samchain/econo-pairs-v1 huggingface dataset:
The challenge before us is to build a new financial architecture that would allow for the more efficient functioning of not only financial intermediation within national economies but also across borders. Islamic finance, with its emphasis on a strong linkage to productive economic activity, its inbuilt check and balances and its high level of disclosure and transparency offers this prospect. Indeed, inherent in Islamic finance is the explicit elements that address several of the issues that have surfaced in the conventional financial system during the current crisis. Given the global dimension of the current crisis, the accelerated pace at which it has spread and the severity of its repercussions, it has called for a higher degree of collective determination by the international community to work together towards developing a global strategy that will evolve a financial system that is stable and sustainable over the entire business cycle. As Islamic finance continues to become an integral part of the global financial system, it will increasingly be exposed to risks of financial stress arising from global financial instability and global economic activity. This necessitates a greater global engagement between those that are driving the reform agenda given that it will result in new structures, standards and regulatory regimes for the industry. This is particularly important  BIS Review 123/2009  1  when such standards become the basis on which assessments are made by multilateral agencies, rating agencies and the market at large.

Caleb M Fundanga: Importance of entrepreneurship in Zambia’s economy Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the PrizeGiving Ceremony for Intermarket Banking Corporation VentureComp 2010 Business Plan Competition, Lusaka, 28 July 2010. *           *  *  Mr Ackim Sinkala, Acting Managing Director – Intermarket Banking Corporation Zambia Limited and Intermarket Securities Limited; Mrs Beatrice Nkanza, General Manager Lusaka Stock Exchange; Dr. Maurice Jangulo, Board Chairman Zambezi Airlines; Dr. Patrick Nkanza, Director General TEVETA; Officials from the Ministry of Science, Technology and Vocational Training; Chief Executive Officers of Financial Institutions and Companies Present; Distinguished Invited Guests; Members of the Press; Ladies and Gentlemen. It is my honour and privilege to officiate at this Prize Giving Ceremony of the VentureComp 2010, K100 Million Business Plan Competition. I was honoured at the beginning of this year to have been given the opportunity to launch this Competition. I did not hesitate to accept the invitation to officiate at this event as the subject of entrepreneurship and the deserved recognition of the entrepreneurial efforts of young men and women is very close to my heart. Distinguished Guests, let me from the onset take this opportunity to commend the sponsors of this competition, Intermarket Banking Corporation Zambia Limited, Intermarket Securities Limited, and their partners, Lusaka Stock exchange (LuSE), Zambezi Airlines and TEVETA for coming up with this excellent and important initiative.
06.02.2023  The role of central banks in sustainable finance* 11th Funseam International Business Symposium. Sustainable Finance: challenges and opportunities Barcelona Margarita Delgado Deputy Governor *lEnglish translation from the original in Spanish. I would like to begin by thanking Funseam for inviting me to take part in this 11th International Business Symposium on Sustainable Finance. The staging of this event and today’s programme are testament to how important sustainable finance has become. Sustainable finance is an ideal tool for undertaking the necessary economic transition and thus meeting the net zero emissions target, as borne out by the different initiatives currently being rolled out. The aim is to meet the Paris Agreement goals, namely to stop average global temperatures from rising by more than 2ºC, while also making the economy better able to adapt to the adverse impact of climate change and boosting the funding of the investments needed to support sustainable growth. Without doubt, this represents an extraordinary challenge for humanity, in all fields, in the decades to come. The year began with the latest edition of the World Economic Forum’s Global Risks Report. According to this report, the top ten risks over the next two years include natural disasters and extreme weather events (in second place) and failure to mitigate climate change (fourth). Taking a ten-year view, the four highest-ranked risks are all related to the environment.

