronger than expected, particularly because of the financing capacity provided by remaining liquidity and the decrease in the level of household debt during 2021. Such a scenario may also emerge if strong global cost pressures increase. This would exacerbate the inflationary problem, triggering a stronger monetary policy reaction by various central banks in the short term, but increasing the likelihood of a global recession in the medium term. The lower part of the MPR corridor accounts for scenarios where inflationary pressures dissipate sooner than expected. It is possible that the contraction in activity and demand will be stronger, either due to weaker investment or faster adjustment in private consumption. Nor can it be ruled out that the external scenario will see a reduction in global cost pressures and inflation easing in most economies, Chile included (figure 13). 6  There are also scenarios where the economy would face more significant changes, which would place growth outside the range of the central scenario projections. One such event could occur if the unfolding Russian invasion of Ukraine proves much more damaging for the world economy. It could also occur if global financial conditions worsen even more significantly, for example, in a scenario where inflation leads to a much larger than expected tightening of monetary policy in the main economies.
•  We are encouraged that regulators in the US and Europe have adopted a substituted compliance or equivalence assessment approach so that entities can comply with just the set of rules applied by the jurisdictions in which they operate. •  MAS supports substituted compliance and equivalence assessments as an important measure to avoid potentially duplicative or inconsistent rules, particularly for entities with international operations. In the area of OTC derivatives trading, MAS is putting in place the rules and infrastructure to support cross-border operations and to help reduce uncertainty to the industry. To allay concerns from the industry over the regulatory burden of having to comply with both home  BIS central bankers’ speeches  5  and host regulations, we are participating in equivalence assessments under the US and European regimes. Thus far, ESMA, the European securities regulator, has recommended to the European Commission that the Singapore framework is broadly equivalent to Europe’s, paving the way for central counterparties in Singapore to offer their services to European participants. We have also submitted to CFTC an application for substituted compliance in respect of requirements on US banks operating here. We are in active discussions with CFTC, and will work with them on the substituted compliance determination, where appropriate, as our OTC regulatory regime comes into force. Impact on trade finance and long-term finance The final unintended consequence is the impact on trade finance and long-term finance.

Second, it remains unclear if structural reform measures can make a bank or banking group safer if a culture of excessive risk-taking is not curtailed and if risk governance frameworks are not strengthened. MAS subscribes to the universal banking model on the premise that it is not the separation between risky and non-risky activities that matters as much as ensuring that risk is well managed wherever it is. •  For domestic banks, MAS does not impose any structural measures. The focus is instead on ensuring that their risk management capabilities are commensurate with the complexity of their activities and that capital and liquidity buffers are healthy. •  For foreign banks that have a significant presence in the retail market, MAS will require local incorporation of their retail operations. The banks can choose to subsidiarise their entire operations within the same legal entity or continue to operate its wholesale banking business under a branch structure. There is no retail ring-fence required. Unintended consequences It is imperative that we press on with the regulatory reform agenda and not succumb to reform fatigue. But even as we do so, we need to be mindful of unintended consequences. Inconsistent implementation of rules The first unintended consequence is the inconsistent application of rules across jurisdictions and across sectors. Inconsistent application of rules across jurisdictions leads to the risk of regulatory arbitrage. Take for example, the new capital rules.
There even exist some banks with few or no physical branches, which rely on the internet and the telephone as their main channels of communication with clients. In general, the development of internet banking appears likely to reduce the franchise value of banks as it contributes to an intensification of competition in the banking sector. Certain commentators even consider that competitive pressure may lead to the separation of various banking activities traditionally performed under the same roof. In the view of these commentators, activities such as deposit taking, payment services and lending could be split up because Internet banking would diminish the traditional synergies between them. What I would like to bear in mind from the discussion on this issue is that, with new information and communication technologies, business practices in the banking industry can be expected to evolve considerably in the near future. For example, advances in data processing as well as in business models may make it possible for banks to make more efficient use of information on customers' business habits, and apply e.g. new credit scoring and other methods of analysis. Customers are likely to benefit from these developments in several ways. Thanks to intensified competition, they are likely to get better and more efficient financial products and services. In particular, new technology such as home banking should contribute to reducing the time and effort spent by customers in purchasing financial products and services.

For example, it was sometimes claimed that stock market prices had reached a permanently higher plateau and that further exceptional rises were to come. Others claimed the death of the business cycle or, in a more realistic version, that business cycle fluctuations could now be expected to be significantly and permanently dampened by the emergence of a New Economy. We cannot fully judge this at the current stage. And uncertainties regarding global economic developments have more or less pushed the discussion about the New Economy into the background. Therefore, in my comments, I shall adopt a rather cautious approach and address the more fundamental issues related to the New Economy. In my interpretation of the debate, there are two main components in the concept of the New Economy. These relate, first, to the way in which the New Economy manifests itself and, second, to the conjunctions of particular events that accompany the emergence of the New Economy. First, the New Economy is seen as leading to a permanently higher rate of potential output growth, with productivity gains driven by technological innovation being the main motor behind the upsurge. The increase in productivity growth that has been regarded as characterising the New Economy is typically seen as the result of an underlying economic process which may take some time to bear fruit and therefore may clearly precede the emergence of the symptoms of the New Economy in macroeconomic data.
Monetary policy based on an inflation target was a relatively new phenomenon at that time. There was also great uncertainty about how this would work in Sweden. For those of us who were around during the crisis years, it is particularly pleasing to see how well the Swedish economy has developed over the past ten years, compared with the previous two decades. Naturally, one cannot ascribe all success to the changeover in stabilization policy – the general economic developments have also been favourable. However, there is no doubt that the new regime with an inflation target for monetary policy has given a steadiness and stability to economic policy that was previously lacking. A stable fiscal policy has also been very important. A lot has happened to the monetary policy framework since the inflation target was introduced. This includes much of the learning process I mentioned in my introduction. As deputy governor during the years 1994 to 1998, I was involved in setting the course, so to speak, and when the work on building up competence and analysis tools for the bank’s main tasks - monetary policy and financial stability began. Other important tasks included improving communication and increasing transparency, both internally and externally. It was necessary to win confidence in monetary policy as quickly as possible and this required openness and clarity. Since I returned to the Bank at the beginning of last year, I have been able to note that the Riksbank’s work procedures have continued to develop and modify.

Anita Angelovska Bezhoska: Open doors to the changing payments landscape Speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the 12th Conference on Payments and Market Infrastructures "Open doors to the changing payments landscape", hosted by the National Bank of the Republic of North Macedonia, Ohrid, 3 June 2019. * * * Distinguished guests, excellences Ladies and gentlemen, good morning It is my great pleasure to welcome you to the 12th Conference on Payments and Market Infrastructures hosted by the National Bank of the Republic of North Macedonia. Through the years, the organization of this conference has benefited from the invaluable contribution and unreserved support of the Dutch Central Bank, for which I express my deep gratitude. The presence of the European Central Bank, the Bank for International Settlement and the European Commission is an inherent feature of the conference, as well. And we are privileged and grateful for that, given the prominent role these institutions play in the area of payments. Financial technologies and innovations are reshaping the financial sector, creating new providers, business models, new products and solutions, thus changing the entire financial ecosystem. It is not imaginary, but rather a real possibility today, with a few swipes on a smartdevice, to be able to track payments across accounts, control direct debits, find a better credit card, compare household bills, or cancel unwanted subscriptions or consents.