samchain/econo-pairs-v1 huggingface dataset:
Going forward, it is important that the international standard setting process allows and continues to promote the more effective integration and exchange of perspectives between Islamic and conventional finance to ensure a coherent global framework that is consistent across similar risks, promotes a better understanding of risk interactions between conventional and Islamic finance activities, and accelerates progress towards best practices based on the sharing of research, experiences and frameworks. Conclusion Let me conclude with a statement from this year’s Per Jacobsson Lecture given by Sir Andrew Crockett on what should guide us in our “efforts to devise a new and stronger financial system”. “It should be global, it should be robust, it should be an effective servant of the real market economy”. This is what the new Islamic financial landscape has evolved to achieve. With its inherent close links to the economy and its trend towards internationalization and the robust institutional arrangements and regulatory standards being introduced and implemented, it will indeed enhance the potentials for Islamic finance to not only serve the economy but to achieve sustainability in this more challenging environment. 4  BIS central bankers’ speeches

But I should first say this: while the HKIMR was established by the HKMA, its Council of Advisors, of which I am not a member, determines its programme of activities. It therefore enjoys professional independence. Thus, I was not a party to the Council’s deliberation of, and its decision to support, Professor Crosby’s proposal to hold the Workshop here. But I am very pleased that the Council of Advisors decided to do so. I will start from the observation that Hong Kong’s economy - like many Asian economies - is a small ship in a big ocean. While the weather today may be placid, the winds can pick up without warning and the waves can be forbidding. You all know about the series of massive speculative capital flows that Asian economies, and even Australia and New Zealand, were exposed to during the Asian financial crisis, and how Hong Kong finally rode out that storm. In times such as those, policymakers naturally ask what is the right course to steer, what are the right policies to follow. One policy is clear - to ensure that the boat is as seaworthy as possible. This, of course, we have sought to do. Following the Asian financial crisis we took a large number of measures to improve the functioning of the currency board, and the efficiency of the financial infrastructure in Hong Kong more broadly.
Finally, as I noted earlier, we followed up in our last FOMC meeting with the release of an addendum to our Policy Normalization Principles and Plans that outlined how our balance sheet normalization plan will work when it is implemented. We also said clearly in the FOMC statement that if the economy evolves in line with our expectations, we expect to begin this process this year. In response, market participants have progressively increased the probability assigned to a change in reinvestment policy this year. Yet, Treasury and agency MBS markets have responded little at the time of these announcements—including those undertaken most recently. To me, this suggests that these communications have generally been effective in fostering an orderly adjustment in expectations about how we are likely to normalize our balance sheet. I also agree with Hélène about the important role of financial conditions in influencing economic activity. As I see it, financial conditions are a key transmission channel of monetary policy because they affect households’ and firms’ saving and investment plans and thus influence economic activity and the economic outlook. If the response of financial conditions to changes in short-term interest rates were rigid and predictable, then there would be no need to pay such close attention to financial conditions. But, as we all know, the linkage is in fact quite loose and variable. For example, during the mid-2000s, financial conditions failed to tighten even as the Federal Reserve pushed its federal funds rate target up from 1 percent to 5¼ percent.

