samchain/econo-pairs-v1 huggingface dataset:
These are more acute where the event – for example, a credit default or a windstorm – being modelled happens infrequently and historical data is therefore scarce, where events cluster rather than occur independently or where the underlying process behind the event – for example the structure of the economy or the natural environment – may have changed, so that history is an unreliable guide to the future. In such circumstances, significant uncertainty about model outputs may call for a more prudent approach. And the temptation to add additional parameters, making models more and more complicated, can often have the perverse effect of weakening model performance. This is why, in addition to scrutinising the technical components of models, we also look at the way they are used within firms. Only a good model can play an important role in a firms’ system of governance. Our expectations of their quality are high as Solvency II specifies that they become an embedded part of the risk management system of a firm. It is therefore not only important for us to rigorously assess them but that senior management have ownership of these models and continuously do the same. The Bank of England takes model approval very seriously indeed and we will not hesitate to hold back approval for the use of models where there are risks that cannot credibly be modelled or data are insufficient.

To echo the Governor’s words from his speech to the Institute and Faculty of Actuaries in September “Insurance is at the core of the new Bank of England”…we have over 200 supervisors and 50 actuaries engaged in the implementation of Solvency II, not to mention the contribution from numerous dedicated policy experts. In addition, with insurance supervision now embedded in the Bank, supervisors benefit from the support of monetary policy experts, credit risk analysts and macro-financial analysts. The insurance sector plays a key role in the financial system and the economy. It protects companies and individuals from perils they could not otherwise shoulder, managing and spreading risk globally. Insurers are vital to efficient allocation and overall provision of capital, they provide alternative sources of funding, increasing the diversity in the system. The PRA has two primary statutory objectives: to promote the safety and soundness of all banks, insurers and major investment firms and, a specific objective for insurers, of contributing to the securing of an appropriate degree of protection for policyholders. These objectives are the guiding principles that ultimately underpin our implementation of Solvency II. The core objective of the new regime is greater policyholder protection. Solvency II is a welcome modernisation of European regulatory standards. You will be familiar with the UK’s ICAS regime. Solvency II recognises many of the principles that form the basis of that regime, and therefore introduces a level playing field with the rest of the EU. Risk-based capital standards and robust valuation practices ensure resilience against unexpected losses.
·  Debt restructuring as well as some positive environment in the economy, especially buoyant export growth in 1998 until the first half of 1999, together with the transfer of NPL to AMC and write-off alter full provisioning, helped NPL to decline from the peak of 48% of credit in mid 1999 to around 18% presently. The current challenges Against this background of achievements, I would now like to turn to the current challenges. The first is the challenge facing monetary policy. Key concern of macroeconomic policy in Thailand at this time is the weak domestic economy. This concern has been met by an accommodative stance of fiscal and monetary policies. But the external environment in which the Thai economic policy operates has changed considerably since the end of last year. The global economy is now slowing with possible substantial impact on the growth performance of the regional economies and on financial markets. Because of the strong dependency on exports, Asia will be one region most affected by the slowdown. Many countries have revised downward their export and growth estimates. Some have seen increased pressure on the external current account and the exchange rate. A key risk to the current environment is the global slowdown coinciding with a period of increased market volatility. This increase in market volatility could come about following possible further repricing of financial assets in the key markets abroad.

