samchain/econo-pairs-v1 huggingface dataset:
When a faulty motorcycle is brought to a mechanic, he may simply jump to conclusions based on his  2  BIS Review 161/2008  previous knowledge. Instead of subjecting the motorcycle to a thorough scientific inquiry, he may conclude that the fault lies in a certain part or a certain mechanism. To reach this conclusion, he has not gathered the relevant information. The chances are that he may be correct or may not be correct. If he is correct, the repair performed on the basis of the diagnosis made with imperfect information will prove to be a success. But the mechanic in that case has behaved like a speculator and the outcome of speculation may have the chance of being a success or a failure. If it turns out to be a failure, the cost to the owner of the motorcycle would be enormous. In that case, since the correct repair has not been performed, the motorcycle will continue to remain faulty. Hence, a true scientist engaging himself in scientific inquiry should not be a speculator. Instead, he should be a person willing to follow the scientific method to arrive at conclusions. Decisions could be made by a mechanic attending to a faulty motorcycle by resorting to either inductivism or deductivism. The inductive approach requires the mechanic to look for evidence in the real world and come to conclusions. For instance, if we see crows that are black and if we continue to see black crows, we may conclude that all crows are black.

When they do so, it is also inevitable for them to base their conclusions on personal biases, fears and prejudices they have been harbouring in their minds. Such conclusions are tainted by biased or prejudiced views held by the person making the conclusions. Hence, such findings are simply an imposition of personal views on the society and, therefore, fail to explain reality and Nature. Therefore, discoveries made in that manner do not enhance the human knowledge. In this background, it is necessary to build the knowledge base of mankind free from biases, fears and prejudices. This could be attained by pursuing scientific inquiry which bases itself on a set of principles, guidelines and an ethical and moral code that discipline the  BIS Review 161/2008  1  researchers. It should, however, be noted that the conclusions derived through scientific inquiry are not static and permanent. The very nature of scientific inquiry is that conclusions derived from a given research study, as Karl Popper pointed out, should be capable of being refuted by a new inquiry. Hence, results produced by scientific research carry with them the property of refutability and are valid only until a new research study would replace them with new results. In this sense, the knowledge base developed through scientific inquiry could be equated to a reservoir from which water would flow out and fresh water would flow in continuously. But the core knowledge, just like the permanently stored water in the reservoir, would remain intact.
Norman T L Chan: Black Bear – Blue Ocean – Wanton Noodle Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Management Association Fellowship Award Dinner, Hong Kong, 26 November 2013. *  *  *  Dennis (Sun), Alfred (Chan), Victor (Lee), Ladies and Gentlemen, 1. I feel very honoured to have been invited to speak at the HKMA Fellowship Dinner tonight. This is not only because the Hong Kong Management Association has been a forerunner in enhancing the standards of management and governance in Hong Kong, but also because the Hong Kong Management Association and the Hong Kong Monetary Authority share the same initials “HKMA”! Hence, attending the Fellowship Dinner tonight has double meanings for me as the Chief Executive of the HKMA. 2. Management is crucial as it embraces knowledge, skills, culture and leadership that would guide and shape the future of an organisation, whether it is public sector or private sector body or whether it is profit-seeking or non-profit-making entity. There is no doubt that, with increased globalisation and technological innovation, markets in different geographical localities have become more interconnected. One author has described the phenomenon as the “World has Become Flat”. 3. An important outcome of the interconnectedness of markets is that competition has become much more intense and ferocious. Talking about competition, let me share with you this story. 4. One day two men went together hiking in the mountain.

