samchain/econo-pairs-v1 huggingface dataset:
4  BIS Review 112/2007  However, I think it is unavoidable that a central bank sometimes surprises analysts when publishing its own forecast for the policy rate. The future is uncertain and different analysts may at times have vastly differing perceptions of economic developments. Publishing a forecast for the repo rate means that the central bank more clearly reports its view of future developments than with earlier more mechanical assumptions of the interest rate. At the same time it means that the central bank to a greater extent risks being exposed to criticism. Even if this is the case, it is my firm opinion that it is better to go the whole way and publish a forecast for the repo rate. The advantages of an own interest rate path clearly outweigh the disadvantages. We will not normally give any signals regarding the way we will vote on the next interest rate decision other than in connection with the monetary policy meetings. This means it will become more important to try to understand the way we reason and how we estimate the driving forces behind inflation and growth. What we will contribute is forecasts for the most important variables, combined with individual clarifications by the respective members. If one understands our way of thinking, one has in total all the information needed to be able to form a good impression of coming interest rate decisions.

And, by removing derivatives and certain structural features embedded in RMBS, it will improve the Bank’s ability to manage the risk associated with this collateral. Moreover, this initiative will also allow smaller counterparties, who do not have access to securitisation platforms, or for whom the cost of securitisation is prohibitively high, to access liquidity insurance in times of need.9 The Bank started processing applications for the pre-positioning of loans in the DWF in January 2011. At the same time as announcing that it would accept portfolios of loans as collateral, the Bank formalised the next steps in its ABS transparency initiative. Following on from its consultation in March 2010, the Bank announced that it would be phasing out the eligibility of residential MBS and covered bonds that did not conform to certain transparency criteria. During a year-long implementation period, running to November 2011, those securities that do not confirm to the new standards will remain eligible for use in the Bank’s operations. But over that period, counterparties should be working to ensure that they meet the new transparency requirements. Subsequently, in the year from November 2011 to November 2012, there will be a 12 month transition, during which the Bank will begin to apply increasingly large haircuts to those securities that do not conform to its requirements. By the end of November 2012, assets that do not comply will become ineligible. The transparency initiative will help the Bank risk-manage collateral more accurately and effectively.
In the area of research and training in Islamic banking and finance, an industry-owned institute named Islamic Banking and Finance Institute Malaysia (IBFIM) was established. IBFIM will become a one-stop centre for the purposes of education, training and research. On the international front, significant progress was achieved on two initiatives, namely, the International Islamic Finance Market (IIFM) and the international standard-setting body. BNM participated actively in both initiatives. The standard-setting body, to be located in Malaysia, will focus on developing international best practices and prudential standards governing the supervision and regulation of Islamic financial institutions. These encouraging developments will contribute further to the overall development of the global Islamic financial system. The insurance industry maintained a positive growth trend in premium income for the third consecutive year since the Asian crisis. Premium income grew by 12.4% in 2001 while the capitalisation of insurers strengthened further to RM4.9 billion as at the end of 2001. The increase in the minimum capital requirement to RM100 million, with effect from 30 September 2001, has been instrumental in advancing the consolidation of the industry. Since 1999, a total of eight mergers and acquisitions were completed. Seven other M&As involving 13 insurers are currently at various stages of implementation. In 2001, macroeconomic policy was focused on managing the downside risks arising from the slowdown in the major economies. Macroeconomic policies were targeted at creating a positive and enabling environment for domestic demand to support growth.