·  Third, to work with the management of the state banks and commercial banks to facilitate their resumption of lending without compromising the banks’ own risk management and the Bank of Thailand’s own supervisory standards. On our part, the Bank of Thailand has improved the credit information system through fostering the establishment of credit bureaus, which provide the much-needed infrastructure for the resumption of new credit. Meanwhile, we will continue to adhere to the best practices in prudential standards, and look to further improving the standards. Let me now turn to the third challenge: Rebuilding our financial architecture. This is an area that the Bank of Thailand takes leadership role to strengthen the soundness and efficiency of the financial institutions. Our leadership must lead to outcome which makes practical sense, measures up to international best practices, and must be market-oriented and suitable to Thailand. So far, we have laid down necessary groundwork to tackle short-term difficulties, such as the persisting non-performing loan problems, the lack of credit growth, or the restoration of financial sector soundness. Long-term prosperity however requires more. It requires a new financial architecture and corresponding market infrastructures to foster competition and efficiency while ensuring a nonrecurrence of past problems. Specifically, in the world where financial innovations, economic integration, and technological advancements bring nations and markets closer and define a new paradigm for competition for financial service industries, the rebuilding of our financial architecture becomes vital for our long-term successes, if not survival. Given such a challenge, which direction are we heading?
They are estimates which are often revised as new information becomes available. But what is striking about the recent revisions is that the changes do not result from any new information about earnings, but simply from a change in the procedures used to weight together the earnings in different firms and industries. It may be that this change has made it more difficult to make comparisons of earnings over time, and hence to measure underlying earnings growth. Whatever the explanation, there has certainly been a change in the estimated profile of earnings growth over the past two years. The revised data suggest that instead of rising steadily BIS Review 86/1998  -4-  throughout last year, as the economy grew at above-trend rates and the labour market tightened, the rate of growth of earnings actually fell. From a peak of 5.3% in February last year, earnings growth is now estimated to have slowed consistently until March of this year, when it reached a level of 3.9%. This deceleration in earnings growth coincided with a period in which, according to the Labour Force Survey, the labour market tightened considerably: employment rose by 360,000 unemployment fell by 320,000 and the unemployment rate fell from 7.8% to 6.5%. Over the same period wage settlements accelerated. And the revised data imply that since March of this year, as the pace of economic growth has slowed, earnings growth has accelerated, from 3.9% in March to 5.2% in June.

It is not easy, therefore, to reconcile the revised earnings data with other information on the labour market. And these data really matter for the MPC’s assessment of the UK economy. I can promise you that the Bank, the Treasury and the Office for National Statistics will, as a matter of urgency, be working together to try to understand what is happening to earnings. Decisions on interest rates must take into account not only those factors which I have highlighted this morning - the international economy, the possibility of a credit crunch and uncertainty about the trend in earnings growth - but also a wide range of other information relevant to the outlook for inflation, including the behaviour of the monetary aggregates, which are still growing quite rapidly, and the fall in sterling’s effective exchange rate. Over the next two weeks more important data will become available, including the first estimate of GDP growth in the third quarter, a CBI Industrial Trends Survey and the monthly report from our regional Agents. At our next meeting on 4 and 5 November, the MPC will take into account all of this information, and occasions like today are part of the process by which we obtain more information and exchange views with those most directly affected by our decisions. BIS Review 86/1998
The financial crisis has shown that balanced economic developments require more than just price stability; financial stability is also of key importance. The SNB’s annual Financial Stability Report is a contribution towards this. In the report, we draw attention to developments which might present a risk for financial stability. In this respect, we are still concerned about imbalances on the mortgage and real estate markets. The financial crisis showed what serious effects the problems in the financial sector can have on the overall economy. It is precisely in the current environment of globally low interest rates that the danger of imbalances on the financial markets is particularly high. With our report, we would like to urge participants in these markets to exercise caution. In addition, recent developments in the area of legal risks demonstrate once again the importance of strongly capitalised Swiss banks. My colleague, Jean-Pierre Danthine, will now present the most important conclusions from our Financial Stability Report. Ladies and gentlemen, thank you for your attention. It is now my pleasure to give the floor to Jean-Pierre Danthine. BIS central bankers’ speeches  3

These attributes are complemented by a competitive tax regime. In the 2008 Forbes Tax Misery and Reform Index, Malta was classified as the fifth most tax-friendly country worldwide for companies and the most attractive in the EU. In addition, Malta has an extensive network of almost fifty double taxation treaties, and income earned overseas may be exempted from double taxation even when no bilateral treaty exists. Malta’s development as an international financial centre is reflected in the range of financial services available. Complementing the traditional retail functions, banks are increasingly offering private and investment banking, project finance, treasury services and syndicated loans. Malta also hosts a number of institutions specializing in trade-related products such as structured trade finance, factoring and forfeiting. At the end of last year, the number of banks stood at 22, up from 17 in 2004. The assets of the banking system, including both the domestically and the internationally-oriented banks, totalled € billion at the end of 2008, an increase of 10.5% over 2007 and nearly double the total in 2004. Other areas, too, have experienced rapid growth. These include fund management and collective investment schemes, captive insurance, asset management, back office  2  BIS Review 65/2009  processing facilities and call centres. Following the recent legislation on professional investment funds, considerable interest has also been shown by the hedge fund industry.
Because of the sensitivity of this model, the analysis is supplemented by Value-at-Risk calculations, risk contribution analyses and stress tests. Value-at-Risk is an estimate of potential loss risk and is defined as the largest expected decline in value of an asset, or an asset portfolio, with a specific probability and over a specific period of time. 2  BIS Review 33/2006  As you can see, our largest holding is in euro. This is not surprising, as the relationship between the euro and the krona has remained relatively stable. Historically, the currency risk attributable to our euro holding has thus been less than that attributable to other currencies in the reserve. The dollar, on the other hand, has been one of the highest risk currencies. The fact that we nevertheless have a relatively large dollar exposure is due to its importance as intervention currency. It is reasonable to wonder why we do not choose to convert some of the currency assets into Swedish assets as long as we have a floating exchange rate regime. In this way the currency risk on these assets would disappear completely. In practice, however, this is not so easy as such a conversion would mean that we intervened in the foreign exchange market. In addition, when and if the Government decides that the krona should be part of a fixed exchange rate regime, we would be forced to intervene again to build up the foreign exchange reserve.

