samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  1  Experience from around the world shows that biggest threat to monetary and financial stability is government that spends beyond its means. 11. A fellow central bank governor told me this story. He had gone to a country in Africa to deliver a speech. This was a country ravaged by hyperinflation brought on by mounting fiscal deficits. His grateful hosts gave him a momento – a beautifully framed currency note denominated in ten million units of the local currency. Ordinarily, he would decline such a gift, to save the trouble of having to declare it back home. But on this occasion, he asked for one more of the framed currency note and paid for it. On reaching home, he sent one of the framed currency notes to his colleague at the Ministry of Finance with a short note saying, “Please put this in a prominent part of your office as I have done. Let it be a constant reminder to us both that if we do not do our jobs properly, this is what will happen to our country.” 12. We at the MAS thank our colleagues in the Ministry of Finance and the broader government. Your fiscal rectitude has allowed us to concentrate on our mission of securing price stability. 13. MAS is independent within the government, not of it. Having a Cabinet Minister as the non-executive Chairman of MAS has insulated MAS from political pressure.

In closing, let me re-dedicate on behalf of my colleagues at the MAS, our commitment to our mission:   to secure for Singaporeans a low rate of inflation;    to preserve the purchasing power of our official foreign reserves;    to keep our financial sector safe and sound amidst crisis and change; and    to grow Singapore as a vibrant and trusted financial centre. In this, we look forward to your continued support. Thank you. BIS central bankers’ speeches  3
5  The sum of households’ net financial and gross housing wealth has declined by over 10% since the start of the crisis. In contrast, external estimates of the loss of supply capacity as a result of the recession, to which the fall in human capital is likely to be closely related, are around the 4-5% range. See, for example, HMT (2009) and IMF (2009). 4  BIS Review 114/2009  None of this is to deny that households’ balance sheets have been affected by recent falls in wealth. But the extent of that deterioration and hence the pressure on households to repair their balance sheets might be exaggerated by failing to take a more comprehensive view of their assets and liabilities. Nevertheless, it is clear that, even putting balance sheets to one side, the financial crisis has affected households and families in ways that have caused them to spend less. Most directly, the recession has led to a pronounced weakening of the labour market, with employment falling and incomes squeezed. The recession and the sharp rise in unemployment may also have led households to revise their beliefs about the stability of the economy and with it the predictability of their own incomes. The period from the early 1990s up to the financial crisis has been dubbed by economists as the Great Moderation. The UK economy enjoyed over 60 consecutive quarters of positive economic growth accompanied by low and stable inflation.

Let me mention just four: 1.  to preserve peace;  2.  to improve economic prospects;  3.  to defend our values; and  4.  to increase personal options continent-wide. The founding fathers of the EU were willing to make political sacrifices to end bloodshed in Europe, following two devastating wars just decades apart. Let us not forget that we are here in a former prison in which every respected Luxembourg family had relatives who stood up for these values. After 70 years of peace in western Europe it is easy to be complacent that war will not happen again. Yet the current situation in Syria, Iraq, Ukraine and that of the Balkans in the 1990s shows that peace is vulnerable, even on our doorstep. But defence and security have to be understood as a common endeavour. The economic benefits of the Union are well documented: free trade, the removal of non-tariff barriers, the elimination of transactions costs of foreign exchange payments and the introduction of a single yield curve across the euro area to name but a few. These measures have reduced costs for businesses and households, and in turn generated higher income and created jobs. Looking ahead, also the recovery is on track to overcome the crisis. Europeans, for all our differences, have many values that we share more closely than even close allies such as the United States. Our social model ensures adequate healthcare and workers’ rights that are absent elsewhere.
In response to the crisis, a network of swap agreements between advanced economy central banks was established giving us the ability to provide a range of currencies to UK-based institutions. This network of swap lines should not necessarily be limited to the G7 economies. In June, the Bank of England signed such an agreement with the People’s Bank of China, reflecting the growing international role of the Renminbi. That dovetails with the possibility of establishing a Renminbi clearing bank in London and our decision to include branches of Chinese banks in our broader policy of openness to hosting foreign wholesale banking activities. Helping the internationalisation of the Renminbi is a global good, consistent with London’s historic role. But rest assured that the Bank will act in a manner consistent with our domestic responsibilities. As my colleague Andrew Bailey said last week, our risk appetite for foreign branches will largely be determined by whether their activities in the UK are covered by credible recovery and resolution plans.15 As always, renewing globalisation and building resilience go hand in hand. 5. Conclusion  After perhaps the worst financial crisis in the FT’s long lifetime, it is reasonable to expect financial services will again grow in importance. The process of financial deepening in emerging markets is only beginning. In Europe, there is a strong case for greater reliance on robust financial markets relative to weakened banks. The UK stands to benefit because of London’s place at the heart of the global financial system.

