samchain/econo-pairs-v1 huggingface dataset:
It is on these grounds that the ERM II design has come under attack, as an unnecessarily lengthy period. 3  Thus, it is not surprising that some acceding countries prefer to stay there for the shortest time possible. -  The last issue I would like to discuss is the determination of the central parity rate. The potential implications of an exchange rate misalignment are large, as the corrective burden would fall on the real sector. An undervaluation or overvaluation of the exchange rate would result in higher inflation or lower economic growth until the real exchange rate returns to equilibrium. In the absence of a nominal exchange rate channel the adjustment process would tend to be slow. Now let me briefly turn to the policy implications the aforementioned issues pose. The ECB policy stance on ERM II (ECB, 2003) emphasizes the primacy of the inflation objective over the exchange rate stability. Approaching the EMU in the context of an IT regime seems quite a plausible option, and one which is even encouraged by the ECB. The period of residence in the ERM II needs however to be as short as possible, so as to avoid the inherent incompatibility of these two targets in the face of the Balassa-Samuelson effects and increased capital inflows. The countries approaching the EMU from a fixed exchange rate regime might have a different perspective on the subject.

This level of growth is expected to exceed the growth potential output, giving rise to a positive output gap, particularly in 2015. Other things being equal, this will contribute to higher inflation. GDP growth in 2014–2016 will be driven by domestic demand, both private consumption and investment, and the contribution from net trade will be negative for the entire period. As a consequence, the sizeable current account surplus we have seen in 2013 and 2014 will shrink rapidly next year and give way to a small deficit by 2016. This is cause for concern in and of itself, and we hope that this forecast will not materialise, as Iceland needs to maintain a current account surplus in the next several years as it focuses on putting its external debt onto a more solid footing and building up FX-reserves that are not financed with foreign loans. Economic policy and economic incentives would then have to centre on improving the outlook for the current account balance. According to the forecast, which extends until end-2017, inflation will be at target for the entire forecast horizon, apart for the last quarter of 2015 and the first quarter of 2016. It will average 2.6% for the three-year period from 2014 through 2017, which is well in line with the 2½% inflation target. But the current equilibrium is fragile, the future is highly uncertain, and there are important known risks ranging from the global economy to the liberalisation of Iceland’s capital controls. We will doubtless discuss some of these at this meeting.
In market economies, the aggregates that can be controlled by authorities are set as targets while designing the policies. In our country, under the current economic conditions, these aggregates include consumer price inflation and the ratio of primary surplus to national income. Other variables, such as the growth rate, real interest rates, and producer price inflation are the outcomes in this sense and can only be forecasted. That is why I believe that the difference between the concepts of macroeconomic targets and forecasts should be taken into account in the opinions expressed. Direct foreign capital investments and competition As I have mentioned earlier, in order to achieve high rates of sustainable growth, the domestic savings gap should be offset by external resource inflow, namely, direct foreign capital investments. Historically speaking, it is clear that Turkey has displayed poor performance in attracting direct investments despite its large domestic market, proximity to developing-strategic markets owing to its geographical position, developed infrastructure and young population. As a matter of fact, net direct foreign capital investments to Turkey in the 1995-2000 period amounted to US dollar 1 billion on average. This corresponds to only 4 per thousand / 4 %0 of Turkey’s GDP. The developments of the following years do not point to a lasting improvement in Turkey’s performance in this sense either.

Lending rates for very small loans, which can be taken as a proxy for loans to small and medium-sized enterprises (SMEs), have declined by almost 190 basis points. The significant improvement in funding conditions for SMEs is especially encouraging as they provide two-thirds of total private sector employment in the euro area. Heterogeneity of lending rates across countries has also fallen sharply. For example, the difference between the average lending rate for firms in countries that were severely affected by the crisis versus other countries has narrowed by around 100 basis points over this period. The pass-through of monetary policy has become more even. Banks are passing on the favourable funding conditions to their customers due to the second series of targeted longer-term refinancing operations, which further supports these positive 2 1/3  BIS central bankers' speeches  developments.2 The sharp reduction in bank lending rates has been accompanied by easier access to funding, which continues to improve in the third quarter according to newest survey results.3 Furthermore, bank lending volumes have been gradually recovering since early 2014. According to the latest Survey on the Access to Finance of Enterprises, covering the period from October 2016 to March 2017, euro area SMEs have continued to signal improvements in the availability of bank loans. Market-based funding conditions, too, have improved significantly in response to the corporate sector purchase programme launched in June 2016.
1  See for example IMF, World Economic Outlook September 2006, Feldstein, 2007, Krugman, 2007. Obsfedt and Rogoff also warned about a substantial depreciation of the dollar as a result of global imbalances as early as 2005. 2  Some observers claimed, however, that the deficit could be sustainable as to a certain extent it could consist of “dark matter” in the form of the value of the knowledge transferred from direct US investments abroad and the implicit insurance services provided to the rest of the world by US financial institutions, see Hausmann and Sturzenegger, 2005. 3  IMF, WEO April 2011. BIS central bankers’ speeches  1  Today I intend to present my view of the global imbalances and their significance to the Swedish economy. 4 There is currently a widely-held view that the large current account surpluses and deficits make the global economy vulnerable, and that they should therefore be reduced. A move towards reduced surpluses and deficits could affect the Swedish economy in a way that has significance for monetary policy. Although it may be underlying imbalances that give rise to deficits and surpluses, we should not, in my view, set targets for how large these deficits and surpluses should be. Surpluses and deficits are to a certain extent a natural result of the different conditions in different countries and important mechanisms for redistributing capital in a way that makes the global economy more effective. Sweden, for example, has had a relatively large current account surplus for 15 years.