Prasarn Trairatvorakul: The outlook for Thailand’s economy in the face of concerns about the slowing US recovery and Europe’s debt crisis Address by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Foreign Correspondents’ Club of Thailand, Bangkok, 3 November 2011. *  *  *  Distinguished FCCT Members and Guests, Ladies and Gentlemen, First of all, I would like to thank the FCCT Board for inviting me to share my view on Thailand’s economic outlook in the face of the U.S. economic slowdown and the Eurozone’s sovereign debt crisis. Actually, the organizer’s original intention reflects very well what was in the back of everyone’s mind over the past few months when we talked about key challenges to the Thai economy. But as all of us here today might agree, things have changed so dramatically over the past month alone, with the country now being swept over by the flood. While our feet need to stand firm weathering through and recovering from the flood together as a nation, our eyes cannot lose focus on what happens in the U.S. and the Eurozone. I think it is fair to say that what happens in the U.S. and the Eurozone will likely reshape the global financial and economic landscape over the years to come. And for Thailand, these factors and their implications on the global economy will also determine whether the recovery from the flood will be a rosy or a painful one. So, my talk today will be divided into two parts.
Peter Praet: Preserving monetary accommodation in times of normalisation Speech by Mr Peter Praet, Member of the Executive Board of the European Central Bank, on "Herausforderungen für die Europäische Geldpolitik 2019" at 33. Internationales ZinsForum 2018, Frankfurt am Main, 26 November 2018. * * *  Introduction In the aftermath of the global financial crisis, central banks have successfully fended off deflationary forces and supported economic recovery. 1 They have brought down policy rates to their effective lower bound and, importantly, have made use of a broad set of unconventional monetary policy measures in pursuit of their statutory objectives. In advanced economies, monetary policies have borne fruit, but their monetary policy cycles clearly differ substantially, reflecting different stages of recovery and degrees of progress towards achieving the central bank’s statutory objectives. In a number of places, central banks have already tightened their monetary policy stance; unconventional monetary policy measures have been wound down and policy rates have been gradually increased. In the euro area, however, significant monetary policy stimulus is still needed to support the further build-up of inflationary pressures and headline inflation developments over the medium term. At the meeting of the ECB’s Governing Council in June, we gave an important signal of a normalisation of our policy instruments. We communicated our anticipation that, subject to incoming data confirming our medium term inflation outlook, we would end net purchases under our asset purchase programme (APP) after December 2018.

Chart 7: EONIA forward curves around June 2018 Governing Council (percentage per annum)  9 / 12  BIS central bankers' speeches  Chart 8: Standard deviation of three-month EURIBOR option-implied density in one year’s time (percent)  10 / 12  BIS central bankers' speeches  But let me turn to the next steps for monetary policy in the euro area. The latest surveys of market participants’ expectations regarding the most likely date for a first rate increase indicate that the “at least through the summer of 2019” formulation has been solidly internalised by market participants. Looking ahead, the rotation implies that our key policy rates and forward guidance about their evolution will become an anchor for monetary policy as the end of our net asset purchases is nearing. Our communication, and the rate path itself, will be calibrated to ensure that inflation remains on a sustained adjustment path. Our policy will remain predictable, and we will proceed at a gradual pace that is most appropriate for inflation convergence to consolidate. In addition, as proved in the past, our forward guidance remains an effective firewall to insulate the euro area from unwarranted tightening pressures originating elsewhere. This protection will be crucial to ensure that, as we move along the normalisation path, euro area financial conditions remain consistent with continued progress towards our policy objective. Finally, our APP portfolio and our unconstrained provision of liquidity will continue, for the time being, to provide an accommodative environment.
My experience is also that the arrangement with six people taking decisions works well for monetary policy. There are effective routines for producing bases for monetary policy decisions and the reasons behind the different members’ positions are clearly given in the minutes from the monetary policy meetings. For these reasons, monetary policy decisions should continue to be taken by a monetary policy committee at the Riksbank which is independent of political bodies. For the same reasons, decisions on the application of the new tools for safeguarding macroeconomic stability should also be taken by this monetary policy committee. It is as yet unclear what these will be. They may include capital requirements, liquidity requirements, risk weightings, loans ceilings etc. that vary over time. But this arrangement doesn’t work well in other areas. When six people, all of whom have the individual responsibility of leading the Riksbank, are to decide on issues where opinions are divided, the preparatory processes can easily become prolonged. It can also lead to a complete inability to act. If one or more members strongly oppose a decision, this can lead to the issue not being taken up for decision at all. Being six people can be particularly problematic when it comes to financial security. In these issues, we have striven to agree. Frequently, of course, we have had to take decisions to strengthen financial stability in a reality marked by a financial crisis. In such cases, it would not have been appropriate to show disunity over the best course of action.