In ibadah (worship), there are times when differences of opinions become a blessing as they provide us a way out of a difficulty in performing a particular act of worship. In addition, specific act of worship deals with our relationship with Allah. Even in the history of Islamic civilisation, the differences in opinions and views were the main reasons for the Islamic civilisation to progress rapidly. In the context of the muamalat, differences of views would be more prevalent due to the diversity in the background, culture, and society that will inevitably result in various interpretations on a particular issue. On one hand, this could be deemed positive as it broadens the scope for Shariah scholars to make references and to understand the reasons and wherefores of the Shariah law. On the other hand, in the context of muamalat, it may lead to difficulties in managing transactions given that different interpretations may hamper parties to contract seamlessly. This is particularly evident in an Islamic financial system that is regulated by the central bank that usually places emphasis on standardising in its policies and market practices as to ensure consistency in compliance among the financial institutions. In this regard, I would like to suggest the following points which could serve as basis for the solutions to the impediments that I have mentioned earlier: i. This Dialogue should strive for all scholars to agree on important Shariah issues that can be used as basis and guidance for the industry practitioners.
Some productive investments will naturally be highly innovative, and potentially also highly risky. Therefore, not all productive investments will be appropriate for annuity books. Those more risky assets may be appropriate for other substantial parts of the UK insurance balance sheet, such as with-profit, unit-linked, and shareholder funds. But the universe of productive investments will likely include long-term illiquid assets with secure cash flows that are a natural match for annuity liabilities. Reforms have been proposed in this area. These relate to assets with prepayment risk and/or subject to construction risk. These changes, combined with application process reforms to reduce administrative burden and approval time where possible, could unlock further opportunities for productive investment in MA portfolios. We have carefully considered the specific asset classes that insurance firms identified in HM Treasury’s Call for Evidence, and we believe these reform proposals address most of them. We remain open and ready to learn about any examples of others - the more specific the better. I want to be clear that the PRA is not doing industrial policy here: we are not seeking to tilt the playing field. What we are doing is removing disincentives that the existing regime unnecessarily places in the way of investment in productive assets that are suitable to back annuity liabilities – a levelling of the playing field. The valuation of liabilities Levelling the playing field is one thing – keeping it safe for the players, not to mention the crowd – is another altogether.

Though from experience, I know the bottom of the ninth can last for eternity in a close baseball game. The continued importance of the transition away from Libor  Public authorities and market participants across jurisdictions have now been working together to transition away from reliance on Libor for a number of years. Its weaknesses were originally exposed during the global financial crisis and while reforms have improved the governance and administration of the rate, the markets on which it is based have long since shrunk to a trickle of transactions. We see little prospect of those markets returning. Plans now need to be in place to transition from Libor to alternative reference rates by end 2021. John and I will speak about the progress that has been made. With 18 months to go these plans must now be acted upon in the time remaining. With the authorities, businesses and households all having to adapt to the challenges of lockdown and new ways of working, there have been calls to step back from the Libor transition as a priority. We understand the level of disruption there has been and central banks have worked to ensure financial institutions have had the support and capacity to be able to ensure a continued flow of financing to support the economy. But in my view, what we saw in financial markets in March in response to the shock of Covid only reinforces the importance of removing the financial system’s dependence on Libor in a timely way.
These changes present several challenges for central banks and regulators: •  We need to establish and apply consistent criteria for the scope of oversight, in order to maintain a level regulatory playing field;  •  We need to take full account of new interdependencies between systems when assessing financial stability risks at a national and international level;  •  We need to work more closely together in risk assessment and oversight and ensure that cross-border operational arrangements are robust ;  •  We need to ensure that financial stability risks posed by financial firms operating key infrastructure functions are adequately captured in their regulation. 49 Meeting these challenges will deliver a robust, resilient financial infrastructure, which the global financial system and the global economy depend upon. BIS Review 130/2007  7

