samchain/econo-pairs-v1 huggingface dataset:
This collaborative effort among a range of market players has resulted in positive milestones being achieved including: (i)  Ongoing review and updating of the financial sector legislation, including the Banking and Financial Services Act; the Pensions Scheme Regulation Act; the Insurance Act; and the Securities Act targeted for legislation in 2012;  (ii)  Participation in the on-going review of the Companies Act whose comprehensive revisions under the Ministry of Commerce, Trade and Industry are scheduled for 2012;  (iii)  Resolution of weaknesses in the state owned financial institutions which have become profitable and innovative in terms of delivery of financial services;  (iv)  Introduction of a regulatory framework for the introduction of a credit reference bureau;  (v)  Development and issuance of anti money laundering guidelines and the establishment of a Financial Intelligence Unit;  BIS central bankers’ speeches  1  (vi)  Development and issuance of the corporate governance guidelines by the regulators; and,  (vii)  Strengthening the autonomy and enhancing the supervisory capacities of the three financial sector regulatory authorities. Through the FSDP, the BoZ is also working with stakeholders like the Institute of Directors (IoD) in enhancing corporate governance among various stakeholders within the financial sector. Under the first phase of the FSDP, IoD conducted seminars on core principles of corporate governance targeted at executives and senior officials in the financial and business sector.

Bwalya K E Ng’andu: Enhancing corporate governance among various stakeholders within the financial sector Opening remarks by Dr Bwalya K E Ng’andu, Deputy Governor (Operations) of the Bank of Zambia, to the Financial Sector Development Programme (FSDP) presentation of corporate governance model board charter to financial sector stakeholders, Lusaka, 25 October 2011. *  *  *  Chief executive officers and senior management of financial institutions Members of the FSDP Secretariat and Working groups Distinguished participants Ladies and Gentlemen Let me start by thanking the organisers of this meeting for inviting me to make opening remarks at the presentation of the corporate governance model board charter. As you are aware, corporate governance has been identified as one of the most important components of the Financial Sector Development Programme (FSDP). The reason for this is not difficult to discern. The relationship between financial institutions and the public is premised on trust. Loss of confidence and trust in even one financial institution can threaten the stability of the entire financial sector because feelings about one erring institution can be extended to other institutions. This fiduciary responsibility that financial institutions carry requires that all players in the financial sector are subjected to elaborate oversight. In this regard, the Boards of Directors are one organ that is vested with this responsibility of oversight.
They increase transparency around financial stability policy, and are instructive for what lies ahead. It will have been no surprise that the Committee regards the current economic and financial environment as presenting very real risks to stability, with the euro area’s problems foremost amongst them. The Committee decided to advise the FSA to find out more about the banking system’s exposures, to disclose more, and to get the banks themselves to disclose more. As part of that, FSA will be looking more closely at banks’ forbearance policies and practices. That is not just about internal systems and controls, important though they are. It is, centrally, about forming judgments on the adequacy of provisions. As such it is a step towards supervisors satisfying themselves about the broad robustness of bank’s asset valuations and risk weightings – a vital element of assessing capital adequacy. Crucially, beyond that, the Committee asked the regulators to ensure that, in the quarters ahead, banks should build their capital resources by retaining more than usual of their profits when profits are buoyant. Although the FPC does not yet have statutory powers, this was a sizable step away from the role played by the Bank over the past decade or so. It is not a sermon. It is a plan. To give it teeth, the Committee considered whether or not to set quantitative limits on distributions and/or qualitative guidance on what should be treated as “buoyant” profits.

Following practice in the USA, we encourage banks to pre-position collateral with us. It is only prudent to do so. Banks’ boards, as well as their supervisors, should take an interest in this as part of ensuring banks have sensible contingency funding plans. The Bank also holds a monthly auction of funds against a reasonably wide range of collateral. The size of those auctions could be increased to cope with stressed markets, and we are ready to do so where desirable. Access to our liquidity-insurance facilities remains confined to banks, as monetary institutions. But as I noted earlier, non-banks – including money funds and finance companies – turned to central banks for liquidity during the 2007–08 crisis. The prevalence of non-bank banks as they used to be called, or shadow banks as they are now known, was a deep faultline in the international financial system. Things cannot be left where they are. The status quo was deeply unsatisfactory, and if we do nothing it will be made worse by the re-regulation of the banking system, which creates powerful incentives to reinvent the economic substance of banking beyond the perimeter of prudential regulation and supervision. The authorities internationally, led by the FSB and with the active involvement of Adair Turner and myself, are debating how to tackle the phenomenon of “shadow banking”. A preliminary, but I hope substantive report will go to G20 Ministers and Governors in October.
Thank you. 3/3  BIS central bankers' speeches