Conversely, at the height of the crisis, financial conditions tightened sharply even as the Federal Reserve aggressively pushed its federal funds rate target down toward zero. As a result, monetary policymakers need to take the evolution of financial conditions into consideration. For example, when financial conditions tighten sharply, this may mean that monetary policy may need to be tightened by less or even loosened. On the other hand, when financial conditions ease—as has been the case recently—this can provide additional impetus for the decision to continue to remove monetary policy accommodation. While I agree with Hélène in most respects, there are a few points where I am less convinced. While the global financial cycle complicates policymakers’ ability to guide financial conditions in their own economies, I’m not persuaded that the trilemma has been replaced by a dilemma—that is, essentially an “either/or” choice between an independent monetary policy versus an open capital account. While there is no panacea to insulate countries from financial spillovers—particularly when policy in some areas is constrained by the effective lower bound on interest rates—I think a combination of exchange rate flexibility, a credible monetary policy framework, sufficient foreign exchange reserves, and a strong financial system can help mitigate the effects of such spillovers. Moreover, it strikes me that market participants have become more discriminating over time about the circumstances of different countries, rather than painting all EMEs with a similar broad brush.
I am aware of the debate between those who believe that central banks should take financial imbalances into account in their monetary policy decisions and those who do not. A basic structure, where monetary policy focuses on monetary stability and where other policy areas – not least the decisions taken by Finansinspektionen – safeguard financial stability is reasonable. But there will be times when interest rates are low for such a long time that risks build up that mean that 28 See Ministry of Finance (2023). 29  See Stein (2013). 30 See also the discussion in Nessén (2016). 17 [30]  monetary policy should take account of financial imbalances. I do not want to belong to any of these camps that quite categorically believe that "leaning against the wind" is always right or always wrong. However, I believe that it may nevertheless be reasonable and wise to allow monetary policy to take into account the build-up of financial imbalances in certain special situations. Some central banks, such as Norges Bank, have a clear mandate for this.31 The Riksbank considers risks associated with developments on the financial markets as long as the credibility of the inflation target is not threatened, and the fulfilment of the target for price stability and macroeconomic stability in the longer term is improved. But to prevent unbalanced developments in asset prices and indebtedness, a well-functioning regulatory framework and effective supervision are needed in particular.

None of these changes is obvious, to say the least, but none should be taboo. II. Supervision: lessons from an active euro area model Fair enough about implementing Basel III; but then comes the next suspicion: Credit Suisse failed despite being Basel III compliant. The answer is clear: good regulation is necessary; it's never sufficient. The risks generated by specific business models such as the asset-liability mismatch at SVB or the weak profitability and weak internal controls that dogged Credit Suisse should typically have led to higher supervisory requirements. Supervision should not be seen as a static business; it must be active and tailored to banks characteristics. This is precisely the spirit of the "Pillar 2" in the Basel framework, with the annual Supervisory Review Process. I sometimes hear doubts about supervision, which some believe should be treated as a legal dialogue, cautious in its form, and slow in its effects. No: supervision can and must be intrusive – including on-site –, exercised by highly skilled practitioners, quick in its reaction, strong in its powers. This is not wishful thinking: it has been our experience for decades in the French ACPR, and now for years in the European SSM. Active supervision is indeed one of the great successes of our European Banking Union. In light of the recent reality test, I believe there are two lessons to be learnt from our model.
8 See Aiyar, S., Calomiris, C. W., and Wieladek, T. (2016) “How does credit supply respond to monetary policy and bank minimum capital requirements?”, European Economic Review, 82, 142-165, Fraisse, H., Lé, M., and Thesmar, D. (2015) “The real effects of bank capital requirements”, HEC Paris Research Paper No. FIN-2013-988, De Jonghe, O., Dewachter. H.. and Ongena, S. (2016) “Bank Capital (Requirements) and Credit Supply: Evidence from Pillar 2 decisions”, National Bank of Belgium No 303. 9 For detailed evidence on how P2P platforms compete with banks, see de Roure, C., Pelizzon, L., and Thakor, A. (2018) “P2P Lenders versus Banks: Cream Skimming or Bottom Fishing?”, SAFE Working Paper No. 206. 5/6  benefits for the society, including a greater financial inclusion by reducing intermediation costs, which would improve the access to funding of households and SMEs. In any case, at this stage, the ultimate impact of new technologies on the structure of the financial system is highly uncertain as it will depend on different factors including the regulatory treatment of the new players.10 Today´s conference will cover all these issues related to the recent changes in the structure of financial markets and their implications for the banking system. We have the privilege to have as speakers experts in those areas from academia, policy makers, think tanks and the banking industry. I am sure that we will have a very productive debate and that we will improve our understanding of these issues.