Apart from the fact that this would reduce the risk of a new international crisis, it would mean that a larger part of global demand would come from those countries that currently have a surplus, for example China, and a smaller part from the United States. It is difficult to know, however, what impact this would have on the demand for Swedish export goods. To the extent that Chinese households and companies demand different types of goods than households and companies in the United States, this largely depends on whether Swedish companies are flexible enough to adapt their production to meet changes in the pattern of demand. The Asian countries that have surpluses are a long way from Sweden and geo-graphical distance is a factor that has a clear negative link to the propensity of countries to trade with each other. 26 However, there are countries with substantial surpluses that are close to Sweden, for example Germany. It is therefore not obvious what the overall impact would be on the demand for Swedish exports if there was a general reduction in current account surpluses and deficits. It is also conceivable that the United States would import more investment goods if its current account deficit decreased, as this would probably entail an expansion of the export-oriented industrial sector at the expense of the more domestically-oriented service sector. This in turn would entail an increased demand for the type of industrial goods that Sweden exports quite a lot of.
But we must continue pressing on with the reform effort and not let reform fatigue get in our way. I need not remind you that Britain herself undertook deep and painful reforms during the 1980s. To a great extent, I believe the golden age the British economy is enjoying today reflects the hard work of not so long ago. Ladies and gentlemen, Globalization is a long and difficult road. We all know the rewards are considerable and the journey worthwhile. But sometimes the obstacles may seem discouraging, even insurmountable. The risks may seem too great. Nearly twenty years ago, the Thai economy was staggering from a global oil crisis. Ten years ago, Thailand was at the epicenter of the Asian financial crisis. Today, we face the challenges of global imbalances and high oil prices. I am optimistic that Thailand will once again overcome these challenges as it overcame those in the past with experience, lessons learned and foresight. The future will bring with it a new set of challenges. I cannot tell you the shape or form that these future challenges will take. But I can tell you this: ten years from today, when my successor addresses the distinguished members of the British Chamber of Commerce, I expect that this room will not be  4  BIS Review 64/2007  large enough for such a gathering. Your membership will have grown by leaps and bounds together with your enterprises. Ladies and Gentlemen, The road ahead still beckons. We have come a long way together.

Third, the atomisation of risk has been accompanied by higher leverage embedded in the instruments themselves, making it hard to assess which of these countervailing effects prevails. While atomisation of risk mitigates the impact of a shock, leverage amplifies it. For instance, “singletranche” collateralised debt obligations (CDOs) substantially increase “embedded” leverage: a singletranche CDO is generally leveraged 5 to 10 times, meaning that potential losses are 5 to 10 times greater than the losses on the underlying portfolio. This is a type of leverage that does not show up in lending figures. Assessing the extent and effect of embedded leverage on a system-wide basis is therefore a real challenge. Lastly, market liquidity can be very fragile. Indeed, it is now much easier to trade credit exposures thanks to standardised credit derivative indexes. However, liquidity remains very uneven among CRT markets and cannot be guaranteed under stressful market conditions. Many institutions are also vulnerable to “runs”. Market liquidity dry-ups therefore constitute one of the risks to be assessed. 3. What are the implications for central bankers and supervisors? I would like to suggest three approaches: First, remind market participants and investors that benign times, such as the current credit environment, should not be the benchmark for assessing risks. Credit risk transfer markets remain untested in stress situations. The US subprime mortgage market is a bellwether reminding us that excesses in credit growth and relaxation of lending standards are paid for sooner or later by much higher risk premia.
As a result, we need to work hard with these issues and invite external evaluation. Cost-consciousness is especially important in cases where a central bank determines its own budget, as hard-won legitimacy can be quickly lost. At Sveriges Riksbank, we will be continuing our search for efficiency gains, and we will so do whether or not we join the Eurosystem. To this end, we need new influences and new ideas, which I hope to get over the coming two days. Once again, I would like to extend you all a very warm welcome to Sveriges Riksbank and this workshop. BIS Review 24/2003  5

