samchain/econo-pairs-v1 huggingface dataset:
Lim Hng Kiang: Towards a new era of growing connectivity between Asia and the Middle East Opening address by Mr Lim Hng Kiang, Minister for Trade and Industry and Deputy Chairman of the Monetary Authority of Singapore, at the 2nd World Islamic Banking Conference: Asia Summit 2011, Singapore, 8 June 2011. *  *  *  Your Excellencies, distinguished guests, ladies and gentlemen, Introduction 1. I am honoured to be invited to deliver the opening address at the 2nd World Islamic Banking Conference: Asia Summit (WIBC Asia). I would like to extend a warm welcome to our overseas guests, especially our distinguished speakers who will be sharing their insights during this conference. Growing connectivity between Asia and the Middle East 2. Despite the recent spate of shocks, the world economy has been resilient with growth projected to moderate slightly to 4.5%1, compared to 5.8% last year. Downside risks such as high energy and commodity prices, the European debt crises, geopolitical tensions in the Middle East and North Africa (MENA) and the Japan tragedy have not substantially derailed the economic momentum. 3. Asia is expected to remain the main locomotive driving economic growth. The International Monetary Fund (IMF) projects Asia’s growth to reach almost 7% this year, led mainly by China at 9.6% and India at 8.2%. Asia has been, and will still be the key engine for global trade. In 2009, the region accounted for 35% of world exports, up sharply from 25% a decade earlier2.

Seeing the large gap between the demand and supply of infrastructure investment, the ADB and Islamic Development Bank (IDB) have jointly set up a $ Islamic Infrastructure Fund in 2009. Several ASEAN countries such as Malaysia and Indonesia have also outlined plans to tap global Islamic funding for their infrastructure projects. 8. Thirdly, given the many ambitious initiatives and plans in the GCC for new industrial developments and infrastructure projects, the Middle East remains a high-potential market for Asian companies. ASEAN-based companies should therefore invest more time and resources to evaluate these opportunities and assess the risks, so as to help fill this demand. In Singapore, International Enterprise Singapore and the Singapore Business Federation (SBF) have been playing a vital role in helping our local companies to understand and differentiate Middle East markets better and to expand their regional footprint. 9. Lastly, many leading Middle East financial institutions have established a presence in Singapore to offer financial services such as wholesale banking, treasury services, trade finance, and wealth management. These institutions play an important bridging role by guiding companies in the region to expand into the Middle East and vice versa. Bank Muscat, the largest bank in Oman, is the latest player to set up in Singapore. Sustaining the growth of Islamic finance 10. As investors and businesses in the Middle East and Asia seek a wider range and diversity of financing options from banks and capital markets, Islamic finance will have to respond to meet their rising needs.
What the world will look like in 2050 will be partly shaped by the future of Europe; and the future of Europe depends on the decisions we take now. Of course, we always face the risk of failure when conducting far-reaching reforms. Yet we cannot afford another missed opportunity and we have to act swiftly without losing a longer term view. For the Euro area, for its citizens, 2016–2017 is the decisive time to act. 4  4  Interview of Robert Mundell by Laura Wallace, « Ahead of his time », Finance and Development, IMF, September 2006, vol 43, n° 3. BIS central bankers’ speeches  BIS central bankers’ speeches  5