For example, all jurists in the region could agree that the tawarruq contract can be used in certain circumstances, and cannot be used in other circumstances;  ii. This Dialogue could agree to disagree on specific Shariah issues, and not only taking respect those of different views, but also to defend the right of a jurisdiction in the region using arguments that may be seen controversial to others. Let’s assume Malaysia allows the use of Bai ‘Dayn in certain circumstances, but another jurisdiction disagrees with this decision. Nevertheless, the decision made by the Malaysian jurists to allow Bai ‘Dayn is respected and in the spirit of Nusantara, will defend Malaysia’s right to use such contract as it is made in accordance with the culture, tradition as well as existing economic system and legislation. iii. This Dialogue should explore a collaborative approach to develop a Shariah framework that is standardised at the regional level. Malaysia has embarked on this initiative with the development of 13 Shariah standards. It would be desirable if other countries in the region can also develop equivalent standards that could eventually be consolidated as Shariah standards that are applicable to the whole region and to even serve as benchmarks to other Muslim countries. Conclusion The rapid transformation of the Islamic financial sector will certainly affect the ascertainment of Islamic law on contemporary issues.
That has been the story of the UK economy over the last 150 years. We ran continuous surpluses in the 50 years before the first world war (Chart 1) and built up a large stock of foreign assets. Partly as a result of that, we benefited from a surplus on our investment account for most of the period since the 1870s. There are two key differences between that period of the UK’s investment abroad and the situation today. 100 years ago the developed countries were investing in emerging markets (at the time in the Americas and Australia) which had abundant land and natural resources but scarce capital and so the returns were high. Currently, capital is flowing “uphill” from emerging to mature economies. Secondly, the investors before were mainly in the private sector and were seeking out the best returns on capital. Today the investors are mainly EME central banks and governments and the build up of foreign assets reflects their policy choices. 1  There is some fuzziness at the edges of this definition. Central bank reserves in some countries, which traditionally have been invested mainly in liquid and safe instruments, are increasingly being switched into riskier assets. Also, in some countries, state-owned banks and companies invest in foreign assets where some of the policy issues are the same as for sovereign wealth funds.

In particular, interest rates on safe assets fell since the build up in foreign assets were invested mainly in government bonds. 14 That both discouraged saving and boosted asset prices. In order to maintain their traditional returns, the private sector sought higher yielding strategies and were too ready to  11  IMF (2007) ‘Exchange rates and the adjustment of external imbalances’ IMF WEO April, Chapter 3. 12  Bernanke, B (2007) "Global Imbalances: Recent Developments and Prospects", speech delivered for the Bundesbank Lecture, Berlin, and Bernanke, B (2005) "The Global Savings Glut and the U.S. Current Account Deficit", speech delivered for the Sandridge Lecture at the Virginia Association of Economists. 13  A fall in desired investment (investment ‘strike’) in some countries also contributed to the decline in global real interest rates. For example, investment-GDP ratios fell sharply in the Newly Industrialised Countries in the wake of the east Asian crisis a decade ago. 14  For example FE Warnock and VC Warnock (2006) (‘International Capital Flows and US interest rates’, NBER Working Paper, 12560) estimate that foreign official flows reduced US 10-year Treasury nominal yields by about 100 basis points lower than otherwise in the year to June 2005. BIS Review 31/2008  5  believe that these could be attained through new products without running bigger risks. We are now dealing with the consequences of that mistake.
Since December 2000, growth forecasts for our trading partners have been halved for 2001. The tragic events of 11 September will have a further dampening effect on activity in the US, Asia and European economies. In the euro area, high oil prices, livestock diseases, the decline in the ICT sector and reduced demand in the US have had a negative impact on economic developments. GDP growth has also slowed considerably over the last year. Unemployment has shown a substantial decline in recent years and is low in many of the smaller countries. Unemployment is high in the large countries. Particular structural features, such as wide regional disparities, are contributing to the high level of overall unemployment. The terrorist attacks of 11 September have reduced demand in the aviation and travel industries. The European Central Bank has cut its key rates by 1 percentage point so far this year. Until the autumn, the Norwegian economy had remained relatively insulated from the world economic slowdown. It now appears clear that Norway will also be affected by the slowdown. A number of Norwegian enterprises in export industries and the travel industry have felt the effects of growing caution among households and businesses worldwide. Investment in mainland enterprises will probably also decline. However, the economic situation in Norway is different from that of the euro area. The Norwegian economy is still characterised by high capacity utilisation with a limited supply of labour. Registered unemployment has been low and stable since the autumn of 1998.