These are great examples of the success under the Blue Ocean theory. However, not all of us can become Bill Gates and Steve Jobs. And there is a limit on how often companies can innovate new products or lines of business. So the Blue Ocean theory is good but has its own limitations. Most people and companies would find it hard to create blue oceans in the day-to-day life. So what is the alternative route to survival and success? In this connection, let me share with you another story. It’s the story about a noodle shop in Wanchai. 7. In the 1970s, a young couple decided that they should start their own business. They borrowed money from their parents and relatives to set up a small noodle shop in Wanchai. They worked very hard and the noodle shop’s business was doing well after several years. In the 1980s the couple used the money they had saved up to buy the shop space of their noodle shop. However, the business of the noodle shop began to decline in the 1990s. A friend of the couple offered help by giving the following advice: “The noodle shop is too old-fashioned. People’s eating habit has changed and they prefer a wider variety of food in the form of a local cafe (茶餐廳)." This sounded sensible and the couple took the advice and converted the noodle shop into a local cafe. The business improved initially but worsened again several months later.
The buyer of the credit risk (the insurance provider) commits itself to compensating the bank if TeliaSonera does not fulfil its obligations in some way during the contract period. The bank pays a regular premium for this, which is determined when the contract is signed. The definition of failing to fulfil its obligations is made clear in the contract between the bank and the investor. This is what is known in the jargon as a credit event. It could mean, for instance, that TeliaSonera doesn’t pay the interest as agreed, that it defaults on payment of the outstanding debt or that it goes bankrupt. The premium the bank has to pay to the investor reflects the market’s assessment of the risk that such an event will occur. The greater the probability, the higher the premium. Most companies for which credit derivatives are traded also have bond loans issued on the international market for corporate bonds. How much an investor is willing to pay for these bonds depends of course on how he assesses the probability that the company will default on its interest payments or perhaps even go bankrupt – that is to say, that a credit event will occur. 1  A more detailed description of the credit derivatives market is provided in the article “Trading activity in credit derivatives and implications for financial stability” in the Riksbank’s Financial Stability Report 2006:2.

While the use of credit derivatives has substantially contributed to enhanced risk-sharing and is expected to have improved the resilience of the financial system, questions can be asked about the sustainability of the pace of growth in these markets as well as about their implications for the emergence of other forms of risk. Two issues in particular have surfaced in the course of the past year. First, the sheer complexity of many of the structured products introduced in the credit derivatives markets implies that there are potentially large risks for end-users who might not fully understand the time-varying risk profiles of such instruments. Indeed, as illustrated in several episodes of recent large corporate downgrades, the pricing of structured credit products might not adequately account for unanticipated changes in correlation structures among the assets incorporated in the underlying pools. Second, the rapid increase in trading volumes has stretched banks’ and dealers’ settlement systems and caused backlogs that could contribute to liquidity problems in a situation of increased trading activity. These problems could be particularly relevant for the European market, given the larger discrepancy in size between the cash bond market and the derivatives market than in the US. There are signs that, in accordance with the recommendations of the Counterparty Risk Management Group II report, many  BIS Review 50/2006  3  global banks have successfully worked towards solutions to these problems. However, it is rather widely acknowledged that pockets of vulnerability remain in these markets.
Abdul Rasheed Ghaffour: Islamic finance and the Fiqh of crisis management Keynote address by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 16th International Shariah Scholars Forum (ISSF) "Islamic Finance and the Fiqh of Crisis Management", 6 October 2021. * * * Assalamualaikum w.b.t and a very good afternoon to all distinguished guests and fellow participants. It is a pleasure and honour for me, to be part of what I believe will be another stimulating and thought-provoking dialogue. I would like to record the Bank’s appreciation to ISRA for hosting this annual platform, and also more broadly, for its continued dedication in advancing the frontiers of applied Shariah knowledge in Islamic finance towards greater heights and prominence. The chosen theme “Islamic finance and the fiqh of crisis management” is very apt and timely. With the persisting rage of the Covid-19 pandemic, our economic and financial backdrop is gripped with unprecedented challenges that emerged within a very short period of time – priced with great health, economic and social costs. The forecasted statistics are rather staggering, sparing no countries from economic fallout and social regress. With as many as 150 million people globally estimated to be pushed into extreme poverty by 20211, exacerbated with the fact that global unemployment is expected to hit more than 200 million people by 20222, the impact from the crisis has disproportionately affected the most vulnerable.