There is not a consensus in the academic literature on what source of financing has a higher contribution to financial stability and economic growth.1 On the one hand, banks, through their interaction with firms, manage private information which benefits the allocation of credit and favors a better and cheaper access of firms to financing when the bank-firm relationship is well developed.2 On the other hand, liquid and efficient financial markets offer the possibility of allocating households’ savings to long-term projects without the need of monitoring these savings. Although financial intermediaries and markets have been generally considered as alternative and competing ways of overcoming frictions between savers and investors, they can be also considered as complementary sources to achieve an optimal allocation of capital. In fact, there is some evidence in the economic literature that a proper diversification of firms’ funding leads to more investment3 and to a lower vulnerability to financial shocks.4 These results suggest that financing structures based exclusively in one of the two sources of funding are probably suboptimal. Certainly, the experience of the recent global banking crisis clearly shows that firms relying only on bank financing had more difficulties in their access to external funding than companies with a richer diversification of their liabilities.
2  All speeches are available online at www.bankofengland.co.uk/speeches  2  The major Brexit contingencies include: -  The form of the new economic partnership between the EU and UK;  -  Whether the transition to that end state will be smooth or cliff-edged; and  -  How agents in the economy (households, businesses and financial markets) react to these prospects, particularly the extent to which they are affected by the uncertainty during the negotiations and the degree to which they anticipate the outcome and pull forward adjustment. As the Brexit process continues and the answers to these questions become clearer, the MPC will adapt its specific guidance and monetary policy more broadly in order to meet the inflation target. My message this evening is straightforward. From a monetary policy perspective, the Bank of England is ready for Brexit whatever form it takes. The role of guidance and the UK experience Before turning to Brexit, I would like to review briefly the MPC’s experience with forward guidance. The objective of forward guidance is to give insights into the MPC’s reaction function – in other words, how the Committee will adjust policy when the outlook for growth and inflation changes. In a perfect world, guidance would be redundant. People would know how the MPC intends to set rates over the future and how those intentions would adjust to economic developments in all eventualities – the so-called reaction function.

William C Dudley: Job creation in the region Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Quarterly Regional Economic Press Briefing, New York, 12 August 2011. *  *  *  Good morning and welcome once again to the New York Fed’s Quarterly Regional Economic Press Briefing. I am pleased to have this opportunity to talk with the journalists covering our region – and through you, to the people in our District. This morning I will focus on regional economic conditions, with particular attention to job creation trends in the Second Federal Reserve District, which covers New York State; northern New Jersey; Fairfield County, Connecticut; Puerto Rico; and the U.S. Virgin Islands. Following my remarks, my colleagues will provide more details. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. National economic conditions The statement issued by the FOMC earlier this week presents a sober assessment of the state of the U.S. economy. Economic growth so far in 2011 has been quite a bit slower than we expected earlier in the year. While jobs growth picked up early in the year, in the last few months conditions in the labor market have deteriorated again and the unemployment rate edged up. Household spending has flattened out, and the housing sector is depressed.
A critical problem in Europe right now is that private borrowing costs are very low in countries like Germany where the economy is operating close to full capacity, but quite high in countries like Italy and Spain – which are struggling in terms of economic performance. The monetary policy transmission channels in Europe are impaired. Banking union would make them work better. •  It would underscore the fact that a euro is a euro and will remain a euro throughout Europe, reducing perceptions of redenomination risk. This would make depositors less prone to move their funds from the periphery to the core and strengthen the resiliency of the system against shocks. •  It would help foster greater integration of the European economy, with potentially significant macroeconomic benefits. In short, banking union has the potential to make a powerful contribution to eurozone stability and growth, both in the short term and in the long term. Now, will moving to a pan-European banking system be easy? Of course not. It will require a common set of standards to be applied across the whole system. This may well reveal shortcomings among particular banks and the burden is not likely to fall evenly across the European Union. It will be important to identify the sources of capital that will fill any such holes in order to ensure ongoing stability and to avoid constraining the availability of credit. The process of banking union appropriately begins with a single supervisory mechanism.