In the current situation, Norwegian interest rates on a par with interest rates in the euro area would lead to instability. If monetary policy had not contributed to curbing demand, the pressure on economic resources would have led to accelerating inflation. Countries participating in EMU have gained access to a large, liquid financial market in their own currency, with low transaction costs. The risk of exchange rate losses associated with cross-border investment and borrowing in the euro area has been eliminated. This can result in substantial gains, not least for some of the smaller countries. The business sector in the euro area is taking advantage of this. The volume of bonds issued by non-financial corporations has increased substantially each year since the introduction of the common currency in January 1999. Financial markets are small and fairly illiquid in Norway compared with the euro area. Combined with the uncertainty associated with exchange rate developments, this can add a premium on the required rate of return on investments in NOK. This can in turn contribute to a higher long-term interest rate in Norway than in the euro area countries over time. In the long term, financial market participants expect Norwegian interest rates to be close to 1 percentage point higher than in the euro area.
The stability charts – 3a and 3b – show the stability of growth and inflation in the G7 countries in the two time periods. In these charts a good performance is to be near the origin of the axes, close to the bottom left hand corner of the chart. The rather poor performance of the United Kingdom prior to 1997 is evident, as is the remarkable degree of stability in the United Kingdom relative to the rest of the G7 after that date. Of course, correlation does not imply causation. And there is little reason to suppose that the MPC is responsible for the higher average growth rate over the past decade. That more likely reflects structural changes in the UK economy, associated with other policy reforms. It is the stability of the UK economy which appears to be the most marked contribution of the MPC. That is a surprise. The conventional wisdom is that, although there is no long-run trade-off between the levels of inflation and output growth, there is a trade-off between the stability of inflation and of output growth. Inflation can be kept closer to the target only by larger changes in interest rates and bigger fluctuations in output growth. Policy-makers thus face a choice between different combinations of inflation and output growth volatility, which, when plotted on a chart, describe a “stability possibility frontier”.5 They can choose a point on that frontier depending on the relative importance they place on stabilising inflation and output growth, but they cannot move inside it.

Moreover, our statistics have been integrated into the euro area accounts, which provide an overall picture of the euro area economy. The next milestone is the release of the new investment funds statistics, today. For some years, the ECB has already published un-harmonised and partly estimated euro area investment fund statistics, at a quarterly frequency. Today we will present, for the first time, harmonised investment fund statistics that cover all investment funds resident in the euro area. This includes data for the main fund types such as bond, equity or mixed funds, but also other types of funds, including hedge funds. Our new dataset contains much more detailed breakdowns both on the assets held and liabilities issued by investment funds. The data provide, for example, detailed information on the residency and sector of the issuers of securities and shares held by the funds. New information is available, as well, on the residency of the holders of the shares issued by euro area investment funds. In addition to the detailed quarterly information, the ECB now also publishes key monthly information on the outstanding amounts and net sales of shares issued by the funds. A further important improvement concerns the timeliness of the publication of these statistics: as from 2010, the statistics will become available after one-and-a-half months (compared to 3-and-a-half months in the past). There are many reasons why high quality statistics on euro area investment funds are important for the ECB’s monetary and financial analysis.
Lorenzo Bini Smaghi: Macro-prudential supervision Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the CEPR/ESI 13th Annual Conference on “Financial Supervision in an Uncertain World”, European Banking Center at Venice International University, Venice, 25-26 September 2009. *  *  *  Introduction 1 The recent financial crisis has produced a broad consensus on analysis and policy action in at least three areas, namely the need: i) to gain a better understanding of systemic risk; ii) to strengthen the macro-prudential aspects of financial supervision; and iii) to deepen central banks’ involvement in it. The establishment of a new body to conduct macro-prudential supervision at EU level – the European Systemic Risk Board (ESRB) – is one element in a comprehensive set of initiatives and responses in this field. My remarks today focus on the future work of this body and consist of four parts. I’ll first consider the origins, purpose and structure of the ESRB. In second place, I’ll discuss the concept of systemic risk, and how it can be monitored and assessed effectively. I’ll examine some analytical tools for systemic risk analysis in the EU and look at how these tasks could be organised in the context of the ESRB. In the third part, I’ll cover the ECB’s experience in conducting financial stability surveillance in the euro area and reflect on the vulnerabilities that we (and other authorities) identified before the crisis.

As for the PSPP, Greek government bonds lost their eligibility on 21 August when the programme ended. At that point, the Eurogroup’s debt measures had still not been ratified. In any case, purchases would have been very limited over such a short period. Is there any chance that Greek bonds could be included at some point in the future in the reinvestment phase of the PSPP? How many years do you think the reinvestment of maturing securities will last? Without a programme, Greek government bonds are now treated like any other bonds for the purpose of ECB eligibility. Once they regain investment grade status they could be included in all ECB programmes, subject to a Governing Council decision. As you know, we intend to reinvest the principal payments from maturing securities purchased under the asset purchase programme (APP) for an extended period of time after the end of our net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. The government seems to have put on hold, for the time being, plans to return to the markets. Do you think that Greece has now regained full access to international capital markets? Do you think it should wait until after the elections to go back to the markets? Greece’s market access conditions have clearly improved compared with one year ago.