samchain/econo-pairs-v1 huggingface dataset:
Ladies and Gentlemen: A greater understanding of Islamic banking and finance on the international front would contribute towards our efforts to reinforce the on-going international initiatives towards fostering greater global financial stability. In this regard, the participation of other financial supervisory and regulatory authorities, and other international standard setting organizations would facilitate this process to achieve our shared interest of preserving the soundness and stability of the Islamic financial system. Ladies and Gentlemen: It has been said that Islamic banking and finance is a "mirror of the sea" for until and unless we have the courage to explore its depth, we would never be able to uncover the treasures that reside within. Islamic banking as a new sphere of finance promises vast opportunities and benefits for all. Its integration into the global financial system will contribute towards achieving our shared aspirations for financial stability to ensure balanced growth in the global economy. BIS Review 64/2002  3

This involves government bond purchases and marks the launch of quantitative easing. 2  BIS central bankers’ speeches  Adding government securities and paper issued by supranational European institutions to the asset purchase programme was a very important step in the monetary easing and economic stimulus policy: the programme will run to September 2016 at least, with a monthly target of € billion for the three programmes as a whole, although government bonds will be the main component of the purchases and of the increase in the Eurosystem balance sheet. The programme is expected to give a significant monetary boost to the economy, keeping inflation in the medium term below, but close to, 2%. The monetary stimulus transmission mechanisms include both the easing of financing conditions for households and firms and, indirectly, the depreciation of the euro. Purchases of public securities will be allocated as follows: 88% to euro area sovereign and national government agency securities, and 12% to supranational institutions and international agencies resident in the euro area. Of the 88% of national government securities, 8 pp will be acquired by the ECB and the remaining 80% by national central banks, according to their capital key in the ECB, with some special rules for national central banks whose government debt markets are so small that these targets cannot be met.
You have informed the public on our actions and interventions related to monetary policy, as well as on our decisions related to financial stability, market efficiency, banking regulations and other more specific aspects. This leads us to the conclusion that the level of reporting has improved significantly, which, in turn, urges us to be more demanding of ourselves in all the arguments and analyses underpinning our decision-making. I would like to thank you for your constructive role in reporting news items related to developments in the economy, finances, money, the banking system, inflation, financial stability, as well as to the risks towards which our economy is exposed. I would also like to assure you that the Bank of Albania will continue to be an open and very loyal institution vis-à-vis the media. The Bank of Albania will be continuously open to communication with regard to the entire spectrum of economic, financial, contemporary, professional and unbiased news. Dear ladies and gentlemen, It has become a tradition now for us to organise, during the end-of-year meeting with the media, a modest but very meaningful ceremony: the awards ceremony for the best diploma thesis. We value true scientific research in its highly beneficial capacity, from a long-term perspective, to enable the building of contemporary and sustainable research models. From this point of view, the Bank of Albania has endeavoured to boost its research capacities, something we consider to be essential, ultimately helping to perfect our entire decision-making process related to monetary policy and financial stability.

Gent Sejko: The importance of media in analysing Albania’s monetary policy Address by Mr Gent Sejko, Governor of the Bank of Albania, at the end-of-year meeting with the media, Tirana, 20 December 2018. * * * Dear ladies and gentlemen, Welcome to our end-of-year meeting with the media. I would like to thank you for your readiness, objectivity, and seriousness in covering the activities of the Bank of Albania and informing the public about them, throughout 2018. Thanks to you, our analyses and decision-making have been communicated in a thorough manner, mindfully tailored and styled in accordance with the age and profession of the targeted audience. I must note that, in addition to broad geographic coverage, your comments and analyses on the economic and financial developments in Albania have been very professional. At the Bank of Albania, my colleagues and I maintain that the current media reality is an important part of our activity. Our decision-making could not be considered complete without your contribution. Communication is a vital and delicate process for a central bank. I must emphasize that, without your help and objectivity, realisation of Bank of Albania’s decision-making regarding monetary policy and financial stability would have been an impossible mission. Figuratively, I would point out that you are the ones that enable the translation of our analyses and conclusions into an adequate and easy-to-understand message for the general public.
This step followed a series of interest rate increases implemented since November 1999. The Governing Council will continue to remain alert to emerging risks to price stability. It is a matter of fact that recent oil price increases have caused the terms of trade of the euro area to deteriorate, and thus have also reduced real income. This loss of real income cannot be avoided for the economy as a whole. Attempts to shift the burden of this loss within the economy will risk endangering the continuation of a non-inflationary growth process. For the maintenance of price stability, it will be particularly important, in the current phase of strengthening economic growth, that wages continue, on average, to grow at rates compatible with the objective of price stability. Any attempt for wages to catch up in reaction to recent oil price increases would be highly detrimental to the current favourable growth prospects, since monetary policy would need to react to the resulting upward pressure on prices. Governments also have to play a role in order not to convey the false impression that the costs stemming from the increase in oil prices could be avoided by relaxing budgetary policies. This would not be in line with the needs of establishing budget positions in balance or in surplus and would complicate the fostering of tax reforms conducive to a stronger growth potential of the euro area.