Individuals and businesses must be able to digitally access all their relevant data and make them available to third party service providers who can then serve these individuals and business in a holistic manner. This could be for purposes of financial planning, trade financing, credit scoring, etc. where data aggregation is important for more customised and comprehensive solutioning. When these foundational digital infrastructures come together, they will have the power to deliver truly end-to-end digital transactions. Take for example, cross-border digital payments. With the four foundational digital infrastructures working in concert, we can effectively tackle the big pain points in know-your-customer checks, sanctions screening, and exchange of documents, to enable cheaper, faster and secure payments. Singapore has implemented these four foundational digital infrastructures. Singaporeans can use their national digital identity – SingPass Mobile – to transact digitally with both the government and the private sector Using SingPass Mobile, Singaporeans can make available relevant verified information to allow banks to onboard them without the need for paper documentation or physical presence. Singapore’s retail payments infrastructure – FAST and PayNow – has made digital payments interoperable. Singaporeans can now move money to one another’s bank accounts in real-time and at zero cost, with just three clicks on their mobile phones, regardless of which bank app they use. The Singapore Financial Data Exchange – SGFinDex – is a pioneering data exchange platform, the first of its kind in the world.
There was also very broad agreement with the extent of the recalibration, which was based on technical work carried out by the staff of the whole Eurosystem in our committees. The analysis we did before the inception of our asset purchases, and the evidence accumulated since, give us confidence that the additional measures announced yesterday provide material upward pressure on price dynamics to reach our objective as initially intended. Arguably, the only difference between our current situation and a more traditional situation is that our monetary policy stance is not determined primarily on the basis of just one tool – interest rates – but on the basis of an array of tools, which include also the pace of asset purchases, and forward guidance on both interest rates and asset purchases. But similar to the times when we steered policy primarily through interest rates, we are continuously monitoring economic and financing conditions, on which our policy action is always conditional. If these developments change in directions that make it necessary to respond again, we are of course ready at any time to adjust this array of tools to secure the return of inflation to our objective without undue delay. There is no particular limit to how we can deploy any of our tools. And in this context it is important to recall that we operate under a clear framework of monetary dominance – we are ultimately driven by our mandate of maintaining price stability.

I would like to elaborate on the Eurosystem’s contribution to enhanced disclosure through its initiative to make loan-by-loan level data on ABS transactions widely available. Let me say from the start that this initiative alone will not suffice to re-open the market, but it would become an important building block along the path towards standardisation, simpler structures, and better post trade price transparency. As you will remember, in December 2009 the ECB launched a public consultation in order to gather market and public feedback on a proposal to introduce requirements on loan level data in ABS transactions and make this an explicit eligibility criterion, should the ABS be used as collateral with the Eurosystem. This initiative may trigger a structural change in the way the different market participants interact within the securitisation markets. By increasing the transparency, availability and quality of the information on the underlying assets, and by ensuring a regular updating of the information, market participants will have a sounder base on which to build valuation, risk and surveillance models. The public consultation included six questions on the general advisability of the initiative as well as on technical details of the implementation. At the end of the consultation period on 26 February 2010, 53 responses from different investors, market data vendors, credit rating agencies, financial service providers, audit firms, stock exchanges, law firms, public authorities, and central securities depositaries, had been received.
The debt burden for households with the highest income (decile 10) has fallen markedly since the banking crisis. This is partly due to changes in the tax system at the end of the 1980s which led to a reduction in tax deductions for interest expenses, especially for high-income groups, and changes in the tax system in 1992. Debt is also unevenly distributed by age. In recent years, the debt burden has increased substantially in the younger age groups. The debt burden for the age group 25-34 is approaching the level prevailing at the time of the banking crisis. The rise in the debt burden must be seen in connection with the fact that they are in the start-up phase and with the rise in house prices. The high debt burden makes these groups vulnerable in the event of an interest rate increase. III. Consumer credit  Banks’ and finance companies’ exposures to household loans depend in part on whether loans are secured. Good collateral provides a buffer against losses and is therefore advantageous for a robust financial system. Mortgage loans account for the majority of household borrowing. The share of housing loans has increased since 1996, whereas the share of other repayment loans, which may be unsecured or secured with collateral in the form of a car or boat, has declined. Other loans include construction loans, bank overdrafts, operating credit, leasing and factoring. Their share is virtually unchanged. Norges Bank’s statistics do not provide the basis for estimating the total scope of unsecured loans.