That is, not to introduce large changes in the aggregate amount of capital currently held in the banking system while at the same time to provide tangible incentives for banks to adopt the most advanced and sophisticated approaches to capital adequacy. As we near completion of the New Accord, I am reminded that the tremendous progress we have made is a reflection of the steadfast commitment that so many have put forth to see the revision process through to its completion. The success of the New Accord will be directly attributable to the enormous support and assistance provided by both bankers and supervisors. Yet a Chinese proverb reminds us that, "On a journey of one hundred miles, ninety is but halfway." I suppose the last miles of any marathon are the toughest to finish. The wisdom of that proverb is borne out by the critical nature of the tasks ahead of us to complete, and then to implement, the new capital framework. Adopting the New Accord will be a challenging but also an exciting undertaking for us all. The potential benefits are many - including improving the management of risk, enhancing transparency and promoting greater financial stability. In short, this new framework will make all of us - bankers, supervisors and others - better at what we do. Thank you very much.
What is the purpose of getting a monthly 2% efficiency gain in some production process if monthly prices change more than 20%? The same principle applies if monthly inflation is more than 4% as it was in Croatia (on average) in the two decades preceding independence. Throughout that period GDP was either stagnant or falling.3 GDP started to increase only in 1994, after prices were successfully stabilized. The costs of inflation are relatively well analysed in the literature, so there is no need to analyse them any further, but let me reiterate that it is important that the incentives in a country help people produce new wealth and not put their efforts into redistributing it. Inflation favors predation over production. The second important function of the central bank is a stable financial or, more narrowly, banking system. But, banking crises have affected a large number of countries and almost none of the transition economies escaped them (Frydl, 1999). A lot of transition economies passed through two banking 3  The dramatic fall in GDP in Croatia in the early nineties cannot be attributed to inflation alone. It was not even the main contributor. The disintegration of former Yugoslavia, war and transition were taking place at the same time. 5  BIS Review 43/2000  crises: the first was the crisis of the old banks with their legacy (dubious assets) from the previous economic system.

Negative interest has led to a decline in interest rates on the money and capital markets, which has been quite substantial in some cases. Mortgage rates have only dropped slightly, however. Fritz Zurbrügg and Andréa Maechler will discuss interest rate developments in more detail later. After the discontinuation of the minimum exchange rate, the Swiss franc appreciated significantly in trade-weighted terms. This was partly due to the fact that the euro had reached a low point in early 2015 in the context of the Greek crisis. Our expansionary monetary policy has since helped to weaken the Swiss franc. Since January 2015, the franc has offset about half of the effective appreciation. It nevertheless remains significantly overvalued. Monetary policy outlook Ladies and gentlemen, let me summarise my main points. Our monetary policy is based on two key elements – the negative interest rate and our willingness to intervene in the foreign exchange market. Unlike during the period when the minimum exchange rate was in force, we now decide on a case-by-case basis when – and on what scale – we will intervene. Our monetary policy aims to have a stabilising effect on the price level and to support the economy. The negative interest rate and our willingness to intervene make the Swiss franc less attractive and thereby help to achieve these goals. The persistently low interest rate environment presents a challenge for savers and investors. However, it is important to emphasise that negative interest is an absolutely essential instrument at this point in time.
facilitate us to trade our bonds in their  Similarly, a mechanism to disseminate  system in the future. Such an initiative  secondary market information on debt  will increase the efficiency and  instruments will also be established  effectiveness of settlement for investors  through the proposed e-trading  and increase the pool of savings  platform and the clearing house. Hence,  available for investment in domestic  we will have a new set of operational  securities. processes for government securities in the secondary market as well, in the near  There will be a new Public Debt Act. A  term. team of professionals is consolidating all the statutes relating to debt  The Treasury is already in the process of  management and a separate Debt  studying the possibility of implementing  Management Unit is being set up at the  liability management for US dollar as  Ministry of Finance. well as Rupee denominated borrowings. The Central Bank will work closely with  This, in our view, is a positive  the Treasury in this process.

But regulation is there to serve the British public, and that should guide us as we aim to strike the right balance in this important set of reforms. Chart A: Comparison of MA and FS for different asset classes as at YE20  Source: MA Asset & Liability Data submissions by firms as at YE20. The chart on the left is ranked by spread in bps (lowest to highest); the chart on the right is ranked by MA as a percentage (%) of spread (lowest to highest). Assets classified as ‘quasi government’ and ‘other’ have been excluded as these contain derivative exposures which distort the comparison. Asset classes – agricultural mortgages and sale and leaseback - where firms have reported limited holdings are also excluded. 1. Like other bits of financial regulation, Solvency II was imported into the UK upon Brexit – parts of it into legislation which is the domain of government and Parliament, and parts of it into the regulator’s rulebook. Because of this structure the review is led by HM Treasury on behalf of government but with strong involvement from the PRA. 2. In more technical terms: the MA reduces firms’ exposure to interest rate and reinvestment risk. It also allows a buy-andhold investment strategy which enables a firm to access the liquidity premium which has historically been observed in spreads on fixed interest assets. 3. Estimate based on regulatory data on annuity contracts collected by the PRA.
Luis M Linde: Macro vulnerabilities, regulatory reforms and financial stability issues Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the International Institute of Finance (IIF) Spring Membership Meeting, Madrid, 25 May 2016. *  *  *  I would like to thank Tim Adams, President and Chief Executive Officer of the International Institute of Finance, for his kind invitation to participate in your Annual Spring meeting. In my speech I will try to cover three topics: macro developments and challenges both in the international context and in the euro area; the stance of monetary policy in different areas; and regulatory changes. The international context Today, the recovery of the world economy remains disappointingly uneven and weak. Global GDP growth in 2015 was 3.1 %, the lowest figure since 2009, and projections by most of the international institutions have been revised downwards again. In spite of that, financial markets have experienced a favourable trend in recent months. The more accommodative tone of monetary policy in most of the world, some macroeconomic data that, although not too buoyant, moved away expectations of a new recession and, in a number of cases, corporate profits, better than expected, helped reverse the worrying trends that markets showed at the beginning of the year. However, serious risks remain. Many developed economies have recovered the level of activity prior to the crisis, but their growth rates have been low by historical standards.