Both of these tasks make far-reaching demands on how our assets should be managed. In concrete terms, it means that I and my colleagues on the Executive Board must achieve a balance between the requirements our task place on asset management and the goal of generating earnings. In this balance it is obvious that the possibility to carry out our statutory tasks takes precedence. Earnings are only taken into account if they are attained without jeopardising the Riksbank’s central policy functions. The result of this balance is perhaps most easily described with the aid of the Riksbank’s balance sheet (see Figure 1). The Riksbank’s balance sheet Our financial assets are dominated by foreign government bonds 1 , which can be sold if necessary to intervene in the foreign exchange market. In other words, these assets have a direct link to our task concerning monetary and foreign exchange policy. Historically, the gold holding has been justified for similar reasons. However, nowadays it has become more common to regard gold as a financial asset like any other. This also applies to the Riksbank, whose gold holding partly is adapted according to its contribution to the diversification of the total asset portfolio 2 . This adjustment is made within the framework of an agreement with other central banks 3 . Other important assets are monetary policy repos, which comprise a central part of the steering interest rate system 4 . For earnings reasons, part of the repo transactions has been extended by means of FX swaps 5 .
We will continue to pursue investigations and enforcement actions into serious conduct breaches to the full extent of powers provided under laws administered by the Bank. Beyond the limits of the Bank’s powers, the Bank 2/3  BIS central bankers' speeches  maintains close cooperation with other authorities to facilitate investigations and enforcement actions. Conclusion Building trust is not easy. It takes hard work, a determination to do the right thing and confidence to make judgements in situations that are not always well-defined. Taken in this context, the work of the FSPB serves as an important anchor for decisions and actions that will engender trust in the financial industry. In a fast moving world, a strong commitment to a professional code of conduct provides the assurance that the public seeks – that financial institutions and employees are held to and will consistently demonstrate high standards of professional and ethical conduct. I hope that the industry will continue to lend its strong support to the FSPB’s work. Following today’s launch of the Professional Code, the Bank would urge financial institutions and professional bodies to reflect the standards set out in the Code in the values and conduct that you demand of your staff, agents and members. This needs to move beyond symbolic gestures, to the diligent implementation of policies and programs that promote the desired culture.

Jessica Chew Cheng Lian: Launch of FSPB Professional Code for the Financial Services Industry Welcome address by Ms Jessica Chew Cheng Lian, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launch of FSPB Professional Code for the Financial Services Industry, Kuala Lumpur, 24 May 2018. * * * I am delighted to be here to witness the launch of the Financial Services Professional Board (FSPB) Professional Code for the Financial Services Industry. Thank you for allowing me an opportunity to offer some brief remarks this morning on the importance of this initiative from Bank Negara Malaysia’s perspective. Let me begin by saying that the launch of the Code comes at a time when issues of culture and conduct in the financial industry have become an important focal point for financial regulators. After a hive of activity largely focused on strengthening prudential rules and standards, there is an acknowledgement that behaviour is ultimately regulated by something that runs deeper than rulebooks. It is not an easy thing to put your finger on. Regulators have talked about “the way things get done” in an institution, or “the human element in everyday decisions”. We like to think of it as how one behaves when no one is watching. On this score, the financial industry could do better. Despite much publicity and widespread efforts to tackle the issue, incidents of misconduct continue to cast a dark shadow over the financial services industry across the world.
We conduct ongoing surveillance of market practices and undertake rigorous enforcement actions to ensure compliance. Disclosure The SFA requires exchanges to develop rules for reliable and unhindered price formation and discovery. First, disclosure must be ongoing. Post-listing, material information likely to affect market prices must be disseminated in a timely and organised manner. For example, a company that makes an acquisition which is likely to have a material impact on its share price must immediately announce it on the website of the Singapore Exchange. Second, disclosure must be accessible to all. Listed companies are prohibited from disclosing material information on an individual or selective basis. These disclosure requirements complement Singapore’s statutory provisions on market manipulation and insider trading. Enforcement …. and its limitations Issuers and investors alike must have confidence that the ground rules are adhered to when they transact in our markets. Constant surveillance and strict enforcement are therefore critical. MAS takes a serious view of any false statement or omission of material information that misleads the market. We will not hesitate to impose stiff penalties on issuers who have made misleading statements in initial public offerings, or IPOs. But no regulator can totally prevent fraud or misconduct. Take for instance our experience with S-chips, or Chinese companies listed on the SGX. Many of them are reputable companies and add breadth to our equity capital market. But some of them are not. Since 2006, accounting irregularities or outright frauds have been discovered in 14 such companies listed on the SGX.