In addition, the rise in prices for domestically produced goods and services stabilised, and towards the end of 2004 there was a tendency towards a more rapid rise in prices for these goods and services. Prices for imported consumer goods fell more than expected at the beginning of 2005, while the tendency towards a more rapid rise in prices for domestically produced goods and services has persisted. So far in 2005, inflation measured by the CPI-ATE has hovered at ¾ per cent. The projections in Inflation Report 1/05, published on 16 March, are based on a gradual increase in the interest rate. This is in line with expectations among financial and foreign exchange market participants. It is assumed that the exchange rate will shadow movements in the forward exchange rate. This implies that in the years ahead the krone will remain fairly stable at approximately the current level. With a path for the interest rate and the krone exchange rate in line with the baseline scenario in Inflation Report 1/05, inflation may increase gradually from less than 1 per cent today to close to 2 per cent in mid-2006. Under these assumptions, inflation may stabilise at around 2½ per cent at the three-year horizon. Developments in line with these projections imply that the output gap will widen to about 1¼ per cent in 2006 and then gradually narrow. Developments since the March Inflation Report was published do not provide grounds for changing the perception of the main features of developments in the real economy.
After the onset of the global financial and economic crisis the franc appreciated by 17% vis-à-vis the euro in 2010 alone, driven by the reallocation of global capital on a massive scale. This has fuelled deflationary risks and slowed economic growth. To counter these effects, massive unilateral interventions were conducted, leading de facto to a closer alignment of monetary conditions with those in the euro area. This points to the conclusion that in a multipolar world having appropriate domestic macroeconomic policies is not sufficient to absorb external shocks. Unless a country or an economic region also has a deep and liquid capital market and its size is sufficient to absorb large capital flows, it is bound to become subordinate to the existing poles, or to be squeezed between them. The prosperity of the euro area countries is inextricably linked to the success of the euro. The euro: a unique construct The euro is the only major currency that is not issued by a single sovereign state, but by a union of states. As this is a totally unprecedented monetary framework, it is fair to ask whether it has what is needed to become one of the poles of the new system – in other words, is it sufficiently robust to ensure sound economic policies at the euro area level and in the individual countries, and does it have a large and deep financial market? Decisions are about to be taken on strengthening the governance of the euro area with a view to achieving these objectives.

The Association has built a strong foundation for its important role in bringing the industry to new heights with the full support of the industry players to realise the shared vision under the industry’s five-year Strategic Blueprint. We have made tremendous strides in setting a clear path for the future. I am confident that the best for this industry is yet to come. Well done to the Association on a great first year. 4  BIS central bankers’ speeches
And as recently as 1970, that share was just under 10 per cent. But today, in the space of just 40 years, developing Asia’s share of world GDP has nearly tripled to 27 per cent. Projections are that developing Asia will again account for half of world GDP by 2050. Will it happen? 5. There are many things that can potentially stop the Asian juggernaut. International conflicts, domestic upheavals, wrong economic policies, even climate change, have been cited as wild cards that can throw these projections off course. Top of my list is old-fashioned misallocation of resources. Asia’s strength – its high savings and investment rates – can become its weakness. 6. The Asian growth story is essentially an investment story, fuelled by high rates of domestic savings and relative openness to foreign capital. Gross fixed capital formation in emerging Asia during 1980–2000 was about 35 per cent of GDP, compared to 21 per cent in Latin America and 25 per cent in Eastern Europe. High rates of investment and high rates of economic growth created a virtuous cycle of development in emerging Asia during the last 40 years, unmatched in history. 7. But there are growing concerns whether this is too much of a good thing. The investment-to-GDP ratio in developing Asia has gone up further, from 30 per cent in 2000 to 38 per cent last year. The ratio of gross capital inflows to GDP has doubled over the same period, from 8 per cent to 17 per cent.