And last, but not least, the leverage ratio could also play an additional role in mitigating bank’s and supervisor’s model risk and measurement error, providing a backstop to riskbased capital measures. Indeed, it could also play a role by itself by constraining leverage in the banking system. But a really crucial challenge is good calibration. Furthermore, there are difficult questions to be addressed regarding impact assessments: What is the meaning of “significant” when referring to the increase of the capital requirements? What is the best approach to capture outlier banks which are making savings through the use of aggressive modelling techniques? Is the impact going to be measured by categories of banks with similar profiles and business models? In this sense, in order to ensure that the analysis is based on the best quality data, the engagement of the industry is crucial, both through sharing its views by responding to consultation processes, and also by contributing with the best quality data to the quantitative impact study being conducted by the Basel Committee. To conclude, it is essential that the final design of the whole framework is consistent and that any potential interactions between different measures are properly evaluated. To conclude, I will say that it will be possible to design a framework that keeps the incentives for sound risk management and that eliminates unwarranted differences in risk weighted assets among banks, while avoiding any significant increase in the capital requirements for the global banking system. Thank you very much for your attention.
In June 2014 monetary policy in the euro area embarked on a phase of renewed expansion, aimed both at enhancing monetary policy transmission, in a context of continued bank deleveraging, and increasing policy accommodation in view of persistently weak inflation. Having limited room for manoeuvre on the main refinancing rate, the ECB initiated a series of new unconventional measures. These consisted of our targeted longer-term refinancing operations 2/6  BIS central bankers' speeches  (TLTROs), our asset purchase programme for public and private sector securities (APP), and our policy of charging a zero interest rate on main refinancing operations and a negative rate on excess reserves. As the floor of our monetary policy corridor – which by then had become the key instrument steering monetary conditions in the money market – was reduced to negative levels, other short to medium-term market yields dipped below the zero line as well. Given the novelty, scope and size of the measures taken, and given their potential interaction with other public policies, communication of these measures proved to be much more difficult than before the crisis, when we only had to explain how changes in the main policy interest rates affect the economy and ultimately the price level. Likewise, holding the ECB accountable for its monetary policy has also become more difficult. Let me illustrate this difficulty by considering how observers have been using Taylor rules to compare our policy interest rates with rule-based benchmarks.