In addition to the European Commission’s green bonds, these instruments have also been issued by both governments and the private sector. Overall, green bonds worth $ billion were issued worldwide in 2022. Added to the issuances of social bonds $ billion), sustainable bonds $ billion) and sustainability-linked bonds3 $ billion), this takes the total to $ billion.4 This is 23% down on the 2021 figure, since the geopolitical context – together with the economic and financial uncertainties – has had an impact on both sustainable finance markets and on the overall volume of issuances. If we also consider financing channels other than issuances, such as sustainable lending, the overall volume of funding in 2022 was down on the previous year. Nonetheless, Spain again set a new record, with a total of € million, representing a 9% increase thanks to the growth in bank financing, which offset the fall in bond-based financing.5  2  Up to the deadline of 19 October 2022. 3  Sustainability bonds are issues whose proceeds are used to finance a combination of green and social projects. Sustainability-linked bonds are instruments whose financial and/or structural characteristics can vary according to whether the issuer achieves a pre-defined sustainability objective. 4  Source: “OFISO Annual Report. Sustainable Finance in Spain in 2022”, based on data from Environmental Finance. 5  Source: “OFISO Annual Report. Sustainable Finance in Spain in 2022”, based on data from Environmental Finance.
Chart 30: Simulation of Bank rate and CPI inflation, if the starting level of slack is 2% Path for Bank rate  Per cent 1.5  Per cent 3  CPI inflation  2.5 1 2 1.5  0.5  1 0 0.5 2013  2014  2015  2016  2017  -0.5 2013 2018  February IR Simulation with a lower bound at 0% Simulation with a lower bound at 0.5%  2014  2015  2016  2017  0 2018  February IR Simulation with a lower bound at 0% Simulation with a lower bound at 0.5%  Source: ONS and Bank Calculations. Simulations show optimal policy under full commitment. Of course, there are good reasons why monetary policy is not set by algorithm. These simulations ignore a number of important practical uncertainties. For example, they assume that this policy path is fully credible and effective in stimulating demand and inflation expectations. In practice, the effects of a policy easing cannot be known with certainty and 18  BIS central bankers’ speeches  policy credibility cannot be guaranteed. Moreover, there are upside as well as downside risks to the inflation outlook. Nonetheless, these experiments are in my view the right baseline when assessing the appropriate policy stance today. Conclusion Inflation has dropped like a stone over the past year, to close to zero. This largely, but not wholly, reflects external forces.

3  This is consistent with Bean (2013), “Global aspects of unconventional monetary policy”, the Monetary Policy Committee’s Forward Guidance document (op cit); and with the Governor’s remarks during the August Inflation Report Press conference: “guidance is not a change in the reaction function, but it gives a better sense of the MPC’s reaction function to financial market participants”. 4  See remarks at the Treasury Select Committee hearing to discuss the Inflation Report on 28 June 2011, and 2012 and 2013 Annual Reports on Monetary Policy to the Treasury Select Committee. 2  BIS central bankers’ speeches  by-quarter. The threshold is not a target. Indeed, a monetary authority cannot have a target for unemployment; it can have a target only for price stability, as Paul Volcker recently stressed.5 That is why the Committee’s Forward Guidance incorporates, crucially, a “knockout” for inflation expectations, where individual members will have to judge whether they are “sufficiently well anchored”. Beyond that, I am glad that in its “financial stability knockout”, the Committee has in effect recognised that monetary policy influences risk-taking behaviour in the financial system.6 This does not mean that the MPC will suddenly lurch towards a supplementary goal of trying to control excesses in markets. The UK’s new architecture gives the Financial Policy Committee some tools to do that where there is a threat to the stability of the financial system.
Although it helped understanding the potential risks and developments during the crisis, it did not serve to identify the imminence and the depth of the global financial crisis. 7  In Greece it were public finances that placed a burden on the domestic banks. In a later stage, due to the deteriorating valuations of Greek sovereign bonds, financing of the government become more difficult due to impaired bank balance sheets. BIS central bankers’ speeches  3  of the list of eligible collateral, and outright purchases of covered bonds and debt securities through the Securities Markets Programme. The two long-term refinancing operations (LTROs) with a maturity of three years implemented in December 2011 and February 2012 allowed banks to satisfy their additional liquidity needs. They relaxed banks’ funding constraints and – owing to their long maturity – addressed impairments in the monetary policy transmission mechanism to longer rates. Beyond the direct effect of averting a major credit crunch, the full effects of the three-year operations will unfold over time and may be gauged only as time proceeds due to the usual lags in monetary policy. The Securities Markets Programme was initiated back in May 2010 and offered necessary support to the monetary transmission but did not address the incentives for governments to engage in the necessary reforms and to rebalance their public finances. While the SMP counts for a significant share of the ECB’s balance sheet, it did not stabilise the situation in a sustainable way.

