samchain/econo-pairs-v1 huggingface dataset:
It is therefore important for Islamic finance practitioners to have greater understanding on the scope of SRI to effectively match the segments of opportunities available in the SRI space. 3/4  BIS central bankers' speeches  An imperative to the successful outcomes of the key growth areas is the availability of multiskilled and top-notch talent in the industry. In Malaysia, we have over 26,000 talents in the Islamic banking industry and a holistic infrastructural ecosystem that supports their developmental needs. As we move forward, we need a deep talent pool with wider set of competencies beyond the scope of Islamic finance knowledge to provide the additional competitive edge to the industry. Continuous nurturing of Islamic finance talent, with intellectual diversity in other related disciplines such as economics, finance, law and financial technology can give rise to new visions and wisdoms that go beyond traditional boundaries. Under the current scenario, talent development is crucial at every level of the organisation from the Board to Shariah committee members as well as front-liners. Currently, an initiative is underway to develop a dedicated programme for Board of Islamic financial institutions with a scope that includes wide-ranging and unique issues within the Islamic finance industry. The Shariah Leaders Education Programme that has commenced since last year has enriched more than 100 local Shariah scholars with the necessary governance and business insights for them to effectively perform their roles as Shariah Committee members.

Progress is also evident in our agenda towards becoming the centre for Islamic fund and wealth management. We emerged as the largest hub, with 35% market share and the most number of Islamic funds. The Malaysian Islamic capital market has also gained its pace as a reputable destination for investment, given its wide range of world class financial products. Backed by a robust Shariah screening methodology, more than 70% of total listed securities in the country are Shariah-compliant, thus providing a wide array of selection for investors. Islamic finance has also become part of the growth strategies of global financial players, indicating greater appreciation of its value propositions. A host of global banking players offering Islamic banking services from diversified regions including from Japan; Europe; and the Middle East have also established their presence in Malaysia. A number of our industry players that offer Islamic finance have also ventured abroad to various jurisdictions. Our MIFC Community, with nearly 40 professional ancillary service entities not only provide key services locally, but many serve global demand and have set benchmarks for 1/4  BIS central bankers' speeches  international best practices. These industry developments which I have highlighted have indeed enhanced the depth and breadth of the Islamic financial services industry. Nevertheless, against the onslaught of global challenges that have intensified uncertainties and complexities, there is heightened urgency for the industry to strategically chart its next phase and reinforce its core strengths.
I would be equally intolerant of misses relative to 2 percent in both directions, above or below, with my intolerance growing the further we deviated from our 2 percent objective. We will almost certainly never be precisely at our 2 percent objective for any length of time given all the forces – many of which are not under our control – that influence actual inflation outcomes over a business cycle. Thus, with a neutral monetary policy, my goal would be to spend about the same amount of time slightly above as slightly below our 2 percent objective. Turning now to U.S. monetary policy, why did I favor raising the federal funds rate target last month? Basically, my assessment was that our conditions for lift-off had been met. Recall, these two conditions were: 1) further improvement in the labor market that we anticipated would be sustained in 2016, and 2) greater confidence that inflation would begin to move back towards our 2 percent inflation objective over the medium term. The timing of policy normalization involves a balancing of risks. I don’t disagree with our critics that there were risks from lifting off in December versus waiting a little longer. First, the economy might turn out to be more fragile than we anticipate, or economic shocks could push the economy off-course relative to our expectations. In other words, our economic projections might be too optimistic.