This is where the Shariah community has to elevate itself, providing guidance that serves as the setting compass for institutions in charting new strategies and enabling the structuring of new innovative solutions. One way to sail through this is by establishing parameters and guidelines as readily implementable approaches. This involves ongoing experimentation, assessment, and learning in any uncertain environment. Shariah recommendations need to accommodate different permutations in varying situations, given the flexibility afforded in Shariah. It is in this spirit that the Bank is currently finalising the Discussion Paper on H ajah that serves as a toolkit in applying hajah, taking into consideration the different magnitude and severity of situations. Hajah application, however, should not be considered as a permanent solution, but it is rather a temporary way out to accommodate certain justified need and necessity. Hence, a clear interpretation of hajah from the context of contemporary financial practices, supplemented with in-depth understanding of its impact will unlock uncharted opportunities for Islamic financial institutions to explore more diversified approaches in delivering financial solutions within the safe boundaries of Shariah compliance. This nudges a refreshed Shariah viewpoint in steering commercial decisions, pushing beyond the frontiers of traditional norms. The implementation of hajah should thus be oriented by robust and detailed governance process and assessment, commensurate to the size and business of financial institutions. As the operating environment becomes more complex, so will the Shariah issues.
An investor wanting to make an inter-temporal transfer without taking on any credit risk, for example, could then buy a bond and purchase credit default swap protection, thus retaining exposure to the cash flows on the risk free component of the underlying instrument. Synthetically, this expands the volume of low risk investment portfolios. On the other side, a market is created for those who specifically want to trade default risk which allows cleaner pricing of this dimension of risk. Efficient markets for each element should raise the efficiency of the corporate bond market as a whole, with attendant benefits for both borrowers and investors. •  Furthermore, because credit default swaps have different maturities, investors could, for example, buy the corporate bond and retain the resulting exposure to default risk in the near term. But they could also buy protection against default at longer horizons, about which they may be more uncertain. •  Moreover, nominal corporate bonds can also be separated into a nominal and inflation-linked risk component if the corporate also issues inflation-indexed bonds. BIS Review 93/2008  3  Investors can utilise these instruments to buy or sell protection against exposure to inflation risk. As noted above, the markets for single-name corporate credit default swaps have become more liquid than the underlying bonds given the flexibility and specificity they provide to endinvestors. 9 The underlying components of risk can, of course, also be recombined by financial engineering to create new financial products with different risk characteristics.

With hindsight, information generation and processing was too reliant on a limited number of rating agencies, and there was too much confidence in the ability of individual rating agencies to solve the highly complex information problems underlying some securities. 22 Third, it is very hard to determine counterparty credit risk for state-contingent securities. In a world of full information, the state-contingent survival of counterparties would be known and nobody would accept contracts from those who could not honour them – at least not without a substantial price discount by way of compensation. But when investors cannot know the full network of exposures in the financial system, it is extremely hard to estimate  6  BIS Review 93/2008  where the ultimate incidence of losses from an extreme shock will occur. The failure of your counterparties’ counterparty can shift you up the queue of potential losers quite quickly. Moreover, the fear of potential counterparty risk itself quickly affects the behaviour of individual firms and thus leads to a collective lowering of risk appetite. 23 These problems are potentially the most acute for what might be called tail-risk products. During the boom, tail-risk products, like deeply out of the money options, seemed an easy way to make money. The protection seller could collect a steady stream of premia with the extremely unlikely prospect of having to make a very large payment. Since these sorts of contracts offer “deep” insurance, it is important to the system as a whole that they are held by the most robust institutions.
This may also be working alongside the level of uncertainty to encourage firms to meet output growth using labour rather than undertaking capital expenditure projects. At the margin, the idea that workers are responding to Brexit by showing increased flexibility could mean that there is more room than headline measures of slack suggest for the economy to grow without generating above-target inflation in the medium term (Slide 8). Certainly, it would help explain why, despite unemployment being at its lowest level in 42 years, measures of domestically generated inflationary pressure generally remain below levels that would be consistent with inflation being at target in the medium term. That includes a wide range of measures, including unit wage costs, those derived from the Consumer Price Index, and those based on national accounts measures of value added. In turn, the subdued nature of domestically generated inflation is evidence that the current elevated level of headline inflation is attributable to pressure arising from the pass through of the depreciation of sterling. In 2  See Broadbent (2017) for a full discussion of these issues Private sector real wage growth, calculated by deflating nominal wage growth by output prices, was 1.8pp weaker in the year to 2017Q2 than expected at the time of the May 2016 forecast, while growth in productivity per head was 0.7pp weaker.