This requires to further expand the monetary pillar to include a thorough analysis of the financial sector as a whole. In particular, monetary analysis should encompass not only an understanding of banks’ behaviour, but also detailed developments in the shadow banking sector as provider of private sector liquidity. The crisis has exposed the shortcomings of the European governance framework, reflecting an incomplete architecture of the monetary union, both in terms of crisis prevention and crisis resolution. The institutional setup – enshrined in the Treaty – allocated the mandate for price stability to the ECB. Instead, the responsibility for financial stability is not uniquely allocated. While the ECB has crisis management tools at hand, financial stability was originally envisaged as a national task. But the crisis has shown that it has a clear euro area dimension. The ECB will gain in importance for financial stability in the context of the current institutional overhaul of the euro area. This process needs to be democratically legitimised and the ECB needs to receive the full set of instruments and authority to fulfil its new responsibilities in independence and without risks to its reputation. Today, we are called to work on a longer-term vision for Europe, to rectify the recognised shortcomings and to implement a fully functioning Economic and Monetary Union. I am convinced that we will succeed to ensure that EMU can provide the stability and prosperity to the citizens of Europe for which it was created. Thank you. BIS central bankers’ speeches  9
As far as impairments to banks’ funding are concerned, the ECB addressed banks’ funding uncertainty by fully accommodating liquidity needs at a fixed interest rate (the ECB main refinancing rate), while simultaneously lengthening the maturity of refinancing operations: from three to six months and twelve months, and more recently two operations with a three-year maturity. This has allowed an alleviation of the funding constraints of the banking system. In this way, a substantial change in the term structure of liquidity has taken place. While before the crisis about three-quarters of outstanding liquidity had a maturity of one  4  See Holmström, B. and Tirole, J., (2011), Inside and Outside Liquidity, MIT Press. BIS central bankers’ speeches  3  week and the rest three months (i.e. an average maturity of 15–20 days), the current average maturity is 28 months (see slide 5). The expansion of the ECB collateralised monetary policy operations, together with the more widespread collateralisation of financial transactions, has raised the fear of encumbrance of bank assets. This risk has not materialised as the list of eligible collateral has been expanded to enable banks to take full advantage of the ECB full-allotment policy, while rigorously applying risk control measures to mitigate liquidity, market and credit risk. But as higher haircuts erode the refinancing power of encumbered assets, there must be an asymptotic limit to the ability of the central bank to provide outside money without endangering its creditworthiness, on which confidence in the currency rests.

This ability has been severely tested by the crisis. Some of the challenges faced by the ECB have been common to other central banks. The threat to the viability of the interest rate channel, and the consequent need to devise alternative (“non-standard”) measures exploiting other channels of transmission, is a prominent example. The crisis has taught us that the liquidity channel exploited by monetary policy in the euro area can be very powerful. It has allowed the ECB to maintain the flow of credit to the real economy and ensure price stability even in face of the soaring liquidity and funding risks experienced by banks during the crisis. Other challenges faced by the ECB have taken a specific form in the euro area and thus been somewhat different from those experienced by central banks elsewhere. The most obvious one is the sovereign debt crisis, with the associated fragmentation of credit markets across national borders and more recently the break-up fears. The destructive potential of these developments is enormous. This has led the ECB to recently announce its Outright Monetary Transactions in secondary markets for sovereign bonds as a means to safeguard the monetary policy transmission mechanism in all countries of the euro area and to counteract self-fulfilling prophecies. The design of OMTs has been inspired by the desire to affirm in a lasting manner “monetary dominance”, in compliance with the principles enshrined in the Maastricht Treaty.
They will instead have to create such expectations by other methods. If one of the countries manages to raise expectations of its future price level it will be sufficient in principle, however, for the other country to keep the exchange rate constant for its expected future price level to also rise. Roosevelt’s decision to allow the dollar to depreciate by 40 per cent against gold during the depression in the 1930’s can be mentioned  14  Coenen, G. and Wieland, V. (2003). “The Zero-Interest-Rate Bound and the Role of the Exchange Rate for Monetary Policy in Japan” Journal of Monetary Economics 50, 1071-1101. BIS Review 19/2009  7  as an example of a currency depreciation carried out with the express purpose of raising the price level in the country. 15 ”Quantitative easing”: ineffective if it is not expected to be permanent Why not just increase the money supply in order to create expectations of a higher future price level? As long as the interest rate is zero then households and firms, as we have already seen, are indifferent about the choice between money and securities such as Treasury bills or bonds. An increased supply of money will then have no effect other than households and firms holding more money and fewer bills and bonds. However, at some time in the future the economy will return to normal, the interest rate will be positive and households and firms will no longer be indifferent when choosing between money and these securities.