As a result, country-specific factors have become less important in determining corporate bond prices and spreads. Cross-border holdings of long-term debt securities of monetary financial institutions grew from about 15% in 1999 to nearly 40% in 2007. Integration in the equity markets is less advanced but shows signs of improvement. Between 1997 and 2006, euro area investors doubled their holdings of equity issued in other euro area countries to 29% of their total portfolio of euro area equity assets. The retail banking segment has remained more fragmented. In particular, the euro area cross-country dispersion of bank interest rates, especially of interest rates on consumer loans, has remained relatively high. This reflects different conditions in national economies (e.g. credit and interest rate risk, size of firms, industrial structure and degree of capital market development), institutional factors (e.g. taxation, regulation, supervision and  2  BIS Review 20/2009  consumer protection) and financial structures (e.g. degree of bank/capital market financing and competitiveness). It was probably overoptimistic to expect a faster convergence in this segment. The creation of the euro also gave rise to expectations of a broad based convergence of underlying economic developments. These expectations were quite varied, in fact. Some people expected greater divergence as a consequence of specialisation. Others expected greater convergence. The result is mixed. Some convergence has been observed, in particular in terms of business cycle and dispersion across countries, which is comparable with that among the US states.
We have an exceptional situation, but understanding where exactly the limits are of the fiscal room for manoeuvre also depends on the culture. I see some cultures where people are very anxious that in the medium and long run the fiscal situation would be unsustainable, others that are reasoning short term. The “discount rate” which is implicit in the various cultures is not the same. We have to also take that into account. We don’t have a federal government. We don’t have a federal budget. If we unravel the Stability and Growth Pact we won’t rebuild it afterwards. It would have been unravelled. And what would I say then to American friends telling me, “you put the cart before the horse – you don’t have a federal budget or a federal government – but you have a single currency”? I understand that from the outside our setup might seem a little surprising, but taking everything into account, the credibility of the euro area, the fact that there has been a quid pro quo at the birth of the euro area in terms of the institutional framework, our setup is very solid. And don’t forget that there is also something which is not negligible. The role of automatic stabilisers is also important, and I urge the members of the euro area to display to which  BIS Review 159/2008  3  degree the worsening fiscal balances represent the functioning of automatic stabilisers.

In addition, these issues are garnering considerable attention internationally at present, including in the wake of a report by the Eminent Persons Group, requested by the G20 and presented in October 2018. In that report, it is recommended that the IMF revisit the IV and make it more flexible as regards CFMs like that currently in use in Iceland. 6  Honoured guests: I had not originally intended to speak at such length on economic developments and prospects and monetary policy conduct, but public discourse over the past few days changed that. I also intended to discuss other changes that, in the long run, could be much more important than whether interest rates are currently a few basis points higher or lower. These changes fall into two categories. First are the changes that could take place following the Ministerial Committee’s decision this autumn to commence work to improve the interactions between monetary policy and financial stability policy and to strengthen the framework and architecture of macroprudential policy and financial supervision. Second are the changes in payment intermediation caused by technological advances, among other factors — which, for example, have put the question of a possible electronic króna, or rafkróna, on the agenda. I have high hopes for these changes. But discussions of them must await another occasion. 7
Solvency II will introduce an enhanced system of governance standards – promoting the embedding of a strong risk culture, demonstrable within the day-to-day operations of insurers. The new regulatory regime will not look to fix firms’ business models to be identical, nor to restrict the level of innovation across the market. Rather, Solvency II seeks to promote a better understanding of the risks being taken, allowing insurers to take informed decisions. 2  BIS central bankers’ speeches  It is for firms’ management to decide upon their chosen risk appetite and the precise details of their risk models. What matters to the PRA is that firms hold capital commensurate to such risk exposures, in line with the Directive. The introduction of the Prudent Person Principle is an example of how risk management and strategic decision making will be owned by the insurer and its management. The Prudent Person Principle will require investment decisions to be made as if being decided upon by the objective “prudent man” and represents a shift from quantitative to qualitative rules. Gone are the old investment limits for asset classes. So insurers will have much more freedom in their investment choices. The PRA does not and will not promote one asset class over another.

There are two aspects to this: we recognise that life insurers can be an important source of long-term, stable financing for corporates, infrastructure and mortgages – this is an important function that we want to see maintained; but we also must consider the wider financial stability angles, avoiding undue influence on the asset allocation behaviour of insurers. Solvency II should not materially drive investment decision making except in so far as it helps to make certain that insurers fully understand the risks that they take. The Prudent Person Principle will seek to ensure that the industry understands and is capable of managing its investment risks. Specifically, insurers must be able to demonstrate that they can properly identify, measure, monitor, manage, control and report on their investment risks and not place reliance upon information provided by third parties. Investment choices should be made in the best interest of policy holders and beneficiaries. Those running a business are best placed to make business decisions. That being said, the PRA does have the benefit of perspective. The PRA has the ability to look across the industry and can also draw upon the expertise of specialists working across the different areas of the Bank of England. Whilst on the subject of the role of management, we understand that there has been some uncertainty around our expectations of the non-executive director role for firms that have internal risk models. Non-executive board members need not be technical experts in risk modelling.
Figure8 Real MPR (*) (9ercent) 8  Brazil  6  8 6  Indonesia  4 2 South Africa  0  Mexico  New Zealand  Colombia  4  Peru 2 0  Chile -2  Australia  -2  (*) Calculated as the current MPR minus inflation expected at December 2016. Sources: Central Bank of Chile and central banks of respective countries. 12  BIS central bankers’ speeches  Figure 9 Total corporate debt (*) (percent of GDP) 125  125  External Debt  Local Debt  100  100  75  75  50  50  25  25  0  09  10  11  13  12  14  15  0  III  (*) Excludes banks. Based on firm-level administrative information. Source: Central Bank of Chile based on Achef, SBIF and SVS data. Figure 10 Corporate financial indicators (1) (percent; times) 12  0,8 Indebtedness (right axis) (3)  9  0,6  6  0,4 Profitability (2)  3  0,2  0  0,0 95  97  99  01  03  05  07  09  11  13  15  (1) Data at December of each year, except 2015 which uses information up to September. (2) Accumulated profits in twelve months before financial expenses plus taxes over total assets. (3) Debt to equity ratio. Source: Central Bank of Chile based on SVS data.

