samchain/econo-pairs-v1 huggingface dataset:
Fundamental to this is the development of the institutions, the markets, the range of financial products and services and having in place the accounting, legal, regulatory, supervisory and shariah frameworks, as well as, for the monetary authority to have the capacity to manage its financial policies within this context. With the development of these respective components having made significant progress, we are now seeing the Islamic financial services industry enter a new phase of development. Following increased liberalisation, the progress in the development of the international financial architecture for Islamic finance and the increased innovation resulting in the development of new products and services, the international dimension of Islamic finance is becoming increasingly more significant. Islamic financial institutions are now also venturing their operations beyond their domestic borders. Islamic-based papers are also being issued in international financial markets, generating significant interest from global investors. The international financial architecture for the development of Islamic finance has also been strengthened with the establishment of the international boards to set the accounting and prudential standards. These developments have cumulatively evolved the Islamic financial system to increasingly become an integral component of the international financial system. The Malaysian experience has been to evolve a comprehensive domestic Islamic financial system that is diversified in terms of its institutions, markets and players. The strategy has been to institute the entire financial system chain to ensure the efficient functioning of the system.

Philipp M Hildebrand: Financial Stability and Hedge Funds: Effective and Ineffective Supervision Speech by Mr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, Diskussionsforum «Nachbarn Deutschland-Schweiz: Impulse für die Zukunft», Berlin, 9 November 2005. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The hedge fund industry has grown rapidly over the past few years and it has become an important segment of global financial markets. The possibility to use leverage and a high degree of flexibility are key elements of a broad range of investment strategies which have made the hedge funds industry very profitable. Hedge funds have been an important source of innovation in the traditional asset management industry and they have rendered financial markets more liquid, more efficient and more flexible. Nonetheless, the rapid growth of the industry and the excessive use of leverage may result in potential systemic risks which are relevant to central banks, unlike prudential matters. Overall, industry leverage is difficult to measure. However, several studies suggest that it is lower than at the time of the near collapse of LTCM in 1998. Even so, temporary excessive levels of leverage with single hedge funds can not be ruled out completely. A crisis in the hedge fund industry might therefore spill over to their primary trading partners, the major investment banks.
It is quite different in another country where the problems are confined to small institutions, where the ultimate aim should not be their survival in order to avoid a serious interruption in the flow of credit, but rather their removal as soon as possible at as little cost as possible. Indeed, some of the biggest developed economies witnessed, at the onset of the financial crisis, how several of their leading banks were collapsing. This was because, in addition to  BIS central bankers’ speeches  3  the sudden downturn in the value of their assets, they saw the short-term funding channels on which they relied so heavily disappear. Given this scenario, the logical and no doubt inevitable reaction was to swiftly inject huge amounts of public money. Yet in Spain’s case, there was overall excess capacity in the sector and the problems were at a group of small or medium-sized institutions with a reasonably long-term financing structure. All told, the advisability of earmarking public funds to these institutions immediately was much less evident. On one hand, it is not surprising that ailing institutions should apply for public aid, if possible without conditions. But the mission of the authorities is to look out for the general interest, setting conditions for this aid that ensure the adjustment and restructuring of the sector and the creation of new, stronger and better managed institutions, of a sufficient size to gain access to wholesale funding, thus enabling them to channel funds appropriately to the economy as a whole.

Yiu-kwan Choi: Launch of the CMU Bond Price Bulletin Remarks by Mr Yiu-kwan Choi, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Signing Ceremony for the Launch of CMU Bond Price Bulletin, Hong Kong, 9 January 2006. *  *  *  It gives me great pleasure to welcome you all to this signing ceremony for the launch of the CMU Bond Price Bulletin. We are pleased to see the launch of the Bulletin. This, we believe, will be a useful tool to help promote the retail bond market in Hong Kong. As you know, financial infrastructure development has always been a priority item on the HKMA's policy agenda. A robust financial infrastructure is important in maintaining the stability and integrity of the monetary and financial systems and in strengthening Hong Kong's status as an international financial centre. Over the years, we are proud that, with the support of banks and other financial institutions, the HKMA has built a sophisticated financial infrastructure that meets the best international standards. Having said that, we are conscious that there is always scope to further strengthen our financial infrastructure to take account of the latest technology and market developments. It was precisely for this reason that the HKMA conducted a comprehensive review last year on financial infrastructure development in Hong Kong. The launch of the Bulletin is one of the recommendations arising from this review. The objective is to provide retail investors with convenient on-line access to information on bond products and bond prices.
Large-scale support measures deployed by governments and central banks played an essential role in ensuring that the global economy, the financial markets and thus also the banks recovered sooner and more vigorously than had been anticipated a year ago. For the banking sector alone, the major industrial nations committed funds amounting to almost 20% of gross domestic product. As a result of the different measures to support the economy and the banking sector, there has been a considerable rise in the indebtedness of many countries, and also, in some countries, in sovereign credit risk. The international big banks – including the Swiss big banks – benefited substantially from these support measures, and were able to increase their profitability in 2009. At the same time, the Swiss big banks reduced their balance sheets by approximately a quarter. Compared to the previous year, their capital situation improved substantially. Their riskweighted capital ratios, in particular, have increased markedly, and are high also by international standards. This is a very positive development. However, it should not be allowed to conceal the fact that the leverage of both big banks is still high – both per se and when compared with banks in other countries. The big banks are still a long way from meeting the leverage target that will apply in Switzerland from 2013.