In the meantime, regulatory and adjustment processes that accompany monetary policy decision-making (especially those that will follow the return of the past to normality) may trigger temporary shocks with effects on both the European economy and the small economies related to it. Again, it is the duty of research to investigate potential shocks and model them in the framework of models corroborating central banks decision-making. This situation is not unique to Albania, but is a global-wide problem. Therefore, we are happy to see here participation from all the regions, whose research will introduce new experiences, of benefit to us not only from their conclusions but also from the methodologies they have applied. Fortunately, the topics that will be discussed address the whole spectrum of central banks’ interest and will enrich our experience with the opinion and focus of your scientific research. I hope you will find Bank of Albania’s experience interesting, informative and valuable for your current and future scientific research. I take this opportunity to thank the regional and European central banks for their high consideration and valuable contribution to the reputation of our research workshop. Finally, I wish you a successful and fruitful Workshop and hope to meet you again in future activities of the Bank of Albania. Thank You! 2/2  BIS central bankers' speeches
The new agreement governs the amount of the annual distributions to the Confederation and cantons for the financial years 2020 to 2025. It is based on the tried-and-tested principles of the previous agreements, while also taking into account the more recent developments. This new agreement takes into account not only the marked expansion of the SNB’s balance sheet and the associated increase in earnings potential, but also the pronounced growth in the distribution reserve stemming from the extraordinary investment results in recent years (Slide Page 5/7  5). These two developments have made it possible to increase the maximum annual distribution, and to already apply this to the 2020 financial year. The maximum annual distribution is now CHF 6 billion, instead of CHF 2 billion and CHF 4 billion under the previous agreements. 2 The actual amount of the distribution depends on whether the net profit exceeds certain thresholds (Slide 6). For the maximum distribution of CHF 6 billion to be made, the net profit must be CHF 40 billion or higher. Setting a maximum distribution of CHF 6 billion per year is based on carefully considered earnings forecasts. These take into account the lower yields expected in the coming years. Bonds make up about 80% of our foreign currency investments, and most of them are government bonds. At present, around 50% of the bonds we hold have a negative yield to maturity in local currency terms (Slide 7).

The CCAR is a significant supervisory innovation intended to ensure that large, complex bank holding companies have robust internal capital planning processes and sufficient capital to withstand stressed economic conditions and to continue to be viable financial intermediaries. Importantly, the CCAR takes a forward-looking perspective in assessing a bank’s capital adequacy, including ensuring that its internal stress testing processes address its unique vulnerabilities and exposures. The CCAR should push banks to proactively manage their capital so as to be well prepared for the type of market stresses that could cause significant declines in income and capital. Other steps could be taken to complement the CCAR. One approach would be to implement a long-term debt requirement in a way that further enhances market discipline and provides incentives for regulators to promptly intervene if necessary. Another might be to structure compensation practices to strengthen senior bank managers’ incentives to proactively manage risk. For example, imagine how incentives would change if a significant portion of senior bank management’s compensation each year were deferred to be available to cover future capital losses. I suspect that over time this would meaningfully alter management’s risk tolerance. Also, in addition to the quantity of the deferred compensation, the form it takes could also affect incentives. If most of the deferred compensation were in the form of debt rather than equity, I suspect this would also affect management’s risk tolerance and the appetite to cut dividend payments, reduce share repurchases or raise more capital more promptly when the firm began to become stressed.
More advanced includes: printing and recording, chemicals, pharmaceuticals, computing, electrical, machinery, motors and equipment. Less advanced includes: textiles, products of wood, paper, rubber, basic metals, non-metals, other materials and other manufactured goods. BIS central bankers’ speeches  1  Over the past two decades, Inflation Targeting central banks have established good track records of keeping inflation from being too high. It has brought tangible benefits to the UK, particularly lowering the volatility of both inflation and of income growth.2 But now those central banks, including the Bank of England, are being tested by inflation that is too low. Inflation has fallen globally (Chart 1) and is below target in 16 of 18 Inflation-Targeting major economies (Chart 2). 11 of those countries have inflation rates below 1%.3 Today I will discuss the consequences for the UK of persistently low global inflation, why it matters, and what the Bank of England can do about it so that businesses and households in Sheffield and beyond can focus on what really matters to them. The bottom line is that there is a risk that the combination of persistently low global inflation and the strength of sterling could weigh on prices here for some time. But despite these headwinds, a solid UK expansion, underpinned by strong domestic demand growth, leaves us on track to return inflation to target within the next two years. To deliver that outcome, a gently rising path for Bank Rate is likely to be required over the next few years. 1.