Many players in the financial markets also appear to be governed by a “follow the leader” principle. There are probably some who avoid going their own way because of the risk of making bad investments and being depicted as losers. It then seems simpler to follow the others, as if things do go wrong, at least the player is not the only one in disgrace. The reward structure in the fund management field probably also reinforces this behaviour. As long as a person has not done a worse job than the average among the competitors, he can look forward to a bonus. It would probably be a better idea if the personal income were more closely connected to the absolute result achieved by the fund. However, the desire to follow others is probably also an expression of uncertainty. The players have too little information to really dare to act independently. It is doubtless the case that players in the financial markets, including the mutual fund investment companies, live in a complicated world. In this world it can be rational to do as the larger players do in the hope that they are better informed. However, this is not always the case, which means that the strategy of following the big players could contribute to worsening financial crises. When everyone rushes for the door at the same time, there is often a crush. And in a crush, it is easy to panic.
The quantitative measurement of these risks over time represents a major challenge. Whereas standards of supervision have traditionally been based on statistical analyses of historical, backward-looking data, there are few, if any, past climate risk events that resemble what scientists are predicting for the 21st century. This is why, to borrow an image from Banque de France Governor François Villeroy de Galhau, the snapshot of risks that I just provided is being supplemented by a video, as it were, of the long-term risks, created through forward-looking climate stress tests. In 2020, France’s Prudential Supervision and Resolution Authority, the ACPR, conducted a pilot climate exercise to measure losses by 2050 connected with the climate transition to net zero by that date. The assessment found that French banks are “moderately” exposed to climate risk. However, our analysis points to a greater probability of default for business loans in the event of a disorderly transition, albeit with variations across sectors, calling for us to work together to organise the financial system’s climate transition [SLIDE 3]. The ECB, meanwhile, is assessing banks’ resilience to climate-related risk at the level of the euro area for the first time through a climate stress test that kicked off in late January. The findings are to be published in July. The ECB also recently conducted supplementary work. After assessing reporting requirements, it found that, overall, European banks have significant room for improvement if they are to meet in full its expectations on climate and environmental risk disclosures.

Although equity and property prices serve as important indicators for the future development of economic activity, they are not a goal of monetary policy. Many reasons militate against a direct monetary-policy response to changes in asset prices. The question nevertheless arises as to whether monetary policy could not do more to prevent any speculative bubbles from forming in the first place. BIS Review 53/2003  1
We are confident that with stronger industry stewardship, we will be able to foster greater market dynamism and growth. My last point today is to touch on the MADANI vision introduced by the Government and share my thoughts on how Islamic finance can further leverage on the concept for the further development of Islamic finance. The word itself has its roots in Arabic and means "being developed in terms of thinking, spirituality and mentality". The Malaysia MADANI concept – or civil society – envisions a country that looks beyond economic wellbeing and materialism to one which emphasises humanity and good values like fair, just and effective governance. MADANI is an acronym for a policy that embraces six core values – keMampanan (Sustainability), KesejAhteraan (Prosperity), Daya Cipta (Innovation), hormAt (Respect), keyakiNan (Trust) and Ihsan (Compassion). Indeed, many of these core values have been embraced by Islamic finance through its Shariah foundation and Value-Based Intermediation. Over the past few years, we have expanded Islamic finance to encompass and strive for higher ideals beyond the generation of profits, among others. For example, embracing sustainability, protecting the environment and strengthening our governance practices. With the MADANI aspirations or values in mind, Islamic financial institutions could look into a broader agenda of empowering the people and alleviating their economic conditions and status.