For another, the sharp increase in loan volumes – especially for mortgages – against a backdrop of persistent economic uncertainty and the substantial rise in real estate prices points to higher credit risk. In addition, for first mortgages on residential properties, banks are required to have less capital backing under Basel II than they did under Basel I – before 2007 (i.e. under Basel I), a mortgage had to be backed with 4.0% capital; since then (i.e. under Basel II), that figure is only 2.8%. This not only gives banks an incentive to grant more mortgages, but also enables them to reduce the capital buffer used to absorb loan losses. In view of the increased interest rate and credit risk, we urge the domestically focused banks to be prudent. They must be prepared for interest rates to rise. Besides the direct effect on the interest rate margin, particular attention also needs to be given to the indirect effect of an interest rate increase, namely that if loans are granted without sufficient attention being paid to borrowers’ financial situations, a rise in the interest rate will inevitably result in higher loan losses. As I have mentioned, the domestically focused banks are well capitalised by historical standards. But in view of the risks and uncertainty, they will also need to maintain a large capital buffer.
Denis Beau: Opportunities and risks of evolving sources of financing for the economy Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at "Les Rencontres du financement de l’économie", organized by Option Finance, Paris, 26 March 2019. * * * Accompanying slides. Ladies and gentlemen, I am very happy to introduce the 6th edition of the Rencontres du financement de l’économie. As a backdrop to your discussions, I would like to focus on the ongoing changes in the financing of the French and European economies and the related opportunities and risks, both from the point of view of a central bank, the Banque de France, and of a supervisor, the ACPR, which are responsible for ensuring the stability of our financial system and for contributing to a financing of economic growth that is resilient to shocks and sound. This concern for strong and effective financing of growth is highly topical for three reasons: - the downside risks to the euro area’s outlook for expansion have increased in recent months, – the digital revolution has started to spread widely across our economies, offering opportunities and gains but also raising threats for those who are unable to adjust, – the predominance of bank lending, which accounts for 60% of corporate debt in France [Slide 1]. The remaining 40% stems from market financing, which is the exclusive preserve of large enterprises. This situation is not unique to France. It is quite widespread in Europe, in contrast with what prevails in the United States.

Mario Draghi: Risk-reducing and risk-sharing in our Monetary Union Speech by Mr Mario Draghi, President of the European Central Bank, at the European University Institute, Florence, 11 May 2018. * * * It is a great pleasure for me to be invited by the European University Institute, which in many ways mirrors what the European project is for. It was founded to encourage exchange, cooperation and a common European vision. Since then, the university has made countless contributions in the fields of economics, law, political science and history. It has often been the meeting point where academic research helps answer the urgent policy questions of the EU. A decade after the great financial crisis, the euro area looks set to exit more resilient than it entered it. Much of the harm caused by the economic downturn has now been reversed by a consistent period of growth. And some of the institutional and structural factors that exacerbated the crisis have been addressed. But we know that our Monetary Union is not complete. The crisis revealed some specific fragilities in the euro area’s construction that so far have not been resolved. To make our Monetary Union more robust against future challenges, we need to address these fragilities. 1. The history of the crisis in the euro area The crisis took place in five main phases. The first phase was similar across advanced economies.
Indeed, henceforth instruments will be available that make the recurrence of a crisis such as the present one highly unlikely, and undoubtedly this work is very useful and very important going forward. Had these instruments been available to us from the outset of the Monetary Union, the current crisis in the euro area would surely not have broken, since the levels of cross-country divergence in terms of competitiveness, excessive debt or budget deficits that we are trying to redress would not have been reached. But all this progress has a very limited impact on our most immediate problem, which is to manage the crisis in which we are immersed. And what I wish to stress here is that this task requires very different tools from those needed to prevent this type of divergence recurring in the future. 18 months on from the outbreak of the sovereign debt crisis, we have robust mechanisms to prevent and sanction future imbalances, mechanisms that may be reinforced further if the improvements proposed by the ECB or some of the suggestions by the German government are finally heeded. But we have still not managed to activate the right mechanisms to halt the current market dynamic. Another example of reasonable approaches in respect of financial regulation – but which may prove insufficient to emerge from the current crisis – is the handling of moral hazard, the perverse incentive which induces agents to pursue inappropriate and risky behaviour because they assume they are not going to pay for the consequences.