Well-trained directors can be firm hands in steering companies through pitfalls which may appear. In such an uncertain environment, it will be critical to reinforce the confidence of stakeholders in how our companies are run. This will require both the government and the private sector to play our part. 6. On the regulators’ end, we will continue to make sensible rules that are practical and outcome focused. We will also continue to keep our rules up to date. The Corporate Governance Council, established by MAS, is reviewing the Singapore Code of Corporate Governance and will submit its recommendations to MAS. On its part, the private sector must nurture a pool of well-trained and ethical directors. 7. Being a director will become increasingly demanding. Companies’ operations are getting more international, and the markets for raising capital becoming more complex. Expectations of directors by stakeholders are also growing. 8. Directors are now exposed to substantial legal and reputational risk if they do not, or are perceived not to have, discharged their fiduciary duties for the company. For example, directors of BP have been sued by shareholders over the costs associated with the oil spill in the Gulf of Mexico. Directors of AIG were also sued for not adequately monitoring the firm’s exposure to the subprime mortgage market. BIS Review 164/2010  1  9. Directors should not become defensive or legalistic in face of these challenges.
As Elizabeth Corley highlighted, there is a disconnect between how we in finance – and I include the public sector here – see the sector and how the general public sees the sector. Interestingly, that disconnect is much less prompted by questions over the health of our banks. Alex Brummer made this same point in terms of a sense of optimism around institutions. That is a good thing because a tremendous amount has been done over the past seven years in order to make banks much stronger. I will not go into all the details, but banks are indeed now beginning to adjust their business models. I’ll add a very clear message on behalf of those of us on the regulatory side to the bankers in the room and those watching from outside: there is no Basel IV. There is no other big wave of capital regulation coming. With the agreement on Total Loss Absorbency Capacity, the last pieces of the puzzle have been put in place. It is true that we do have to make some adjustments to risk weights; and there will always be things to iron out, but I repeat there is no big other prudential regulatory wave for the banking sector. As Andrew Bailey made clear in one of the break-out sessions I attended, the focus now is about greater certainty and adjusting business models to these new realities.

The fact of the matter is that the contraction in 2009 proved to be significantly smaller than originally predicted, with the fall in GDP turning out to have been 7½%, as opposed to the 10% forecasted earlier in the year. There are probably several explanations for this. Automatic fiscal stabilisers were allowed to work more or less freely in 2009, with fiscal consolidation taking hold this year. Icelanders were allowed early withdrawal from their third-pillar pension funds, which last year and this year is equivalent to 2½% of annual GDP, as I mentioned earlier. The financial restructuring of corporations and households has been delayed and, although this is detrimental for medium-term recovery, it has postponed some of the pain. The depreciated exchange rate has stimulated the traded goods sector. Finally, although the destruction of wealth that Iceland has experienced as a result of the collapse of the Icelandic banks is enormous, it is not proportionate to the size of the banks, as foreign creditors will lose much more. But we will continue to pay the price this year, as GDP will contract further between 2009 and 2010, but unfortunately I cannot give you much new detail on the prospects for 2010, nor can I discuss monetary policy, as I have entered the seven-day silent period before the announcement of the interest rate decision and the issuance of a new forecast next Wednesday.
However, risks only changed form and address in the financial system, just like the energy continuously transforms in the physical universe. Almost all economists agree that we are heading to a slow, gradual and painful recovery. And as a central banker who has spent almost 30 years in this profession, I can tell you that it is a miracle itself to have so many economists agree on one issue with so much vigor and conviction. The future of the global financial system will be shaped by the lessons we derive from our current experience. The ongoing crisis revealed that preventive measures put in place at the local level by national authorities may not be effective to address global problems. It also underlined the importance of international cooperation and coordination in designing and implementing economic policies. It is clearly understood that the only way to prevent future crises at the global scale is multilateral cooperation. However to establish and sustain multilateral cooperation is not an easy task. As (John Maynard) Keynes once said, “The biggest problem is not to let people accept new ideas, but to let them forget the old ones.“ It is very likely that economic agents will try to hold onto their old habits when the effects of the crisis subdue. Appeals on regulators will pile up for a more lenient implementation of rules, regulations, and policies. Politicians will face pressure from their constituents to give priority to local concerns at the expense of global coordination.