Today, despite the effort to develop foreign currency (FC) issuances and other businesses out of Malaysia, we have not yet reached a critical mass. To date, FC issuances constitute only 4% of the total outstanding sukuk in Malaysia (March 2023: RM1.3 trillion), with USD being the main currency1. In terms of international players, these past few years have seen more consolidation rather than expansion or growth. Notwithstanding these, the FC or international business should represent a continuous opportunity for market players to develop further, in particular with the continued growth of our own international trade and investment and the foreign exchange liberalisations we have undertaken. Moving forward, while the opportunities of FC business remain available, the MIFC agenda will also give due consideration to strengthening the domestic ringgit market. Inclusion of MGII into international indices such as Markit iBoxx ALBI, Bloomberg Global Aggregate and JPMorgan GBI-EM have already led to improved visibility of Islamic instruments and increased foreign participation. Increased foreign participation in the local market via government issuances and multinational corporations' (MNCs) investment in the Halal industry is also envisaged to increase ringgit market appeal among the investors. Growth of takaful and re-takaful also continues to be a development focus. In the financial sector, Malaysia's takaful industry has continued to grow at a faster rate than conventional insurance. It recorded a compound annual growth rate (CAGR) of 20.6% in the first nine months of 2022 and outperformed conventional insurance's CAGR of 10.8%2.
François Villeroy de Galhau: Prospects, challenges and promises New Year wishes to the Paris financial centre New Year wishes to the Paris financial centre by Mr François Villeroy de Galhau, Governor of the Bank of France, 12 January 2017. * * * I would like to welcome you all, our partners throughout the year – public officials, financial and economic players, journalists – to this magnificent Golden Gallery for this happy tradition of extending New Year wishes to the Paris financial centre. I would like to start by extending to you, on behalf of the whole of the Banque de France and the ACPR, our warmest wishes for 2017, for you and your loved ones, as well as for all of your staff. To these personal wishes, I would like to add several collective wishes this evening: first for Europe and its economy, then for our country, and finally for the smooth financing of our economy and for financial institutions. 1. For Europe and its economy A year ago, I had noted with you that 2016 had begun as the year of volatility, with the turbulences in the financial markets. In fact, 2016 was rather the year of uncertainty, with the Brexit victory in June, the American election in November and the Italian referendum in December.

However, despite these uncertainties, 2016 was marked by a certain degree of stability in Europe: euro area growth, which was at first fragile at the beginning of the year, strengthened and financial markets proved resilient in the face of the different shocks. For 2017, of course, none of these uncertainties have been lifted and others will be added to the list: 2017 is an election year in the Netherlands, France, Germany and possibly Italy. Nevertheless, the euro area can count on four points of reference:  economic growth, which promises to be robust; in the Eurosystem, it is expected to stand at 1.7%, as in 2016.  the gradual rise in inflation. This should not be a surprise, for several months the Eurosystem has been repeatedly announcing the crossing of the 1% threshold: at endDecember, inflation rose by 1.1% in the euro area. This is partly due to the rebound in energy prices, but it is also the result of our non-standard monetary policy; we have been able to avoid the deadly danger of deflation that was creeping up on us. On the contrary, there now seems to be concerns about a “return of inflation"; this is very exaggerated ... and we have not yet reached our target of 2%. The other point raised concerns the differences between countries, with the German 1.7%. These differences should gradually diminish over the course of the year, and they are consistent with the underlying economic fundamentals. the monetary policy of the Eurosystem.
Then the Federal Reserve would have to slam on the brakes, we’d have a recession, people would be thrown out of work. Not a good situation. So, the idea is to have an economy that moves in a smooth way. And so by taking out a little bit of that accommodation, moving up interest rates just a little bit, we think it’s more likely that we’ll achieve a soft landing and keep the economy about where it is today in terms of employment. So, it’s a delicate adjustment. It’s not something that’s very harsh. We think it’s appropriate and necessary. But I think the economy will be able to adjust to this just fine. Dr. Olajide Oladipo: Thank you. Sometime ago, I think that was 2012, 2013, I took some students to the Federal Reserve Bank. And you do have annual events at the Fed which I attend every year, often in March. A question that came to mind is that the students were very excited when they went to the Federal Reserve Bank. The question I wanted to ask you is what are the skills required to work at the Fed? President Dudley: Well, there’s lots of different parts of the Federal Reserve. There isn’t one particular skill. There’s a lot of economists because we think about how the economy is working and operating and the conduct of monetary policy. There’s a lot of people that work on overseeing banks. Supervision is one of our biggest groups.

It has contributed to our now being in a situation where household indebtedness and house prices have increased at a more rapid rate than can be regarded as sustainable in the long term. Our assessment at the monetary policy meeting in February was that a slightly earlier increase in the repo rate would reduce the risk of an abrupt adjustment in house prices and household indebtedness further ahead, which might have adverse consequences for both inflation and the real economy. One could say that, bearing this risk in mind, we discussed the appropriate timing of an interest rate increase that we anyway considered necessary with regard to the inflation target. I and my colleagues on the Executive Board of the Riksbank have pointed out in several different speeches that this procedure does not mean that we have introduced other objectives for monetary policy in addition to the price stability target and the aim to contribute to subduing fluctuations in the real economy. We expressed this quite clearly in the special document on monetary policy strategy we published prior to the summer. It therefore surprises me when I still see monetary policy described in some contests in a way that implies that we have other objectives besides price stability when making decisions on the repo rate.