In a Taylor rule, such benchmarks are pinned down mainly by the deviation of inflation from target and by a measure of economic slack. On this basis, observers held central banks accountable for monetary policy decisions, as the relation between policy objective and instrument is transparent and not equivocal. In a nutshell, empirical regularities lay the ground for a prescriptive monetary policy rule – even though oversimplified – against which central bank actions can be evaluated. In crisis times, it turned out to be nearly impossible to track the monetary policy stance using a Taylor rule. First, with the interest rate having ceased to be the main instrument, incorporating balance sheet measures into the rule is not straightforward at all.. Second, as the transmission of policy interest rates to the economy has been impaired, their comparison with Taylor rule benchmarks has become much less informative. Third, in view of persistently weak and low inflation and a high degree of economic slack, Taylor rules might well prescribe the setting of interest rates below their effective lower bound, wrongly indicating a tight policy stance, as the easing effects of unconventional measures cannot be accounted for. Developing other comparatively simple monitoring tools has not been possible. Overall, the ability of observers to use policy rules to hold the ECB accountable has been severely hindered. How can we then be sure that the measures taken fall within the ECB’s narrowly defined price stability mandate?
This is partly due to globalisation, not least financial globalisation. It affects the scope of countries and thereby of central banks to conduct their own economic policy based on national prerequisites. Sweden is a small, open economy with a large financial sector. The room for manoeuvre in economic policy regarding both monetary policy and financial stability is, in my opinion, much less than it was for, say, 15–20 years ago. According to the textbooks, with a floating exchange rate, we should be able to conduct an independent monetary policy. And we can, but to what extent? Today’s low inflation is, for example, very much a global phenomenon. Stability in the financial system is also affected by financial globalisation. As a consequence of the ever-stronger links between different countries’ financial systems, regulatory frameworks are also increasingly often formulated outside national borders. The strengthening of global financial regulatory frameworks is, of course, also a result of the financial crisis which broke out in 2008 – and the after-effects of which the global economy is still struggling with. I would, however, like to stress that in Sweden we coped relatively well with the financial crisis and its aftermath. We had robust frameworks and the power to act, as regards both fiscal policy and monetary policy. We also had enough flexibility to be able to cope with the Swedish banking system’s need for liquidity and assist other countries in our vicinity in order to help stabilise the financial system. Economic development in Sweden has been favourable in many ways.

At the Riksbank, we consider there to be a risk of overconfidence in the market taking its responsibility for cash supply, both now and in the future. In our consultation response, we therefore propose that the market’s responsibility for giving customers access to a payment account and related cash services be regulated more clearly; or that the law include an option for the state to intervene if the market fails, regarding both cash and electronic payments. Despite everything, there is still a long time to go before Sweden becomes a cashless society. There is still SEK 73 billion in circulation in the form of 317 million banknotes and 1.9 billion coins – a significant sum of money. The Swedish payment system RIX will change But the Riksbank’s role as regards payments is not just limited to ensuring the availability of cash. The Riksbank’s system for payments between banks and a number of other financial institutions – the RIX system – is the hub of the Swedish payment system. All payment transactions between banks, clearing organisations and the National Debt Office pass through RIX. 4 This makes it an important part of the Swedish financial infrastructure with a daily turnover of about SEK 450 billion divided among over 15,000 payments. The development of payment services makes adjustments of the RIX system necessary. An example is the development of payments in real time using, for example, the Swish mobile phone app.
Theoretical models, as captivating intellectual efforts as they are, need a reality check from time to time. The signs are here for us all to see. In another fascinating Disney movie, “Tangled”, princess Rapunzel follow the signs she spots in the sky to beat its fears and escape from its ivory tower. I think we should do the same. Outside central banks, the greatest danger is populism. 7  The fact that in so many developed countries the cumulated wage gap has not been closed not only subdues inflation, but it also fuels dissatisfaction of voters giving rise to populism. Inside central banks, the greatest danger is dogmatism. We need to fight both with common sense, with more data-dependent policies, and with a deeper understanding of the factors influencing consumer choices and society as a whole. i  Voinea, Liviu, 2018, Explaining the post-crisis Philips curve: Cumulated wage matters for inflation, No.

Our approach is closer to Duesenberry (1952), who introduced relative income instead of the rate of change of income as the explanation of the differences in saving at the same level of income. He referred to the influence of past living standard on current consumption. Saving depends, he wrote, on the level of current income relative to higher incomes in previous years. However, he stopped short of calling a wage gap or of considering the influence his consumption and saving theory may have on inflation. What matters most for consumption during and after a crisis is not the unit change of income, the savings for retirement, or the future income. A recession is a game – changer. A global financial crisis is a global game-changer. In a recession, the transitory component of income becomes negative not only for one person or for a small group, but for the national or global economy. This makes it very difficult to predict future income. When nothing is steady anymore, the only valid reference remains the past income. In a crisis, the reference is not ahead of us, but rather it is in the past. Retirement savings and linear employment prospects are uncertain. People relate to their peak gains in the not so distant past rather than to uncertain future gains. Consumption does not depend only on current income and future expectations, but also on past income. Stock is more relevant than flow, because people have a strong reference which is their previous income levels.