This has enhanced our understanding of the commercial environment and invigorated our organisation. Just as MAS has gained from such insider insight, industry too needs its share of talent. Through the mixing of talent between the public and private sectors, industry will also come to understand the intent and thinking behind MAS’ policies and actions. Over time, this will lead to a healthier and more constructive relationship where MAS and industry together work toward developing Singapore as a world-class financial centre. Enhance market discipline Fourth, we need to continue to enhance market discipline. The easy part is to establish and enforce the right rules for disclosure and corporate governance. Getting companies to internalise and abide by the spirit of tighter rules will take longer, though our standards of disclosure are already quite good compared to other countries. The most difficult part will  BIS Review 62/2002  7  be enhancing consumer education and awareness, without which, as I noted earlier, disclosure and caveat emptor cannot work. We do not need to convert the entire population into Chartered Financial Analysts. But we must help the public to understand basic finance and investment concepts, and to make effective use of the information that is available. They also need to understand that investing is for the long term and should be based on fundamental analysis. This requires a collective effort on the part of MAS, industry bodies and consumer groups.
We will probably have to live with some of the repercussions of the crisis for some time to come, but we expect the financial markets to normalise. But it is necessary to achieve a balanced economic growth even beyond the monetary policy forecasting horizon. If we are to do so we must attend to any deficiencies regarding, for instance, regulation, supervision and the allocation of responsibility, deficiencies which have come to light rather clearly in recent years. It is important to establish a system that covers all aspects; a system that prevents unnecessary risks and imbalances from building up. Experiences of the financial crisis in the 1990s have in many ways contributed to changes that have given our economy better resilience during periods such as the past few years. Merely the fact that we entered this crisis with sound public finances, a surplus on our current account and a lower, more stable inflation rate has given us room to manoeuvre that we previously lacked and which many other countries lack now. Some changes have also been made with regard to financial supervision and analysis of the bank sector. The banks themselves have also learnt from the previous crisis and have acted, at least in Sweden, in a much more responsible manner with regard to credit granting, for instance. But to some extent I think our memories were too short in the 1990s, when the acute crisis was behind us and crisis management was no longer such a pressing issue.

This is mainly because households’ interest expenditure will stop falling and then rise as the repo rate is raised. BIS Review 25/2010  9  Figure 9 Inflation measured as the CPI and the CPIF Annual percentage change  Source: Statistics Sweden  From crisis interest rate to monetary policy in an economic downturn The Executive Board of the Riksbank decided at the latest monetary policy meeting to hold the repo rate unchanged at 0.25 per cent to attain the inflation target of 2 per cent and to give sufficient support to the economic recovery. We are expecting to begin raising the repo rate again in the summer or in early autumn 2010 (Figure 10). This is slightly earlier than in our last forecast, which is because of the two components I mentioned. The financial markets have become increasingly stable and statistics on economic activity – such as slightly higher growth abroad, stronger employment and higher inflation – have gradually confirmed the picture of the recovery being on firmer ground. Figure 10 From crisis interest rate to monetary policy in a recession Per cent  Source: The Riksbank  10  BIS Review 25/2010  At the same time, we are now assuming that the increases in the repo rate can be made more gradually. This means that the forecast for the repo rate in the longer term is marginally lower than before, just under 4 per cent at the beginning of 2013. But, of course, forecasts so far ahead are very uncertain.