3/4  BIS central bankers' speeches  Europe boasts state-of-the-art payment systems. They should be used by pan-European providers to offer innovative, safe and user-friendly solutions for the benefit of people across Europe and all over the world. 4/4  BIS central bankers' speeches
It is impossible for the Bank of England to set separate interest rates for Aberdeen and Aberystwyth, Belfast and Birmingham. A central bank, by definition, cannot be local. Or can it? I would argue that not only is this feasible but essential. I have spoken previously about the “twin deficit” problem facing central banks: the deficit in public understanding and the deficit in public trust.56 Boosting this understanding, and restoring trust, among the public is among the most pressing issues facing central banks. Reconnecting communities with institutions helps strengthen Rajan’s Third Pillar. But how is this best done? The public’s understanding of the economy and policy is enhanced when messages are relevant to their lives and locality. 57 A central bank’s understanding of the economy is enhanced if it can tap into the lived, local experiences of companies and citizens making up the economy. And a better mutual understanding between communities and central banks would, in turn, help build trust between them. Constructing a Third Pillar shrinks the twin deficits of public trust and understanding. This is not a new point. Despite being headquartered in London since 1694, the Bank of England has had a regional presence for much of its history. After the UK banking crisis of 1825, the Bank set up a network of 15 regional branches to provide commercial banking facilities.58 Though their purpose was operational, it quickly became clear that the intelligence gathered by the Bank’s branches could help in understanding the economy.

To meet the escalating demand for new products and services, top-tier financial institutions are known for their commitment in research and development to enhance innovation, especially in process and product innovation in order to remain competitive. In the process, such financial players will be able to better position themselves to be part of the global financial community. As such, human intellectual capital has become an important factor in sustaining the performance and competitiveness of the Islamic financial industry. Indeed, the fast pace of innovation in global financial services in general and in the Islamic financial services sector in particular, demands new expertise and skills. Since research and development remains at the forefront of any well-acclaimed international financial framework, the same is true for any player in the Islamic finance industry. At a time when global economic development plays a decisive role in determining how markets perform, the accessibility to accurate and concise market information is crucial. Kuwait Finance House's initiative, in this regard, as the first Islamic Bank worldwide to possess an Economics & Investment Banking Research arm based in Malaysia, is a major advancement on this front. The establishment of the Research Unit will facilitate information sharing amongst the Islamic financial institutions and other key stakeholders. The setting up of the Research Unit provides vital information which can be shared. The promotion of information sharing and exchange of knowledge will encourage better understanding and spur global collaboration among the financial players.
What is making it so painful is that one of the channels through which rebalancing is occurring is a significant squeeze on households’ real post-tax incomes. According to the latest data, the level of households’ real take-home pay in 2010 Q4 was the same as in 2007 Q4 (Chart 7). Put bluntly, real incomes have stagnated over the past three years. The main driver of the squeeze was the elevated rate of consumer price inflation reflecting, in part, the required increases in indirect taxation (VAT) needed to help rebalance the government budget, and increases in import prices relative to domestic wages and prices. But it also reflects the falls in labour productivity and the degree of slack in the labour market, which have weighed down on nominal earnings growth. During the depths of the downturn in 2009, nominal wage inflation fell sharply (and in many cases pay cuts were introduced), as companies sought to reduce costs and, together with their employees, reacted flexibly to the risk of severe cut backs in employment. Even so, the unemployment rate rose by 3 percentage points, peaking at 8% in February 2010. Normally, following a recession, one might expect household income to start recovering, once unemployment stops rising and productivity growth recovers. But not this time. Although the data released last week suggested that unemployment has continued to fall back a little from its peak, it has not moved much.

They must do so before the global regulatory community can be comfortable with their launch and widespread adoption. Central Bank Digital Currency  A very reasonable and important question is whether a better outcome would be for central banks themselves to harness much of the technological and IT systems innovation and directly digitise cash? A Central Bank Digital Currency (CBDC) would be an electronic form of central bank money that could be used 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  by households and businesses to make payments. Digital central bank money would surely address the decline in the use of paper money without the complications of creating the protections required around stablecoins? Yes and no is I suspect the answer. The question is a good one and should be considered (and is being so) but the answer is not in yet. It’s a very big question. Offering a CBDC would allow broad access to central bank money in a digital form. But any launch of a CBDC requires careful prior consideration to fully explore all the issues and implications in order to make an informed decision, including ascertaining that there would be demand for such a thing. CBDC, whilst offering much potential, also raises profound questions about the shape of the financial system and the implications for monetary and financial stability and the role of the central bank. There are fundamental questions in play.