This would increase the potential for a more diverse range of products and services to meet the changing requirements in corporate, retail and investment activities. Given the universal nature of the Islamic banking licence, the attention given to the capacity for innovation will become an important defining factor in the progress of Islamic finance. With the rapid progress on the issuance of prudential and supervisory standards by the Islamic Financial Services Board (IFSB), Islamic finance is now governed by its own international best practices. The establishment of the Islamic Financial Services Board in 2002 was part of the efforts to strengthen the international Islamic financial architecture. Thus far, two standards have been issued, namely the standards for Capital Adequacy and the Guiding Principles for Risk Management for Islamic financial institutions. Bank Negara Malaysia will be implementing these IFSB standards for adoption by Malaysian Islamic banking institutions. The harmonisation of the prudential standards across borders will also enhance the process of global financial integration in Islamic finance. The Islamic financial institutions are also able to benefit from maximising their balance sheet structure, by leveraging on the Profit Sharing Investment Accounts in addition to their own capital. Under the IFSB Capital Adequacy Standard, the total risk weighted assets funded by the Profit Sharing Investment Accounts will be deducted in the determination of the overall Risk Weighted Capital Ratio of the institutions.
Miroslav Singer: The Czech Republic outside EMU – a success story born from painful lessons. A Czech view on resolving the euro crisis Speech by Mr Miroslav Singer, Governor of the Czech National Bank, as part of the OMFIF (Official Monetary and Financial Institutions Forum) Golden Series on World Money, Reform Club, London, 28 June 2011. *  *  *  A horrible end is better than endless horror. Lieber ein Ende mit Schrecken als ein Schrecken ohne Ende. Ferdinand Von Schill (1776–1808) Ladies and Gentlemen, As we all know, the eurozone is facing serious problems at the present time. It is my opinion that there are important lessons to be learned from the collapse of the Bretton Woods system in the early 1970s. The Czech policy authorities learned these lessons – often the hard way – first of all after the split of Czechoslovakia 1993, and again during the financial and currency crisis that hit the Czech Republic later in the same decade. In my speech today I will recall these lessons and examine how they can be applied in order to minimise the costs of resolving the eurozone debt crisis. Before going any further, however, I’d like to draw your attention to four basic – and surprising, perhaps even shocking – facts about the Czech Republic. First of all, it may come as a shock to some of you to learn that the Czech Republic is not an Eastern European country.

The fourth-quarter figure was slightly higher than estimated in the previous Monetary Policy Report and expected by the market, largely due to the greater contribution of mining. In the last six quarters, the expansion of sectors other than natural resources, that better reflect changes in the use of installed capacity, has continued showing relatively stable rates, around 5.5%, not far above the trend. Domestic demand growth, in contrast, has picked up again. After falling steadily during 2011 and approaching GDP growth rates in early 2012, it rose again in the following quarters, to end the year with a y-o-y expansion that outperformed GDP by 1.5 percentage points. This reacceleration reflects stronger investment and, most recently, also stronger private consumption. On the investment front, the strong momentum of mining and energy projects has persisted, while imports of capital goods have continued to reflect the strong increase in the purchases of transport equipment. Moreover, in the real estate industry, sales have remained strong, particularly for housing in construction stage, and other indicators such as dispatches, sales and imports of materials for this sector have remained high despite some marginal slowdown. The expansion of consumption has found support in rising personal income, which reflects the evolution of employment and real wages. In the fourth quarter of 2012 consumption grew 7.3% in real terms, owing primarily to durable goods. Partial data from the first quarter of this year, such as retail, household items and car sales, signals dynamic private consumption. Domestic financial conditions show no major changes in recent months.
The first one has to do with the defense of the financial customer. It clearly needs strengthening. 1  A household is defined to be in financial risk when debt service amounts to 75 percent of its annual income and its expenditures are 20 percent greater than income. This is estimated at the survey, so it includes households that may be going through temporary difficulties or facing a solvency problem. The data presented here correspond to households in the Metropolitan Region. 4  BIS central bankers’ speeches  Reinforcing the financial area of the Consumer Service Office (SERNAC) and the implementation of standardized credit contracts – with very clear rules for reprogramming and forbidding abusive practices – point in that direction. The second such flaw refers to investor protection; it is necessary to ensure that investors receive reliable information and are spared the deceptions that seem to have occurred in this case. The Bank is readily available to cooperate in these discussions. Another important aspect of the operation of the retail industry is safeguarding the normal functioning of the payment system, in as much as there are stores that will accept credit cards from retail stores as a means of payment. In concrete, what is sought is to ensure that businesses associated the credit card receive what is due them at the right time. This aspect is regulated in the bylaws of the Central Bank.