Thriving and surviving in this world has demanded a new generation of leadership – forward looking leaders that are able to succeed and bring teams, organisations and countries, to new successes, to new frontiers and having the ability to sustain such performance in this new and more challenging environment. A further phenomenon that has intensified the demand for a new generation of leadership is the trend towards the relentless pursuit of instant results and the attainment of short-term goals. Additionally, the complexities of the world has also had the unintended effect of blurring our lens to focus on immediate challenges and problems. The scourge of shorttermism has defined a world where success is measured by short term results because the criteria for success and the incentive structures have promoted such behaviours. Such successes can however be only fleeting. The world needs leaders who offer a compelling vision with ambitious goals, where the outcomes will genuinely add value and make a difference, and with results that are sustainable. In this new environment of increased interconnectivity and increased inter-linkages, the role of leaders is also about galvanising and bringing together highly diverse entities and providing solutions to problems that have multi-facetted dimensions. It is also about managing diverse relationships that are often conflicting. While this is not new, what has changed is the intensity and the scale of the interconnectedness of businesses and of the goals that need to be achieved.
The foreign capital penetration in the countries I refer to is still low and mainly reflects the inability of our financial systems to facilitate the absorbing of foreign investments in our economies. Finally, considering the above mentioned trends of financial intermediation the following region specific sources of risk need caution scrutiny, namely credit risk, indirect foreign exchange risk, and vulnerabilities associated with foreign branches entry. -  Credit risk  The acceleration of credit growth rates in some countries of the region is warning when associated with an increase in the NPL ratio. Unfortunately there are chances that the buildup in credit risk may be underestimated The deterioration in quality of disbursed credit is not immediately apparent as the increase in the share of new loans can temporarily depress the reported nonperforming loans (NPLs) and credit quality problems typically emerge with a delay. In the aftermath of deterioration in loan portfolio an increased risk of a credit crunch  BIS Review 119/2007  7  emerges; when banks recognize the extent of the build up they may sharply cut or reverse lending growth. Specifically the domination of foreign banks in the region may possess additional risks associated with a possible credit crunch. As long as subsidiaries of foreign banks earn high profits, they have easy access to new capital from their headquarters given that they account for a small share of the loan book of their international banking group.

Particularly, this stand for: independence, transparency and accountability. It is well recognized by foreign and domestic institutions that legal and real independence status of Bank of Albania enjoys satisfactory standards. On the other hand we believe that independence represents a dynamic rather than a static process, therefore we have adopted contemporaneous practices of communication explaining our decisions to Albanian public. This process is embodied in the continuous improvement of the monetary policy report, standard communication of the supervisory board monetary policy decisions, improved analyses and research efforts, and last but not the least, intensive public activity of the Bank of Albania Governor, with various groups of interest across the country. Taken together these have improved public understanding and expectation building for current and future developments in inflation and economic activity. Our approach to communication has further improved our accountability and has resulted in increased credibility and authority within Albanian public. During the past 2-3 years we have increased our ownership in the short and medium run economic and financial development programs. Since the beginning of transition the economic program has been designed and implemented under the setup of IMF support programs. The current program will end in 2008. Starting from 2009, the Bank of Albania and other Albanian authorities will have full ownership in the design and implementation of financial and monetary policies. In the meantime our relationship with IMF will continue under Article IV, moreover the IMF assistance will be considered a welcomed secondary factor.
In order to do that, I first want to summarise the principles governing the Bank’s provision of liquidity insurance, and how those have contributed to a complete overhaul of the Bank’s operations since the start of the financial crisis in 2007. Principles for providing liquidity insurance In order to understand our liquidity insurance facilities, it is helpful first to think about why they are necessary at all – and that relates to what it is that commercial banks do. 2 In their simplest form, banks provide customers with a variety of basic financial services: an on-demand source of bank notes; deposit and savings accounts; payment services; and they supply credit, to both businesses and households. These are critical services for the efficient functioning of the UK economy – done well they make us all better off. But providing them generates a necessary degree of risk. The most obvious is credit risk – if you lend someone money, you might not get it back. That risk does not justify support from the central bank – the consequences of bad commercial lending decisions should be borne by banks’ management and the shareholders, and not by the UK taxpayer. Banks also bear liquidity risk, which might crystallise for reasons beyond their control. For example, bank liabilities typically comprise a large amount of on-demand customer deposits, and their assets tend to comprise longer-term loans to households and firms.