For large value payment system, RENTAS, the systemically important payment system for transfer and settlement of high value interbank funds and scripless securities transactions, is continuously being enhanced to support cross-border payments and settlements. In this regard, a Payment versus Payment infrastructure for interbank settlement of USD/RM trade transactions was implemented in 2006 in collaboration with Hong Kong Monetary Authority and a cross-border link with Euroclear was established in 2012. In addition, RENTAS has also been equipped with the capability to support Renminbi denominated funds and securities transactions. On the retail payment front, measures are also geared towards enhancing the efficiency, accessibility and quality of retail payment infrastructure and services. To this end, Bank Negara Malaysia has focused on creating the enabling environment to accelerate the country’s migration to electronic payments (e-payments), to enhance economic efficiency and increase our competitiveness. This has been done by establishing a conducive pricing and incentive structure, enhancing the e-payment infrastructure and promoting awareness and confidence in the use of e-payments. These initiatives to modernise our financial system has already begun to yield results bringing about the desired cost savings. In concluding my remarks, let me congratulate SWIFT on this occasion of the expansion of their operations here. I also wish the management and staff of the Kuala Lumpur Corporate Services Centre every success in your endeavours and look forward to its contribution to our economy as we advance forward in this significantly challenging and rapidly evolving economic environment. 2  BIS central bankers’ speeches
The ability to endure, to persevere, to be resilient in the face of such extreme odds is about having a great sense of purpose of what needs to be achieved and the motivation of why it needs to be achieved. The sheer responsibility and the awareness of the accountability that comes with it is the very driver of such perseverance. It is also the fear of failure and knowing the far-reaching and damaging consequences. This is reinforced with the values and the discipline to stay the course to do what is right and to do what is in the interest of the people. The discipline is also important so that the Central Bank is consistent in its behaviour in managing the challenging conditions or in its aspirations to push the frontiers and create great value for the country. During such times, having great clarity in the vision and on the objective of what is to be achieved becomes paramount. This has to be the starting point if it is to draw on the energies of the entire organisation. Articulating it with great clarity throughout the organisation allows the collective alignment to the goals. This also avoids being diverted by distractions when we are confronted with destabilising times. It is also imperative when we are ambitious with bringing about change and transformation. Knowing clearly the outcomes and the benefits it brings increases the potential of bringing diverse groups within a country and across countries to building the consensus on achieving a common goal.

This Leadership Energy Summit will hear from the experience of successful individuals on the source of their energy in generating outcomes and results that have made a difference. We will also learn about other sources of energy from which we can tap on and strengthen. This is the challenge of the new generation of leaders if they will truly be able to make lasting and meaningful changes in their environment. On this note, let me wish you a highly energised Summit. BIS central bankers’ speeches  3
Inflation is still being restrained by the fall in prices for imported consumer goods, increased competition in a number of markets and the current period of lower nominal pay increases. The trend in prices for consumer goods over the past two or three years is a result of favourable developments in the Norwegian and global economies. Low inflation is being accompanied by real income growth and a rise in production. It cannot be ruled out that small open economies are particularly vulnerable to fluctuations in international prices. Deviations from the inflation target in Norway are broadly in line with Sweden and New Zealand, but are larger than for example in the UK and Canada. Developments in recent years have also been influenced by the fairly large favourable disturbances to which the Norwegian economy has been exposed. Developments in Norway’s terms of trade provide an illustration of this here. As consumers, we enjoy the benefits of falling prices for many imported goods. As a nation, we benefit from a fall in prices for the goods we import in relation to prices for the goods we export. Norway’s terms of trade are improving. The impact of the rise in oil and gas prices is particularly strong – and the domestic economy is shielded to a certain extent through the oil fund mechanism – but there have also been terms-of-trade gains in the mainland economy. The situation in Norway differs from that of our Nordic neighbours.