Several Asian economies have been raising policy interest rates, though real interest rates still remain rather low. There has also been a fair amount of exchange rate appreciation. Since mid-2009, most regional currencies have appreciated by about 5 to 6 per cent in real effective terms. Monetary policy in Asia is likely to remain tight in the months ahead. This should help to get the price of capital right, tame asset price inflation, and reduce the risk of misallocated resources. 15. Indeed, as emerging Asia continues to grow, allowing the exchange rate to steadily appreciate over the medium term is vital to ensuring that capital inflows are moderated and capital is allocated to productive investments. 16. But interest rates and exchange rates cannot take the burden of adjustment entirely, especially over the short term, given the scale and pace of capital inflows. Therefore,  2  BIS central bankers’ speeches  macroeconomic policy adjustments have been complemented in some Asian countries by macroprudential measures, like reductions in banks’ loan-to-value ratios and debt-to-income ratios. In exceptional cases, resort to capital flow management measures may be necessary to bring the situation under control. Strengthen infrastructure for allocating capital 17. Next, emerging Asia must strengthen its infrastructure for allocating capital. Banks are still the principal channel for allocating capital in Asia, and post-Asian financial crisis, many Asian authorities have taken steps to strengthen their banks. Banking systems were cleaned up of their non-performing loans, recapitalised, and strengthened.
Virtually all of the net credit growth since then has been from the bond markets. In tandem, the assets under management have risen by 60% globally and 80% in the EU. These trends will continue as the Capital Markets Union is developed. The ESRB is currently contributing in two ways to more resilient capital markets. First, it is promoting a shared understanding of the fundamental drivers of market liquidity. Second, it is gathering consistent information on the nature and size of the risks associated with market-based finance. The ESRB has unique powers in this regard given its ability to collect information from financial participants from across the EU.1 The ESRB is currently surveying market makers and asset managers as part of a broader study into the risks from a reduction in market liquidity. This work should be completed by mid-2016. The survey will draw out the implications for liquidity conditions, including whether openended funds have liquidity sufficient to meet redemptions in the event of market stress. 1  2  Of course, the ESRB must exercise this power with care and precision. And the case for doing so must be compelling. But the rapid growth of market-based finance satisfies these tests. BIS central bankers’ speeches  In a similar survey of 143 investment funds, the Bank of England found that, in aggregate, these funds expected to be able to liquidate in one day roughly three times estimated dollar corporate bond market turnover; clearly a fallacy of composition. The ESRB survey will provide a valuable wider perspective.

With your leadership, the reform programme is substantially complete, and authorities are now implementing it to maximise its effectiveness. 2  4  Bank of England survey results. Respondents were asked for their views on the statement ‘I believe that financial markets work in the interest of society’. Possible responses were: strongly agree, agree, neutral, disagree, strongly disagree. Only one third agreed or strongly agreed. BIS central bankers’ speeches  But durable financial stability requires more than microprudential standards that bolster the resilience of individual firms. It also requires a macroprudential perspective, with flexibility to respond to shocks wherever they occur; with higher standards for systemically important firms; and to increase levels of resilience when risks increase. The ESRB has been helping Member states fulfil these roles, and it remains alert to emerging vulnerabilities. As President Draghi recently described to this Committee, over the coming year, the ESRB will develop assessments of the macroprudential stances of Member States to complement its existing risk monitoring and focus on the risks of low interest rates on financial stability and an abrupt transition to a low-carbon economy. Thank you for your attention. I look forward to your comments and questions. BIS central bankers’ speeches  5
What I have started to describe is the first objective that the new legislation gives to the PRA, namely the safety and soundness of the firms we will supervise. But there is another important leg to the definition of the objective, namely that the underlying objective of our pursuit of safety and soundness is the stability of the financial system. For banks, this had led us to emphasise that we will be a proportionate supervisor, putting more emphasis on the large firms that have more scope to damage the stability of the system. We think we can do this for banks because the depositor is protected by the deposit insurance arrangements on the first £ of deposits provided by the FSCS for all banks except branches from other EU countries (where the insurance comes from the home country), and because as a consequence of the crisis the resolution regime is now set down in statute, though we clearly have work to do to make the larger banks resolvable using those resolution powers, supplemented we expect by future EU legislation. For insurers, the legislation gives the PRA a second objective, namely the protection of policyholders. We do not have a comparable objective for depositors. Policyholder protection means in effect that our approach of proportionality in supervision cannot be the same for insurers. Why? This is a good question because the FSCS is set up to cover insurance.

Let me turn to the third and final issue, namely how do we think about the issue of systemic risk, and systemically important status, for insurers? This is obviously topical in the context of the IAIS proposed policy measures for globally systemically important insurers. First of all, in my view the case for systemic importance for insurers has to be proved. It does not follow that because major banks are systemically important, the same must be true for insurers. And, second, if a case can be made, it does not automatically determine what the response should be; in other words, it does not follow that the same capital treatment of systemic firms and/or a statutory resolution regime are needed as for banks. The calibration of these responses will have to be proven, and the response will need to be consistent with mitigating the cause of the systemic risk. So, let’s put banks to one side, but only after making one important point, that whereas systemic risk in banking is dangerous in good part because that it is in the nature of banking that the confidence issue combined with a very high level of  BIS central bankers’ speeches  5  inter-connectivity of risk within the system creates systemic risk, this is not true to the same extent in insurance.