This implies a gradual reduction in the effect on actual M3 growth arising from the downward impact of the steep yield curve and the associated allocation of funds into longer-term deposits and securities outside M3. At the same time, the annual growth rate of M1 has continued to moderate, although it remained strong at 9.2% in June 2010. In part, this reflects somewhat higher opportunity costs of holding overnight deposits relative to other short-term deposits. The still weak annual growth rate of bank loans to the private sector continues to conceal countervailing developments, with increasingly positive growth in loans to households and stabilised negative annual growth in loans to non-financial corporations. A lagged response of loans to non-financial corporations to developments in economic activity is a normal feature of the business cycle. The data up to June indicate that, after expanding for a few months earlier in the year, the size of banks’ overall balance sheets has not increased further. The challenge remains for banks to expand the availability of credit to the non-financial sector when demand picks up. Where necessary, to address this challenge, banks should retain earnings, turn to the market to strengthen further their capital bases or take full advantage of government support measures for recapitalisation. In this respect, we welcome the EU-wide stress-testing exercise, which was prepared and conducted by the Committee of European Banking Supervisors (CEBS) and national supervisory authorities, in close cooperation with the ECB.
The risks multiply. What can one do about this? You can, of course, opt for the easy approach. You can continue to maintain tight controls and resist liberalization. But this will hinder the development of your domestic financial markets, and also the skill of the people involved, both the regulators and the commercial banks themselves. In my opinion, the right approach is for the emerging market to create, or improve and maintain the right fundamentals. In a way, instead of trying to extend your breakwater further and further, it is better to change from the less stable rowing boat to a more sturdy and seaworthy ship, one that can handle the rough ocean better. In this respect, there are three things that I wish to highlight. The first is the need to ensure that the country conducts proper macroeconomic policy. I mention this even though it is not directly the job of supervisors because it can overwhelm everything. To take the example of Thailand, we used the fixed exchange regime for too long, but without the domestic flexibility to adjust wages and prices to correct lack of competitiveness. We therefore could not maintain the parity for long. It also led to distortion in risk perception that led to excessive foreign exchange risk mismatch, over investment in the non-traded sector and damaging speculation, especially in real estate.

When we had to change to the flexible exchange regime, the exchange rate depreciated to a low point of less than 50% of its pre-crisis value before backing up to above 60. The exchange losses that occurred was, among other things, one of the major factors causing the level of non-performing loans to go up to the peak of 45%. This was almost one out of every two dollars lent out. What stress test can really prepare us for such an event? The second is to have the right infrastructure for the domestic financial markets. This topic includes many things like (a)  having the proper market rules,  (b)  having the legal framework that facilitates the enforcement of creditors’ rights,  (c)  having the laws and procedures to deal with bankruptcy,  (d)  having proper accounting and auditing standards as well as a reliable system of credit information on individual borrowers. BIS Review 52/2002  1  I can still recall that during the 1997 crisis, the inter bank market in Thailand ceased up for fear of counter party failure. But the problem also extended to the system of commercial trade credit between ordinary companies, the sellers and buyers of goods. Today, five years after the event, the system of trade credit still has not regained its full recovery. This problem can be mitigated with the function of credit bureau that reports regularly on payment behavior of commercial firms. Third is to ensure that there exists proper supervision of financial institutions.