Dominant academic paradigm may restrict those who radically incorporate lessons of these days into their studies. And of course, central banks, as always, will be criticized for spoiling the party at its hottest moment by taking away the punch bowl. We should be aware that keeping the old habits will only give us a new and may be more severe crisis in the near future. Thanks to the global efforts, lessons derived from the crisis have already started to initiate dramatic changes in the global financial governance. There have been encouraging developments in recent months to design a new global financial system to prevent future crises. In the recent meeting of G-20 finance ministers and central bank governors, member  BIS Review 120/2009  1  countries confirmed their commitments to the principles of strengthening transparency and accountability, enhancing sound regulation, promoting integrity in financial markets, and reinforcing international cooperation. I believe the establishment of Financial Stability Board with increased participation of emerging countries is a critical step in achieving these objectives. In recent years, as a byproduct of market-oriented structural reforms and prudent macroeconomic policies, the share of emerging countries in world output and their role in global financial markets has significantly increased. Now, we are faced with a more diversified group of countries with different objectives and interests. Since the rise of emerging economies has dispersed economic power, decision-making process and international cooperation has become more complicated.
The latest instance of this comes from Britain, where one of the first things the new government did was relinquish control of interest rate policy to the Bank of England. The harm done by inflation High inflation impairs the workings of the economy. General price increases make it more difficult for households and firms to keep tabs on how the prices of certain goods BIS Review 56/1997  -2-  and services are moving in relation to others. It then also becomes more difficult for firms to know which products are worth marketing, which investments will pay best and so on. A case in point and one that is certainly familiar to some of you is Sweden’s property boom in the 1980s. The combination of high inflation and the tax system in those days made speculation in real estate profitable. The property market then collapsed in the early 1990s and occasioned huge economic costs. The overheated real estate market had crowded out other, more productive investments and when the bubble burst, finance companies and banks were hit by loan losses at the same time as the ensuing adjustment entailed massive costs in the form of lost production and unemployment. There are also grounds for supposing that low, stable inflation moderates cyclical fluctuations in economic activity. This seems to be the case, at least, in the United States, where since 1982 there have been two long expansionary phases separated by a single, relatively brief downturn. Experience in Sweden points to the same conclusions.

But an appreciably weaker development of consumption, which was a prominent component of one of the alternative scenarios, seems to have become somewhat less probable. Exchange rate The Riksbank does not target the exchange rate. The monetary policy target is price stability. But the exchange rate does feature as one important factor in the Riksbank’s assessment of inflation in the coming two years. The exchange rate conditions demand in the economy, particularly in the export sector, and also affects inflation directly in the form of import prices. The latter, more immediate effect is, however, transitory and of secondary interest provided it does not influence inflation expectations and thereby price and wage setting behaviour. An assessment of future inflation therefore requires a forecast or judgement of the exchange rate in the coming two years, yet this is a variable that is notoriously difficult to predict and has fluctuated widely for Sweden since 1992. A natural starting point for this is the current exchange rate together with an estimate of what a reasonable long-term level might be in relation to competitiveness, financial saving, etc. The past six months provides an example of how the argument might go. Since October 1996 the krona’s effective exchange rate has weakened by about 7 per cent. Most of this change stems from the appreciation of sterling and the US dollar against currencies in continental Europe (Diagram 6).