It should also be noted that the figures for the twelve-month rise in consumer prices are considerably more volatile in Norway than in other countries. We see from the figures that consumer prices in Norway, even when tax changes and energy products are excluded, are more volatile than indices in other countries where these products are included. Low inflation is not the result of declining demand, activity or employment. In our conduct of monetary policy, we weigh the objective of stabilising inflation close to 2½ per cent over time against the objective of stable growth in output and employment. Since inflation is low, we have chosen to keep the interest rate at a low level and have at times considered an even lower interest rate. However, as the Norwegian economy has shown solid growth since summer 2003, we decided instead to use some time to bring inflation back to target. In a period of increasing cross-border labour flows, substantial technological advances, changes in competitive conditions and new trading patterns, we may, with our very open economy, have to accept a somewhat greater variation in inflation and deviations from the target, as we have witnessed over the past two to three years. BIS Review 17/2006  3
Notes: For methodology see Favara, G, Gilchrist, S, Lewis, K F, Zakrajsek, E (2016) Recession Risk and the Excess Bond Premium, FEDS Notes, Board of Governors of the Federal Reserve System. To assess whether recent global developments represent a soft patch or herald renewed stagnation, it is helpful to consider the position of the global economy with respect to three interrelated cycles: the business cycle, the financial cycle and the cycle of globalisation. In each cycle, imbalances can build that hasten their demise, so I will focus on a few of the most important imbalances to assess global prospects. The Business Cycle The business cycle tracks fluctuations in demand about the supply potential of the economy. In the expansion phase, growth in output exceeds that of the economy’s supply capacity. As a result, costs rise more quickly as companies use resources more intensively, putting upward pressure on inflation. When output growth falls below potential, the opposite occurs. Business cycles have historically lasted up to eight years on average across advanced economies.5 Recent experience suggests the expansionary phase is getting longer, and the downturn shorter, partly because of the greater credibility of monetary policy.6  5  In the UK and US, the average duration has been 5 ½ years, based respectively on Hills et al (2010) and the National Bureau of Economic Research’s business cycle dating committee (http://www.nber.org/cycles.html). 6 See, for example, Miles, D, Panizza,U, Reis, R and Ubide, A (2017) ‘And Yet It Moves.

Last year trade growth lagged the growth of global activity, and current global export PMIs now signal a contraction in global trade (Chart 11). Chart 11: Trade growth has weakened notably 56  Diffusion Index, 50 = no change  Percentage change on a year ago  55 54 53  Global manufacturing PMI: New export orders (6 month lead, LHS)  7 6  CPB world trade volume (3 month MA, RHS)  5 4  52  3  51  2  50  1  49 48  0  47  -1  46 2011  -2 2012  2013  2014  2015  2016  2017  2018  2019  Sources: CPB,Markit Economics and Bank calculations. Bank of England simulations suggest that the impact through direct trade channels of the narrow, bilateral tariffs already announced would tend to be small and would be largely confined to the countries directly involved. A larger increase in tariffs of 10 percentage points between the US and all of its trading partners could take 2½ per cent off US output and 1 per cent off global output through trade channels alone, although the impact on the UK is smaller reflecting a greater exchange-rate driven boost to net exports. If business confidence and financial conditions are also affected (as recent experience suggests they would be), these impacts could double (Table 2).
Further development of this framework promises to support financial and macroeconomic stability, within an overall strategy focused on achievement of our primary objective: price stability. Such considerations, in concert with the development of a new framework for macroprudential oversight, should permit to reduce the frequency, duration and economic impact of financial crises. These are themes that will be discussed in depth in the course of today’s colloquium. We have to make sure that the global financial system, as well as continental and national ones, are made much more resilient. Yet, it would be unrealistic to believe that financial crises can be eliminated. Recent experience has also demonstrated the need for central banks to be timely and agile in managing financial crises without ever – in any circumstances – losing their sense of the medium to long-term orientation to price stability. As regards the ECB, in the face of financial crisis, monetary policy was eased significantly through conventional means in late 2008 and early 2009, with key interest rates being reduced significantly. Moreover, non-standard measures, in the form of the ECB’s enhanced credit support were introduced. These aimed at maintaining an efficient transmission of monetary policy by supporting market functioning. Such measures were instrumental in the maintenance of price stability, since, in the face of downside risks to price stability, they ensured that the easing of the monetary policy stance was transmitted into a broader easing of financing conditions.

Although in many respects the crisis that unfolded in 2007 and 2008 can be seen as the direct result of vulnerabilities and imbalances which had been growing steadily and which had been identified fairly early-on, they combined in such ways that few would have anticipated their potential severity for the functioning of the financial system. This notwithstanding, we and other major central banks reacted swiftly to mitigate the stresses in the functioning of money and other affected markets. Against this background, to build a safer financial system it is of paramount importance that the responsible authorities enhance their financial sector surveillance while at the same time financial institutions play a decisive role by enhancing their risk management practices. A key challenge for policy-makers will be to design appropriate responses to enhance the stability of the financial system – including improving the detection and understanding of risks and vulnerabilities and translating these into concrete risk warnings and policy recommendations – without imposing restrictions that would unnecessarily hamper financial innovation and reduce the efficiency of the system. Many improvements, including the new Basel II Capital Accord, were already under way when the crisis erupted, and they address several of the weaknesses that have been identified. However, the ferocity of the financial turmoil and its fall-out which spread well beyond the financial sector call for more far-reaching reforms in the area of macro-prudential supervision.