Is this method to the disadvantage of other countries? The method is to the advantage or disadvantage of other countries depending on whether a normal monetary policy expansion, an interest rate cut, is to the advantage or disadvantage of other countries. The effects of a small, open economy's monetary policy on other countries is normally limited, and the net effect depends on a number of circumstances. Monetary policy is normally conducted in each country without regard to such effects. The impact that a currency depreciation or a monetary expansion in a larger country has on the trade balance of other countries depends on both income and substitution effects. The former is positive due to the greater output and the greater demand for foreign imports, while the latter is negative due to changes in the real exchange rate and the terms of trade. Depending on the initial position, the positive income effect can be quite substantial. However, as the income and substitution effects normally have different signs it can be expected that the net effect is normally fairly small. This is supported by simulation studies. 14 Today, however, we have a situation in which the two largest economies in the world, the US and Japan, both have a zero interest rate. If the authorities in these countries want to stimulate the real economy by lowering the real interest rate further by creating higher inflation expectations, they clearly cannot do this by depreciating their currencies against each other at the same time.
Macroeconomic stability was preserved and performance of the Chilean economy was much better than in previous world recessions (figure 1). Also, the financial system endured the global financial crisis with no setbacks, no systemically important financial institutions experienced major stress, and macroeconomic policies set the stage for the healthy recovery we are witnessing now. The macroeconomic framework of the Chilean economy was very important in attaining these results. This framework rests on four pillars. First, monetary policy management is based on a flexible inflation-targeting regime, conducted by an autonomous central bank and supported by a floating exchange rate system. The inflation targeting scheme considers a 3% annual inflation target, with a two-year horizon to correct deviations and a ±1 percentage point tolerance range. 1 The floating exchange rate regime includes the possibility of intervening in the foreign exchange market under exceptional circumstances, which has happened four times since September 1999. Second, a fiscal policy that is accountable and predictable thanks to a structural balance rule. 2 The significant amount of savings accumulated during the run-up of copper prices was a crucial factor in bolstering the resilience of the Chilean economy and in providing a countercyclical fiscal boost. Third, a high degree of commercial and financial integration with the rest of the world.

Examples include using the Kuala 2  BIS central bankers’ speeches  Lumpur Regional Centre for Arbitration that offers services as dispute resolution for Islamic financial contracts; Hong Kong issuers tapping the Ringgit sukuk liquidity for cost-effective pricing given the depth of the sukuk market in Malaysia; as well as enhancing knowledge and expertise in Islamic finance through our higher learning education centres such as the International Centre for Education in Islamic Finance (or INCEIF). Forward-looking scenario – A common trading platform for sukuk Future growth prospect for the sukuk market is tremendous. Growth is expected to come from the GCC and Asian regions as infrastructure projects are estimated to be USD2 trillion and USD8.3 trillion respectively till 2020. Hong Kong, with its sizeable bond market to GDP of 72% can play a role in funding these projects. Moving forward, more efforts are needed towards developing financial inter-linkages between our two markets. One area is for our financial communities to explore a common sukuk trading platform for cross-border transactions. A common platform that incorporates international standards and best practices in all aspects of the sukuk trading is key to instil confidence in secondary markets. It can also increase cross-border activities. It has the potential to spur further diversification of product offerings, reduces cost of intermediation and boosts trading activities.
The ultimate objective of Basel II is to achieve more resilient banks, and thus preserve the broader financial stability. In the Asia Pacific region, thirteen countries have adopted the standardized approaches under Basel II for credit and operational risks. A number of countries have also either already adopted or announced plans to adopt the more advanced approaches by 2010 or earlier. Malaysia adopted the standardised approach this year and has recently issued a concept paper detailing the parameters for the implementation of the more advanced approach to be adopted in 2010. The global economy has entered a period of greater uncertainty, with a number of developments that are taking place in some of the developed economies having destabilising implications on the global economy. The international financial markets continue to be in turmoil, triggered by the developments in the subprime market in the United States and resulting in the tightening of liquidity in the credit markets. The impact of these developments on the financial position of financial institutions has affected the functioning of the financial markets and the financial intermediation process. This has required interventionist policies to contain its systemic implication. In addition, the global economy has been through a period of high commodity and energy prices which has not only translated into higher inflation but has also contributed to dampening economic growth. While the Asian region has experienced robust growth in the first half of 2008, the regional economies will be affected by these developments.

I strongly believe that Europe’s economic weight rests on a tripod with no equivalent elsewhere in the world: our single market, our single currency and our shared social and environmental model. These are three assets, constituting our common identity, that we should build on. First, we in Europe share, thanks to our founding fathers and to Jacques Delorsi, a large single market. It removes most internal borders and regulatory obstacles to the free movement of goods, capital, services, and people in the European Union. It was no coincidence that access to the single market lay at the heart of the Brexit debate. Second, thanks to Helmut Kohl, François Mitterrand and many others, we have built a new and solid currency: the euro is a unique success, which is recognised worldwide and supported by a clear majority of euro area citizens (75%ii). Third, our common social model combines a lower level of inequality with a higher level of public services – let’s call it soziale Marktwirtschaft in German, and pay tribute to social democracy as well as to Christian Democrats. This model is more and more environmental,  Page 2 sur 14 and in this respect, Europe is clearly ahead. The world in this 21 st century, starting with its youth across the different continents, needs our European values. But do we have the power to project these values? Power is, in physics, the multiplication of weight by speed: we collectively have the former, but we lack the latter.