Concerns that household or government debt will weigh on demand could cause firms to delay further their already weak investment spending (Chart 8 – see annex). Such rational corporate caution is consistent with the behaviour of many financial asset prices, which appear to be pricing the possibility of material downside tail risks, such as that economic weakness and persistently low global inflation become mutually reinforcing.11 This fear of fear itself might be reflected in other asset prices too; in particular those that measure or are influenced by inflation expectations. Along with measures from household surveys, some of these have fallen in recent months.12 Those expectations matter as they feed into the wage and price setting processes that ultimately determine inflation. That is why central banks are keenly alert to the possibility that low inflation could de-anchor mediumterm inflation expectations, increasing the persistence of inflation. 10  In UK-weighted terms, global output is estimated at 2% below potential. 11  Yields on sovereign bonds remain exceptionally low. In the six months to January, estimates of the equity risk premium rose by over 100bps in the UK and the euro area back to levels last seen in the heart of the crisis – December 2008 for the UK and June 2012 for the euro area. In addition, the probability of large declines in equity prices implied by options prices rebounded during 2014. Discussed in Carney, M (2015), “Fortune favours the bold”, Lecture to honour the memory of The Honourable James Michael Flaherty, P.C., Iveagh House, Dublin.
History has shown that inflation measured in terms of consumer prices has not always signalled when imbalances in the economy have been building up. Many of the countries that were hit by depression and banking crises during the 1930s had beforehand witnessed steep rises in asset prices and a sharp credit expansion without any increase in inflation. In Japan, the recession that followed in the wake of a strong credit expansion and rising asset prices during the second half of the 1980s proved, as we know, very severe and protracted. Neither in Japan had inflation provided signals in time that large imbalances were building up. Also during the latter part of the 1990s we have seen examples of crises with a similar course of events, for example in Thailand and other parts of Asia. Banking crises are not a necessary condition for countries to be hit hard after such a development. This is shown by what happened in the United States and England at the beginning of the 1990s. Focus on price stability and financial stability During the 1990s, confidence in an economic policy aimed at achieving price stability seems to have strengthened in earnest in large parts of the world. World inflation is now back to the levels reached before the 1970s, and monetary policy is again playing the leading role in stabilisation policy. Modern neo-Keynesian1 research based on theories of nominal rigidities has shown that not only real shocks but also monetary shocks can temporarily affect the real economy.

The depreciation largely occurred over a few days at the end of July, but the downward trend – broad-based across the market and founded on good market quality – continued over the following months. Overall, the situation on the foreign exchange market remains fragile, however. Despite the positive market environment, the Swiss franc has not weakened any further in recent weeks. The risk of renewed Swiss franc appreciation remains, particularly if there is a return to risk aversion in the market. A look at the option markets shows that investors are still prepared to pay a higher premium to hedge against Swiss franc appreciation than against its depreciation (cf. chart 4). Progress made in reforming reference interest rates  Let me turn now to reference interest rate reform. The Financial Conduct Authority (FCA) in the UK announced in July of this year that it would not guarantee the continuation of Libor beyond 2021. The reason for this is that the volume of money market transactions underlying Libor – unsecured interbank loans – has been low for a number of years. The FCA will exercise its power to compel panel banks to take part in the Libor panel only until the end of 2021. After that, the possibility of Libor disappearing fairly quickly due to the withdrawal of panel banks can no longer be excluded. The period until the end of 2021 should now be used by market participants to ensure an orderly transition from Libor.
As mentioned earlier, reflecting large fiscal imbalances and a loss of confidence on the part of investors, government bond spreads increased dramatically for some euro area countries and became very volatile in 2010. The willingness of investors to support governments’ financing needs declined, with the result that the governments of three euro area countries have since then required financial support by means of joint EU/IMF programmes. These programmes are subject to strict conditions on fiscal adjustment in order to restore public finances to health. However, the need to pursue more ambitious consolidation targets is more general. It is striking to see that there are currently only two euro area countries that are not subject to an excessive deficit procedure. Fiscal consolidation is essential to ensuring an environment conducive to output growth and price stability. Looking ahead, implementing fiscal consolidation and securing the sustainability of public finances are among the major challenges faced by policy-makers. The consolidation of public finances requires a comprehensive policy comprising: (i) the timely correction of excessive deficits; (ii) the reduction of government debt to more sustainable levels; and (iii) the reorganisation of banks in order to limit strong links between the balance sheets of governments and financial sectors, which typically result in the socialisation of banks’ liabilities in times of crisis. These measures need to be complemented by pension and healthcare reforms to alleviate the fiscal burden arising from population ageing.

I would also add that this discussion represents a dangerous and unwelcome distraction from more important debates on issues such as how to enhance the euro area’s economic governance, make our economies more dynamic, ensure the sustainability of public finances and strengthen the banking sector, which deserve our full attention and to which we must devote our energies. 2  A recent study covering more than 200 cases of debt restructuring since 1970 finds that the impact of defaults on the ability of defaulting countries to access credit subsequently is larger and more protracted that previously believed. See Cruces, J. and Trebesch, C., “Sovereign defaults: The price of haircuts”, unpublished mimeo, 2010. 3  Cottarelli, C., Forni, L., Gottschalk, J. and Mauro, P., “Default in Today’s Advanced Economies: Unnecessary, Undesirable, and Unlikely”, IMF Staff Position Notes, No 10/12, IMF, Washington, DC, 2010. BIS central bankers’ speeches  7