21 I have previously discussed the financial risks that occur on the Riksbank’s balance sheet when we have large bond holdings. 22 These risks in combination with the Riksbank’s weak earning capacity constitute an argument in favour of a smaller balance sheet in the long run. This is the best way of safeguarding the Riksbank’s future capacity to fund its own operations and conduct an independent monetary policy. 23  Reasonable for the Riksbank’s balance sheet to shrink in the long run The Riksbank’s balance sheet has grown rapidly in recent years, partly because we have purchased government bonds for monetary policy purposes, and partly because the foreign exchange reserve has been strengthened. In other countries, arguments have been put forward indicating that central banks should perhaps continue to hold large bond holdings even in the future when monetary policy has been normalised. In my opinion, these arguments are of limited relevance to Sweden and the Riksbank. On the other hand, there are arguments indicating that the Riksbank should mitigate its financial risk by winding down most of its bond holdings when monetary policy is normalized. My assessment is that the best way of winding down the bond holdings with as little market influence as possible is to hold the bonds in the portfolio until they mature. Over the next decade, the Riksbank’s bond holdings will then develop approximately as shown in Figure 6. The repo rate and the rate path will thus be the main monetary policy tools when monetary policy has been normalized.
Therefore, it is extremely important that the parties involved – particularly the social partners and the Government – make every effort to push matters in that direction. It is important that the decisions taken in wage negotiations over the next several months be based on correct information. The report published jointly by the social partners last month, entitled In the Prelude to Wage Negotiations, contains cogent information on wage developments in recent years. According to the report, the emphasis placed on the lowest wages in recent years has borne fruit, at least in part. For example, office workers’ and general labourers’ wages rose most during the period from 2006 through 2014, and they rose in excess of the general wage index. The report also confirms what has previously been reported, that wages and productivity per hour worked are relatively low in comparison with trading partner countries and that Icelandic workers compensate somewhat for this with longer working hours. This highlights the fact that, in the long run, increased productivity is the premise for higher real wages. In this context, the weak productivity growth in recent years could give some cause for concern. On the other hand, it also reflects the growth of labour-intensive sectors such as tourism, which have been supported by the low real exchange rate and have facilitated a more rapid decline in unemployment than would otherwise have been possible.

The fiscal policy applied during the three first quarters of the year materialised in the annual fall of public spending for this period, whereas income growth was low and budget deficit was in check. On the other hand, the fourth quarter of 2012 and year 2013 are expected to be characterised by upward fiscal spending and budget deficit. This fiscal policy increases the macroeconomic stimulus in the short run; however, it should be sensitive to the need for medium and long-term stability of the public debt. BIS central bankers’ speeches  1  Foreign demand was the main driver of economic activity in the third quarter of the year. Latest foreign trade data confirm the same trend for the successive period. Thus, in October, the trade deficit continued the corrective trend, narrowing down to 10.3% in annual terms. Its performance has reflected mainly the good performance of exports, which maintained positive rates of their annual growth, 12.0% in this month. Imports have also contributed to narrowing the trade deficit, contacting 2.3% in annual terms, in this month. The analysis of monetary indicators points to low monetary pressures on prices. Higher money supply, the M3 aggregate, continued to decelerate in October, settling at 6.2%. In particular, lending to the private sector slowed down significantly. Annual credit growth for the private sector was 2.4% in October, reaching its all-time low. To a large extent, it is influenced by the low demand of households and business for loans, as reflected by the performance of consumption and private investments.